ACIT CIR 21(3), MUMBAI V. ANILA SILK INDUSTRIES, MUMBAI

ITA 2073/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8432 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-04-2010
• Assessment Year: 1991-1992
• Appeal Filed On: 03-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Keywords: Opportunity of being heard; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVA N, JM ITA NO.2073/MUM/2009 : ASST.YEAR 1991-92 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 21(3) MUMBAI. VS. M/S.ANILA SILK INDUSTRIES B-102, TEJPAL INDUSTRIAL ESTATE ANDHERI KURLA ROAD, SAKINAKA MUMBAI 400 070. PAN : --- (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.RAVIKIRAN RESPONDENT BY : --- NONE --- O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE LEARNED CIT(A) ON 19.01.2009 DELETING THE PENALTY OF RS.18, 81,979 IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE ACT IN RELAT ION TO ASSESSMENT YEAR 1991-92. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S.144 DETERMINING TOTAL INCOME AT RS.7 LACS. THE TRIBUNAL SET ASIDE THE ASSESSMENT VIDE ITS ORDER DATED 25.04.200 3DIRECTING THE A.O. TO MAKE FRESH ASSESSMENT AS PER LAW AFTER ALLOWING A REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THIS FRESH ASSESSMENT, AGAIN CO MPLETED U/S.144, THE A.O. ISSUED NOTICE REQUIRING THE ASSESSEE TO ATTEND HIS OFFICE AND PRODUCE ALL DETAILS AND SUPPORTING EVIDENCES IN SUPPORT OF RETURN OF INCOME ALONG WITH DETAILS AND BANK STATEMENT FOR VERIFICATION. THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE BEFORE THE A.O. AS A RESULT OF WHICH THE ASSESSMENT WAS AGAIN COMPLETED ON THE ESTIMATED TOTAL INCOME OF RS.7 LACS. THE ASSESSEE FILED APPEA L BEFORE THE LEARNED CIT(A) WHO GAVE RELIEF OF RS.4 LACS TAKING INTO CONSIDERATION THE COMPLETE FACTS OF THE CASE ITA NO.2073/MUM/2009 M/S.ANILA SILK INDUSTRIES. 2 INCLUDING THE EXPLANATION GIVEN BY THE ASSESSEE THA T THE TRADING RESULTS WERE COMPARABLE BUT THE CONSUMPTION OF RAW MATERIAL WAS ON HIGHER SIDE. RESULTANTLY THE TOTAL ESTIMATE OF INCOME WAS REDUCED TO RS.3 LA CS. THE ASSESSING OFFICER IMPOSED PENALTY U/S.271(1)(C) AT 100% OF THE TAX ON THE INCOME OF RS.30,89,708 (REVISED LOSS OF RS.27,89,708 MINUS FINALLY ASSESSE D AT AN INCOME OF RS.3 LACS). THE LEARNED CIT(A) ORDERED FOR THE DELETION OF PENA LTY. 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF ASSESSEE DESPITE NOTICE. IT IS SEEN FROM THE STATEMENT OF FA CTS THAT THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT ETC. AS THESE WERE NOT TRACEABLE BECAUSE OF THE TIME GAP OF AROUND 15 YEARS. BE THAT AS IT MAY, IT IS S EEN THAT THE INCOME HAS BEEN FINALLY DETERMINED AT RS.3 LACS ON ESTIMATED BASIS WITHOUT ANY BASIS. IT IS A SIMPLE CASE OF ESTIMATION OF INCOME DE HORS THE SPECIFIC ADDITIONS FALSIFYING ASSESSEES CLAIM QUA DEDUCTIONS. IT IS TRUE THAT WHEN THE ASSESSEE FAIL S TO PRODUCE BOOKS OF ACCOUNT THE INCOME HAS TO BE ESTIMATED ON SOME REAS ONABLE BASIS U/S.144 AND SOME SORT OF ESTIMATION IS BOUND TO BE THERE. BUT SUCH AN ESTIMATION OF INCOME, WITHOUT ANYTHING ELSE, CANNOT BE A CASE FOR IMPOSING PENAL TY U/S.271(1)(C) OF THE ACT. THERE IS NO DEARTH OF JUDGEMENTS PASSED BY THE HON BLE COURTS ON THIS ISSUE. RECENTLY THE HONBLE DELHI HIGH COURT IN CIT VS. AERO TRADERS P. LTD. [(2010) 322 ITR 316 (DEL.)] HAS UPHELD THE DELETION OF PENALTY U/S.271(1)(C) O N THE GROUND THAT THE ADDITION WAS MADE BY THE A.O. ON THE BASIS OF ESTIMATED PROFIT AND THE SAME WAS SUBSTANTIALLY REDUCED IN APPEAL. SIMILAR V IEW HAS BEEN EXPRESSED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN HARIGOPAL SINGH VS. CIT [(2002) 258 ITR 85 (P&H)] . IN VIEW OF THE ABOVE PRECEDENTS, IT IS SEEN IN T HE PRESENT CASE THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER BY E STIMATING A PARTICULAR AMOUNT OF INCOME, WHICH ESTIMATION WAS REDUCED IN APPEAL. IN SUCH A SITUATION THE LEARNED CIT(A) WAS PERFECTLY JUSTIFIED IN ORDERING FOR THE DELETION OF PENALTY. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER. ITA NO.2073/MUM/2009 M/S.ANILA SILK INDUSTRIES. 3 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 11 TH DAY OF FEBRUARY, 2011. SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 11 TH FEBRUARY, 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) XXI, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.