The DCIT, Circle-9, Ahmedabad V. Shri Mahendra D.Desai, Ahmedabad

ITA 1987/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63133 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 05-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR

Judgement Text

ITA NO 1987 /AHD/2012 A.YR.. 2006 -07 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AH MEDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T.A. NO. 19 87/AHD/2012. (ASSESSMENT YEAR: 2006-07 ) DEPUTY COMMISSIONER OF INCOME TAX,CIRCLE-9, 2 ND FLOOR, PRATYAKSHA KAR BHAVAN, NR.PANJARA POLE, AMBAWADI, AHMEDABAD. (APPELLANT) VS. SHRI MAHENDRA D. DESAI, PROP. BHAGWATI ASSOCIATES, 32, ASHWEAMEGH BUNGALOWS, SCHEME-3, SATTELITE ROAD, AHMEDABAD. (RESPONDENT) PAN: AAJPD 4857H APPELLANT BY : SHRI T. SHANKAR, SR. D.R. RESPONDENT BY : SMT/ URVASHI SHODHAN ( )/ ORDER DATE OF HEARING : 1-11-201 2 DATE OF PRONOUNCEMENT : 23-11-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THE PRESENT APPEAL IS AGAINST THE ORDER OF CIT (A) -XV, AHMEDABAD DATED 26-12-2012 WHEREBY THE PENALTY OF RS.21,09,68 8/- LEVIED U/S. 271(1)(C) BY THE ASSESSING OFFICER FOR ASSESSMENT Y EAR 206-07 WAS DELETED. ITA NO 1987 /AHD/2012 A.YR.. 2006 -07 2 2. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME ON 7-11-2006 DECLARING TOTAL INCOME OF RS.16,25,760/-.THE CASE W AS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3 ) VIDE ORDER DATED 26- 12-2008 AND THE TOTAL INCOME WAS DETERMINED AT RS.1 ,34,31,760/- AFTER MAKING ADDITION ON ACCOUNT OF GROSS PROFIT (RS.48, 54,881/-), FICTITIOUS LIABILITY/CREDIT U/S. 68 (RS.66,67,540/-), OUT OF N OOR AND JAKAT (RS.2,93,707) AND OUT OF VEHICLE EXPENSES (RS.68,072/-).AGAINST T HE AFORESAID ADDITIONS MADE BY ASSESSING OFFICER, ASSESSEE PREFERRED APPEA L BEFORE CIT (A). CIT (A) VIDE ORDER DATED 4-9-2009 DELETED ADDITION TO T HE EXTENT OF RS.51,54,781/- OUT OF FICTITIOUS LIABILITIES/CREDIT S, RS.2,93,707/- OUT OF NOOR AND JAKAT AND ALSO GRANTED RELIEF OUT OF VEHICLE AN D TELEPHONE EXPENSES. THE INCOME AFTER GIVING THE APPEAL EFFECT OF CIT (A )S ORDER WAS DETERMINED AT RS.79,38,337/-. IT IS ON THE AFORESAID ADDITIONS , ASSESSING OFFICER VIDE ORDER DATED 16-3-2011 LEVIED PENALTY U/S. 271(1)(C) OF RS.21,09,688/- .AGAINST THE ORDER OF PENALTY, ASSESSEE PREFERRED A PPEAL BEFORE CIT (A). CIT (A) VIDE ORDER DATED 21-6-2012 DELETED THE PENA LTY BY HOLDING AS UNDER: 6. I HAVE PERUSED THE FACTS AND SUBMISSION OF THE CASE AS MADE AVAILABLE BY APPELLANT IN HIS DETAILED WRITTEN SUBM ISSION WITH EVIDENCES ON 16-4-2012. I HAVE PERUSED THE CONTENTI ONS AS RAISED BY BOTH A.O. AS WELL APPELLANT. I HAVE PERUSED VARIOUS ORDERS AS RELIED ON BY APPELLANT. AFTER CAREFUL CONSIDERATION OF FAC TS, CONTENTIONS AND RATIO OF CASE RELIED ON BY APPELLANT, I AM INCLINED TO ACCEPT THE CONTENTION OF THE APPELLANT THAT IN HIS CASE, DESPI TE THE FACT THAT SOME OF THE ADDITIONS WERE CONFIRMED BY LD. CIT (A) IN Q UANTUM APPEAL, THE SATISFACTION SO DRAWN BY A.O. FOR IMPOSITION OF PEN ALTY IS NOT JUSTIFIED AND NOT BASED ON PROPER LEGAL PREPOSITIONS. THE LD. CIT (A)-XV, AHMEDABAD WHO CONFIRMED SUCH ADDITION IN QUANTUM AP PEAL FOR PREVIOUS YEAR, IN HER ORDER DATED 31-3-2010 FOR A.Y . 2005-06 IN THE CASE OF APPELLANT ON SIMILAR FACTS AND ADDITION, DE LETED THE PENALTY ITA NO 1987 /AHD/2012 A.YR.. 2006 -07 3 U/S. 271(1) (C) OF THE ACT, IN A.Y. 2005-06. IT IS MENTIONED BY LD. CIT (A) THAT: THROUGH THIS OFFICE APPELLATE ORDER OF A.Y. 05-06 DT.12-6- 08, G.P. ADDITION AT 17% RATE WAS SUSTAINED PRIMARI LY O THE GROUND OF DISCREPANCIES NOTICED IN FREIGHT LIABILIT Y, G.P. ADDITION SUSTAINED BY ITAT IN A.Y. 98-99 AND CASH EXPENSE OF TRANSPORTATION FOUND NOT FULLY VERIFIABLE. FREIGHT LIABILITY DISCREPANCY WHICH COULD NOT BE TELESCOPED IN G./P. ADDITION WAS SUSTAINED TO THE EXTENT OF RS.12,66,045/- FURT HER LD. CIT (A)-XV I HER THIS ORDER AT PARA 4 HELD THAT: AFTER GOING THROUGH RIVAL SUBMISSIONS IT IS SEEN T HAT DESPITE ASSESSMENT AND PENALTY [PROCEEDINGS BEING SEPARATE PROCEEDINGS THE A.O. HAS NOT MADE ANY EFFORTS TO JU STIFY THE PENALTY BUT HAS LEVIED IT MECHANICALLY ONLY BECAUSE CERTAIN ADDITIONS WERE CONFIRMED IN APPEAL. PERUSAL OF THE APPELLATE ORDER SHOWS THAT (REFERENCE IS INVITED TO PARA 15, 16 AND 17 PARTICULARLY) UNPROVED FREIGHT LIABILITY WAS USED A S ONE OF THE REASONS BY THE CIT (A) FOR UPHOLDING GP ADDITION. T HE LIABILITY UPHELD IN APPEAL IS ALSO BASED ON A CERTAIN INTERPR ETATION OF BUSINESS OF THE APPELLANT AND THE ACCOUNTS PLACED I N THE BALANCE SHEET. IT IS ESTABLISHED LAW THAT SUSTENANC E OF QUANTUM ADDITION DOES NOT IMPLY AUTOMATIC IMPOSITION OF PEN ALTY. IN THIS CASE NEITHER CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULARS HAS BEEN ESTABLISHED BY THE A.O. IN THE PENALTY ORDER. I AM THEREFORE INCLINED TO RELY ON FOLLOWING CASE LAWS SOME OF WHICH WERE CITED BY THE LD. A.R. FOR DIRECT ING THE A.O. TO DELETE THE PENALTY IMPOSED. IT IS THEREFORE FOLLOWING THE RATIO OF THIS APPEAL ORDER BEING DELIBERATED ON SIMILAR FACT AND SUBMISSION, THE A.O . IS DIRECTED TO DELETE THE PENALTY. 3. AGGRIEVED BY THE ORDER OF CIT (A), THE REVENUE I S NOW IN APPEAL BEFORE US. ITA NO 1987 /AHD/2012 A.YR.. 2006 -07 4 4. BEFORE US, AT THE OUTSET, THE LD. A.R. SUBMITTED THAT AGAINST THE QUANTUM ADDITION SUSTAINED BY CIT (A), ASSESSEE HAD PREFERRED APPEAL BEFORE HONBLE ITAT. ITAT VIDE ORDER DATED 21-9-201 2 (ITA NO.2896/AHD/2008 & 3025/AHD/2009) HAS DELETED THE A DDITION AND THEREBY IN THE QUANTUM, PROCEEDINGS THE APPEAL OF T HE ASSESSEE IS ALLOWED. HE PLACED ON RECORD THE COPY OF THE ORDER OF ITAT. HE THEREFORE SUBMITTED THAT SINCE THE ADDITION ON WHICH THE PENALTY WAS LE VIED HAS ITSELF BEEN DELETED, THERE WAS NO QUESTION OF PENALTY AND THERE FORE URGED THAT ORDER OF CIT (A) BE UPHELD. 5. THE LD. D.R. DID NOT CONTROVERT THE AFORESAID FA CTUAL POSITION BUT HOWEVER SUPPORTED THE ORDER OF THE A.O. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE FACTUAL POSITION THAT EMERGES FROM THE RECORDS IS THAT CIT (A) HAD SUSTAINED THE ADDITION ON ACCOUNT OF G.P. ADDIT ION AND PARTLY ON ACCOUNT OF ADDITION MADE U/S. 68. THE CO-ORDINATE B ENCH OF TRIBUNAL VIDE ORDER DATED 21-9-2012 DECIDED THE ISSUE IN FAVOUR O F ASSESSEE AND DELETED THE ADDITION BY HOLDING AS UNDER:- 4. NOW, WE TAKE UP THE ASSESSEES APPEAL FOR ASSES SMENT YEAR 2006-07 I.E. ITA NO.2937/AHD/2009. THE GROUNDS RAIS ED BY THE ASSESSEE ARE AS UNDER: THE LD. CIT (A)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN PASSING APPELLATE ORDER DATED 4-9-2009 FOR A.Y. 2006-07 IN THE CASE OF APPELLANT BY CONFIRMING THE G.P. ADDITI ON OF RS.48,54,881/-. ITA NO 1987 /AHD/2012 A.YR.. 2006 -07 5 2. THE LD. CIT (A) ERRED IN LAW AND ON FACTS IN CON FIRMING THE ADDITION OF RS.14,12,759/- U/S.68 AS UNPROVED FREIG HT LIABILITY (THOUGH THE ADDITION MADE IS RS.62,67,640/- BUT IT GETS TELESCOPED WITH G.P. ADDITION OF RS.48,54,881/- AND THE BALANCE RS.14,12,759/- IS ADDED HERE. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING OF APPEAL. 4.1. REGARDING GROUND NO.2, IT WAS AGREED BY BOTH T HE SIDES THAT THIS ISSUE IS INTERCONNECTED WITH GROUND NO.3 OF TH E ASSESSEES APPEAL IN ASSESSMENT YEAR 2005-06. IN THAT YEAR, WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND IT WAS HEL D THAT NO ADDITION IS JUSTIFIED OUT OF OUTSTANDING FREIGHT LIABILITY AND ON SIMILAR LINES, IN THIS YEAR ALSO, WE HOLD THAT NO ADDITION IS JUSTIFIED OU T OF OUTSTANDING FREIGHT LIABILITY. GROUND NO.2 IS ALLOWED. 4.2. REGARDING GROUND NO.1 ALSO, IT WAS SUBMITTED T HAT THIS ISSUE IS SIMILAR TO GROUND NO.2 RAISED IN ASSESSMENT YEAR 20 05-06. IN THAT YEAR, WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE A SSESSEE AND ACCORDINGLY IN PRESENT YEAR ALSO, THIS ISSUE IS DEC IDED IN FAVOUR OF THE ASSESSEE. THIS GROUND IS ALSO ALLOWED. 4.3. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLO WED. 7. IN VIEW OF THE AFORESAID FACTS WE ARE OF THE VIE W THAT SINCE THE ADDITION BASED ON WHICH THE PENALTY WAS LEVIED, HAS ITSELF BEEN DELETED, THE PENALTY ORDER EMANATING FROM IT THEREFORE DOES NOT SURVIVE. WE THUS FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT (A) AND T HUS CONFIRM THE ORDER OF CIT (A). ITA NO 1987 /AHD/2012 A.YR.. 2006 -07 6 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 23 11 - 2012. SD/- SD/- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-XV, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 20 - 11 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 20 /11 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..