M/s Heera Moti Agro Products, Solan V. DCIT, CC-I, Chandigarh

ITA 140/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4059 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPKITA MOHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 140/CHD/2018 ASSESSMENT YEAR : 2008-09 M/S HEERA MOTI AGRO PRODUCTS, VS. THE DCIT, CENTRAL CIRCLE-1, 199, HPSIDC, INDUSTRIAL AREA, CHANDIGARH BADDI, DISTT. SOLAN PAN NO. AACFH8098M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL ADVOCA TE RESPONDENT BY : MS. DEEPKITA MOHAN, JCIT DATE OF HEARING : 15.05.2018 DATE OF PRONOUNCEMENT : 09.08. 2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 24.11.2017 OF THE COMMISSIONER OF I NCOME TAX(A)-3, GURGAON [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A)-3 GURGAON HAS ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) ON ADDITION OF RS. 30,000/- IN RESPECT OF RENTAL INCOME AND ON ACCOUNT OF ADDITION ON ESTIMATED BASIS ON ACCOUNT OF LEASE & GROSS PROFIT OF RS. 64,536/-. 2. THAT LD. CIT(A) HAS ALSO ERRED IN CONFIRMING TH E LEVY OF PENALTY ON RS. 4,60,000/- UN-RECONCILED EXPENSES. ITA NO. 140/CHD/2018- M/S HEERA MOTI AGRO PRODUCTS, SOLAN 2 3. THAT THE LEVY OF PENALTY ON LEASE RENTAL AND GRO SS PROFIT ON ESTIMATED BASIS IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THAT THE PENALTY HAS BEEN LEVIED AGAINST THE FAC TS AND CIRCUMSTANCES OF THE CASE . 3. THE PERUSAL OF ABOVE GROUNDS OF APPEAL REVEAL TH AT THE ASSESSEE IS AGGRIEVED AGAINST THE ACTION OF THE CIT(A) IN CO NFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 196 1 (IN SHORT 'THE ACT') ON VARIOUS ISSUES. 4. GROUND NO.1 : IN THIS GROUND, THE ASSESSEE HAS AGITATED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN RESPECT OF TWO ISSUES. THE FIRST ISSUE IS REGARDING THE LEVY OF PENALTY ON A DDITION FOR RS. 30,000/- IN RESPECT OF RENTAL INCOME. IN THIS RESPECT, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE IMPUGNED ASSESSMENT ORDER AS WELL AS ORDER OF THE CIT(A) IN QUANTUM PROCEEDINGS AND HAS STATED THAT T HE IMPUGNED PENALTY HAS BEEN LEVIED ASSUMING THAT THE ASSESSEE HAD RECEIVED RENTAL INCOME FROM ITS SISTER CONCERN M/S JINDAL SA LES CORPORATION. HOWEVER, IT WAS PLEADED BEFORE THE LOWER AUTHORITIE S THAT NO RENT WAS PAID BY THE SISTER CONCERN TO THE ASSESSEE AND EVEN THAT PROPRIETOR OF M/S JINDAL SALES CORPORATION NAMELY SHRI RAJNEESH J INDAL HAD FILED AN AFFIDAVIT DATED 1.3.2013 DEPOSING THEREIN THAT P REMISES WAS VACATED W.E.F. 1.4.2005. IT HAS BEEN FURTHER PLEAD ED THAT EVEN NO EXPENDITURE IN THIS RESPECT WAS CLAIMED BY M/S JIND AL SALES CORPORATION IN ITS BOOKS OF ACCOUNT. HOWEVER, THE L OWER AUTHORITIES CONFIRMED THE ADDITION ONLY ASSUMING THAT RENT IN Q UESTION MIGHT HAVE BEEN RECEIVED BY THE ASSESSEE OBSERVING THAT THE AFFIDAVIT OF ITA NO. 140/CHD/2018- M/S HEERA MOTI AGRO PRODUCTS, SOLAN 3 SHRI RANJEESH JINDAL WAS SELF-SERVING AND CANNOT B E TAKEN AS CREDENCE OF. THE ASSESSING OFFICER ALSO INITIATED P ENALTY PROCEEDINGS ON THIS ISSUE AND IMPOSED THE IMPUGNED PENALTY ON A N ADDITION OF RS. 30,000/- MADE IN THIS RESPECT WHICH HAS BEEN FURTHE R CONFIRMED BY THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE RECORD. THE ASSESSEE IN THIS CASE HAD C OME WITH THE AVERMENT THAT NO RENT WAS RECEIVED FROM M/S JINDAL SALES CORPORATION. THAT THE PREMISES WAS VACATED ON 1.4.2 005 AND THAT NO RENT WAS RECEIVED FROM M/S JINDAL SALES CORPORATION FROM 1.4.2005 ONWARDS. THERE IS NO EVIDENCE ON THE FILE TO SHOW T HAT ASSESSEE ACTUALLY RECEIVED THE RENT IN QUESTION. THOUGH IN T HE QUANTUM PROCEEDINGS, THE ADDITION WAS MADE ON ASSUMPTION BA SIS AND FURTHER CONSIDERING THE EVIDENCE OF THE ASSESSEE IN THE SH APE OF AFFIDAVIT OF THE LESSEE AS NOT RELIABLE. HOWEVER, SO FAR AS PE NALTY PROCEEDINGS ARE CONCERNED, WE DO NOT FIND THAT THERE IS ANY EVI DENCE ON FILE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME OR CONCEALED HIS INCOME IN THIS RESPECT. IT HAS BEEN H ELD TIME AND AGAIN HELD THAT EVERY ADDITION MADE IN THE QUANTUM PROCEE DING DOES NOT NECESSARY LEAD TO LEVY OF PENALTY U/S 271(1)(C) O F THE ACT. THE PENALTY LEVIED BY THE LOWER AUTHORITIES IN THIS RES PECT IS, THEREFORE, ORDERED TO BE DELETED. 6. THE SECOND ISSUE TAKEN BY THE ASSESSEE IN THIS G ROUND OF APPEAL IS REGARDING ADDITION ON ACCOUNT OF LEASE & GROSS P ROFIT OF RS. 64,536/- ESTIMATED ON THE BASIS OF UNACCOUNTED SALE S. ITA NO. 140/CHD/2018- M/S HEERA MOTI AGRO PRODUCTS, SOLAN 4 7. DURING THE SEARCH ACTION CARRIED OUT AT THE PREM ISES OF THE ASSESSEE, A SEIZED PAPER PAGE 13 HAD BEEN GENERATED FROM THE DATA ACCOUNTING SOFTWARE FROM THE COMPUTER OF THE ASSESS EE REPRESENTING THE RECEIPTS AND PAYMENT ACCOUNT FOR THE MONTH OF S EPTEMBER TO DECEMBER 2007. THE ASSESSEE FAILED TO RECONCILE TH E RECEIPT OF RS. 2,79,500/- WITH THE BOOKS OF ACCOUNT. IN THE ABSENC E OF ANY EXPLANATION OF THE AFORESAID RECEIPTS, THE SAID REC EIPTS WERE TAKEN AS SALES OUTSIDE THE BOOKS OF ACCOUNT ON WHICH THE GP WAS ESTIMATED AND TAXABLE INCOME WAS CALCULATED AT RS. 64,536/-. THE PENALTY PROCEEDINGS WAS ALSO INITIATED AND THE IMPUGNED PEN ALTY WAS LEVIED IN RESPECT OF THE ABOVE STATED ADDITION TO THE INCO ME OF THE ASSESSEE; WHICH HAS BEEN FURTHER CONFIRMED BY CIT(A). 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT PENALTY CANNOT BE LEVIED ON THE BASIS OF ESTIMATED ADDITION. FURTHER, THAT THE DOCUMENTS FOUND DURING SEARCH ACTION WAS D UMB DOCUMENTS AND THAT EVEN THE ADDITIONS WERE NOT WARRANTED. TH E LD. COUNSEL HAS FURTHER INVITED OUR ATTENTION TO PARA 23 OF THE ORD ER DATED 17.1.2017 OF THE TRIBUNAL PASSED IN THE CASE OF ASSESSEE IN R ESPECT OF QUANTUM ADDITIONS IN ITA NOS. 751 & 752/CHD./2013 DECIDED ALONG WITH OTHER APPEALS OF THE RELATED CONCERNS OF THE ASSESS EE, WHEREIN, THE ADDITION OF RS. 4,60,000/- MADE (AS TAKEN IN GROUN D NO.2 OF THE APPEAL) ON THE BASIS OF IDENTICAL DUMB DOCUMENT HAS BEEN DELETED BY THE TRIBUNAL. 9. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT T HOUGH THE ASSESSEE HAS NOT PRESSED THE ISSUE BEFORE THE TRIBU NAL ON THE ADDITION ITA NO. 140/CHD/2018- M/S HEERA MOTI AGRO PRODUCTS, SOLAN 5 MADE ON THIS ISSUE, HOWEVER, THE FINDINGS OF THE T RIBUNAL IN RESPECT OF THE ADDITION FOR RS. 4,60,000/- WHICH WAS BASED ON THE SAME DOCUMENTS FOUND DURING THE SEARCH ACTION, SINCE STO OD DELETED, HENCE, IT CANNOT BE SAID TO BE A CASE OF CONCEALMEN T OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 10. THE LD. COUNSEL HAS MADE SIMILAR SUBMISSION IN RESPECT OF GROUND NO.2 AND HAS STATED THAT SINCE THE QUANTUM ADDITION OF RS. 4,60,000/- STOOD DELETED VIDE ORDER OF THE TRIBUNAL DATED 17.1.2017, HENCE, THERE IS NO BASIS FOR THE SUSTAINABILITY OF THE IMPUGNED ADDITION. 11. AFTER CONSIDERING THE ABOVE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE, WE DO NOT FIND ANY JUSTIFICATION ON T HE PART OF THE LOWER AUTHORITIES ON LEVYING PENALTY ON THE ABOVE ISSUES AND THE SAME IS ORDERED TO BE DELETED. 12. GROUND NOS. 3 & 4 ARE GENERAL IN NATURE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.08.2018 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09.08.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR