Parkar Agrochem Exports Ltd., Ahmedabad V. The Dy.CIT.,Range-5, Ahmedabad

ITA 1396/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0440 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 03-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PANDEY
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTA NT MEMBER PARKER AGROCHEM EXPORTS LTD. 13, NATIONAL PLAZA, OPP. LAL BUNGLOW, C.G. ROAD, AHMEDABAD PAN NO. AAACP9277B (APPELLANT) VS DY. COMMISSIONER OF INCOME TAX, RANGE-5 AAYKAR BHAVAN, AHMEDABAD (RESPONDENT) REVENUE BY: SRI A.K.PANDEY, SR. D.R. ASSESSEE BY: MS. URVASHI SHODHAN DATE OF HEARING : 11-3-2013 DATE OF PRONOUNCEMENT : 22 -3-2013 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XVI AHMEDABAD DATED 16-03-2010 CONFIRMING THE PENALTY O F RS. 1,39,398/- U/S 271(1)(C) LEVIED BY ASSESSING OFFICER ON THE ADDITI ON OF 3,83,566/-. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED BY HIM U/S 143(3) OF THE ACT MADE FOLLOWING ADDITIONS/DISALLOWANCES. ITA NO. 1396/AHD/2010 A.Y.:-2004-05 I.T.A NO.1396/AHD/2010 A.Y. 2004-05 PAGE NO PARKAR AGROCHEM EXPORTS LTD VS. DY COMMISSIONER OF INCOME-TAX 2 (I) INFLATED PURCHASE PRICE OF ARENDA RS. 2,66,1 25/- (II) UNPROVED LOSS ON SALE OF ALUMINUM RS. 54,715 /- (III) UNDERESTIMATION OF CLOSING STOCK RS. 25,592 /- (IV) SHORTAGE OF CASH IN PATTY CASH RS. 11,129/- (V) OUT OF FOREIGN TRAVELING EXPS. RS. 17,010/- (VI) OUT OF CLAIM OF DEPRECIATION RS. 27,820/- THESE ADDITIONS WERE CONFIRMED BY LD. CIT(A). SUB SEQUENT TO THIS ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF THE ASSESSEE MADE P ENALTY OF RS. 1,39, 380/- WAS LEVIED. IN APPEAL, THIS PENALTY HAS ALSO BEEN CONFIRMED BY LD. CIT(A). 2. FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPE AL BEFORE US. AT THE TIME OF HEARING LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED THAT HONBLE ITAT VIDE ITS ORDER DATED 31-05-2010 IN ITA NO. 401 1/AHD/2007 HAS DELETED THE FOLLOWING ADDITIONS:- (I) INFLATED PURCHASE PRICE OF ARENDA RS. 2,66,1 25/- (II) UNPROVED LOSS ON SALE OF ALUMINUM RS. 54,71 5/- THEREFORE, PENALTY IN RESPECT OF THESE ADDITIONS MA Y KINDLY BE DELETED. IN RESPECT OF OTHER ADDITIONS THE SUBMISSIONS OF THE L EARNED COUNSEL FOR THE ASSESSEE WAS AS UNDER. 3. IN RESPECT OF 25,592/- UNDERESTIMATION OF CLOSI NG STOCK ASSESSEE SUBMITTED THAT CONTROVERSY IS ONLY IN RESPECT OF VA LUATION OF THE STOCK AND I.T.A NO.1396/AHD/2010 A.Y. 2004-05 PAGE NO PARKAR AGROCHEM EXPORTS LTD VS. DY COMMISSIONER OF INCOME-TAX 3 THERE IS DIFFERENCE OF QUANTITY OF STOCK, THEREFORE , NO PENALTY FOR CONCEALMENT MAY KINDLY BE IMPOSED. AS FAR AS ADDITION OF RS. 1 1,129/- FOR SHORTAGE OF CASH IN PATTY CASH IT WAS ONLY DUE TO LACK OF VOUCH ERS AND THEREFORE ALSO DOES NOT QUALIFY ANY PENALTY FOR CONCEALMENT. AS REGARD S ADDITION OF RS. 17,010/- OUT OF FOREIGN TRAVELING EXPENSES THE ASSESSEES SU BMISSION WAS THAT THE ADDITION WAS REDUCED TO RS. 3190/- BY LD. CIT(A) MA KING THE ISSUE DEBATABLE ON WHICH PENALTY FOR CONCEALMENT CAN NOT BE LEVIED. ADDITION OF RS. 27,820/- MADE BY ASSESSING OFFICER OUT OF CLAIM OF DEPRECIATION THE CONTROVERSY WAS ABOUT ALLOWABILITY OF YEAR ONLY AND NOT ABOUT THE EXISTENCE OF THE ASSET, THEREFORE, NO CASE OF CONCEALMENT IS MADE OUT. SHE, THEREFORE, PRAYED THAT PENALTY IN RESPECT OF THESE ADDITIONS A LSO MAY KINDLY BE DELETED. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDERS OF LOWER AUTHORITIES. 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND FORCE IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE AS SESSEE. AS FAR AS THE TWO (I) ADDITIONS INFLATED PURCHASE PRICE OF ARENDA AMO UNTING TO RS. 2,66,125/- AND (II) ADDITION ON ACCOUNT OF UNPROVED LOSS ON SA LE OF ALUMINUM AMOUNTING TO RS. 54,715/- ARE CONCERNED, SINCE HON BLE ITAT HAS DELETED THESE ADDITIONS THE PENALTY HAS NO LEGS TO STAND A ND, THEREFORE, IS HEREBY DELETED. AS FAR AS OTHER SMALL ADDITIONS ON WHICH PENALTY HAS BEEN LEVIED BY THE ASSESSING OFFICER AND HAS BEEN SUSTAINED BY LD. CIT(A), WE FIND THAT THERE IS NO FINDING BY A.O. THAT EXPLANATION OFFERE D BY THE ASSESSEE IN THIS RESPECT WAS NOT BONAFIDE OR WAS FALSE THEREFORE PEN ALTY FOR CONCEALMENT U/S 271(1)(C) OF THE ACT CANNOT BE LEVIED AUTOMATICALLY SIMPLY BECAUSE ADDITION WAS MADE ON THESE ACCOUNTS. THE PENALTY SO IMPOSED AND SUSTAINED BY LD. CIT(A) IS THEREFORE DELETED. I.T.A NO.1396/AHD/2010 A.Y. 2004-05 PAGE NO PARKAR AGROCHEM EXPORTS LTD VS. DY COMMISSIONER OF INCOME-TAX 4 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R.MEENA) ( D.K.TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 22 /03/2013 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# STRENGTHENED PREPARATION & DELIVERY OF ORDERS IN TH E ITAT 1) DATE OF TAKING DICTATION 13-03-2013 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE N.A. 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 18-03-2013 4) DATE OF CORRECTION 19-03-2013 5) DATE OF FURTHER CORRECTION XXXX 6) DATE OF INITIAL SIGN BY MEMBERS 20-03-2013 7) ORDER UPLOADED ON 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) ORDER SENT TO BENCH CLERK 22-03-2013