Shri Mansinh Naranbhai Chauhan, Bhavnagar V. The Income tax Officer,Ward-2(1), Bhavnagar

ITA 2143/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9864 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-09-2010
• Assessment Year: 1996-1997
• Appeal Filed On: 21-05-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: S N DIVATIA
• Section: 133A; 133(6)

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, JM AND D.C.AGRAWAL, AM MANSINH NARANBHAI CHAUHAN, C/O ASHAPURA JEWELLERS, M.G. ROAD, BHAVNAGAR. VS. INCOME-TAX OFFICER, WARD 291), BHAVNAGAR. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S. N. DIVATIA, AR RESPONDENT BY:- SHRI R. K. DHANESTA, DR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST LE VY OF PENALTY OF RS.2,34,000/-. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS CARRY ING ON BUSINESS OF SELLING GOLD ORNAMENTS. A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE PREMISES OF ASSESSEE ON 5.10.1995. DURING THE C OURSE OF SURVEY EXCESS STOCK OF GOLD ORNAMENTS VALUED AT RS.7,06,44 9/- WAS FOUND. ON THIS BASIS, THE ASSESSEE DECLARED AN UNACCOUNTED IN COME OF RS.8 LACS AND AGREED TO PAY TAX THEREON. HOWEVER, IN THE RETURN O F INCOME ASSESSEE CLAIMED LOSS OF RS.5,85,001/- IN ONION TRADING BUSI NESS. THE CLAIM WAS EXAMINED DURING ASSESSMENT PROCEEDINGS AND THE SAME WAS REJECTED. THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LD. CIT (A) AND THE TRIBUNAL ALSO CONFIRMED THE ORDER OF LD. CIT(A) BY OBSERVING AS UNDER :- ITA NO.2143/AHD/2007 ASST. YEAR :1996-97 ITA NO.2143/AHD/2007 ASST. YEAR 1996-07 2 5. HAVING HEARD BOTH THE PARTIES, WE HAVE CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THERE IS NO DISPUTE OF THE FACT THAT THE ASSESSEE HAS NEVER DONE BUSINESS IN ONION IN THE PAST. THE TRANSACTIONS WITH THE FARMERS WERE FOR THE FIRST TI ME AND THE LAST TIME AND THESE FARMERS HAD NEVER SIGNED SUCH AGREEMENTS FOR SALE OF GOODS IN THE PAST AND WITH ANY OTHER PARTIES. WE FURTHER FIND TH AT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE WITH REGARD TO MOVEMENT OF GO ODS. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE IN ORDER TO NEGATE TH E FINDING OF THE AUTHORITIES BELOW THAT THE TRANSACTIONS IN OPINION ARE ENTIRELY ON PAPER AND WERE IN THE NATURE OF SMOKE SCREEN CREATED TO A VOID PAYMENT OF TAX. THE LD. AR OF THE ASSESSEE COULD NOT GIVE THE DETAI LS OF OPINION TRANSACTIONS DESPITE ASKED FROM THE BENCH AND INSTE AD THE LD. AR OF THE ASSESSEE REPEATEDLY REQUESTED THE BENCH TO SEND BAC K THE CASE TO THE FILE OF THE AO FOR CONSIDERING THIS AFRESH. BUT WE ARE U NABLE TO ACCEDE TO SUCH PRAYER OF THE LD. AR OF THE ASSESSEE. WHEN THE ASSE SSEE COULD NOT SUBMIT THE DETAILS OF ONION TRANSACTIONS EITHER BEFORE THE AO OR BEFORE THE LD. CIT(A) OR BEFORE US, IT WILL BE UNFRUITFUL IN ALLOW ING SECOND INNING TO THE ASSESSEE TO PRODUCE THE DETAILS. THEREFORE, THE ASS ESSEE HAVING FAILED TO ESTABLISH ITS CLAIM OF HAVING ONION BUSINESS AND SU FFERED LOSS BEFORE ANY OF THE AUTHORITIES BELOW AND ALSO BEFORE US, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN CONFIRMING THE NON-AL LOWANCE OF SET OFF OF LOSS IN ONION TRADING AGAINST ADDITIONAL INCOME DET ECTED DURING SURVEY. THE AO THEREAFTER ISSUED SHOW CAUSE NOTICE TO THE A SSESSEE BEFORE LEVY OF PENALTY UNDER SECTION 271(1)(C). IN RESPONSE TO THI S THE ASSESSEE SOUGHT TO GET TIME BY SAYING THAT HE HAS FILED APPEAL BEFORE THE HON. HIGH COURT IN QUANTUM PROCEEDINGS. THE AO DECLINED TO GIVE ANY TI ME AND LEVIED THE PENALTY OF RS.2,34,000/-. 3. BEFORE LD. CIT(A) THE ASSESSEE SUBMITTED AS UNDE R :- (A) AS POINTED OUT IN REPLY DATED 9/2/99 TO AO DURING T HE ASSESSMENT PROCEEDINGS, THE APPELLANT HAD CARRIED O N SUCH BUSINESS IN PAST ALSO. THE DETAILS GIVEN IN PARA-2 OF THE SAID LETTER RELATING TO SOME OF THE SALES BILLS OF ONION CLEARLY PROVE THAT SUCH TRANSACTIONS WERE MADE IN 1994 ALSO. (B) THE APPELLANT HAD ALSO PRODUCED ENOUGH EVIDENCE TO PROVE THE DELIVERY OF GOODS AND EVEN SALE-PURCHASE PRICE ETC. IT WILL BE NOTICED FROM THE SLIPS ISSUED BY WEIGH BRIDGE THE T RANSPORT CHARGES RECOVERED AS PER THE SALE BILLS ETC. THAT T HERE WAS ITA NO.2143/AHD/2007 ASST. YEAR 1996-07 3 DELIVERY OF GOODS FROM THE AGRICULTURIST TO THE APP ELLANT AND SALES IN THE MARKET YARD. THE WEIGHMENT SLIPS ARE O N PAGE 81 TO 111 OF THE PAPER BOOK. (C) THE EXTRACT IN FORM 7/12 OF VARIOUS AGRICULTURISTS FROM WHOM ONION WAS PURCHASED ALSO RECORD THAT THEY HAD CULTI VATED ONION IN 1995-96. (D) THE SALES OF ONION WERE MADE THROUGH VARIOUS COMMIS SION AGENTS OF AGRICULTURE PRODUCE MARKET YARD AND THE S AME WERE SUPPORTED BY THEIR BILLS AND EVEN CONFIRMATION LETT ERS. (E) EVEN IN CASE OF MAKHIJA ONION COMPANY, THE AO HAD I SSUED LETTER DATED 133(6) ON 18/12/1998 AND COPY OF INTIM ATION DATED 2/3/1998 FOR ASST. YEAR 96-97 ISSUED BY ITO, WD-2, BHAVNAGAR ALONG WITH CONTRA ACCOUNT WERE FILED (SEE PAGE 118 TO 120). THE COMMISSION AGENTS ARE NOT LIABLE TO SALES TAX AND A S SUCH THE BILLS ISSUED BY THEM DO NOT INDICATE S.R. REGISTRAT ION NO. (F) THE COMMISSION AGENTS HAD CHARGED COMMISSION AND AL SO MADE DEDUCTION TOWARDS MAJOORI, TRANSPORT ETC. AS IT WOU LD BE NOTICED FROM THE BILLS ISSUED BY THEM. (G) THE SALE PROCEEDS FROM THE COMMISSION AGENTS HAD BE EN RECEIVED BY CHEQUE/D.D. (H) THE AGRICULTURISTS VENDORS HAD BEEN PAID BY BANK D .D. AND EVEN IN CASE OF SHRI JIVABHAI CHAUHAN, COPY OF HIS BANK PASS BOOK WAS FILED. THUS IT WAS EMPHASIZED THAT ASSESSEE HAS ACTUALLY C ARRIED OUT BUSINESS IN ONION AND IT HAS SUFFERED LOSS WHICH WAS ADJUSTED I N INCOME DECLARED DURING SURVEY. THE LD. CIT(A) REJECTED THIS ARGUMEN T BY HOLDING THAT THE DETAILS AND EXPLANATION FURNISHED WERE EXAMINED AND FOUND THAT ALL EVIDENCES WERE MANAGED, THE FACTS WERE DISTORTED AN D NEW EVIDENCE WAS CREATED. THE ASSESSEE DID NOT HAVE ONION BUSINESS I N EARLIER PERIOD AND THERE WAS NO MATERIAL TO SHOW THAT ASSESSEE HAD CAR RIED OUT ANY SUCH BUSINESS THIS YEAR ALSO. 4. BEFORE US, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAS EVIDENCE IN THE FORM OF PURCHASE VOUCHERS, SALE-VOU CHERS, PAYMENT THROUGH CHEQUES AND OTHER EVIDENCES AS CLAIMED BEFO RE THE LD. CIT(A). ALL THESE EVIDENCES WERE REJECTED BY LD. CIT(A) SUM MARILY. THE TRIBUNAL ITA NO.2143/AHD/2007 ASST. YEAR 1996-07 4 ALSO DID NOT CONSIDER THE EVIDENCES OF ASSESSEE DOI NG THE BUSINESS IN ONION. 5. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT ASS ESSEE HAS FAILED TO PRODUCE EVIDENCES BEFORE THE AO, IN THE QUANTUM PRO CEEDINGS OR EVEN BEFORE THE TRIBUNAL. THE ASSESSEE ALSO FAILED TO SU BMIT ANY EXPLANATION BEFORE THE AO. THEREFORE, THERE IS NO CASE FOR ANY RELIEF. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. EVEN THOUGH THERE IS A FINDING BY THE TR IBUNAL THAT ASSESSEE DID NOT FURNISH DURING QUANTUM PROCEEDINGS ANY EVIDENCE OF CARRYING ON ANY BUSINESS IN ONION BUT SUCH EVIDENCE WAS APPARENTLY FURNISHED BEFORE THE LD. CIT(A) IN PENALTY PROCEEDINGS. THE LD. CIT(A) H AS SUMMARILY REJECTED THESE EVIDENCES WITHOUT GIVING ANY FINDING AS TO THE NATURE OF THESE EVIDENCES AND WHY THEY ARE NOT RELIABLE. HE AUGHT TO HAVE CARRIED OUT HIMSELF OR THROUGH THE AO NECESSARY ENQUIRIES S O AS TO FIND OUT THE UNTRUTHFULNESS OF SUCH EVIDENCES. THE ASSESSEE HAS RIGHT TO SUBMIT THE EVIDENCE BEFORE THE LD. CIT(A) PROVIDED HE GIVES OP PORTUNITY TO THE ASSESSEE AND ALSO PROVIDED THAT ASSESSEE GIVES REAS ONS FOR NOT SUBMITTING EVIDENCE BEFORE THE AO. IN THE PRESENT CASE LD. CIT (A) ADMITTED FRESH EVIDENCES AND ALSO DID NOT DISCUSS THEM AS TO WHY T HEY SHOULD BE REJECTED. MERELY SAYING THAT EVIDENCES WERE ALL MAN AGED IS NOT SUFFICIENT UNLESS THERE ARE REASONS TO HOLD SO. WE ACCORDINGLY , RESTORE THE MATTER TO THE FILE OF LD. CIT(A) WHO WILL DECIDE AFRESH THE A PPEAL ON PENALTY ISSUE AFTER CONSIDERING THE FINDING OF THE TRIBUNAL IN QU ANTUM PROCEEDINGS AND ALSO THE EVIDENCES FURNISHED BY THE ASSESSEE BEFORE HIM. THUS WE RESTORE THE MATTER TO THE FILE OF LD. CIT(A) FOR FRESH DECI SION. ITA NO.2143/AHD/2007 ASST. YEAR 1996-07 5 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 30/9/10. SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD, DATED : 30/9/10. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 23/9/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 28/9/2010 MEMBER .OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..