The ITO, Ward-1(4), Surat V. Priya Dyeing & Printing Pvt.Ltd., Surat

ITA 2069/AHD/2009

• Counselvise Citation: 206920514 RSA 2009
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 29-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y C SURTI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. MOHAN ALAN KAMONY, AM) ITA NO.2069/AHD/2009 AY: 2005-06 THE INCOME TAX OFFICER, WARD 1 (4), ROOM NO.206, 2 ND FLOOR, AAYAKAR BHAVAN, MAJURA GAGE, SURAT VS M/S. PRIYA DYEING & PRINTING MILLS PVT. LTD., BLOCK NO.206/P, KADODARA, SURAT PA NO. AABCP 3964 G (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. C. SURTI, DR RESPONDENT BY NONE DATE OF HEARING: 15-09-2011 DATE OF PRONOUNCEMENT: 23-09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II , AHMEDABAD DATED 03-03-2009, FOR ASSESSMENT YEAR 2005-06, CHALLENGIN G THE DELETION OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF DYEING AND PRINTING OF C LOTH ON JOB WORK BASIS. ADDITION WAS MADE ON ACCOUNT OF FALL IN GROS S PROFIT, BECAUSE IN THE CURRENT YEAR IT WAS 11.35% AS AGAINST AVERAGE G ROSS PROFIT OF 11.96% IN THE EARLIER YEAR. PENALTY WAS IMPOSED ON ACCOUNT OF THE SAME ADDITION. THE AO NOTED IN THE PENALTY ORDER TH AT THE ASSESSEE ITA NO.2069/AHD/2009 ITO, WARD 1 (4), SURAT VS M/S. PRIYA DYEING & PRINT ING MILLS LTD. LTD. 2 DID NOT MAINTAIN PROPER RECORDS LIKE PURCHASE BILLS ETC. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) WHILE CHALLENGI NG THE PENALTY ORDER THAT THERE IS MINOR FALL IN GROSS PROFIT AS C OMPARED TO THE EARLIER YEARS AND THAT NO SPECIFIC DEFECTS HAVE BEEN POINTE D IN THE BOOKS OF ACCOUNTS. ADDITION IS MADE MERELY ON ESTIMATE BASIS . THEREFORE, NO CASE OF CONCEALMENT OF INCOME OR FILING OF INACCURA TE PARTICULARS OF INCOME IS MADE OUT. THE ASSESSEE RELIED UPON SEVER AL DECISIONS IN SUPPORT OF THE CONTENTION. THE LEARNED CIT(A) ACCEP TED THE CONTENTION OF THE ASSESSEE AND RELIED UPON THE DECI SION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SUBHASH T RADING CO. 221 ITR 110 IN WHICH IT WAS HELD THAT PENALTY IS NOT LE VIABLE ON THE ADDITION ON ACCOUNT OF GROSS PROFIT. THE LEARNED CI T(A) NOTED THAT THE ASSESSEE MAINTAINED BOOKS OF ACCOUNTS AND VOUCHERS. THE ASSESSEE OFFERED EXPLANATION AND ADDITION WAS MADE ONLY ON L OW GROSS PROFIT. THEREFORE, PENALTY IS NOT LEVIABLE IN THE MATTER. A PPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLOWED. 3. THE LEARNED DR RELIED UPON THE ORDER OF THE AO. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SER VICE OF NOTICE. A/D CARD IS AVAILABLE ON RECORD. THE ASSESSEE IS, T HEREFORE, PROCEEDED EX-PARTE. 4. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW THE LEARNED CIT(A) RIGHTLY CANCELLED THE PENALTY IN THE MATTER. THE AO IN THE ASSESSMENT ORDER MERELY NOTED FALL IN THE GROSS PROFIT AS COMPARED TO AVERAGE GROSS PROFIT OF EARLIER YEARS. THE ASSESSEE WAS DOING THE WORK ON JOB WORK BASIS. THEREFORE, THERE WAS NO NEED TO ITA NO.2069/AHD/2009 ITO, WARD 1 (4), SURAT VS M/S. PRIYA DYEING & PRINT ING MILLS LTD. LTD. 3 MAINTAIN DAY TO DAY STOCK REGISTER. NO SPECIFIC DEF ECTS HAVE BEEN POINTED OUT IN THE MAINTENANCE OF THE BOOKS OF ACCO UNTS. THEREFORE, EVEN IF, ADDITION IS MADE ON ACCOUNT OF LOW GROSS P ROFIT BY ITSELF NO GROUND TO PROVE THAT ASSESSEE HAS CONCEALED PARTICU LARS OF INCOME OR FILED INACCURATE PARTICULARS OF INCOME. MERELY ENHA NCING THE INCOME ON ACCOUNT OF GROSS PROFIT WOULD NOT ATTRACT THE PR OVISION OF SECTION 271 (1) (C) OF THE IT ACT. THERE IS NOTHING ON RECO RD TO JUSTIFY LEVY OF PENALTY IN THE MATTER. WE, THEREFORE, DO NOT FIND A NY JUSTIFICATION TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) IN CAN CELING THE PENALTY. IN THE RESULT DEPARTMENTAL APPEAL HAS NO MERIT AND IS DISMISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- 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 D Y. REGISTRAR, ITAT, AHMEDABAD