Aparna Saree Private Limited, Kolkata V. DCIT, CC-I, Kolkata, Kolkata

ITA 2183/KOL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62129 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 09-12-2010
• Court: TRIBUNAL
• Department Lawyers: B K DAS
• Keywords: Search and seizure

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () . .. . . .. . , ,, , , ! ''# $% ''# $% ''# $% ''# $% ] ]] ] [BEFORE HONBLE SRI C.D.RAO, AM & HONBLE SRI GE ORGE MATHAN, JM] !' !' !' !' /ITA NOS.2183 & 2184/KOL/2010 (%) *+/ ASSESSMENT YEARS : 2003-04 & 2004-05 ($- / APPELLANT ) - % - ( /0$- /RESPONDENT) APARNA SAREE PRIVATE LIMITED. D.C.I.T., CENTRAL CIRCLE-I, KOLKATA -VERSUS- K OLKATA (PAN:AACCA 1439 L) $- 1 2 / FOR THE APPELLANT: SHRI SUBASH AGARWAL /0$- 1 2 / FOR THE RESPONDENT: SHRI B.K.DAS 3%4 1 /DATE OF HEARING : 04.07.2012. 5* 1 /DATE OF PRONOUNCEMENT : 04.07.2012. 6 / ORDER . .. . . .. . , PER SHRI C.D.RAO, AM ITA NO.2183/KOL/2010 IS FILED BY THE ASSESSEE AGAIN ST ORDER OF THE LD.CIT(A)- CENTRAL-III, KOLKATA IN APPEAL NO.47/CC-I/CIT(A)-C -III/KOL/07-08 DATED 14.09.2010 FOR ASSESSMENT YEAR 2003-04. ITA NO.2184/KOL/2010 I S FILED BY THE ASSESSEE AGAINST ORDER OF THE LD.CIT(A)-CENTRAL-III, KOLKATA IN APP EAL NO.48/CC-I/CIT(A)-C- III/KOL/07-08 DATED 14.09.2010 FOR ASSESSMENT YEAR 2004-05. 2. SHRI SUBASH AGARWAL, LD. AUTHORISED REPRESENTATI VE APPEARED ON BEHALF OF ASSESSEE. SHRI B.K.DAS, LD. DR APPEARED ON BEHALF O F THE REVENUE. 3. IN ITA NO.2183/KOL/2010 THE ASSESSEE HAS RAISED THE FOLLOWING GROUND :- 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY U/S 271(C) OF T HE INCOME TAX ACT, 1961 @ 100% AMOUNTING OF RS.33,228/-. 3.1. IN ITA NO.2184/KOL/2010 THE ASSESSEE HAS RAIS ED THE FOLLOWING GROUND :- 2 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY U/S 271(C) OF T HE INCOME TAX ACT, 1961 @ 100% AMOUNTING OF RS.2,73,696/- 4. AS THE ISSUE IN THIS APPEAL IS AGAINST THE CONF IRMATION OF LEVYING OF PENALTY U/S 271(C) OF THE IT ACT AND AS BECAUSE OF THE LEVYING OF PENALTY IS IDENTICAL FOR BOTH THE ASSESSMENT YEARS AS ALSO THE REASONING FOR CONFIRMA TION OF THE PENALTY BY LD. CIT(A) IS IDENTICAL FOR BOTH THE ASSESSMENT YEARS THE TWO APP EALS ARE BEING DISPOSED BY THIS COMMON ORDER. 5. THE LD. AR FOR ASSESSEE SUBMITTED THAT THE FACT S OF LEVYING OF PENALTY IS THAT THERE WAS A SEARCH AND SEIZURE OPERATION AT THE ASS ESSEES PREMISES ON 24.01.2005. IN THE COURSE OF SEARCH CERTAIN SALES HAD BEEN FOUND T O BE UNRECORDED IN THE ASSESSEES REGULAR BOOKS OF ACCOUNTS. IT WAS THE SUBMISSION TH AT MORE SPECIFICALLY THE ASSESSEE COULD NOT SPECIFICALLY POINT OUT CERTAIN SALES WHIC H HAD BEEN MADE AS HAVING NOT BEEN RECORDED AND CORRESPONDING ENTRIES HAVE BEEN MADE I N THE ASSESSEES BOOKS OF ACCOUNT. IT WAS THE SUBMISSION THAT FOR A.YR.2003-0 4 THE SALES WERE TO THE EXTENT OF RS.3,01,375/- AND FOR A.YR.2004-05 THE SALES WERE TO THE EXTENT OF RS.7,57,000/-. IT WAS THE SUBMISSION THAT AS THE ASSESSEE WAS UNABLE TO SPECIFICALLY POINT OUT THE SALES AS RECORDED IN THE BOOKS OF ACCOUNTS THE ASSESSEE H AD ACCEPTED THE ADDITION REPRESENTING THE GROSS PROFIT AS ALSO THE PLAUSIBLE CAPITAL REQUIRED FOR THE SAID UNACCOUNTED PURCHASE AND SALES. IT WAS THE SUBMISSI ON THAT FOR A.YR. 2003-04 THE LD. CIT(A) HAD REDUCED THE PENALTY FROM 200% TO 100% AN D FOR A.YR.2004-05 THE PENALTY LEVIED BY THE AO ITSELF WAS 100% WHICH WAS CONFIRMED BY THE LD. CIT(A). IT WAS THE SUBMISSION THAT THE SALES FOR A.YR.2003-04 WAS NEARLY RS.33.23 CRORES AND FOR A.YR. 2004-05 SALES WAS NEARLY 39.24 CRORES. IT WAS THE SUBMISSION THAT THE SALES BEING SO HIGH THE TRANSACTIONS WHICH COULD NOT BE S PECIFICALLY POINTED OUT WERE MINUSCULE TO THE EXTENT OF ABOUT 0.001% AND LESS. I T WAS THE SUBMISSION THAT THE MATTER WAS ALSO OLD AND CONSEQUENTLY ASSESSEE WAS U NABLE TO SPECIFICALLY PIN POINT THE TRANSACTIONS THROUGH ITS REGULAR BOOKS OF ACCOUNT. IT WAS THE SUBMISSION THAT FOR THIS MISTAKE OR INABILITY ON THE PART OF ASSESSEE THE AS SESSEE SHOULD NOT BE BOUND WITH PENALTY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD RESPONDED TO THE SHOW CAUSE 3 NOTICE AND HAD ALSO EXPLAINED ITS POSITION BEFORE T HE AO AND BEFORE THE LD. CIT(A). IT WAS THE SUBMISSION THAT THE SUBMISSION OF THE ASSES SEE HAD NOT BEEN FOUND TO BE FALSE OR NOT PLAUSIBLE. IT WAS ONLY ON THE GROUND THAT TH E ASSESSEE HAD TRAINED A SET OF EMPLOYEES AND ON THE GROUND THAT THE ASSESSEE HAD N OT FILED ANY APPEAL AGAINST THE ADDITION BEFORE THE LD. CIT(A) AS ALSO THE REASON T HAT THE ASSESSEE HAD NOT VOLUNTARILY COME FORWARD WITH THE DECLARATION OF THE UNDISCLOSE D INCOME THAT THE PENALTY WAS LEVIED. IT WAS THE SUBMISSIONS THAT THE ASSESSEE IS A DEALER OF CLOTH AND MOSTLY WHOLESALE DEALER AND FOR THIS PURPOSE THE ASSESSEE DID HAVE ITS EMPLOYEES. THE ASSESSEE HAD NOT FILED THE APPEAL AGAINST ADDITION BEFORE CIT(A) BECAUSE THE ADDITION WAS NOMINAL AND THE ASSESSEE HAD ALSO ACCEPTED THAT THE ASSESSEE COULD NOT SPECIFICALLY PIN POINT AND CORRELATE THE SAID SALES . IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE HAD RECORDED ITS TRANSACTIONS IN ITS BOOKS OF ACCOUNTS AND IT WAS NOT THIS SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS NO T RECORDED THE SALES IN ITS BOOKS OF ACCOUNTS. BUT THE ASSESSEE IS UNABLE TO SPECIFICALL Y IDENTIFY THE SALES AS RECORDED IN THE BOOKS OF ACCOUNT THAT THE ASSESSEE HAS ACCEPTED THE ADDITION. IT WAS THE SUBMISSION THAT THE PENALTY IS LIABLE TO BE DELETED. 6. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORD ERS OF THE AO AND THE LD. CIT(A). IT WAS THE SUBMISSION THAT THERE WAS AN ABS OLUTE CONCEALMENT AND A CLEAR CUT DETECTION DURING THE SEARCH. IT WAS THE SUBMISSION THAT IT IS OUT OF THE SEIZED MATERIAL THAT THE ADDITION HAS BEEN MADE AND THE OFFER BY AS SESSEE WAS NOT VOLUNTARY. IT WAS THE SUBMISSION THAT THE PENALTY AS LEVIED AND CONFIRMED BY THE CIT(A) IS LIABLE TO BE UPHELD. 7. ON A SPECIFIC QUERY BY THE BENCH AS TO WHY THE R EVENUE IS NOT IN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) FOR REDUCING THE PENALT Y FROM 200% TO 100%. THE REVENUE SPECIFICALLY SUBMITTED THAT AS THE QUANTUM OF PENAL TY ON ACCOUNT OF REDUCTION WAS MINUSCULE 8. WE HAVE HEARD THE SUBMISSIONS. A PERUSAL OF THE FACTS IN THE PRESENT CASE SHOW THAT THE ADDITION WHICH HAS RESULTED IN THE LEVY OF PENALTY IS ON ACCOUNT OF CERTAIN SALES 4 AND EVIDENCES WHICH HAS BEEN FOUND IN THE COURSE OF SEARCH BUT WHICH THE ASSESSEE HAS BEEN UNABLE TO SPECIFICALLY CO-RELATE WITH ITS BOOKS OF ACCOUNT. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ADDITION HA S BEEN ACCEPTED BY THE ASSESSEE ONLY BECAUSE THE ASSESSEE HAS BEEN UNABLE TO CO-REL ATE THE SALES WITH ITS BOOKS OF ACCOUNTS. IT IS ALSO EVIDENT FROM THE REPLY FILED I N RESPONSE TO THE PENALTY THE NOTICE WHICH HAS BEEN EXTRACTED BY THE LD. AO IN HIS ORDER . THE ASSESSEE HAS SPECIFICALLY ADMITTED THAT THE TRANSACTIONS ARE VOLUMINOUS DUE T O VOLUMINOUS IN NATURE THE SPECIFIC ANALYSIS AND CORRELATION COULD NOT BE DONE. FURTHER , A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS ADMITTED TO TH E WHOLE TRANSACTIONS AS MUCH AS THE INCOME HAS BEEN UNABLE TO CORRELATE WITH ITS REGULA R BOOKS OF ACCOUNT. ADMITTEDLY THE TRANSACTION IS VERY MINISCULE WHEN COMPARED TO THE TOTAL VOLUME. A PERUSAL OF THE PROVISION OF SECTION 271(C) OF THE IT ACT SHOWS THA T THERE SHOULD BE CONSCIOUS CONCEALMENT. SUCH A MINUSCULE TRANSACTION CANNOT BE CONSIDERED AS CONSCIOUS CONCEALMENT BY THE ASSESSEE. NO OTHER ADDITION HAS RESULTED AS A CONSEQUENTIAL OF THE SEARCH. MISTAKES IN FIXING ENTRIES DO OCCUR. HAVING EMPLOYEES AND AS ADMITTED BY THE AO LARGE NUMBER OF EMPLOYEES ONLY WOULD LEAD TO MOR E MISTAKES BEING CREDITED. UNDER THE CIRCUMSTANCES WE ARE OF THE VIEW THAT AS THE ADDITION AND THE ALLEGED CONCEALMENT IS MINISCULE IS ALSO ON THE GROUND THAT THE ASSESSEES EXPLANATION HAS BEEN FOUND TO BE BONA FIDE AND THE EXPLANATION GIVE N BY THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE. WE ARE OF THE VIEW THAT PENALTY U/S 271 (1)(C) OF THE IT ACT IS NOT ACCEPTED IN THE PRESENT CASE. UNDER THE CIRCUMSTANC ES THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A) FOR BOTH THE ASSESS MENT YEARS STAND CANCELLED. 9. IN THE RESULT BOTH THE APPEALS OF ASSESSEE ARE A LLOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT ON 04.07.2012. SD/- SD/- [ .''# $% , ] [ .., ] [ GEORGE MATHAN ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( ( ) )) ) DATE: 04.07.2012. R.G.(.P.S.) 5 6 1 /((7 87*9- COPY OF THE ORDER FORWARDED TO: 1. APARNA SAREE PRIVATE LIMITED, 15/1/A/LOUDON STREET, KOLKATA-700017. 2 THE D.C.I.T., CENTRAL CIRCLE-I, KOLKATA. 3. THE CIT- 4. THE CIT(A)- CENTRAL-I, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 07 /(/ TRUE COPY, 6%3/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES