The ACIT, Circle-9, Surat V. M/s. Suryanarayan Silk Mills Pvt.Ltd., Surat

ITA 1631/AHD/2011

• Counselvise Citation: 163120514 RSA 2011
• Duration Of Justice: 4 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: M K PATEL
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I RAJPAL YADAV , JUDICIAL MEMBER THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 9, SURAT (APPELLANT) VS M/S. SURYANARAYNA SILK MILLS, GANDHI COLONY, A.K. ROAD, SURAT PAN: AAQFS4159J (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR. D . R . ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 16 - 06 - 2 015 DATE OF PRONOUNCEMENT : 24 - 06 - 2 015 / ORDER P ER : RAJPAL YADAV , JUDICIAL M EMBER : - REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 28 TH FEBRUARY, 2011 PASSED FOR ASSESSMENT YEAR 2004 - 05. I T A NO . 1631 / A HD/20 11 A SSESSMENT YEAR 200 5 - 06 I.T.A NO. 1631 /AHD/20 11 A.Y. 20 05 - 06 PAGE NO A CIT V S. M/S. SURYANARAYNA SILK MILLS 2 2. THE GRIE VANCE OF THE REVENUE IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED IN DELETING THE PENALTY FOR RS. 4,86,660/ - IMPOSED U/S. 271(1)(C) OF THE INCOME TAX ACT BY THE ASSESSING OFFICER. 3. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH T H E RECO RD CAREFULLY. IT EMERGES OUT F R O M THE RECORD THAT A SSESSEE I S A PARTNERSHIP FIRM ENGAGED IN THE BUSINES S OF CLOTH DYING, PRINTING AND PROCESSING ON JOB WORK BASIS. THERE IS A FALL IN GP AND LD. ASSESSING OFFICER HAS REJECTED THE BOOK RESULT. THE LD. ASSESSING OFFICER FURTHER OBSERVED THAT CONSUMPTION OF COLOUR AN D CHEMICALS HAS BEEN INCREASED FROM 12.7% OF THE TURNOVER TO 21.5% OF THE TURNOVER. HE MADE AN ADHOC ADDITION OF R S. 10 LACS WHICH HAS BEEN REDUCED TO 5 LACS BY THE ITAT IN T H E QUANTUM APPEAL DECIDED ON 28 TH MAY, 2005. (ITA NO. 1051/AHD/2008) THE LD. ASS ESSING OFFICER FURTHER FOUND THAT THE PARTNERS HAVE A NEGATIVE CAPITAL BALANCE OF RS. 29,66,561/ - . THE FIRM HAS DEBITED BANK INTEREST AND BANK COMMISSION OF RS. 33,96, 6 04/ - IN THE PL ACCOUNT. ON A PROPORTIONATE BASIS @ 12%, HE CALCULATED THE INTEREST OUG HT TO HAVE BEEN CHARGED BY THE FIRM ON THE DEBIT BALANCE IN THE CAPITAL ACCOUNT OF THE PARTNERS. ACCORDINGLY, HE MADE A DISALLOWANCE OF INTEREST OF RS. 3,55,988/ - . 4. THE LD. ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDING U/S. 271(1)(C) OF THE INCOME TAX ACT AND ULTIMATELY IMPOSED A PENALTY OF RS. 4,86,660/ - . 5. ON APPEAL, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS DELETED THE PENALTY. I.T.A NO. 1631 /AHD/20 11 A.Y. 20 05 - 06 PAGE NO A CIT V S. M/S. SURYANARAYNA SILK MILLS 3 6. WITH THE ASSISTANCE OF LD. REPRESENTATIVES , WE HAVE GONE THROUGH THE RECORD CAREFULLY. PERUSAL OF THE RECORD WOULD SUGGEST THAT ADDITION WAS MADE ON AN ESTIMATE BASIS. THERE IS NO FINDING RECORDED BY THE ASSESSING OFFICER THAT ASSESSEE HAS MADE ANY BOGUS CLAIM OR ITS BILLS WERE FOUND TO BE FALSE. THE LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE QUALITY OF B OOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AS WELL AS NON - CONFIRMATION BY THE PARTIES FROM WHOM COLOUR AND CHEMICALS WERE PURCHASED. SIMILARLY , THE INTEREST HAS BEEN DISALLOWED ON NOTIONAL BASIS. IT IS NOT O N THE RECORD THAT ASSESSEE HAD AN AGREEMENT TO THE PARTNERS THAT INTEREST WILL BE PAID ON CAPITAL ACCOUNT OR IT WILL BE CHARGED ON NEGATIVE CAPITAL ACCOUNT. ON DUE CONSIDERATION OF THE FACTS COUPLED WITH THE FINDING OF LD. COMMISSIONER OF INCOME TAX (APPEALS), WE ARE OF THE VIEW THAT THERE IS NO DELI BERATE ATTEMPT AT THE END OF ASSESSE TO FURNISH INACCURATE PARTICULARS OR CONCEALED THE PARTICULARS OF INCOME. LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE PENALTY. WE DO NOT FIND ANY MERIT IN THIS APPEAL. IT IS DISMISSED. ORD ER PR ONOUNCED IN THE OPEN COURT ON 24 - 06 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) ( RAJPAL YADAV ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD : DATED 24 /06 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 1631 /AHD/20 11 A.Y. 20 05 - 06 PAGE NO A CIT V S. M/S. SURYANARAYNA SILK MILLS 4 BY ORDER/ , / ,