Shri Chhogaram Hardanji Patel, Baroda V. The Income tax Officer,Ward-5(3), Baroda

ITA 1632/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0322 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Assessee Lawyers: SURENDRA V MODIANI

Judgement Text

I.T.A. NO . 1632 /AHD/201 3 A SSESSMENT Y EAR: 200 7 - 08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 1632 /A HD/ 20 1 3 ASSESSMENT Y EAR : 200 7 - 08 CHHOGARAM HARDANJI PATEL .... . ...... . ... . APPELLANT 6, SUMANGAL APARTMENT , B/H. GANGOTRI APARTMEN T , R .V. DESAI ROAD, BARODA 390 001. [ PAN: A EPPP 4009 R ] VS. INCOME TAX OFFICER, WARD 5(3), BARODA. ... ............ . RESPONDENT APPEARANCES BY: SURENDRA V. MODIANI , FOR THE APPELLANT ANTONY PARIATH, FOR THE RESPO NDENT D ATE OF CONCLUDING THE HEARING : 05 .0 7 .2016 DATE OF PRONOUNCING THE ORDER : 04 .10.2016 O R D E R 1 . TH IS APPEAL CHALLENGES LEARNED CIT(A) S ORDER DATED 2 5 TH MARCH, 2013 CONFIRMING PENALTY OF RS.1,76,500/ - IMPOSED ON THE ASSESS EE, UNDER SECTION 271 (1)(C) O F THE INCOME TAX ACT 1961 , FOR THE ASSESSMENT YEAR 200 7 - 08 . 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE IMPUGNED PENALTY. 3. TO ADJUDICATE ON THIS A PPEAL, ONLY A FEW FACTS NEED TO BE TAKEN N OTE OF. IT IS A CASE IN WHICH A PART OF PURCHASES, ON ADHOC BASIS, HAVE BEEN DISALLOWED. WHEN MATTER I.T.A. NO . 1632 /AHD/201 3 A SSESSMENT Y EAR: 200 7 - 08 PAGE 2 OF 3 TRAVELLED IN APPEAL BEFORE THIS TRIBUNAL, A DIVISION BENCH CONFIRMED THE DISALLOWANCE @ 20% BY OBSERVING AS FOLLOWS : - 9. WE FIND THAT LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) HAS HELD THAT SINCE THE CORRESPONDING SALE HAS BEEN ACCEPTED BY THE DEPARTMENT THERE COULD NOT HAVE BEEN SALE WITHOUT CORRESPONDING PURCHASES. ACCORDING TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE MIGHT H AVE PURCHASED GOODS IN CASH FROM THE OPEN MARKET AT A LESSER PRICE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THEREFORE, RESTRICTED THE DIS ALLOWANCE TO 30% OF THE AMOUNT O F PURCHASE OF RS.26,54,142 / - . WE FIND THAT NO MATERIAL WAS BROUGHT BEFORE US TO SHOW THAT THE PRICE OF PURCHASE CLAIMED BY THE ASSESSEE WAS MORE BY 30% THAN THE MARKET VALUE OF SUCH GOODS. KEEPING IN VIEW THE COMPLETE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED OPINION , DISALLOWANCE OF 20% OF PURCHASE AMOUNT SHALL MEET THE ENDS OF JUSTICE . WE THEREFORE, MODIFY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO THE ABOVE EXTENT AND DIRECT THE LEARNED ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 20% OF THE PURCHASE AMOUNT OF RS.26,54,142/ - . THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 4. IT IS IN THIS RESPECT THAT THE IMPUGNED PENALTY IS LEVIED BY THE ASSESSING OFFICER, AND CONFIRMED BY THE LEARNED CIT(A). THE ASSESSEE IS NOT SATISFIED AND IS IN APPEAL BEFORE ME. 5. HAVING HEARD THE RIVAL CONTENTIONS, AND HAVING PERUSED THE MATERIAL ON RECORD, I AM OF THE CONSIDERED VIEW THAT IT IS NOT A FIT CASE FOR CONFIRMING THE PENALTY. AS I SAY SO, I AM IN RESPECTFUL AGREEMENT WITH THE VIEW OF A DIVISION BENCH IN THE CASE OF LALIT THAKKAR HU F V S. ITO (IT N O.608/AHD/2006; ORDER DATE 16.05 .2006), AS FOLLOWS : - 6. I HAVE HE ARD THE RIVAL CONTENTIONS OF BOTH THE REPRESENTATIVES AND RECORDS PERUSED. A FTER CONSIDERING THE FA CTS OF THE CASE, I FIND THAT IT IS NOT A CASE WHERE IN THE ASSESSEE HAS CONCEA LED ANY INCOME OR HAS FURNISHED ANY INACCURATE PARTICULARS OF INCOME . IT IS A CASE OF ESTIMATE OF PROFIT ON PURCHASES, WHICH HAS NOT BEEN SUBSTANTIA TED BY THE ASSESSEE BY ONE OR OTHER REASONS. FOR THIS PURPOSE, THE ADDITION TO THE TOTAL CAN BE SUSTAINED B UT MERELY ON THAT BASIS PENAL T Y U/S.271 (1)(C) IS NOT LEVIABLE. IT IS ALSO PERTINENT TO NOTE THAT IN SUCH CASE OF ES TIMATION OF THE AMOUNT FOR THE PURPOSE OF ADDITION DEPENDS ON THE FACTS OF EACH CASE. UNDER THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW T HAT IN CASE WHERE ADDITION IS MADE MERELY ON ESTIMATION BASIS, PENALTY U/S. 271(1)(C) IS NO T LEVIABLE. ACCORDINGLY, THE PENALTY OF RS.28,830/ - LEVIED U/S. 271(1)(C) IS CANCELLED. I.T.A. NO . 1632 /AHD/201 3 A SSESSMENT Y EAR: 200 7 - 08 PAGE 3 OF 3 6. IN THE PRESENT CASE ALSO, THE DISALLOWANCE IS ON ESTIMATE BASIS ALON E, AND THERE IS NOTHING CONCRETE AGAINST THE ASSESSEE. IN THIS VIEW OF THE MATTER, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, I DELETE THE IMPUGNED PENALTY OF RS.1,76,500/ - . THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7 . IN THE RESULT, THE APPEAL IS AL LOWED . PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF OCTOBER , 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 4 TH DAY OF OCTOBER , 2016. PBN/* COPIES TO: ( 1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD