A.C.I.T. CC - XXI , Kol, Kolkata V. M/s Central Roller Flour Mills (P)Ltd., Kolkata

ITA 1785/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78372 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 1988-1989
• Appeal Filed On: 05-12-2012
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: S K TULSIYAN
• Keywords: Bogus purchase
• Section: 145

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NOS.1785 & 1786/KOL/2012 #$ %&/ ASSESSMENT YEARS: 1988-89 & 1989-90 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. M/S. CE NTRAL ROLLER FLOUR MILLS (P) LTD. CENTRAL CIRCLE-XXI, KOLKATA. (PAN: AABCC8240N) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 14.07.2014 DATE OF PRONOUNCEMENT: 16.07.2014 FOR THE APPELLANT: SHRI RAJENDRA PRASAD, JCIT, SR. DR FOR THE RESPONDENT: SHRI S. K. TULSIYAN, ADVOCAT E / ORDER PER SHRI MAHAVIR SINGH, JM : BOTH THESE APPEALS BY REVENUE ARE ARISING OUT OF SE PARATE ORDERS OF CIT(A), CENTRAL-II, KOLKATA IN APPEAL NOS. 23 & 26/CC-XXI/CIT(A)C-II/11 -12 BOTH DATED 11.09.2012. PENALTY IN DISPUTES WERE LEVIED BY ACIT, CENTRAL CIRCLE-1, PAT NA U/S. 271(1)(C) OF THE ACT VIDE HIS SEPARATE ORDERS BOTH DATED 24.10.2008. 2. THE ONLY COMMON ISSUE IN THESE TWO APPEALS OF RE VENUE IS AS REGARDS TO THE ORDER OF CIT(A) DELETING THE PENALTY LEVIED BY AO U/S. 271(1 )(C) OF THE ACT ON ESTIMATED ADDITION ON ACCOUNT OF APPLICATION OF GROSS PROFIT RATE. FOR TH IS, REVENUE HAS RAISED IDENTICALLY WORDED GROUNDS EXCEPT VARIANCE IN AMOUNT AND FOR THE SAKE OF BREVITY, WE REPRODUCE THE GROUND FROM ITA NO. 1785/KOL/2012 AS UNDER: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.3,93,358/- IMPO SED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961, WHEN THE QUANTUM ADDITION WAS CONFIRMED BY THE HONBLE ITAT TO THE EXTENT OF GP RATE OF 7.5% AS AGAINST THE G.P. RATE OF 4.11 % DISCLOSED BY THE ASSESSEE. 3 . AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STATED THAT IN ASSESSEES OWN CASE THE TRIBUNAL IN AY 1987-88 AND 1990-91 IN ITA NO. 534 & 535/K/2011 DATED 20.05.2013 EXACTLY ON THE SAME FACTS DELETED THE PENALTY BY OBSERVING IN PARA 4 TO 6 AS UNDER: 2 ITA NOS. 1785 & 86/K/2012 CENTRAL ROLLER FLOUR MILLS (P) LTD. AY 1988-89 & 1 989-90 4. IT WAS SUBMITTED BY THE LD. DR THAT THE ASSESSE E WAS INVOLVED IN FODDER SCAM. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE INCOME OF THE ASSESSEE HAD BEEN ESTIMATED BY THE AO AT 15%. IT WAS THE SUBMISSION THAT ON APPEAL IN THE QUANTUM PROCEEDINGS, THE LD. CIT(A) HAD REDUCED THE INCOME OF THE ASSESSEE BY ES TIMATING THE SAME AT 10% AND ON FURTHER APPEAL THE TRIBUNAL HAD REDUCED THE ESTIMAT ION TO 7.5%. THE LD. DR DREW OUR ATTENTION TO THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES CASE IN QUANTUM PROCEEDINGS WHEREIN IT WAS THE SUBMISSION T HAT IN PARA 2.8 OF THE ORDER THE TRIBUNAL HAD RECOGNIZED THAT SHRI DIPESH CHANDAK WH O WAS A DIRECTOR OF THE ASSESSEE COMPANY WAS INVOLVED IN THE FODDER SCAM AND THE ASS ESSEE HAD BEEN USED AS A CONDUIT FOR THE TRANSACTIONS INVOLVED IN THE FODDER SCAM. I T WAS THE SUBMISSION THAT AS THE ASSESSEE HAD NOT COOPERATED IN THE ASSESSMENT PROCE EDINGS AND AS THE TRIBUNAL HAD FOR THE EARLIER ASSESSMENT YEARS ESTIMATED THE INCOME A T 7.5%, HAD CONTINUED TO ESTIMATE THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER APPEA L AT 7.5%. IT WAS THE SUBMISSION THAT THE FACT THAT THE ASSESSEES ACCOUNTS WERE NOT RELI ABLE ITSELF LED THE FOUNDATION FOR LEVY OF PENALTY US 271(1)(C) OF THE ACT. IT WAS THE FURTHER SUBMISSION THAT AS THE ASSESSEE COULD NOT SUBSTANTIATE ITS RETURN THE AO HAD LEVIED PENAL TY U/S 271(1)(C) OF THE ACT. IT WAS THE SUBMISSION THAT ON APPEAL THE LD. CIT(A) HAD DELETE D THE PENALTY LEVIED BY HOLDING THAT THE ADDITIONS TO THE INCOME WAS ESTIMATED ON THE BA SIS OF ASSUMPTION AND EXTRAPOLATION WITHOUT ANY DEFINITE FINDING OF THERE BEING ANY AMO UNT ON ACCOUNT OF BOGUS PURCHASES. CONSEQUENTLY THE LD. CIT(A) HAD DELETED THE PENALTY LEVIED FOR BOTH THE ASSESSMENT YEARS. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. HE FULLY RELIED ON THE ORDER OF THE AO. 5. IN REPLY THE LD. AR SUBMITTED THAT THE INCOME OF THE ASSESSEE HAD BEEN ESTIMATED AND THERE WAS NO CLEAR CUT FINDING OR EVIDENCE TO SHOW THAT THE ASSESSEE HAD CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS I NCOME. IT WAS THE SUBMISSION THAT IN THE COURSE OF RE-ASSESSMENT THE ACCOUNTS OF THE ASS ESSEE HAD BEEN REJECTED BY INVOKING THE PROVISION OF SECTION 145 OF THE ACT. IT WAS THE SUBMISSION THAT THE FACT THAT THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED ITSELF CL EARLY SHOWS THAT THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE FACTS OF 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE FACTS OF THE PRESENT CASE SHOWS THAT IN THE COURSE OF ASSESSMENT THE AO HAD ESTIMATED THE I NCOME OF THE ASSESSEE AT 15%. THIS INCOME WAS REDUCED BY THE LD. CIT(A) TO AN ESTIMATE D 10% AND FURTHER REDUCTION OF THE SAME BY THE TRIBUNAL TO 7.5%. FURTHER A PERUSAL OF THE ORDER OF THE LD. AO SHOWS THAT THIS ISSUE OF ADJUDICATING THE GROSS PROFIT RATE IS ALSO PENDING UNDER APPEAL BEFORE THE HONBLE HIGH COURT AT PATNA. THUS IT IS CLEARLY SEE N THAT THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED RIGHT FROM THE LEVEL OF THE AO AND C ONTINUES TO BE ESTIMATED. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT HE CANCELLED THE PENALTY LEVIED ON THE GROUND THAT THE INCOME HAS BEEN ESTIMATED ON THE BASIS OF ASSUM PTION AND EXTRAPOLATION WITHOUT ANY DEFINITE FINDING OF THEIR BEING ANY AMOUNT ON ACCOU NT OF BOGUS PURCHASES. FURTHER, A PERUSAL OF THE PENALTY FOR BOTH THE ASSESSMENT YEAR S UNDER APPEAL ALSO CLEARLY SHOWS THAT THE INCOME ALLEGEDLY TO HAVE BEEN CONCEALED FO R BOTH THE ASSESSMENT YEARS ARE IDENTICAL AMOUNTS WHICH ALSO GIVES SUPPORT TO THE F INDING THAT THE INCOME HAS BEEN ESTIMATED FOR BOTH THE ASSESSMENT YEARS ON THE BASI S OF ASSUMPTION AND EXTRAPOLATION. ADMITTEDLY ON ESTIMATED ADDITION TO THE INCOME NO P ENALTY IS LEVIABLE AS NO SPECIFIC CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS COULD BE POINTED OUT ON PART OF THE ASSESSEE. IN THIS CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDINGS OF THE LD. CIT(A) IN CANCELING THE PENALTY IS ON A RIGHT FOOTI NG AND THE SAME IS UPHELD. 3 ITA NOS. 1785 & 86/K/2012 CENTRAL ROLLER FLOUR MILLS (P) LTD. AY 1988-89 & 1 989-90 4. AS THE FACTS AND CIRCUMSTANCES AND ISSUE ARE EX ACTLY IDENTICAL IN ASSESSEES OWN CASE FOR PREVIOUS YEARS AND SUBSEQUENT YEARS, THE ISSUE IS S QUARELY COVERED. HENCE, WE ARE OF THE VIEW THAT THE FINDINGS OF THE CIT(A) IN CANCELLING THE P ENALTY IS ON A RIGHT FOOTING AND THE SAME IS HEREBY UPHELD. BOTH THE APPEALS OF DEPARTMENT ARE DISMISSED. 5. IN THE RESULT APPEALS OF REVENUE ARE DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.07.2 014. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 TH JULY, 2014 -. #/0 1 JD.(SR.P.S.) 2 *3 4 3%5- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT ACIT, CENTRAL CIRCLE-XXI, KOLKATA. 2 *+() / RESPONDENT M/S. CENTRAL ROLLER FLOUR MILLS (P) LTD.,14A, FMC FORTUNA, 5 TH FLOOR, 234/3A, A.J. C. BOSE ROAD, KOLKATA-700 020. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:; *# / DR, KOLKATA BENCHES, KOLKATA +3 */ TRUE COPY, #