The ITO, Ward-9(1), Surat V. Shri Bharatbhai Narandas Patel, Surat

ITA 1925/AHD/2011

• Counselvise Citation: 192520514 RSA 2011
• Duration Of Justice: 4 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Bogus purchase; Gross profit estimation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI PRAMOD KUMAR, AM AND S. S. GODARA, JM. ITA NO.1925/AHD/2011 ASST. YEAR :2006-07 INCOME-TAX OFFICER, WARD -9(1), SURAT. VS SHRI BHARATBHAI N. PATEL, PROP. OF M/S ARCHANA IMPEX, 119-B, AKSHAR DIAMOND MINI BAZAR, VARACHHA ROAD, SURAT (APPELLANT) (RESPONDENT) PA NO.ABIPP 6339A APPELLANT BY SHRI KAMLESH MAKWANA, SR.DR RESPONDENT BY SHRI M. K. PATEL, AR DATE OF HEARING: 22/7/2015 DATE OF PRONOUNCEMENT: 14/8/2015 O R D E R PER S. S. GODARA, JUDICIAL MEMBER. THIS REVENUES APPEAL FOR AY 2006-07, ARISES FROM O RDER OF THE CIT(A)V, SURAT, DATED 18.4.2011 IN CASE NO.CAS-V/1 2/10-11, DELETING PENALTY OF RS.39,19,220/- IMPOSED BY THE A SSESSING OFFICER IN PENALTY ORDER DATED 29.3.2010, IN PROCEEDINGS U/ S 271(1)(C) OF THE INCOME-TAX ACT (IN SHORT THE ACT). 2. THE ASSESSEE INDIVIDUAL MANUFACTURES POLISHED D IAMONDS FROM THE ROUGH ONES AND ALSO TRADES THEREIN. THE AS SESSING OFFICER ITA NO.1925/AHD/2011 ASST. YEAR 2006-07 2 FRAMED A REGULAR ASSESSMENT IN HIS CASE ON 31.12. 2008 INTER ALIA MAKING ADDITIONS ON ACCOUNT OF BOGUS PURCHASES OF R OUGH DIAMONDS OF RS.19,04,896/- AND ON ACCOUNT OF LOW GROSS PROFI T OF RS.97,21,982/- ; RESPECTIVELY. HE INITIATED PENALTY PROCEEDINGS U/ S 271(1)(C) OF THE ACT ALLEGING CONCEALMENT AND FURNISHING OF INACCURA TE PARTICULARS OF INCOME AT THE ASSESSEES BEHEST. THE CIT(A) UPHELD THE ASSESSING OFFICERS ACTION IN HIS ORDER DATED 31.3.2009. THE ASSESSEE FILED APPEAL ITA NO.1920/AHD/2009 BEFORE THE TRIBUNAL. IN THE MEANTIME THE ASSESSING OFFICER HEAVILY RELIED UPON HIS FINDI NGS IN THE COURSE OF ASSESSMENT AND OBSERVED THAT THE IMPUGNED ADDITIONS WERE A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME S O AS TO LEVY MINIMUM IN QUESTION PENALTY OF RS.39,19,220/- U/S 2 71(1)(C) OF THE ACT. HE ACTED ACCORDINGLY AND PASSED PENALTY ORDER ON 29.3.2010. 3. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HOL DS IN THE ORDER UNDER CHALLENGE THAT BOTH THE ABOVE STATED AD DITIONS WERE MADE ONLY ON THE BASIS OF ESTIMATION BECAUSE OF THE FACT THAT THERE WAS FAILURE ON ASSESSEES PART IN PRODUCING THE PUR CHASE PARTIES AND THE G.P. WAS VERY LOW NARROW AS COMPARED TO THE ONE DECLARED IN THE PRECEDING FIVE ASSESSMENT YEARS. HE HAS ACCORDINGLY DELETED THE IMPUGNED PENALTY BY HOLDING THAT EACH AND EVERY ADD ITION CONFIRMED ITA NO.1925/AHD/2011 ASST. YEAR 2006-07 3 DOES NOT LEAD TO THE CASE OF CONCEALMENT OR FURNISH ING OF INACCURATE PARTICULARS OF INCOME SO AS TO IMPOSE SECTION 271(1 )(C) PENALTY IN QUESTION. THEREFORE, THE REVENUE IS AGGRIEVED. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE CASE LAW. WE NOTICE FROM THE CASE RECORD THAT POST FACTO THE CIT(A)S ORDER DELETING THE IMPUGNED PENALTY, A CO- ORDINATE BENCH OF THE TRIBUNAL IN QUANTUM PROCEEDINGS DECIDED ON 19.12.2014 HAS MODIF IED THE ADDITION OF BOGUS PURCHASE OF RS.19,04,896/- TO RS. 1,90,000/- @ 10% ONLY. THE OTHER ADDITION OF LOWER GROSS PROFIT OF RS.97,21,982/- (SUPRA) STANDS REDUCED TO RS.18,00,000/- BY INCREAS ING THE G.P. @ 0.34% ALREADY DECLARED TO THAT @ 1.34% ACCEPTING TH E ASSESSEES CONTENTIONS IN PART. THIS LEADS US TO A CONCLUSION THAT BOTH THE IMPUGNED ADDITIONS ARE BASED ON ESTIMATION ONLY RIG HT FROM ASSESSMENT TILL THE SECOND APPELLATE STAGE. WE OBSE RVE IN THESE CIRCUMSTANCES THAT SUCH AN EXERCISE IS PURELY A SUB JECTIVE OPINION WHICH CANNOT BE TREATED AS A CASE OF CONCEALMENT AN D FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S 271(1)(C) OF T HE ACT. THE REVENUES ARGUMENT SEEING RESTORATION OF THE IMPUGN ED PENALTY ACCORDINGLY FAILS. ITA NO.1925/AHD/2011 ASST. YEAR 2006-07 4 5. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/8/2015 SD/- SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER (S. S. GODARA) JUDICIAL MEMBER DATED 14/8/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 24/7/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 27/7/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 14/8/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: