The ACIT, Circle-2, Bhavnagar V. M/s. G.N. Ship Breakers, Bhavnagar

ITA 177/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89232 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-04-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Loose papers; Document seized; Documents seized
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NOS. 176 & 177/AHD/2011 (ASSESSMENT YEAR:2000-01) ACIT, CIRCLE-2, BHAVNAGAR AP PELLANT VS. M/S. G. N. SHIP BREAKERS, 206, MADHAV DARSHAN, WAGHAWADI ROAD, BHAVNAGAR RESPONDENT PAN: AACFG7195A / BY REVENUE : SHRI ROOPCHAND, SR.D.R. / BY ASSESSEE : SHRI SANJAY R. SHAH, A.R. /DATE OF HEARING :09.04.2015 !' /DATE OF PRONOUNCEMENT : 22.04.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: BOTH THESE APPEALS PERTAIN TO SAME ASSESSEE, ONE ON QUANTUM AND ONE ON PENALTY FILED BY REVENUE ARE ARI SING OUT FORM THE ORDERS OF CIT(A)-XX, AHMEDABAD, DATED 28.1 0.2010 I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 2 FOR THE ASSESSMENT YEAR 2000-01. SO, THEY ARE BEIN G DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONV ENIENCE. 2. IN ITA NO. 177/AHD/2011 FOR A.Y. 2000-01, REVENU E HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AN D IN FACTS IN DELETING THE ADDITIONS TOTALING RS.13,27,7 53/- WHICH WERE MADE ON THE BASIS OF SCRUTINY OF T HE SEIZED MATERIALS, AND AFTER OBTAINING AN EXPLANATION OF THE ASSESSEE. 1.1 THE LD. CIT(A)-XX, AHMEDABAD HAS ERRED IN FAILI NG TO APPRECIATE THE FACT THAT THE MATERIALS ON THE BASIS OF WHICH SUCH ADDITIONS WERE MADE WERE NOT DUMB DOCUMENTS. SINCE THEY WERE FOUND AND SEIZED FROM TH E POSSESSION OF THE ASSESSEE WHO DID NOT DENY HIS OWNERSHIP OF SUCH MATERIALS, A PRESUMPTION WAS AVAILABLE TO BE DRAWN U/S.L32(4A) OF THE I.T. ACT T HAT THE NOTINGS ON SUCH DOCUMENTS/MATERIALS PERTAINED T O THE ASSESSEE'S BUSINESS ACTIVITIES. 1.2 THE LD. CIT (A) HAS FURTHER ERRED IN FAILING TO TAKE INTO CONSIDERATION THE FACT THAT THE ASSESSEE HAD FAILED 'TO DISCHARGE ITS ONUS OF SATISFACTORILY EXPLAINING THE NOTINGS ON SUCH DOCUMENTS/MATERIALS. THE ASSESSEE TAILED TO FURNISH ANY DOCUMENTARY EVIDENCE IN SUPPO RT OF THE CLAIMS MADE BEFORE THE ASSESSING OFFICER, A FACT WHICH HAS BEEN CLEARLY RECORDED IN THE ASSESSMENT ORDER, EXCERPTS OF WHICH HAVE BEEN REPRODUCED BY TH E CIT(A) IN THE BODY OF THE APPELLATE ORDER. 2.1 THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS.4,58,000/- REPRESENTING UNACCOUNTED AND UNEXPLAINED EXPENSES AS EVIDENCED BY THE DOCUMENTS SEIZED AS PER ANNEXURE A.3. THE ASSESSING OFFICER HAD EXAMINED THE NOTINGS ON PAGE 54 OF AR,NEXURE-3 AND HAD CONSIDERED THE EXPLANATION O F I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 3 THE ASSESSEE, IN CONSEQUENCE OF WHICH HE HAD ACCEPT ED THE EXPLANATION REGARDING EXPENSES TOTALING RS.1,75,000/- OUT OF THE TOTAL SUM OF RS.7,00,500/- . THERE WAS THUS COMPLETE APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. 2.2 THE LD. CIT(A) HAS ERRED IN RELYING TOTALLY ON THE ORDER OF THE CIT(A) XIX, IN THE CASE OF SHRI BALKISHAN AGARWAL WITHOUT RECORDING HIS REASONS FOR DOING SO AND WITHOUT SHOWING HOW THE FACTS OF THE CASE OF SHRI BALKISHAN AGARWAL WERE SUFFICIENT TO DELETE THE ADDITION MADE IN THE HANDS OF THE ASSESSEE. 3. FIRST WE TAKE ITA NO. 177/AHD/2011. ASSESSING O FFICER MADE ADDITION OF RS.14,56,363/- ON ACCOUNT OF UNACC OUNTED SALES AND EXPENSES. ASSESSING OFFICER HAS MADE ADD ITION BY OBSERVING AS UNDER: 'ASSESSEE'S OFFICE PREMISES AT 206, MADHAV DARSHAN WAS COVERED UNDER SECTION 133A ON 29-06-99. INCRIMINATI NG DOCUMENTS RELATED TO GATE PASSES OF UNACCOUNTED SAL ES AND UNACCOUNTED EXPENSES INCURRED BY THE ASSESSEE DURIN G LAST FEW WEEKS OF SUCH ACTION WERE IMPOUNDED VIDE ANNEXU RE X- 16. ASSESSEE DECLINED TO REPLY THE SHOW CAUSE VIDE LETTER DATED: 19-5-2001 ON THE GROUND THAT SURVEY WAS NOT CARRIED OUT ON THE DAY OF SEARCH HENCE THIS COULD NOT BE TH E PART OF BLOCK PROCEEDING. DURING REOPENED ASSESSMENT PROCEEDING ALSO THE ASSE SSEE WAS ASKED TO EXPLAIN AS TO THE SALES AND EXPENSES A S RECORDED IN ANNEXURE X 16 SHOULD NOT BE ADDED AS UNACCOUNTED SALES AND EXPENSES- ASSESSEE HAS SUBMIT TED HIS REPLY VIDE LETTER DATED: 16-3-2006. THE RELEVAN T PORTION OF THIS REPLY IS REPRODUCED AS UNDER: PAGE NO. DESCRIPTION IN BRIEF. AMOUNT INVOLVED RS. OUR EXPLANATION 1 IT CONTAINS 2 PAGES OF SPIRAL DIARY EVIDENCING 1, 17,495/- (1)82387/- IS A PHONE NUMBER OF MR. PATWARI I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 4 UNACCOUNTED SALES TO VISHAL JAIN OF RS. 82387/- THROUGH PALWARI AND FURTHER SALES OF RS.35,108/- THROUGH SUKHDEVSINGH. WHO LIVES IN MAMSA VILLAGE NEAR SOSIYA. IT'S A MERE NOTING OF TELEPHONE NUMBER ON DIARY. (2)35108 IS ALSO A TELEPHON E NUMBER S UKHDEVSINGH WHO LIVES IN ALANG / SOSIYA. THESE TELEPHONE NUMBERS ARE WRITTEN BY MR. PANEY WHO IS MANAGER AT THE SHIP BREAKING PLOT. 2 IT CONTAINS I WRITTEN PAGE OF SPIRAL DIARY EVIDENCING EXPENSES OF RS. 3650/- +RS. 4900/- TOTALING OF RS. 8580/- 8580/- IT IS NOTING OF THE FREEON GAS CYLINDER WHICH WAS PROPOSED TOBE SOLD AS FOLLOWS: 15.800X231=3650 AND 11X18= 880/- THUS TOTALING 4930/- THE TRANSACTION DID NOT TOOK PLACE AFTER NOTING BUT THIS IS NOT THE EXPENSE. 5 IT CON TAINS 2 WRITTEN PAGE OF SPIRAL DIARY EVIDENCING EXPENSES PAID TO SOME MISTRY OF RS. 10510/- + UNRECORDED SALES MADE TO YUNSUBHAI OF RS. 45,000/- 55,510/- (L)IT IS A NOTING OF RATE GIVEN T YUNUSBHAI FOR SHAFT @12.51 AND RS. 13.51 AND IF THE DEA L IS FINALIZED, YUNUS BHAI WILL ADVANCE RS. 40,000/-. AND ANOTHER NOTING IS FAR RS. 5000/- FOR ASHISH PAREKH FOR CYLINDERS + GAS. (2) ANOTHER NOTING REPAIRING CHARGES TO BE PAID FOR RS. 11,510/- IS BOOM OF CRANE. 7 TO 9 ALL THESE PAG ES CONTAINS DEAILSOF WAGES PAID TO DIFFERENT PERSON TOTALED IN FOLLOWING MANNER. PAGE NO. 7 R.59625/- I NCLUDING BROUGHT FORWARD 118542/- THIS IS THE STATEMENT ABOUT PAYMENT AND IS DULY RECORDED IN THE BOOKS OF ACCOUNTS FOR THE MONTHS OF MAY99 AND JUNE 99. I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 5 RS.25,125/- PAGE NO. 8 RS.5900/- IN ADDITION TO RS.25,150/- CARRIED FORWARD. PAGE NO.9 RS.34,377/- +6 OTHER ENTRIES TOTALING RS.54,017/- 10 IN EVIDENCES COMPLETE ACCOUNT OF ABDULLABHAI FROM 14TH MAY 99 TO 7.6.99 EVIDENCING ADVAN CE OF RS. 340000/- AND UNRECORDED SALES OF RS. 386042/- IS CONSIDERED TOTAL UNACCOUNTED SALES. 386042/- TH IS IS NOT THE UNACCOUNTED SALES. TH E ACCOUNT STATEMENT OF M/S VAISHALI TRADERS IS ENCLOSED. THE GOODS ARE SUPPLIED TH ROUGH ABDULLABHAI. THE DISPATCHES ARE MADE ACCORDING TO THE SHEET AS PER PAGE NO.10 A ND INVOICES ARE ISSUED TO THE PARTY AS PER THE ACCOUNT STATEMENT E NCLOSED. GOODS WORTH RS.251940/- IS ISSUED TO M/S VAISHALL TRADERS. 16 TO 24 THESE PAGES EVIDENCES DAY TO DAY CASH INCOMING AND OUTGOING FROM 18.6.99 TO 28.6.99. AFTER IGNORING C ARRIED FORWARD AMOUNT THE TOTAL UNRECORDED SALES IS RS.467094/- FROM WHICH UNRECORDED EXPENSES CAPITAL OUTGOING ARE ALSO MADE 467094/- A SEPARATE SHEET IS E NCLOSED FOR THE EXPLANATION OF THIS ADDITION. 33 THIS PAGE EVIDENCING UNRECORDED SALE OF RS. 185000/- TO YAHIYABHAI AND FURTHER UNACCOUNTED SALE OF RS. 45000/- TO RAZAKBHAI RS. 230000/- THIS IS MERELY A NOTING OF THE AMOUNT OF SCRAP THAT MAY FETCH THE SALE VALVE. NO TRANSACTION TOOK PLACE. 36 IT EVIDENCES UNRECORDED SALE OF DG SET AND OTHER ITEMS WORTH RS. 10100+ 1000+ 53000/-. 73100/- THIS IS ALSO A MERE NOTI NG OF THE VARIOUS AMOUNTS OF THE MANAGER AND NO TRANSACTION TOOK PLACE. I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 6 TOTAL 1456363/- I HAVE GONE THROUGH THE IMPOUNDED MATERIAL, CASE RE CORD OF BLOCK PROCEEDING AND REPLY SUBMITTED BY THE ASSESSE E. ASSESSEE HAS TRIED TO GIVE A REASON TO EACH AND EVE RY ENTRY ENTERED IN THIS ANNEXURE. BUT, HE HAS NOT SUBMITTED EVEN A SINGLE DOCUMENT IN SUPPORT OF HIS CLAIM. EVEN THE R EPLIES LIKE' THIS IS THE STATEMENT, LABOR REPAYMENT AND IS DULY RECORDED IN THE BOOKS OF ACCOUNTS FOR THE MONTHS OF MAY 1999 AND JUNE 1999' FOR PAGE NO. 7 TO 9; FOR PAGE N O. 10, ASSESSEE HAS OFFERED THE COMMENT THAT 'THIS IS NOT THE UNACCOUNTED SALE,. THE ACCOUNT OF STATEMENT OF M/S VAISHALI TRADES IS ENCLOSED ' ARE NOT SUPPORTED BY A NY DOCUMENT. ASSESSEE HAS ALSO GIVEN EXCUSES LIKE TRA NSITION DID NOT TAKE PLACE AFTER NOTING AND 'THIS IS MERELY A NOTING OF SCRAP AMOUNT BUT NOT TRANSACTION TOOK PLACE. THESE KINDS OF EXPLANATION DO NOT EXPLAIN THE CORE ISSUE OF SHO W CAUSE NOTICE. IT IS A FACT THAT THIS ANNEXURE WAS IMPOUND ED FROM THE ASSESSEE'S PREMISES AND TO EXPLAIN THE ENTRIES WITH DOCUMENTARY EVIDENCE IS THE RESPONSIBILITY OF THE A SSESSEE. IN ABSENCE OF ANY SUCH EXPLANATION I AM LEFT WITH N O OTHER OPTION THEN TO ADD AMOUNT OF RS.14,56,363/- AS UNACCOUNTED SALES AND EXPENSES INCURRED BY THE ASSE SSEE DURING THE YEAR. PENALTY PROCEEDINGS ARE INITIATED UNDER SECTION 271(1)(C) OF THE ACT. 3.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE. CIT(A) HAVING CONSIDERED THE SAME HAS GRANTED RELIE F TO THE ASSESSEE TO THE TUNE OF RS.13,27,753/-, WHICH HAS B EEN OPPOSED ON BEHALF OF REVENUE INTER ALIA SUBMITTED T HAT CIT(A) WAS NOT JUSTIFYING IN DELETING THE ADDITION OF RS.1 3,27,753/- WHICH WERE MADE ON THE BASIS OF SCRUTINY OF SEIZED MATERIAL AND AFTER OBTAINING AN EXPLANATION OF ASSESSEE. AC CORDINGLY, ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER ON THE I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 7 ISSUE BE RESTORED. ON OTHER HAND, LEARNED AUTHORIZ ED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 3.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT ASSESSING OFFICER MADE TOTAL A DDITION OF RS.14,56,363/- ON ACCOUNT OF UNACCOUNTED SALES AND EXPENSES AND CIT(A) HAS GRANTED RELIEF AS FAR AS ADDITION OF RS.13,27,753/- IS CONCERNED AS DISCUSSED IN PARA 6 OF ORDER OF CIT(A). 3.2.1 FIRST COMPONENT OF ADDITION IN QUESTION IS WI TH REGARDS TO ADDITION OF RS.1,17,495/- MADE BY ASSESS ING OFFICER. IN APPEAL, CIT(A) HAVING GOING THROUGH THE DOCUMENT S IN THIS REGARD OBSERVED THAT 82387/- IS PHONE NUMBER OF MR. PATWARI WHO LIVES IN MAMSA VILLAGE NEAR SOSIYA AND 35108 IS PHONE NUMBER OF SUKHDEVSINGH WHO LIVES IN ALANG/SOSIYA VI LLAGE. ASSESSING OFFICER HAS NOT BROUGHT OUT ANY MATERIAL TO SUGGEST THAT ABOVE FIGURES REPRESENT SALES. HE HAS NOT VER IFIED THE CONTENTIONS RAISED ON BEHALF OF ASSESSEE. HE MADE ADDITION WITHOUT VERIFYING THE CONTENTION MADE BY ASSESSEE I N THIS REGARD THAT SAID FIGURES REPRESENT PHONE NO. OF ABO VE SAID PERSONS. IN VIEW OF ABOVE, ASSESSING OFFICER WAS N OT JUSTIFIED TO REACH THE CONCLUSION THAT AMOUNT REPRESENT SALE PROCEED MADE TO VISHAL JAIN AND SAME HAS RIGHTLY BEEN DELET ED BY CIT(A). WE UPHOLD THE SAME. 3.2.2 NEXT COMPONENT OF ADDITION BEFORE US IS REGAR DING ADDITION OF RS.1,18,542/-. IN THIS REGARD, ASSESSI NG OFFICER AS I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 8 WELL AS ASSESSEE AGREED THAT IT IS STATEMENT OF LAB OUR PAYMENT. THE CONTENTION OF ASSESSEE HAS BEEN THAT PAYMENT HA S BEEN REFLECTED IN ACCOUNTS, ASSESSING OFFICER HAS NOT MA DE ANY ENQUIRIES IN THIS REGARD. MOREOVER, ASSESSING OFFI CER HAS NOT GIVEN ANY FINDING TO THE FACT THAT ENTRIES WERE NOT FOUND IN BOOKS OF ACCOUNTS. IN VIEW OF ABOVE, ADDITION MADE BY WAS RIGHTLY DELETED BY CIT(A), WHICH NEEDS NO INTERFERE NCE FROM OUR SIDE. WE UPHOLD THE SAME. 3.2.3 NEXT COMPONENT OF ISSUE IS WITH REGARDS TO AD DITION OF RS.3,86,042/- MADE BY ASSESSING OFFICER. EVEN I N THIS REGARD, ASSESSING OFFICER AND ASSESSEE AGREED WITH THESE WERE SALES MADE. ASSESSING OFFICER HELD THAT IT IS THE ACCOUNT OF ABDULBHAI WHEREAS ASSESSEE HAS STATED THAT IT REPRE SENTS SALES MADE THROUGH ABDULBHAI TO M/S. VAISHALI TRADERS AND THE SAME WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS. A SSESSING OFFICER HAS NOT MADE ANY FURTHER ENQUIRIES IN THIS REGARD. HOWEVER, HE HAS NOT GIVEN ANY FINDING TO THIS EFFEC T THAT ENTRIES WERE NOT FOUND IN BOOKS OF ACCOUNTS. IN ABOVE SITU ATION, HE WAS NOT JUSTIFIED TO MAKE ADDITION AND SAME HAS RIG HTLY BEEN DELETED BY CIT(A). WE UPHOLD THE SAME. 3.2.4 NEXT COMPONENT OF ADDITION IS WITH REGARDS TO AMOUNT OF RS.4,67,094/- MADE BY ASSESSING OFFICER B Y OBSERVING THAT THESE PAGES EVIDENCE DAY TO DAY CASH INCOMING AND OUTGOING FROM 17.06.99 TO 26.06.99. IN THIS RE GARD, STAND OF ASSESSEE HAS BEEN THAT SALES WERE NOT UNRECORDED AND I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 9 SUBMITTED THAT AMOUNTS WERE REFLECTED IN BOOKS OF A SSESSEE AND PARTY IN BOOKS OF GURU ASHISH SHIP BREAKERS. A SSESSING OFFICER HAS NOT CONSIDERED THE ABOVE STAND OF ASSES SEE WHILE ESTABLISHING THAT SALES SHOWN IN THESE SHEETS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS. IN VIEW OF ABOV E, ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION IN QUE STION AND SAME HAS RIGHTLY BEEN DELETED BY CIT(A). WE UPHOLD THE SAME. 3.2.5 NEXT COMPONENT OF ISSUE IS WITH REGARDS TO AD DITION OF RS.2,30,000/-. ASSESSING OFFICER HAS MADE THE S AID ADDITION BY HOLDING THAT THESE RECORDINGS WERE THAT FOR UNAC COUNTED SALE. IN APPEAL, THE COPIES OF DOCUMENTS WERE FURN ISHED DURING APPELLATE PROCEEDINGS. ON EXAMINATION OF SAME, CIT (A) OBSERVED THAT NO ENQUIRY HAS BEEN MADE BY ASSESSING OFFICER TO ESTABLISH THAT THE FIGURES REPRESENT SALES MADE BY ASSESSEE. THE DOCUMENTS IN ITSELF WAS FOUND DUMB DOCUMENT BY CIT(A). ASSESSING OFFICER COULD NOT ESTABLISH THAT THEY PER TAIN TO ANY TRANSACTION. SO, CIT(A) RIGHTLY DELETED THE SAME. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FR OM OUR SIDE. WE UPHOLD THE SAME. 3.3 IN VIEW OF THIS, WE UPHOLD THE ORDER OF CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION TOTALLING TO RS.13,27, 754/- WHICH WAS MADE BY ASSESSING OFFICER. SAME IS UPHELD. 4. NEXT ISSUE IS WITH REGARDS TO ADDITION OF RS.4,5 8,000/-. ASSESSING OFFICER MADE ADDITION OF RS.4,58,000/- ON ACCOUNT OF I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 10 UNACCOUNTED EXPENSES AS PER PAGE 54 OF ANNEXURE A3. IN APPEAL, CIT(A) OBSERVED THAT ADDITION HAS BEEN MADE ON THE BASIS OF DOCUMENTS RELATING TO ASSESSEE SEIZED FROM THE RESIDENCE OF SHRI BALKRISHAN AGGARWAL. CIT(A) FURT HER OBSERVED THAT CONCERN CIT(A), AHMEDABAD HAS CONSIDERED THESE DOCUMENTS IN APPEAL ORDER DATED 08.05.2002 AGAINST ASSESSMENT ORDER FOR BLOCK PERIOD 1.4.89 TO 30.6.99 IN CASE OF ASSESSEE IN APPEAL NO. CIT(A)XIX/134/01-02 BY OBSER VING AS UNDER: ON THE FACTS AD IN THE CIRCUMSTANCES OF THE CASE, ASSESSEES EXPLANATION THAT THE SEIZED DOCUMENT WAS IN THE NATURE OF AN AIDEMEMOIRE APPEARS TO ME TO BE M ORE PLAUSIBLE AND CREDITWORTHY. I AM, THEREFORE, UNABL E TO SUSTAIN ASSESSING OFFICERS FINDING THAT THE FIGURE S RECORDED ON LEFT HAND SIDE OF THE SEIZED DOCUMENTS REPRESENTED ASSESSEES UNACCOUNTED SALES. THE ADDI TION OF RS.7,05,000/- MADE BY THE ASSESSING OFFICER ON T HIS SCORE IS, THEREFORE, DELETED. 4.1 IN THIS BACKGROUND, CIT(A) AGREEING WITH THE FI NDING OF CIT(A) XIX OBSERVED THAT ADDITION MADE BY ASSESSING OFFICER WAS WITHOUT ANY BASIS AND SAME WAS DELETED BY CONCE RN CIT(A) AND NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE I N THIS REGARD. ON SAME BASIS, CIT(A) IN THIS CASE RIGHTLY DELETED THE ADDITION IN QUESTION. SAME IS UPHELD. 5. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSE D. 6. NOW WE TAKE ITA NO.176/AHD/2011. REVENUE HAS FI LED THE APPEAL ON THE FOLLOWING GROUNDS: I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 11 1. THE LD. CIT(A) XX, AHMEDABAD HAS ERRED IN LAW AND IN FACTS IN REDUCING THE PENALTY LEVIED U/S. 271(1) (C) OF THE I.T. ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER LEVYING PENALTY ON THE ENTIRE ADDITION OF RS.14,56,363/- ON ACCOUNT OF UNEXPLAINED SALES AND EXPENSES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER LEVYING PENALTY ON THE ADDITION OF RS.4,58,000/- ON ACCOUNT OF UNEXPLAINED EXPENSES. 7. ASSESSING OFFICER HAS LEVIED PENALTY U/S.271(1)( C) ON ACCOUNT OF ADDITION AS DETAILED AS UNDER: (1) THE LEARNED ASSESSING OFFICER HAS ERRED ON FAC TS AND IN LAW IN LEVYING PENALTY U/S.271(L) ON ADDITION OF RS.3,00,000/- ON ACCOUNT OF INVESTMENT IN WINCH. (2) THE LEARNED ASSESSING OFFICER HAS ERRED ON FA CTS AND IN LAW IN LEVYING PENALTY U/S.271(L) ON ADDITION ON ACCOUNT OF UNACCOUNTED SAFES AND EXPENSES OF RS. 14,56,363/-. (3) THE LEARNED ASSESSING OFFICER HAS ERRED ON FA CTS AND IN LAW IN LEVYING PENALTY U/S.271(1) ON ADDITION ON ACCOUNT OF UNACCOUNTED EXPENSES OF RS.4,58,000/-. (4) THE LEARNED ASSESSING OFFICER HAS ERRED ON FAC TS AND IN LAW IN LEVYING PENALTY U/S.271(L) ON ADDITION OF RS.2,28,057/- MADE ON ACCOUNT OF SALE OF OIL. 7.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN CIT(A) HAS GRANTED RELIEF BY OBSERVING AS U NDER: 3.1 IT IS SEEN THAT THE AO HAS LEVIED THE PENALTY UNDER SECTION 271(1)(C) ON ALL THE ADDITIONS MADE. IT IS SEEN THAT I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 12 AS FAR AS THE ADDITION ON ACCOUNT OF UNACCOUNTED SA LE OF OIL AND NON FERROUS METAL IS CONCERNED, THE ADDITION IN RESPECT OF NON FERROUS METAL HAS BEEN SUBSTANTIALLY REDUCED . THE AO HAS NOT CONSIDERED THE RELIEF GRANTED BY CIT(A) VIDE HIS ORDER DATED 9-1-2007. IN VIEW OF THE ABOVE, THE AO IS DIRECTED TO LEVY P ENALTY ON THE REDUCED QUANTUM ONLY. 3.1(I) AS FAR AS THE ADDITIONS OF RS.3,00,000/- ON ACCOUNT OF GENERATOR, RS.4,58,000/- ON ACCOUNT OF SEIZED DO CUMENTS ARE CONCERNED, THESE ADDITIONS HAVE BEEN DELETED IN ORDER NO.CIT(A)-XX/204/10-11 DATED 28-10-2010. HENCE THER E IS NO QUESTION OF LEVY OF PENALTY ON THE SAME. 3.1(II) AS FAR AS THE ADDITION OF RS.14,56,363/- IS CONCERNED, THE SAME HAS BEEN REDUCED TO RS.(55,510 + 73,100) = RS.1,28,610/-. THE AO IS DIRECTED TO LEVY PENALTY O N THE REDUCED AMOUNT ONLY. 7.2 AS FAR AS LEVY OF PENALTY ON ACCOUNT OF ADDITIO N OF RS.14,56,363/- IS CONCERNED, CIT(A) RIGHTLY OBSERVE D THAT SAME HAS BEEN REDUCED TO RS.(55,510 + 73,100) = RS.1,28, 610/- WHICH HAS BEEN CONFIRMED BY US VIDE PARA 3 OF THIS ORDER. IN THIS BACKGROUND, CIT(A) HAS RIGHTLY DIRECTED THE AS SESSING OFFICER TO LEVY PENALTY ON REDUCED AMOUNT I.E. RS.1 ,28,610/-. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLEDGE WITH REGARDS TO ALL THESE QUANTUM ADDITIONS DELETED BY C IT(A). IN VIEW OF THIS, WE ARE NOT INCLINED TO INTERFERE IN T HE FINDING OF CIT(A) ON THE ISSUE WHEREBY HE HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO LEVY PENALTY ON REDUCED AMOUNT IN QUANTUM ADDITION. WE UPHOLD THE SAME. I.T.A. NOS. 176 & 177/AHD/2011 FOR A.Y. 2000-01 (ACIT VS. M/S. G. N. SHIP BREAKERS) PAGE 13 8. NEXT ISSUE IS WITH REGARDS TO LEVY OF PENALTY ON ADDITION OF UNACCOUNTED EXPENSES OF RS.4,58,000/- MADE BY ASSES SING OFFICER. IN APPEAL, CIT(A) DELETED THE ADDITION OF RS.4,58,000/- ON ACCOUNT OF SEIZED DOCUMENTS WHICH HAS BEEN CONFI RMED BY US VIDE PARA 4 OF THIS ORDER. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. IN VIEW OF THIS, WE ARE NOT INCLINED TO INTERFERE IN THE FINDI NG OF CIT(A) WHO HAS DELETED THE PENALTY LEVIED BY ASSESSING OFF ICER ON ACCOUNT OF RS.4,58,000/- ON ACCOUNT OF SEIZED DOCUM ENTS. WE UPHOLD THE SAME. 9. AS A RESULT, BOTH APPEALS FILED BY REVENUE ARE D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF APRIL, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR Y ADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22/04/2015 TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;