Appeal Details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 8026 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-12-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Next Hearing Date
14-06-2017
Assessment Year
2009-2010
Appeal Filed On
16-06-2014
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO.1839/AHD/2014 ASSTT. YEAR : 2009-2010 AMRUTBHAI JAGMALBHAI DESAI 146/17/18, CHINUBHAINAGAR BUS STAND SINGARWA ROAD KATHWADA AHMEDABAD 382 430. VS. ITO, WARD - 7(1) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : NONE WRITTEN SUBMISSIONS REVENUE BY : MS.SONIA KUMAR, SR.DR / DATE OF HEARING : 11/10/2017 / DATE OF PRONOUNCEMENT: 04/12/2017 78/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)- XXI, AHMEDABAD DATED 24.2.2014 PASSED FOR ASSTT.YEA R 009-10. 2. GRIEVANCE OF THE ASSESSEE IS THE LD.CIT(A) HAS E RRED IN CONFIRMING PENALTY OF RS.5,16,856/- IMPOSED BY THE AO UNDER SE CTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER , FILED WRITTEN SUBMISSIONS. THEREFORE, WE PROCEED TO DISPOSE OF AP PEAL OF THE ASSESSEE, AFTER HEARING THE LD.DR AND CONSIDERING MATERIAL AVAILABL E. 4. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED HIS RETURN OF INCOME ON 27.10.2010 DECLARING TOTAL INCOME AT RS.1,42,358/- WHICH WAS PROCESSED ITA NO.1389/AHD/2014 2 UNDER SECTION 143(1) OF THE ACT. THEREAFTER, RETUR N WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSU ED ON 27.8.2010 WHICH WAS DULY SERVED UPON THE ASSESSEE. THEREAFTER, QUE STIONNAIRE WAS ALSO ISSUED U/S.142(1) OF THE ACT ON 27.6.2011. ON SCRUTINY OF THE ACCOUNTS, IT WAS REVEALED TO THE AO THAT SAYAJI INDUSTRIES LTD. DEDU CTED TDS FOR A PAYMENT MADE TO THE ASSESSEE. A CONFIRMATION FROM THE SAID SAYAJI INDUSTRIES WAS RECEIVED BY THE DEPARTMENT STATING THAT ASSESSEE HA D PURCHASED WASTE BRAN AND BURT COAL ASH FROM SAYAJI INDUSTRIES FOR RS.9,2 7,571/-. ASSESSEE HAS ALSO RECEIVED A SUM OF RS.3,90,968/- FROM SAYAJI INDUSTR IES. THESE DETAILS WERE NOT REFLECTED IN THE BOOKS OF THE ASSESSEE. ASSESS EE FAILED TO GIVE SATISFACTORY EXPLANATION TO THE AO IN RESPONSE TO THE SHOW CAUSE NOTICE, ACCORDINGLY, AO MADE AN ADDITION OF RS.13,18,539/- TO THE INCOME OF THE ASSESSEE. SIMILARLY, DURING THE ASSESSMENT PROCEEDINGS, IT REVEALED TO T HE AO THROUGH AIR DETAILS THAT ASSESSEE HAS DEPOSITED AN AMOUNT OF RS.31,55,5 00/- IN CASH WITH PUNJAB NATIONAL BANK, WHICH WERE NOT ALSO REFLECTED IN THE RETURN. ASSESSEE EXPLAINED THAT THIS DEPOSIT WOULD BE OUT OF SALE PR OCEEDS DONE IN INDIVIDUAL CAPACITY AND NOT REFLECTED IN THE RETURN. THE AO HOWEVER CALCULATED PROFIT AT THE RATE OF 10.94% AND INITIATED PENALTY. QUANTUM O F ADDITIONS HAS NOT BEEN DISPUTED OR CHALLENGED BY THE ASSESSEE BEFORE APPEL LATE AUTHORITIES. 5. IN THE PENALTY PROCEEDINGS UNDER SECTION 271(1)( C), THE LD.AO IMPOSED PENALTY OF RS.5,16,856/-, WHICH WAS CONFIRMED BY TH E LD.FIRST APPELLATE AUTHORITY. THE ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL AGAINST THIS IMPOSITION OF PENALTY. 6. IN THE WRITTEN SUBMISSIONS, THOUGH THE ASSESSEE HAS ADMITTED OF UNACCOUNTED PURCHASES OF RS.13,18,539/-, IT WAS SUB MITTED THAT SAME WAS OCCURRED DUE TO MISTAKE ON THE PART OF ACCOUNTANT, AND THAT THIS FIGURE WAS AGGREGATE OF PAST PURCHASES AND DOES NOT PERTAIN TO PRESENT ASSESSMENT YEAR ITA NO.1389/AHD/2014 3 ALONE. AS REGARDS GP ADDITION, IT IS CONTENDED THA T GP ADDITION BASED ON ESTIMATION DOES NOT ATTRACT PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT, AND THE THEREFORE, THE SAME IS LIABLE TO BE CANCELLED. ON THE OTHER HAND, THE LD.DR RELIED ON ORDERS OF THE REVENUE AUTHORITIES. 7. I HAVE CONSIDERED CONTENTIONS OF THE LD.DR AND G ONE THROUGH THE RECORD AND PERUSED MATERIAL AVAILABLE ON RECORD. SECTION 2 71(1)(C) OF THE INCOME TAX ACT, 1961 HAS DIRECT BEARING ON THE CONTROVERSY. T HEREFORE, IT IS PERTINENT TO TAKE NOTE OF THE SECTION. '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. (1) THE ASSESSING OFFICER OR THE COMMISSIONER (APPE ALS) OR THE CIT IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B)** ** ** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. (I)AND (INCOME-TAX OFFICER,)** ** ** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CL AUSE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF T AX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INACCURATE PARTICU LARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR O FFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIA L TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THE N, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME O R SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB- SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPE CT OF WHICH PARTICULARS HAVE BEEN CONCEALED. ITA NO.1389/AHD/2014 4 8. A BARE PERUSAL OF THIS SECTION WOULD REVEAL THA T FOR VISITING ANY ASSESSEE WITH THE PENALTY, THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) DURING THE COURSE OF ANY PROCEEDINGS BEFORE THEM SH OULD BE SATISFIED, THAT THE ASSESSEE HAS; (I) CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS FAR AS THE QUANTIFICATION OF THE PENALTY IS CONCERNED, THE PENALTY IMPOSED UNDER THIS SECTION CAN RANGE IN BETWEEN 100 % TO 300% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE, AS A RESULT OF SUCH CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. THE OT HER MOST IMPORTANT FEATURES OF THIS SECTION IS DEEMING PROVISIONS REGARDING CON CEALMENT OF INCOME. THE SECTION NOT ONLY COVERED THE SITUATION IN WHICH THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS, IN CERT AIN SITUATION, EVEN WITHOUT THERE BEING ANYTHING TO INDICATE SO, STATUTORY DEEM ING FICTION FOR CONCEALMENT OF INCOME COMES INTO PLAY. THIS DEEMING FICTION, BY WAY OF EXPLANATION I TO SECTION 271(1)(C) POSTULATES TWO SITUATIONS; (A) FI RST WHETHER IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCO ME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR LEARNED CIT(APPEAL); AND, (B) WHERE IN RESPECT OF ANY FACT, MATERIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND THE AS SESSEE FAILS, TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF THE TOTAL INCOME. UNDER FIRST SITUATION, THE DEEMING FICTION WOULD CO ME TO PLAY IF THE ASSESSEE FAILED TO GIVE ANY EXPLANATION WITH RESPECT TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME OR BY ACTION OF THE ASS ESSING OFFICER OR THE LEARNED CIT(APPEALS) BY GIVING A CATEGORICAL FINDIN G TO THE EFFECT THAT EXPLANATION GIVEN BY THE ASSESSEE IS FALSE. IN THE SECOND SITUATION, THE DEEMING FICTION WOULD COME TO PLAY BY THE FAILURE O F THE ASSESSEE TO SUBSTANTIATE HIS EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION ITA NO.1389/AHD/2014 5 OF TOTAL INCOME AND IN ADDITION TO THIS THE ASSESSE E IS NOT ABLE TO PROVE THAT SUCH EXPLANATION WAS GIVEN BONA FIDE AND ALL THE FA CTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME HAV E BEEN DISCLOSED BY THE ASSESSEE. THESE TWO SITUATIONS PROVIDED IN EXPLANATION 1 APPENDED TO SECTION 271(1)(C) MAKES IT CLEAR THAT THAT WHEN THIS DEEMIN G FICTION COMES INTO PLAY IN THE ABOVE TWO SITUATIONS THEN THE RELATED ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE FOR THE PURPOSE OF SECTION 271(1)(C) WOULD BE DEEMED TO BE REPRESENTING THE I NCOME IN RESPECT OF WHICH INACCURATE PARTICULARS HAVE BEEN FURNISHED. 9. IN THE LIGHT OF THE ABOVE, IF I EXAMINE FACTS OF PRESENT CASE, THEN IT WOULD REVEAL THAT THE ASSESSEE HAS MADE UNACCOUNTED PURCHASES FROM M/S.JAYAJI INDUSTRIES LTD. TO THE TUNE OF RS.13,18, 539/- AND UNACCOUNTED DEPOSITS OF RS.31,55,500/- IN CASH WITH PUNJAB NATI ONAL BANK. ADMITTEDLY, THESE TRANSACTIONS NEITHER RECORDED IN THE BOOKS NO R REFLECTED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. IN THE PENALTY PROCE EDINGS, ASSESSEE WAS REQUIRED TO SHOW CAUSE WHY PENALTY UNDER SECTION 27 1(1)(C) SHOULD NOT BE LEVIED IN THIS CASE. IN RESPONSE TO THE SAME THE AS SESSEE FAILED TO GIVE SATISFACTORY EXPLANATION TO PROVE ITS CASE EXCEPT A BALD STATEMENT THAT TRANSACTIONS COULD NOT BE RECORDED DUE TO MISTAKE O N THE PART OF ACCOUNTANT, AND THAT THE ALLEGED DEPOSITS IN CASH WITH BANK IS AGGREGATE OF FIGURE OF EARLIER YEARS. THIS EXPLANATION IS NOT BORNE OUT FROM ANY RECORD, AND IT IS CASE OF CONCEALMENT OF INCOME. A PERUSAL OF THE PENALTY ORD ER WOULD INDICATE THAT PENALTY WAS IMPOSED BY THE AO ON ACCOUNT OF CONCEAL MENT. THE ASSESSEE HAS NOT DISPUTED FACTUM OF UNACCOUNTED PURCHASES AND CA SH DEPOSITS WITH THE BANK. BEFORE ME ALSO, THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL TO PROVE ITS CASE. THEREFORE, BOTH THE REVENUE AUTHORITIES BELOW RIGHTLY APPRECIATED FACTS OF THE CASE AND VISITED THE ASSESSEE WITH THE PENAL TY UNDER SECTION 271(1)(C) OF ITA NO.1389/AHD/2014 6 THE ACT, WHICH REQUIRE NO INTERFERENCE. I UPHOLD BO TH ORDERS OF REVENUE AUTHORITIES AND DISMISS APPEAL OF THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 4 TH DECEMBER, 2017 AT AHMEDABAD. S D / - (RAJPAL YADAV) JUDICIAL MEMBER
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