The DCIT, Circle-9, Surat V. M/s. Shree Siddhivinayak Silk Mills, Surat

ITA 1973/AHD/2009

• Counselvise Citation: 197320514 RSA 2009
• Duration Of Justice: 5 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 17-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJNISH K VOHRA
• Assessee Lawyers: M K PATEL

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.1973/AHD/2009 [ASSTT.YEAR : 2004-2005] DCIT, CIR.9 SURAT. /VS. M/S. SHREE SIDDHIVINAYAK SILK MILLS GANDHI COLONY A.K. ROAD, SURAT. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI RAJNISH K. VOHRA, SR.DR 12 . / &/ ASSESSEE BY : SHRI M.K. PATEL 3 . 24'/ DATE OF HEARING : 5 TH JUNE, 2014 567 . 24'/ DATE OF PRONOUNCEMENT : 4.7.2014 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2004-2005 IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A). 2. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY U/S.271 (1)(C) OF RS.1,43,43,813/- MADE BY THE AO WITHOUT APPRECIATIN G THE FACTS OF THE CASE. ITA NO.1973/AHD/2009 -2- 3. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ULTIMATE ASSESSED I NCOME IN THIS CASE WAS NIL, AND THEREFORE, THE ASSESSEE DID NOT PREFER ANY APPE AL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) IN THE ASSESSMENT CASE OF THE A SSESSEE. HOWEVER, HE SUBMITTED THAT THE PENALTY WAS LEVIED ON THE ADDITI ON OF RS.3.99 CRORES, WHICH REPRESENTED THE GROSS LOSS CLAIMED BY THE ASSESSEE, THEREFORE, DID NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. HE RELIED ON THE ORDER OF THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE PENALTY WAS LE VIED ON THE ADDITION OF RS.3.99 CRORES, AND THE CIT(A) HAS RECORDED THAT ESSENTIALLY IT REPRESENTED THE DISALLOWANCE OF THE GROSS LOSS CLAI MED BY THE ASSESSEE, WHICH PRIMA FACIE DID NOT REPRESENT ANY CONCEALMENT OF INCOME OR THE FURNISHING OF ANY INACCURATE PARTICULARS. THE AS SESSED INCOME ULTIMATELY WAS NIL, AND THIS PLEA OF THE ASSESSEE COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE. WE FIND THAT THE CIT(A) HAS RECORD ED THAT THE REASONS FOR DISALLOWING THE CLAIM OF LOSS WAS FIRSTLY OF THE NO N-AVAILABILITY OR NON- PRODUCTION OF THE BOOKS OF ACCOUNT, AND SECONDLY, T HE ALLEGED EVASION OF TAX BY THE ASSESSEE BY UNDERSTATING THE SALES. REG ARDING THE FIRST ISSUE OF NON-PRODUCTION OF BOOKS OF THE ACCOUNTS, THE CIT(A) HAS RECORDED THAT THE BOOKS OF ACCOUNTS WERE PARTIALLY PRODUCED ON 16.11. 2006 AND ON 5.12.2006, AND COMPLETE BOOKS WERE NOT PRODUCED B EFORE THE AO. THE CIT(A) HAS RECORDED THAT THE AO HAS STATED THAT THE BOOKS WERE PRODUCED PARTIALLY ON TWO DAYS, WHICH HAS BEEN CLARIFIED BY THE ASSESSEE, AS BEING THE PRODUCTION OF THE PURCHASE REGISTER, PURCHASE B ILLS FILE, THE BANK ACCOUNT AND THE BANK STATEMENT, THE CASH BOOK AND T HE SALE REGISTER, WHICH WERE MORE THAN SUFFICIENT FOR THE AO TO VERIFY THE ASSESSEES CLAIM OF LOSS. THE LIST OF THE SUNDRY DEBTORS AND CREDITORS, LIST OF PURCHASE ABOVE ITA NO.1973/AHD/2009 -3- RS.50,000/-, MONTH-WISE DETAILS OF PURCHASE AND CON SUMPTION, THE STOCK STATEMENT, AND NAMES AND ADDRESSES OF THE PARTIES F ROM WHOM PURCHASES WERE MADE AND DETAILED BREAK-UP OF THE EXPENSES, AS ALSO THE RECEIPTS IN EXCESS OF RS.1 LAKH WERE FURNISHED. THE ASSESSEE H AS ALSO FILED REASONS FOR LOSS SUFFERED ALONG WITH CERTAIN DOCUMENTARY EVIDEN CES. THE CIT(A) IN THESE FACTS HAS RECORDED THAT THE RECORDS AND DETAI LS WHICH WERE ESSENTIAL FOR THE AO TO ASCERTAIN THE CORRECTNESS AND THE TRU TH OF THE LOSS CLAIMED BY THE ASSESSEE WERE ALL AVAILABLE WITH THE AO. REGAR DING, SECOND ISSUE OF EVASION OF TAX BY UNDERSTATING THE SALES, THE CIT(A ) HAS RECORDED THAT ADVERSE INTERNATIONAL MARKET CONDITIONS, WHILE AFFE CTING THE EXPORTER ALSO AFFECTS THE SUPPLIER TO THE EXPORTER. FURTHER, A M AJOR PART OF THE SALE WAS OF DAMAGED AND WASTED GOODS WHICH COULD BE SOLD ONLY W ITH THE PERMISSION OF THE DEVELOPMENT COMMISSIONER, AND THE OTHER SALE S, WHICH WERE THE EXPORT SALES, WERE AFFECTED BY THE ADVERSE INTERNAT IONAL MARKET CONDITIONS. THIS CONTENTION OF THE ASSESSEE WAS SUPPORTED BY TH E EXPORT INVOICES DULY VERIFIED AND CERTIFIED BY THE CUSTOM DEPARTMENT. T HE CIT(A) ON THESE FACTS OF THE CASE HAS CONCLUDED THAT ONCE IT WAS AC CEPTED THAT THERE WAS SIMPLY NO GROUND FOR REJECTING THE BOOKS OF ACCOUNT S, IT HAS ALSO TO BE ACCEPTED THAT THERE WAS NO GROUND WHATSOEVER FOR RE JECTING THE LOSS CLAIMED BY THE ASSESSEE, ESPECIALLY WITHOUT VERIFYI NG THE RECEIPTS OF THE EXPENSES CLAIMED, NO PENALTY COULD BE LEVIED EITHER FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE CIT(A) HAS CONCLUDED THAT THE ABSENCE OF BOOKS OF ACCOUNTS FOR WHATEVER REASON, COULD NOT DIRECTLY MEAN CONCEALMENT ON THE PART OF THE ASSESSEE OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, AND THEREFORE, LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT JUSTIFIED. THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE , FOR THE REASONS DETAILED ABOVE, WE HOLD THAT NO PENALTY UNDER SECTION 271(1) (C) OF THE ACT WAS ITA NO.1973/AHD/2009 -4- LEVIABLE IN THIS CASE, AND ACCORDINGLY, THE GROUND OF THE APPEAL OF THE REVENUE BEING WITHOUT ANY MERIT, IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## #. .. .# ## #. . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD