Sh. Vinay Kumar Bansal (Legal Heir of Sajjan Kumar Bansal), Fatehabad V. ITO, Fatehabad

ITA 196/DEL/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3550 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-04-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHURI
• Assessee Lawyers: K SAMPAT
• Keywords: Principle of natural justice
• Section: 143(3); 133A; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.196/DEL/2017 ASSESSMENT YEAR 2012-13 VINAY KUMAR BANSAL (LEGAL HEIR OF SAJJAN KUMAR BANSAL) PROP. M/S. VINAY KUMAR SUMIT KUMAR, BHATTU MANDI, BHATTU, DISTT.-FATEHABAD. PAN: ADEPB 4297P VS. ITO, WARD-2, FATEHABAD. (APPELLANT) (RESPONDENT) ASSESSEE(S) BY : S/SHRI K. SAMPAT & V.RAJA KUMAR, ADV. REVENUE BY : MS. BEDOBANI CHAUDHURI, SR.D.R. / DATE OF HEARING : 18/04/2017 / DATE OF PRONOUNCEMENT: 20/04/2017 ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LEARNED CIT(A), ROHTAK, VIDE ORDER DATED 11.11.2016 FOR THE ASSESSM ENT YEAR 2012-13. 2. THE ASSESSEE HAS RAISED THE SOLE GROUNDS OF APPE AL. THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE L D. AO IN LEVYING PENALTY OF RS.2,59,887/- U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 3. THE BRIEF FACTS OF THE CASE AS ARE EMANATING FRO M THE ORDER OF THE PENALTY ARE REPRODUCED HEREINBELOW: THE ASSESSEE IS A COMMISSION AGENT. SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 W AS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSE SSEE ON 20.03.2012. RETURN DECLARING , A TAXABLE OF RS. 2797400/- WHICH INTER-ALIA INCLUDES ADD I TIONAL INCOME OF RS.1000000/- SURRENDERED DURING TH E COURSE OF SURVEY, WAS E-FILED ON 30.09.2012. LATER ON, THE CA SE WAS SELECTED FOR COMPULSORY SCRUTINY AND ASSESSMENT WAS COMPLETED U/S 143(3) ON 18.03.2015 A T A TOTAL INCOME OF RS.3688491/- BY MAKING AN ADDITION OF RS.746309/- ON ACCOUNT OF OUT OF BOOK PURCHASE O F GUAR-STOCK OF 73.70 QUINTALS, AN ADDITION OF RS.6752/- ON ACCO U NT OF OUT OF BOOKS SALE OF ALLEGED STOCK OF GUAR OF 63.70 QUINTALS AND ADDI T ION OF RS.88000/- ON ACCOUNT OF UNEXPLAINED INVESTM ENT/OUT ITA NO.196/DEL/2017 2 O F B OOKS PURC H ASE OF BARDANA / SUTLI STOCK. . S IMU L TANEOUSLY, PENALTY PROCEEDINGS U/S. 271(1)(C) WERE ALSO I NITIATED AQALNST THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME TO THE TUNE OF RS. 841061/-(746309+6752+88000) AND THE SATISFACTION TO THIS EFFECT IS ALSO DULY RECORD ED IN THE ASSESSMENT ORDER DATED 18.03.2015. ACCORDINGLY, PENALTY NOTICE U/S 274 REA D WITH SECTION 271 OF THE INCOME TAX ACT, 1961 WAS ALSO ISSUED TO THE ASSESSE E ON 18.03.2015 WHICH WAS SERVED ALONGWITH ASSESSMENT ORDER ON 26.03.2015 FOR COMPL I ANCE ON 01 . 04.2015. 2. IN REPLY TO THE SAID NOT I CE, THE ASSESSEE, VIDE APPLICATION DATED 13.04.2015, STATED THAT THE ADDITION OF RS.746309/- AND OF RS.6752/- HAVE BEEN MADE DISBELIEVING THE APPEL LA NT'S P L EA THAT THIS STOCK OF GUAR 63.70 QUINTALS IS VERY MUCH INCLUDED IN THE TOTA L PURCHASE AND SALE OF 2858 QUINTALS OF GUAR MADE DURING THE YEAR AND THE PROFIT AND SALE O F GUAR STOCK IS ALSO DULY REFLECTED IN THE TRADING ACCOUNT. WITH REGARD TO THE ADDITION OF 88000/- MADE ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN PURCHASE OF BARDANA/SUTLI, THE ASSES SEE HAS STATED THAT, BEING A COMMISSION AGENT, THE PURC HASES/SALES OF AGRICULTURAL COMMODITIES ARE MADE ON BEHALF OF THE TRADERS AND T HE PARTIES ON WHOSE BEHALF PURCHA S E/SALE OF COMMODITIES ARE MADE KEEP BARDANA AT T H EIR PREMISES WHICH IS SENT TO THE SELLERS AT THE TIME OF DESPATCH AN D T H A T TH E ASSESSEE H AS NEITHER PURCHASE BARDANA/SUTLI NOR HAVE CONSUMED OR SOLD TH E SAME. 2.1 T H E ASSESSEE HAS RAISED THE SAME P LE A AT THE TIME OF COMPLET I ON OF THE A SSESSMENT PRO C EED I NGS A L SO AND THE SAME HAS A L READY BEEN REJECTED DUR I NG TH E C OURSE OF ASSESSME N T P R OCEED I NGS WI TH DETA IL ED D I SCUSSION I N THE ASSESSMENT ORDER. FO R T H E SAKE O F B R E VITY, TH E SAME I S NO T NEEDED/REQU I RED TO BE REPRODUCED A GAIN. HO W E V E R, THE PRESE NT S U BM I SS I ON / P L EA OF T HE ASSESSEE I S GAIN CONS I DERED A N D RE J EC T ED WITH TH E OBS ERV A TI O N T H AT T H E SA I D ADD ITI O N S HAVE BEEN MADE ON THE B AS I S O F UNREC O R DED S T O CK O F QUA R/ BARDA N A / S UTLI F O U ND DUR I NG T H E COURSE O F SURV E Y A ND TH A T T OO AF T E R HAVIN G CONFR O NT E D T O T H E AS S ESSEE . IT I S AGA IN I MP E R A TIVE TO MENT I ON HERE THAT ON BE IN G C O NFRONTED T O TH E ASSESSEE WITH R EGA R D TO THE E XCE SS STOCK OF GUAR, TH E ASSESSEE IN H I S ST AT EMEN T R ECO R DED DUR IN G TH E COUR SE OF S URVEY STA TED THAT I AM NO T A W A RE O F THI S STOCK AND SO F A R AS MY KN O WL EDGE I S CONCE R NE D, T HI S STOC K D OES NOT P E R T A I N TO M Y FIRM AN D MY F I RM HAS S T OC K O F O NLY O F K H A L AND B IN O L A. EXCEPT, MY F I RM HAS NO STOCK O F ANY OTHER C OMMOD I T Y. WHE R EAS, DUR I NG THE COURSE OF ASSESSMENT PROCEEDINGS AS WE L L AS DUR I NG THE COURSE OF PRESENT PENALTY PROCEEDINGS, THE A SSESSEE HAS ' SUBMITTED THAT THE EXCESS STOCK OF GUAR OF 63.70 QUINTALS I S INCLUDED IN THE TOTAL STOCK OF GUAR PURCHASED AND SO L D DUR I NG THE , YEAR. THE ASSESSEE'S CONTRAD I CTORY STATEMENT ON TH I S CRUC I A L I SS U E WITHOUT ANY DOCUMENTARY EVIDENCE APPEA R S TO BE ODD AND I S , THE R EFO R E, NOT ACCEPTAB L E. 3 . T H E RA TI O O F CIT A TI O N S /JU DGMENTS QU O T ED BY THE ASSESSEE ARE A L SO N OT APP LI CAB L E IN TH E CASE O F T H E ASSESSEE AS T HER E A R E POS I T IV E EV I DENCE O N RECO R D IN T H E S H A PE O F INVENTORY OF ST OC K SHOWING T HE P HY S I CA L S T OC K OF GUAR AND BA R DANA / S UTLI WHI C H W AS N O T F O UN D RECO R DED IN TH E BOOKS OF THE ACCO U NTS O F T H E ASSESSEE E V E N AFTER COMP L E TI ON THEREO F. E VEN O N BE IN G ASKED , THE ASSESSEE COU L D NO T PRODUCE T H E PUR CH ASE / SA L E B ILL S O F T HE A LL EGED GUAR AND BARDANA S T OC K OF 63 . 70 Q UIN TA L S. RAT H ER , TH E ASSESSEE W E NT OF R E IT ERA TI NG THAT THE GUA R STOCK OF ITA NO.196/DEL/2017 3 63.70 QU IN TA L I S IN C L UDED I N T HE TOTA L S T OCK OF G U AR P UR CHASED AND SO L D DU RI NG THE YEAR. F R OM T H E ABO V E F ACTS O F THE CASE , IT I S CR Y S T A L C L EAR THAT THE MENSREA OF THE ASSESSEE W AS TO CONCEA L T HE PA R T I CULA R S O F I NC OME IN R E L AT I ON TO WH I CH ADD I T I ONS HAVE BEEN MAD E. NE ED L ESS TO SAY, OU T OF BOOKS SALE/PURCHASE OF GUA R STOCK IS NOT A ME R E O MI SS I ON OR N E GL I GENCE. RATHER , I T I S A CONSCIOUS AND DE LI BERATE ACT & ATTEMP T ON T HE PAR T OF THE ASSESSEE TO CON C EA L TH E PART I CULARS OF I NCOME WI TH THE SO L E I NTEN TI O N TO EVADE T HE C H A R GEAB ILI T Y OF TAX, INT ERES T AND P EN A LTY ON T H E CON C E A LE D IN CO ME. 3 . 1 AS TH E SA L ES / P UR C H ASE OF A L L EGED STOC K OF QUAR / BARDA N A / S UTLI I S NOT FO UN D RECO R DED I N T H E BOO K S O F ACCOUNTS E V EN A FT E R COMP L ET I ON TH E R EO F; A N D N O S U RRENDER O N T HI S ACCOUNT W AS A L SO MADE B Y TH E ASSE S SEE ; AND T H E ASSESSEE HAS N O MATE RI A L/ E VI DE N CE CONT R AR Y TO THI S FA CT ; THE DE LI BE R A T E AND WILL FU L ATTEMPT OF TH E ASSESS E E TO CO N CEA L O F PARTI CU L ARS OF IN CO M E IS P R OVED TO TH E E XT E NT OF RS. 8 410 61 /- I S P ROV ED. THE MER E ASSE R T I O N O F THE AS S ESSEE T H AT THE STOC K O F GUAR OF 63.70 Q UIN TA L S I S IN C LUD ED IN THE TO T A L SA L E / P UR C H ASE OF GUAR M ADE DUR I NG THE YEAR WIT HOUT P R OPE R S U BS T AN TI A L I S N OT ACCEPTAB L E. THE ASSESSEE AS S ERTION WITHOUT PROPER SUBSTANTIATION IN RESPECT OF THE UNA CCOUNTED STOCK OF BARDANA/SUTLI IS ALSO NOT ACCEPTABLE. 4. I, THEREFORE, HOLD THE ASSESSEE IN DEFAULT FOR CONCEALMENT OF PARTICULAR OF INCOME TO THE EXTENT OF RS.841061/- AND IMPOSE A PE NALTY OF RS.259887/- FOR THE SAID DEFAULT U/S.271(1)(C) OF THE INCOME TAX ACT, 1 961. THE QUANTUM OF PENALTY IS CALCULATED AS UNDER: (I) TAX SOUGHT TO BE EVADED : RS.259 887/- (II) MAXIMUM PENALTY @ OF 300% : RS.779661/- OF THE TAX SOUGHT TO BE EVADED (III) MAXIMUM PENALTY @ OF 100% : RS.259887/- OF THE TAX SOUGHT TO BE EVADED FOR THE SAKE OF NATURAL JUSTICE AND TO BE FAIR AND REASONABLE, A MINIMUM PENALTY OF RS.259887/- IS IMPOSED UPON THE ASSESSEE . 4. LEARNED CIT(A) CONFIRMED THE ACTION OF THE AO. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. IT WAS BROUGHT TO MY NOTICE BY THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI K. SAMPAT, ADV., THE ASSESSEE HAS MADE A SURRENDER OF RS.10 LAKH ON ACCOUNT OF MARRIAGE EXPENSES, WERE SURRENDERED ON ACCOUNT ITSE LF IN BINOLA. THE SURVEY WAS MADE ON 20.03.2012 AND THE ACCOUNTANT WAS ON LE AVE FOR ABOUT TWO MONTHS AND WHEN HE CAME BACK HE PREPARED THE FINAL ACCOUNTS AND FILED THE RETURN OF INCOME AS PER THE FINAL AUDITED ACCOUNTS BEFORE THE DUE DATE ON 30.09.2012. AS A MATTER OF FACT, THE DIFFERENCE POI NTED OUT OF GUAR, SUTLI, ETC. ITA NO.196/DEL/2017 4 ARE IN FACT TALLIED AND THERE IS NO DIFFERENCE AND THEREFORE THE ADDITIONS ON THIS ACCOUNT CANNOT BE MADE AND NO CONCEALMENT CAN BE SAID TO HAVE BEEN DONE. THOUGH THE ASSESSEE HAS NOT APPEALED AGAINST THE ADDITIONS MADE BY THE AO, WHICH DOES NOT MEAN THE ASSESSEE HAS ACCEPT ED THE PENALTY PROVISIONS. THE ASSESSEE HAS SUBMITTED THE EXPLANAT ION AND THE ACCOUNTS DURING THE PENALTY PROCEEDINGS AS WELL AS THE ASSES SMENT PROCEEDINGS. AS REGARDS THE PACKAGING EXPENSES LIKE SUTLI, ETC. ARE ON ACCOUNT OF CUSTOMERS AND NORMALLY THE ASSESSEE HAS NEVER BEEN DEALING ON ACCOUNT OF GUAR, ETC. BUT IN THE IMPUGNED YEAR HE DEALT WITH A LITTLE ON ACCOUNT OF GUAR, ETC. THE ASSESSEE HAVING SUBMITTED ALL THE EXPLANATIONS HAS NOT CONCEALED THE PARTICULARS OF HIS INCOME OR HAS NOT FURNISHED INAC CURATE PARTICULARS OF SUCH INCOME, AND THEREFORE, NO PENALTY IS LIABLE TO BE L EVIED IN SUCH CIRCUMSTANCES AND THE PENALTY SO LEVIED BY THE AO AND CONFIRMED B Y THE LEARNED CIT(A) IS DIRECTED TO BE DELETED. THUS, THE SOLE GROUND OF TH E ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 20 TH APRIL, 2017 SD/- (B.P. JAIN) ACCOUNTANT MEMBER DATED: 20/04/2017 PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSTT. REGISTRAR, ITAT, NEW DELHI