Alekhan Offset Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(1), Surat

ITA 15/AHD/2012

• Counselvise Citation: 1520514 RSA 2012
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Difference of opinion

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !'# !'# !'# !'#, , , , $ $ $ $ %& %& %& %& , , , , &' ( & # &' ( & # &' ( & # &' ( & # BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.15/AHD/2012 [ASSTT.YEAR : 2006-2007] ALEKHAN OFFSET PVT. LTD. A/26-33 ROAD NO.14 M.G. ROAD, UDHNA UDYOG NAGAR, SURAT 394 210. PAN : AAECA 3426 D /VS. ITO, WARD-1(1) SURAT. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .% / 0 &/ ASSESSEE BY : NONE ( / 0 &/ REVENUE BY : SHRI RAHUL KUMAR, SR.DR 2 / %3'/ DATE OF HEARING : 1 ST MARCH, 2012 456 / %3'/ DATE OF PRONOUNCEMENT : 07-03-2012 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS)- I, SURAT DATED 30.09.2011 FOR THE ASSESSMENT YEAR 2 006-2007. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE, AND ACCORDINGLY THE APPEAL OF THE APPELLANT-ASSESSEE IS BEING DISPOSED OF EX- PARTE QUA THE ASSESSEE ON MERIT AFTER HEARING THE LEARNED DR . 3. THE GROUND NO.1 AND 2 OF THE ASSESSEES APPEAL R EADS AS UNDER: ITA NO.15/AHD/2012 -2- 1. THE LD.CIT(A) ERRED IN CONFIRMING PENALTY U/S.2 71(1)(C) OF THE ACT WITHOUT GIVING REASONS. 2. THE APPELLANT SUBMITS THAT HAVING FURNISHED ALL THE DETAILS AND EVIDENCE OF CONSUMPTION AND WASTAGE OF THE STOC K, CONFIRMATION FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT OUGHT NOT TO HAVE BEEN MADE. 4. THE LEARNED DR SUBMITTED THAT THE PENALTY OF RS. 1,78,733/- WAS RIGHTLY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT BY THE AO. HE SUBMITTED THAT THE FIGURES OF CONSUMPTION DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME WERE NOT SUPPORTED BY ANY BOOKS OF ACCOUNTS OR RECORDS AND THE SAME WERE IMAGINARY. HE SUBMITTED THAT THI S ATTEMPT OF THE ASSESSEE AMOUNTS TO MISLEADING THE DEPARTMENT BY SH OWING BOGUS FIGURES, AND THEREFORE, WAS A CLEAR ATTEMPT ON THE PART OF T HE ASSESSEE TO INFLATE ITS CONSUMPTION FIGURE AND SUPPRESS ITS CLOSING STOCK F IGURES IN ORDER TO REDUCE ITS PROFITS. HE SUBMITTED THAT THE FIGURES DEBITED IN THE ACCOUNTS FILED BY THE ASSESSEE WERE UNSUPPORTED AND NOT BASED ON ANY RECO RDS AND THE ACTION OF THE ASSESSEE WAS MALA FIDE . HE REFERRED TO THE RELEVANT PORTIONS OF THE ASSESSMENT ORDER AND THE ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT BY THE AO AND THAT OF THE CIT(A). HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT IT IS A CASE OF REJECTION OF THE BOOKS OF ACCOUNTS AND MAKING ADDITION ON ACC OUNT OF SUPPRESSION OF CLOSING STOCK AND INFLATION IN THE FIGURE OF CONSUM PTION. WE FIND THAT THE ASSESSEE FILED AN EXPLANATION WHICH, ALTHOUGH, NOT BELIEVED BY THE DEPARTMENT, BUT COULD NOT TERM AS NOT BONA FIDE . MERELY BECAUSE THERE WAS A DIFFERENCE OF OPINION BETWEEN THE DEPARTMENT AND THE ASSESSEE REGARDING THE FIGURE OF CONSUMPTION DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME, IT CANNOT BE SAID THAT THE CONDUCT OF THE ASSESSEE WAS MALA FIDE . NO OTHER MATERIAL HAS BEEN PLACED ON RECORD BY THE DEPARTMEN T TO PROVE THE MALA FIDE ITA NO.15/AHD/2012 -3- ON THE PART OF THE ASSESSEE. THE ASSESSEE COULD N OT PRODUCE THE DAY-TO-DAY STOCK REGISTER AND QUANTITATIVE TALLY. THE FIGURES OF CONSUMPTION ARE NOT SUPPORTED BY EVIDENCE. THESE FACTS OF THE CASE MAY JUSTIFY REJECTION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ADDITION ON A CCOUNT OF INFLATION IN CONSUMPTION AND SUPPRESSION OF STOCK, BUT ARE NOT S UFFICIENT TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE FIND THAT T HE AO HIMSELF HAS ALLOWED 15% OF EXCESS CONSUMPTION AND WASTAGE CLAIM ED BY THE ASSESSEE AND HAS MADE ADDITION OF ONLY BALANCE AMOUNT. THUS , IT IS CLEAR THAT THE ENTIRE CLAIM OF THE ASSESSEE HAS NOT BEEN HELD AS B OGUS AND PART OF THE CLAIM OF THE ASSESSEE HAS BEEN REJECTED ON ESTIMATE BASIS . WE ARE UNABLE TO SUSTAIN THE CONCLUSION OF THE REVENUE AUTHORITIES T HAT IT IS ESTABLISHED BEYOND DOUBT THAT THE ASSESSEE HAS DELIBERATELY, KN OWINGLY AND CONSCIOUSLY CONCEALED THE INCOME TO THE EXTENT OF RS.5,31,113/- BY WAY OF SUPPRESSION OF CLOSING STOCK AND ON ACCOUNT OF GP ON UNACCOUNTE D SALES. IN THIS VIEW OF THE MATTER, WE CANCEL THE PENALTY LEVIED UNDER S ECTION 271(1)(C) OF THE ACT AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& / TEJ RAM MEENA) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !'# !'# !'# !'# /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD