Gandhi Vadia Associates, Ahmedabad V. The Income Tax Officer, Ward-2(3), Bhavnagar

ITA 2051/AHD/2014

• Counselvise Citation: 205120514 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURIAN
• Assessee Lawyers: RIDHI SHAH

Judgement Text

I.T.A. NO.: 20 51/AHD/14 ASSESSMENT YEAR: 2010 - 11 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD C BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND S S GODARA JM] I.T.A. NO. : 2051 /AHD/1 4 ASSESSMENT YEAR : 2010 - 11 GANDHI VADIA ASSOCIATES .APPELLANT C/O GANIBHAI A VADIA PLOT NO.164, ANJUM SECTOR 28, GANDHINAGAR [PAN: AAHFG 8975 H] VS. INCOME TAX OFFICER . RESPONDENT WARD 2(3), BHAVNAGAR APPEARANCES BY: RIDHI SHAH , FOR THE APPELLANT JAMES KURIAN, FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : SEPTEMBER 08 , 201 5 DATE OF PRONOUNCING THE ORDER : NOVEMBER 30 , 2015 O R D E R PER PRAMOD KUMAR AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 24 TH JUNE 2014 PASSED BY THE CIT(A) IN THE MATTER O F PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2010 - 11 . GRIEVANCE OF THE ASSESSEE, IN SUBSTANCE, THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE IMPUGNED PENALTY OF RS 87,571. 2. THE ISSUE IN APPEAL LIES IN A NARRO W COMPASS OF MATERIAL FACTS. DURING THE COURSE OF THE QUANTUM ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE ADDITIONS OF RS 1,05,004 IN RESPECT OF OPENING BALANCES OF THE SUNDRY CREDITORS, ON I.T.A. NO.: 20 51/AHD/14 ASSESSMENT YEAR: 2010 - 11 PAGE 2 OF 3 THE GROUND THAT THESE CREDITORS COULD NOT BE VERIFIED. THE ASSESSING OFFICER ALSO NOTED THAT AN AMOUNT OF RS 98,000, RECEIVED BY CHEQUE BY THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR, WAS CREDITED TO SUSPENSE ACCOUNT, AND THAT NECESSARY CONFIRMATIONS AND SUPPORTING DETAILS WERE NOT FURNISHED BY THE ASSESSEE. T HIS AMOUNT WAS ALSO ADDED TO THE INCOME RETURNED BY THE ASSESSEE. THE ASSESSEE ACCEPTED THESE ADDITIONS AND DID NOT CARRY THE MATTER IN APPEAL. THE MATTER, HOWEVER, DID NOT REST THERE. RELYING UPON HON BLE KARNATAKA HIGH COURT S JUDGMENT IN THE CASE OF CIT VS SREE VALLIPAPA TEXTILES [(2007) 294 ITR 322 (KAR)], IN SUPPORT OF THE PROPOSITION THAT THE PROVISIONS OF SECTION 271(1)(C) HAS TO BE STRICTLY APPLIED IN THE LARGER INTEREST OF THE DISCIPLINE IN FILING CORRECT RETURNS BY THE ASSESSEE, THE ASSESSING O FFICER ALSO IMPOSED A PENALTY OF RS 87,751 FOR CONCEALMENT OF INCOME REPRESENTING THE ABOVE ADDITIONS. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BE FORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 4. AS LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDS, THE MERE FACT QUANTUM ADDITIONS HAVI NG RECEIVED FINALITY PER SE CANNOT BE PUT AGAINST THE ASSESSEE IN PENALTY PROCEEDINGS AND THAT PRECISELY IS THE CASE BEFORE US. AS FOR THE UNSECURED CREDITORS OF RS 1,05,400, IT IS NOT EVEN IN DISPUTE THAT THE ADDITION REPRESENTS AMOUNTS WHICH WERE INCLUDE D IN THE OPENING BALANCES AND, THEREFORE, THESE AMOUNTS BEING ADDED TO THE INCOME OF THIS YEAR IS SOMETHING CORRECTNESS OF WHICH, TO SAY THE I.T.A. NO.: 20 51/AHD/14 ASSESSMENT YEAR: 2010 - 11 PAGE 3 OF 3 LEAST, IS DOUBTFUL IN LAW. AS FOR THE AMOUNT OF RS 98,000, THE AMOUNTS WERE RECEIVED BY CHEQUES AND THE ASSESSEE D ID FURNISH COMPLETE DETAILS OF IMARANBHAI ALLAUDINBHAI MANKAD AND RIZWANABEN AIMRANDBHAI MANKAD, ALONGWITH THE PHOTO IDENTITY PROOF, BEFORE THE CIT(A) BUT THE CIT(A) HAS TO TAKE INTO ACCOUNT THESE DETAILS ON THE GROUND OF TECHNICALITIES OF RULE 46A. IN OU R CONSIDERED VIEW, ON THESE FACTS, IT IS QUITE DOUBTFUL WHETHER THESE ADDITIONS WERE SUSTAINABLE IN LAW. THE ASSESSEE S EXPLANATIONS ABOUT THE ADDITION OF RS 1,05,400, REPRESENTING OPENING BALANCES OF CREDITORS, AND ABOUT THE ADDITION OF RS 98,000 REPRESEN TING RECEIPTS, THROUGH BANKING CHANNELS, FROM THE CUST OMERS WHO WERE IDENTIFIED PROPERLY AT THE APPELLATE STAGE , DESERVES TO BE ACCEPTED. WHATEVER MAY HAVE BEEN DONE AT THE ASSESSMENT STAGE, AS THE LEARNED COUNSEL CONTENDS, WAS DONE TO BUY PEACE OF MIND AN D TO LET THE MATTER REACH FINALITY. THERE CANNOT BE ANY OCCASION TO IMPOSE PENALTY IN RESPECT OF SUCH ADDITIONS. WE, THEREFORE, DELETE THE IMPUGNED ADDITIONS. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH DAY OF NOVEMBER, 2015. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 30 TH DAY OF NOVEMBER , 201 5 . COPIES TO : (1) THE APPE LLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD