Shri Jayantilal Joitaram Patel, Ahmedabad V. The ACIT, Circle-6, Ahmedabad

ITA 1718/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9059 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 12-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NOS: 1718 & 1719/AHD/2013 (ASSESSMENT YEARS: 2005-06 & 2006-07) JAYANTILAL JOITARAM PATEL A/30, ANKUR SOCIETY, OPP. PRIYA CINEMA, N.H. 8, KRISHNANAGAR, AHMEDABAD-382346 V/S ASST. COMMISSIONER OF INCOME TAX, CIRCLE-6, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AFTPP5830R APPELLANT BY : SHRI M.S. CHHAJED, AR RESPONDENT BY : SHRI KEYUR PATEL, SR. D.R. ( )/ ORDER DATE OF HEARING : 08 -03-201 7 DATE OF PRONOUNCEMENT : 09 -03-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. ITA NOS. 1718 & 1719/AHD/2013 ARE APPEALS BY THE AS SESSEE PREFERRED AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-XI, A HMEDABAD DATED 15.05.2013 PERTAINING TO A.YS. 2005-06 & 2006-07 RE SPECTIVELY. ITA NOS. 171 8 & 1719/AHD/2013 . A.YS. 2005- 06 & 2006-07 2 2. THE COMMON GRIEVANCE IN BOTH THESE APPEALS RELATE T O THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER MADE U/S. 143(3) R.W.S. 147 OF THE ACT DATED 24.12.2010. THE ASSESSMENTS WERE COMPLETED BY MAKING AN ADDITION OF RS. 64,86,975/- IN A.Y. 2005-06 AND RS. 24,33,735/- IN A.Y. 2006-07. THE ADDITIONS IN BOTH THE ASSESSMENT YEARS WERE MADE BY TREATING THE PURCHASES OF THE ASSESSEE AS BOGUS. 4. THE QUANTUM ADDITIONS MADE BY THE A.O. IN THE RESPE CTIVE ASSESSMENT YEARS TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 26.10.2012 IN ITA NOS. 878 & 879/AHD/2012 HAS DIREC TED THE A.O. TO APPLY NET PROFIT RATE ON BOGUS PURCHASE @ 12.5% FOR BOTH THE YEARS. 5. TAKING A LEAF OUT OF THIS FINDING OF THE TRIBUNAL, THE A.O. PROCEEDED BY LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. 6. THE ASSESSEE COULD NOT SUCCEED BEFORE THE FIRST APP ELLATE AUTHORITY AND HENCE THE APPEALS BEFORE US. 7. WE FIND THAT ON IDENTICAL SET OF FACTS, THE HONBLE HIGH COURT OF GUJARAT IN TAX APPEAL NO. 800 OF 2008 IN THE CASE OF RAMESHCHA NDRA A. SHAH HAS HELD AS UNDER:- 6.1. SO FAR AS THE ISSUE INVOLVED IN APPEALS NO. 83 3 TO 836 OF 2005 IS CONCERNED, IN VIEW OF THE DECISIONS CITED HEREINABO VE BY LEARNED ITA NOS. 171 8 & 1719/AHD/2013 . A.YS. 2005- 06 & 2006-07 3 ADVOCATE FOR THE APPELLANT WE ARE OF THE OPINION TH AT THE PENALTY HAS BEEN WRONGLY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. IN THE CASE OF KRISHI TYRE RETREADING AND RUBBER INDUSTRIES (SU PRA), IT HAS BEEN HELD THAT THE ADDITION HAD BEEN SUSTAINED PURELY ON ESTIMATE BASIS AND NO POSITIVE FACT OR FINDING HAD BEEN FOUND SO A S TO EVEN MAKE THE ADDITION WHICH WAS PURE GUESS WORK, NO PENALTY UNDE R SECTION 271(1)(C) OF THE ACT COULD BE SAID TO BE LEVIABLE O N SUCH GUESS OR ESTIMATION. WE THEREFORE ANSWER THE ISSUE INVOLVED IN APPEALS NO. 833 TO 836 OF 2005 IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. 8. AS NO DISTINGUISHING DECISION IN FAVOUR OF THE REVE NUE HAS BEEN BROUGHT TO OUR NOTICE BY THE LD. D.R., RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), WE DECIDE THE IM PUGNED APPEALS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE A.O. I S ACCORDINGLY DIRECTED TO DELETE THE PENALTY IN BOTH THE YEAS UNDER CONSIDERA TION. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 09 - 03- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY AC COUNTANT MEMBER AHMEDABAD: DATED 09/03/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT.