ACIT, CHENNAI V. M/s. Letraco Kid Leathers, CHENNAI

ITA 1486/CHNY/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4524 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 22-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI (BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 1486/MDS/2009 ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME-TAX, BUSINESS CIRCLE-VI, CHENNAI. (APPELLANT) V. M/S. LETRACO KID LEATHERS, FLAT NO. 1B, ATKINSON PALACE, NO.2, JOTHI VENKATACHALAM ROAD, VEPERY, CHENNAI-600 007. PAN : AABFL4487H (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB RESPONDENT BY : SHRI D. ANAND O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN APPEAL NO. ITA 255/08-0 9 DATED 18-06-2009 FOR THE ASSESSMENT YEAR 2004-05 AGAINST THE CANCELLATION OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. SHRI SHAJI P. JACOB, SR. D.R. REPRESENTED ON BEH ALF OF THE REVENUE AND SHRI D. ANAND, ADVOCATE REPRESENTED ON BEHALF OF TH E ASSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THERE W AS A SURVEY U/S 133 OF THE INCOME-TAX ACT ON 04-09-2006 AND AS A CONSEQUEN CE OF THE SURVEY THE ASSESSEE HAD DECLARED ADDITIONAL AMOUNTS AND HAD PA ID TAXES ALSO. IT WAS ITA NO.1486/MDS/2009 2 SUBMITTED THAT THE AO HAD ALSO MADE AN ADDITION TOW ARDS THE BOGUS SUNDRY CREDITORS WHICH ON APPEAL BEFORE THE TRIBUNAL HAD B EEN SENT BACK TO THE AO FOR RE-EXAMINATION VIDE ORDER OF THE TRIBUNAL IN ITA NO . 368/MDS/2008 DATED 18-7- 2008. IT WAS THE SUBMISSION THAT THE AO HAD LEVIED PENALTY ON THE ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE AND THE LEARNED CI T(A) DELETED THE SAME BY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT OF MADRAS IN THE CASE OF CIT V. S. KHADER KHAN SONS REPORTED IN (2 008) 214 CTR 589 AND THE DECISION IN THE CASE OF CIT V. M. PACHAMUTHU REPOR TED IN (2008) 214 CTR 524. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF TH E AO. 3. IN REPLY, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT NOTHING MORE HAD BEEN BROUGHT IN BY THE REVENUE TO SHOW THA T THE STATEMENT GIVEN AT THE TIME OF SURVEY CONSTITUTED CONCEALED INCOME. H E VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PENALTY ORDER AS PASSED BY THE AO SHOWS THAT ON THE BASIS OF THE ADMISSION MADE BY THE ASSESSEE IN THE COURSE OF SURVEY THE ADDITION HAS B EEN MADE. WHAT IS THE NATURE OF THE ADDITION, WHAT IS THE CONCEALMENT AND WHAT IS THE SOURCE OF INCOME WHICH HAS BEEN CONCEALED, NOTHING IS COMING OUT OF THE ORDER OF PENALTY. A PERUSAL OF THE ASSESSMENT ORDER ALSO SHOWS THE SAME . IT IS ALSO NOTICED THAT THE AO HAS MADE AN ADDITION OF RS. 23,62,558/- AS BOGUS CREDITS. BUT THIS ADDITION HAS BEEN RESTORED TO THE FILE OF THE AO AS A CONSEQ UENCE OF THE ORDER OF THE ITA NO.1486/MDS/2009 3 TRIBUNAL IN I.T.A.NO. 368/MDS/2008 DATED 18-7-2008. A PERUSAL OF THE PENALTY ORDER CLEARLY SHOWS THAT THE AO HAS CONSIDERED THIS AMOUNT OF BOGUS CREDITS FOR THE PURPOSE OF LEVY OF PENALTY. THE PENALTY ORDER HAS BEEN PASSED BEFORE THE ORDER OF THE TRIBUNAL. CONSEQUENTLY, AFTER THE ORD ER OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN RESPECT OF THE BOGUS CREDITS THE ADDITION IN RESPECT OF BOGUS CREDITS NO MORE SURVIVE FOR THE PURPOSE OF CO NSIDERING FOR THE LEVY OF PENALTY. IN RESPECT OF THE ADDITION ON THE BASIS O F THE ADMISSION MADE IN THE COURSE OF SURVEY, IT IS NOTICED THAT THE ISSUE IS S QUARELY COVERED BY THE DECISIONS OF THE JURISDICTIONAL HIGH COURT IN THE CASES OF S. KHADER KHAN SONS AND M. PACHAMUTHU, CITED SUPRA. IN THE CIRCUMSTANCES, RES PECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT, REFERRED TO SUPRA, THE FINDING OF THE LEARNED CIT(APPEALS) ON THIS ISSUE STANDS CONFIRMED . ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 5. THE ORDER WAS PRONOUNCED IN THE COURT ON 6 TH AUGUST, 2010. SD/- SD/- ( PRADEEP PARIKH) (GEORGE MATHAN) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 6 TH AUGUST, 2010. H. COPY TO: (1) APPELLANT/RESPONDENT/CIT(A)/CIT/D.R./ GUARD FILE