The DCIT, Circle-9, Ahmedabad V. Shri Babulal K.Daga, Ahmedabad

ITA 2070/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89259 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: PF JAIN
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2070/AHD/2011 ( / ASSESSMENT YEAR : 2006-07) THE DCIT CIRCLE-9 AHMEDABAD / VS. SHRI BABULAL K DAGA PROP.OF PORBANDAR ROAD LINES 810, PB PAREKH TOWER OPP.VANIJYA BHAVAN KANKARIA, AHMEDABAD ./ ./ PAN/GIR NO. : ADQPD 8962 R ( # / APPELLANT ) .. ( $% # / RESPONDENT ) #& / APPELLANT BY : SHRI M.K. SINGH, SR.DR $% #'& / RESPONDENT BY : SHRI P.F. JAIN, AR ()'* / DATE OF HEARING 24/03/2015 +,-.'* / DATE OF PRONOUNCEMENT 10/04/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABA D (CIT(A) IN SHORT) DATED 28/06/2011 PERTAINING TO ASSESSMEN T YEAR (AY) 2006-07. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- ITA NO.2070/AHD /2011 DCIT VS. SHRI BABULAL K DAGA ASST.YEAR 2006-07 - 2 - 1) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY O F RS.5,54,289/- LEVIED U/S.271(1)(C) OF THE ACT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDAB AD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CO MMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 31/12/008. WHILE FRAMING THE ASSESSMENT ORDER, THE ASSESSING OFFICER (AO IN SHORT) MADE VARIOUS DISALLOWANCES AN D ASSESSED THE INCOME AT RS.2,46,87,352/- AGAINST THE TOTAL DECLAR ED INCOME BY THE ASSESSEE AT RS.69,27,336/-. THE AO ALSO INITIATE D PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. THE AO SUBSEQUENTLY MADE DISALLOWANCE OF RS.14,60,450/-, DISALLOWANCE ON ACCOUNT OF NON-PAY MENT OF TDS OF RS.53,824/- & DISALLOWANCE ON ACCOUNT OF OTHER MISC ELLANEOUS EXPENSES OF RS.1,32,456/- AND LEVIED A PENALTY OF RS.5,54,28 9/-. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, ALLOWED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND S UBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIO N. ITA NO.2070/AHD /2011 DCIT VS. SHRI BABULAL K DAGA ASST.YEAR 2006-07 - 3 - 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE LD.CI T(A) HAS PASSED A WELL-REASONED ORDER BASED ON THE FACTS. HE SUBMITT ED THAT THE ADDITIONS WERE MADE ON ADHOC BASIS BY WAY OF ESTIMATION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDINGS IN P ARAS-4 TO 6 OF HIS ORDER BY HOLDING AS UNDER:- 4. IT IS SEEN THAT PENALTY HAS BEE IMPOSED OF RS .53,824 (WRONGLY MENTIONED IN PARA 8 OF THE PENALTY ORDER BY THE AO AS RS.52,824) ON THE ADDITION MADE U/S.40(A)(IA) IN THE ASSESSMEN T ORDER PASSED U/S.143(3) ON 31.12.2008 ON ACCOUNT OF NON-PAYMENT OF TDS ON FREIGHT EXPENSES. PENALTY ON THIS AMOUNT IS DIRECT ED TO BE DELETED BECAUSE THE APPELLANT HAD HIMSELF DECLARED IN THE A UDIT REPORT FILED WITH THE RETURN THE FREIGHT EXPENSES AT RS.1, 38,13,824 DISALLOWED U/S.40(A)(IA) DUE TO NON-PAYMENT OF TDS, HOWEVER IN THE COMPUTATION OF INCOME FILED WITH THE RETURN THE ASSESSEE ADDED ONLY RS.1,37,60,000 AND THEREFORE THE AO ADDED RS.5 3,824 THAT IS THE DIFFERENCE IN THE TWO FIGURES. IN MY VIEW THE APPELLANT HAD NOT CONCEALED OR FURNISHED INACCURATE PARTICULARS AND H AD MADE DUE DISCLOSURES IN THE RETURN, THEREFORE THE PENALTY OF RS.53,824 IS DIRECTED TO BE DELETED. 5. IT IS SEEN THAT THE PENALTY HAS BEEN IMPOSED ON DISALLOWANCE MADE OF RS.14,60,450/- IN THE ASSESSMENT ORDER PAS SED U/S.143(3) DATED 31.12.2008 OUT OF TOTAL CLAIM OF RS.9,73,63,3 49 ON ACCOUNT OF FREIGHT, TRIP EXPENSES, DIESEL EXPENSES, TYRE EX PENSES AND TRUCK EXPENSES BECAUSE THE EXPENDITURE WAS FOUND UNVERIFI ABLE, VOLUMINOUS AND MOSTLY IN CASH BY THE AO. THE ADHOC ADDITION OF ITA NO.2070/AHD /2011 DCIT VS. SHRI BABULAL K DAGA ASST.YEAR 2006-07 - 4 - RS.14,60,450 MADE AT 1.5% OF CLAIM OF VARIOUS EXPEN SES TOTALLI8NG TO RS.9 CRORE ODD WAS UPHELD VIDE THIS OFFICE APPEL LATE ORDER DATED 22.7.2009. VIDE WRITTEN SUBMISSION DATED 17.3.2011 IT WAS STAT ED THAT THE ADDITION WAS MADE ON LUMPSUM, ADHOC BASIS WITHOUT A NY CONCRETE FINDING ABOUT FILING OF WRONG PARTICULARS AND CONCE ALMENT OF INCOME. IT WAS STATED THAT SUCH ADDITIONS CANNOT U NDER ANY CIRCUMSTANCES BE CALLED AS CONCEALMENT AND THAT NO PENALTY SHOULD BE IMPOSED. WITH RESPECT TO PENALTY IMPOSED ON 1/6 TH DISALLOWANCE OF RS.1,32,456 OUT OF VARIOUS EXPENSES LIKE DEPRECIATION ON CAR, VEHICLE RUNNING EXPENSE, TRAVE LLING, TELEPHONE AND OFFICE EXPENSES TOTALLING TO RS.7,94,740. IT W AS STATED THAT THE ADDITION WAS REDUCED TO RS.1,00,894 VIDE CIT(A) ORD ER DATED 22.7.2009. WITH RESPECT TO THE ABOVE TWO ESTIMATED ADDITIONS SEVERAL CASE LAWS WERE CITED IN SUPPORT OF NON-LEVY OF PENALTY. 4.1. IT IS NOT DISPUTED THAT THE ADDITION WAS MADE ON LUMP-SUM, ADHOC BASIS. MOREOVER, THE ABOVE FINDING OF THE LD.CIT(A ) IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE L D.CIT(A) AS THE LD.CIT(A) HAS RIGHTLY FOLLOWED THE RATIO LAID DOWN BY THE HONBLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF CIT VS . AJAIBSINGH & CO. REPORTED AT (2002) 253 ITR 630 (P&H) AND ALSO THE R ATIO LAID DOWN BY THE HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS REPORTED AT 322 ITR 158(SC). THUS, GROUN D NO.1 OF REVENUES APPEAL IS REJECTED. 5. GROUND NOS.2 & 3 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. ITA NO.2070/AHD /2011 DCIT VS. SHRI BABULAL K DAGA ASST.YEAR 2006-07 - 5 - 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH DAY OF APRIL, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 10/ 04 /2015 2*..,(.../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XV, AHMEDABAD 5. 7(8$45 , *45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<) / GUARD FILE. ! / BY ORDER, %7$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 24.3.15(DICTATION-PAD 5+PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..26.3.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.10.4.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.4.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER