Sonalben Samirkumar Shah, Ahmedabad V. The ACIT, Circle-3, Ahmedabad

ITA 180/AHD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9942 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Section: 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SONALBEN SAMIRKUMAR SHAH, 4, SHAIVAL RESIDENCY, OPP. RUBIPARK SOCIETY, NR. SAVERIPARK DERASAR, OLD WADAJ, AHMEDABAD PAN: BHWPSU758P (APPELLANT) VS THE ACIT, INCOME TAX CIRCLE - III, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI S.N. DIVETIA , A.R. DATE OF HEARING : 27 - 10 - 2 016 DATE OF PRONOUNCEMENT : 17 - 11 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR ISES FROM ORDER OF THE CIT(A) - III, AHMEDABAD DATED 24 - 10 - 2013 IN APPEAL NO. CIT(A) - III/456/ACIT - CIR.3/13 - 14 , IN UPHOLDING THE PENALTY OF RS. 1,40,360/ - , IN PROCE EDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 180 / A HD/20 14 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 180 /AHD/20 14 A.Y. 2009 - 10 PAGE NO SONALBEN SAMIRKUMAR SHAH VS. ACIT 2 2. IN THIS CASE, THE ASSESSEE HAS FIL ED RETURN OF INCOME DECLARING INCOME OF RS. 23 , 36 , 243/ - ON 23RD SEP, 2009. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER HAS NO TICED THAT ASSESSEEE HAS DEBITED COMMODITY TRADING LOSS OF RS. 4 , 46 , 279/ - IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER HAS QUESTIONED THE ASSESSEE TO FURNISH THE SPECIFIC DETAILS OF ANY EXI S TING CONTRACT FOR SALE AS PER PROVISION OF SECTION 43(5) (A). IN THIS CONNECTION, THE ASSESSING OFFICER HAS STATED THAT THERE SHOULD BE CONTRACT OF ACTUAL DELIVERY OF GOODS MANUFACTURED OR MERCHANDISED / SOLD BY THE ASSESSEE. HE FURTHER ADDED THAT THERE SHOULD BE ANOTHER CONTRACT OF RAW MATERIAL OR MERCHANTING TO GUARD AGAINST THE LOSS THOUGH FUTURE PRICE IN RESPECT OF CONTRACTING OF ACTUAL DELIVERY. IN THIS CONNECTION, THE ASSESSEE HAS STATED TH AT THEY HAVE NOT ANY WRITTEN HEDGING OF CONTRACT FOR THE PURCHASE OR SALE AND HE AGREED FOR THE DISALLOWANCES OF THE COMMODITY LOSS OF RS. 4 , 46 , 279/ - . THEREAFTER , THE ASSESSING OFFICER HAS DISALLOWED THE ABOVE STATED AMOUNT AND INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOME. DURING THE COURSE OF PENALTY PROCEEDINGS, TH E ASSESSEE HAS STATED THAT SHE HAS NOT CONCEALED ANY INCOME NOR FURNISHED ANY PARTICULAR OF INCOME. THE ADDITION WAS AGREED UPON DURING THE COURSE OF ASSESSMENT PROCEEDINGS DUE TO INADVERTENT MISTAK E ON THE PART OF THE ASSESSEE. T HE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND LEVIED PENALTY OF RS. 1 , 40 , 360/ - U/S 271(1)(C) OF THE I.T. ACT. I.T.A NO. 180 /AHD/20 14 A.Y. 2009 - 10 PAGE NO SONALBEN SAMIRKUMAR SHAH VS. ACIT 3 3. AGAINST THE ORDER OF ASSESSING OFFICER, THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) . THE LD. CIT(A ) HAS SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER ON THE GROUND THAT NOW A DAYS ONLY A MICROSCOPIC MINORITY OF RETURNS ARE SELECTED FOR DETAILED SCRUTINY AND THIS TYPE OF TENDENCY ON THE PART OF THE ASSESSEE OF FILING INACCURATE RETURN TO BE STR ONGLY DISCOURAGED . 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US , THE LD. AUTHORIZED REPRESENTATIVE STATED THAT ASESSEE HAS NOT CONCEALED ANY INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME AND THE ADDITION WAS AGREED UPON CONSIDERIN G THE FACT THAT THE ASSESSEE DID NOT HAVE ANY RETURN HEDGING CONTRACT FOR THE PURCHASE AND SALE OF COMMODITY . THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE CASE OF SHADILAL SUGAR & GENERAL M ILLS LTD. 168 ITR 705 (SC) AND R ELIANCE PETRO - PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC). ASSESSEE HAS ALSO FURNISHED A COPY OF ORDER OF HON'BLE GUJARAT HIGH COURT ON THE IDENTICAL ISSUE DECIDED IN FAVOUR OF THE ASSESSEE IN THE CASE OF CIT VS. NAVIN CHANGRA AND CO (2014) 42 TAXMANN.COM 28. ON THE OTHER HAND, LD. D.R. RELIED ON THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS). 5 . WE HAVE CONSIDERED THE CONTENTIONS OF BOTH THE SIDES AND PER USED THE MATERIAL ON RECORD. WE OBSERVE D THAT ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME AS THE ASSESSEE HAS DEBI TED COMMODITY TRADING LOSS OF RS. 4 , 46 , 279/ - IN THE PROFIT AND LOSS ACCOUNT TO PROTECT THE FUTURE LOSSES. DURING THE COURSE OF I.T.A NO. 180 /AHD/20 14 A.Y. 2009 - 10 PAGE NO SONALBEN SAMIRKUMAR SHAH VS. ACIT 4 ASSESSMENT PROCEEDINGS, THE ASSESSEE AGREED FOR ADDITION AS IT DID NOT HAVE ANY WRITTEN HEDGING CONTRACT FOR THE PURCHA SE AND SA LE OF COMMODITY. WE HAVE ALSO NOTICED THAT HON BLE G UJARAT HIGH COURT IN THE JUDGMENT AS CITED (SUPRA) HAS DELETED THE PENALTY LEVIED U/ S 271(1)(C) ON ACCOUNT OF TRAD ING LOSS FROM DERIVATIVE TRANSACTION AS NORMAL LOSS ON THE GROUND THAT IT WAS A BONAFI DE CLAIM ON PART OF THE ASSESSEE. 6 . IN VIEW OF THE ABOVE STATED FACTS AND FINDINGS, WE CONSIDER ED THAT THE LD. COMMI SSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER , THEREFORE, WE ALLOW THE APPEAL OF THE AS SESSEE. 7. IN THE END, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 11 - 201 6 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD : DATED 17 /11 /2016 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 180 /AHD/20 14 A.Y. 2009 - 10 PAGE NO SONALBEN SAMIRKUMAR SHAH VS. ACIT 5 BY ORDER/ , / ,