The ACIT, Circle-4, Surat V. Surat Beverages Pvt. Ltd., Surat

ITA 144/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1969 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Speculation loss
• Section: 271(1)(c)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.144/AHD/2014/SRT / ASSESSMENT YEAR: 2006-07 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4, SURAT. VS. M/S. SURAT BEVERAGES PVT. LTD., 107, SAJNI COMPLEX, NEAR SCE COMPLEX, CITY LIGHT ROAD, SURAT 395 007. [PAN: AADCS 0403K] ( ' / APPELLANT) ( #$' /RESPONDENT) / ASSESSEE BY : SHRI RASESH SHAH, C.A /REVENUE BY : SHRI DILEEP KUMAR, SR. D.R /DATE OF HEARING : 10-10-2018 / DATE OF PRONOUNCEMENT : 29-10-2018 / ORDER PER C.M. GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT (CI T(A) FOR SHORT) DATED 14.10.2013 FOR THE ASSESSMENT YEAR (A.Y) 2006-07. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOW S: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 24, 97,551/- U/S. 271(1)(C) OF THE ACT. 2 ITA NO.144/AHD/2014/SRT (A.Y: 2006-07) M/S. SURAT BEVERAGES PVT. LTD. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A), SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A)-II, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE AOS ORDER MAY BE RESTORED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 24,97,551/- U/S. 271 (1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AND THE LD. CIT(A) , SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A)-II, AHMEDABAD MAY BE SET-AS IDE AND THAT OF THE AOS ORDER MAY BE RESTORED. 4. REPLYING TO THE ABOVE, THE LD. ASSESSEES REPRES ENTATIVE (AR) STRONGLY SUPPORTED THE FIRST APPELLATE ORDER AND SU BMITTED THAT THE ADDITION MADE BY THE AO ON ESTIMATE BASIS WAS REDUCED TO RS. 30,00,000/-, WHICH WAS ALSO ON ESTIMATE BASIS AS THE ASSESSEE COULD NO T SUBSTANTIATE THE VALUATION OF WORK IN PROGRESS (WIP), WHILE COMPUTIN G THE CLOSING STOCK VALUATION SHOWING THE BOOKS OF ACCOUNTS. FROM THE RELEVANT PART PARAS 5 TO 8 OF THE APPELLATE ORDER, WE OBSERVE THAT THE LD . CIT(A) NOTED THAT DESPITE THE FACT THAT THE ASSESSEE COULD NOT SUBSTA NTIATE CORRECTNESS OF CLOSING STOCK VALUATION BUT THIS FACT DOES NOT LEAD TO A CONCLUSION THAT THE ASSESSEE CONCEALED IMPORTANT FACT FROM THE AO DURIN G ASSESSMENT PROCEEDINGS. THE LD. CIT(A) ALSO OBSERVED THAT THE PART SUSTAINMENT OF ADDITION BY THE TRIBUNAL ALSO ESTIMATE BASIS, DOES NOT FALL WITHIN AMBIT OF 3 ITA NO.144/AHD/2014/SRT (A.Y: 2006-07) M/S. SURAT BEVERAGES PVT. LTD. EXPLANATION TO S. 271(1)(C) OF THE ACT AND DEEMED C ONCEALMENT ALLEGATION CANNOT MADE AGAINST THE ASSESSEE FOR IMPOSING PENAL TY U/S. 271(1)(C) OF THE ACT. 5. ON THE ISSUE OF PENALTY IMPOSED U/S. 271(1)(C) O F THE ACT ON THE ASSESSEE ON ACCOUNT OF DEEMED SPECULATIVE LOSS THE LD. CIT(A) RIGHTLY OBSERVED THAT THIS ADDITION PERTAINS TO THE SET OF F OF DEEMED SPECULATIVE LOSES AND THE SAME HAS BEEN MADE UNDER DEEMING PROV ISION OF THE ACT THEREFORE, IT CANNOT BE ALLEGED THAT THE ASSESSEE H AS CONCEALED PARTICULARS OF ITS INCOME AND THE LD. FIRST APPELLA TE AUTHORITY WITH THESE OBSERVATIONS ALSO CANCELLED PENALTY IMPOSED ON THIS COUNT. WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH TH E FINDINGS AND CONCLUSION RECORDED BY THE LD. CIT(A) ON BOTH THE C OUNTS AND THUS, WE UPHOLD THE SAME. ACCORDINGLY, GROUNDS OF REVENUE B EING DEVOID OF MERITS ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 9 TH OCTOBER, 2018. / SURAT ; DATED : 29 TH OCTOBER, 2018 / EDN # & / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . // TRUE COPY // SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER 4 ITA NO.144/AHD/2014/SRT (A.Y: 2006-07) M/S. SURAT BEVERAGES PVT. LTD.