Shri Dashrathbhai Kantibhai Patel, Anand V. The Income tax Officer,Ward-2, Anand

ITA 2119/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1205 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 13-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Assessee Lawyers: N C AMIT
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ././ ./ ITA NO. 2119/AHD/2013 / // / ASSESSMENT YEAR : 2003-04 SHRI DASHRATHBHAI KANTIBHAI PATEL, PROP. MARUTI TRADERS, NR. SARDAR PATEL STATUTE, VALASAN, TAL. ANAND PAN : ADUPP 5587 G VS INCOME TAX OFFICER, WARD-2, ANAND / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE BY : SHRI N. C. AMIT, AR REVENUE BY : SHRI ADITYA SHUKLA, SR DR / // / DATE OF HEARING : 11/07/2016 / // / DATE OF PRONOUNCEMENT: 12/07/2016 / // / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, BARODA DAT ED 06.05.2013 FOR ASSESSMENT YEAR 2003-04. 2. GROUND NO.2 ABOUT LIMITATION IS NOT PRESSED. B Y THE REMAINING GROUNDS, THE ASSESSEE CHALLENGES THE IMPOSITION OF PENALTY OF RS.1,02,955/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 3. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT AN AD DITION OF RS.16,44,439/- WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK. THE ASSESSEE CARRIED THE MATTER UPTO ITAT WHICH VIDE ORDER DATED 29.03.2011 IN ITA NO.3826/AH D/2007 DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE VALUATION OF CL OSING STOCK AFRESH. IN THE LIGHT OF DIRECTION OF ITAT, THE ASSESSING OFFICER S UBSEQUENTLY PASSED THE ORDER U/S 143(3) R.W.S. 254 OF THE ACT AND HAS INIT IATED PENALTY PROCEEDINGS U/S 271(1)(C) IN SUCH ORDER ON ADDITION WHICH WAS F URTHER MADE IN THE LIGHT OF DIRECTION OF ITAT. THE ASSESSEE CONTENDED THAT ALL THE RELEVANT DETAILS SMC-ITA NO. 2119/AHD/2013 SHRI DASHRATHBHAI KANTIBHAI PATEL VS. ITO AY : 2003-04 2 ABOUT THE VALUATION OF CLOSING STOCK WERE FURNISHED ALONGWITH RETURN OF INCOME. A CHANGE IN VALUATION OF THE STOCK CANNOT BE CALLED FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. RELIANCE WAS PLACED ON FOLLOWING DECISIONS:- I) NEW SORATHIA ENGINEERING CO. VS. CIT, 282 ITR 642 (GUJ.), II) MUKESHCHANDRA A. LAKDAWALA VS. ITO (ITAT) III) GUJARAT CREDIT CORPORATION LTD, 302 ITR 250 IV) RELIANCE PETRO PRODUCTS LTD, 322 ITR 158 (SC) V) CHAINRUP SAMPATHRAM VS. CIT, 24 ITR 451 (SC) VI) CIT VS. SHAH DOSHI & CO, 133 ITR 23 (GUJ), LOWER AUTHORITIES, HOWEVER, IMPOSED THE PENALTY. L D. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AND CONTENDS TH AT HONBLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD, REPORTED IN (2013) 358 ITR 295 (SC), HAS CLEARLY HELD THAT VALUATION OF STOCK IS A MATTER OF PREPONEMENT OR POSTPONEMENT OF TAXATION WHICH SHOULD NOT BE AGI TATED BY THE DEPARTMENT. BESIDES, HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD HAS ALSO HELD THAT WHEN ALL THE DETAIL S WERE FURNISHED ALONG WITH RETURN OF INCOME, MERE DISALLOWANCE OR ADDITIO N CANNOT BE LIABLE FOR PENALTY U/S 271(1)(B) OF THE ACT. 4. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. I FIND MERIT IN THE CONTENTION OF THE L D. COUNSEL FOR THE ASSESSEE RELYING ON THE JUDGMENTS OF EXCEL INDUSTRIES LTD (S UPRA), RELIANCE PETRO PRODUCTS LTD (SUPRA) AND OTHER JUDGMENTS. I AM, TH EREFORE, OF THE SMC-ITA NO. 2119/AHD/2013 SHRI DASHRATHBHAI KANTIBHAI PATEL VS. ITO AY : 2003-04 3 CONSIDERED VIEW THAT THIS IS NOT A FIT CASE FOR LEV YING PENALTY U/S 271(1)(C) WHICH IS HEREBY DELETED AND THE ASSESSEES APPEAL I S ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 12 TH JULY, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 12/07/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD