Smt. Chhayadevi V. Kothari, Jalna V. Income-tax Officer, Jalna

ITA 1757/PUN/2013

• Counselvise Citation: 175724514 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-12-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 18-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE MS. SUSHMA CHOWLA , JUDICIAL MEMBER AND SHRI R.K. PANDA , ACCOUNTANT MEMBER ITA NO. 1757 /PN/2013 ( ASSESSMENT YEAR : 200 4 - 05 ) ITA NO. 1758 /PN/2013 ( ASSESSMENT YEAR : 20 05 - 06 ) ITA NO. 1759 /PN/2013 ( ASSESSMENT YEAR : 20 06 - 07 ) SMT. CHHAYADEVI V. KOTHARI KOTHARI UDYOG NEAR DHAVALESHWAR MANDIR BHOKARDAN ROAD, JALNA .. APPELLANT V/S INCOME TAX OFFICER WARD - 1(3), JALNA .... RESPONDENT PERMANENT ACCOUNT NUMBER AKYPK1481F ASSESSEE BY : NONE REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 16 .12 .2014 DATE OF PRONOUNCEMENT : .1 2 .2014 O R D E R PER R.K PANDA , A .M. THE ABOVE THREE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 29 TH JULY 2013, OF THE LD. CIT(A), AURANGABAD, RELATING TO A.Y. 2004 - 05 TO 2006 - 07 RESPECTIVELY. SINCE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DI SPOSED OF BY THIS COMMON ORDER FO R THE SAKE OF CONVENIENCE. 2 . DESPITE SERVICE OF NOTICE THROUGH RPAD (ACKNOWLEDGMENT PLACED ON RECORD), NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE NAME OF THE ASSESSEE WAS CALLED. N O PETITION SEEKING ADJOURNMENT OF THE CASE WAS ALSO 2 SMT. CHHAYADEVI V. KOTHARI FILED . T HEREFORE, T HESE APPEALS ARE BEING DISPOSED OF ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. D.R. 3 . LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) OF RS.59,923 FOR THE A.Y. 2004 - 05, RS.17,36,153 FOR TH E A.Y. 2005 - 06 AND RS.3,85,841 FOR THE A.Y. 2006 - 07 IS THE ONLY ISSUE IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUFACTURING OF MITHA MASALA AS PROPRIETOR O F KOTHARI UDYOG. A SURVEY ACTION UNDER SECTION 133 A OF THE ACT WAS CONDUCTED AGAINST THE ASSESSEE ON 22 ND OCTOBER 2005. DURING THE COURSE OF SUCH SURVEY, CERTAIN DIARIES / REGISTERS WERE IMPOUNDED WHICH SHOWS THAT CERTAIN SALES, PURCHASES AND OTHER EXPEN SES ARE NOTED IN SUCH DIARIES WHICH ARE NOT DISCLOSED TO THE DEPARTMENT. AS PER AUDIT REPORT OF THE SPECIAL AUDITOR, THERE WAS HUGE VARIATION IN THE SALES DECLARED TO THE DEPARTMENT AND SALES FOUND AS PER THE SEIZED DIARIES. SUCH UNACCOUNTED TURNOVER FOR T HE ASSESSMENT YEAR 2004 - 05 WAS RS.1,31,28,497, FOR THE A.Y. 2005 - 06 IT WAS RS.2,77,06,738 AND FOR THE A.Y. 2006 - 07 IT WAS RS.1,20,93,981. ON BEING ASKED BY THE A.O., IT WAS SUBMITTED THAT THE HUSBAND OF THE ASSESSEE SHRI VIJAY KUMAR KOTHARI, WAS RUNNING TH E BUSINESS IN THE NAME AND STYLE OF KOTHARI FOODS. BASED ON THE IMPOUNDED DIARIES, THE HUSBAND OF THE ASSESSEE FILED HI S RETURN OF INCOME DECLARING INCOME OF RS.1,81,553 FOR THE A.Y. 2004 - 05, RS.51,97,712 FOR THE A.Y. 2005 - 06 AND RS.11,46,286 FOR THE A.Y. 2006 - 07. THE A.O., APPLYING THE GROSS PROFIT RATE OF 19.84% FOR A.Y. 2004 - 05, 29.67% FOR A.Y. 2005 - 06 AND 20.60% FOR A.Y. 2006 - 07, MADE ADDITION OF RS.26,04,693, RS.82,20,589 AND RS.24,91,360 TO THE TOTAL INCOME OF THE ASSESSEE FOR THE A.Y. 2004 - 05, 2005 - 0 6 AND 2006 - 07 RESPECTIVELY. IN APPEAL, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO TAKE THE NET PROFIT DECLARED BY THE HUSBAND OF THE ASSESSEE AT RS.1,18,553 FOR THE A.Y. 2004 - 05, RS.51,97,912 FOR THE A.Y. 2005 - 06 AND 3 SMT. CHHAYADEVI V. KOTHARI RS.11,46,286 FOR THE A.Y. 2006 - 07 IN THE RETURN OF INCOME FILED BY HIM AS PROFIT ON ACCOUNT OF SUCH SUPPRESSED TURNOVER. INSOFAR AS THE OTHER ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INITIAL INVESTMENT AND THE ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE ARE CONCERNED , HE D ELETED SUCH ADDITIONS. THE ASSESSING OFFICER THEREAFTER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT . R EJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND OBSERVING THAT THERE WAS PERSISTENT NON - COMPLIANCE BY THE ASSESSEE TO THE STATUTORY NOTICE S ISSUED DURING THE ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER LEVIED PENALTY OF RS.59,923 FOR THE A.Y. 2004 - 05, RS.17,36,153 FOR THE A.Y. 2005 - 06 AND RS.3,85,841 FOR THE A.Y. 2006 - 07 UNDER SECTION 271(1)(C) OF THE ACT. 5 . IN APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6 . WE HAVE HEARD THE LD. D.R. AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT DURING THE SURVEY ACTION U/S 133A, INCRIMINATING MATERIALS REVEALING SUPPRESSED SALE AND EXPENDITURE WERE FOUND. WE FIND THAT IN THE QUANTUM APPEAL FLED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A ), THE TRIBUNAL, VIDE ORDER DATED 30 TH JUNE 2014, VIDE ITA NO.793 TO 795/PN/2010 AND 796 TO 798/PN/2010, FOR A.Y. 2004 - 05 TO 2006 - 07 HAS DIRECTED THE ASSESSING OFFICER TO ADOPT NET PROFIT OF 5% FOR THE A.Y. 2004 - 05, 15% FOR THE A.Y. 2005 - 06 AND 7.5% FOR TH E A.Y. 2006 - 07 OF THE SUPPRESSED TURNOVER. THUS, THE RELIEF GRANTED BY THE LD. CIT(A) WAS SLIGHTLY ENHANCED. FURTHER, DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL IN THE QUANTUM PROCEEDINGS, THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO ACCEPTED THE TURNOV ER OF THE HUSBAND AS SUPPRESSED TURNOVER OF THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS CONCEALED HER PARTICULARS OF 4 SMT. CHHAYADEVI V. KOTHARI INCOME AND FURNISHED INACCURATE PARTICULARS OF HER INCOME. T HEREFORE, THE PROVISIONS OF SECTION 271(1)(C) ARE CLEARLY ATTRACTED. THE LD. CIT(A), WHILE CONFIRMING THE ORDER OF THE ASSESSING OFFICER, HAS GIVEN COGENT REASONS WHILE SUSTAINING SUCH PENALTY. WE , THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) CONFIRMING THE PE NALTY LEVIED BY THE ASSESSING OFFICER WHICH, IN OUR OPINION, IS A REASONED ONE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE . ACCORDINGLY, THE ORDER OF THE LD. CIT(A) UPHOLDING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT IS UPHELD. G ROUND S OF APPEAL RAISED BY THE ASSESSEE FOR ALL THE THREE YEARS ARE ACCORDINGLY DISMISSED. 7 . IN THE RESULT, ASSESSEES APPEALS FOR THE A.Y. 2004 - 05, 2005 - 06 AND 2006 - 07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER 2014. SD/ - ( SUSHMA CHOWLA ) JUDICIAL MEMBER SD/ - ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE, DATED: 18 TH DECEMBER 2014 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, PUNE CITY CONCERNED; ( 5 ) THE DR, ITAT, PUNE; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (ASSTT. REGISTRAR) ITAT, PUNE