Shri Himatlal Vasanji Lodhia, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-5 (1), RAJKOT-GUJARAT

ITA 22/RJT/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1319 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RANJIT LALCHANDANI
• Keywords: Principle of natural justice; Agreed addition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] HIMATLAL VASANJI LODHIA, C/O R. K. SHUKLA & CO., 2 ND FLOOR, OPERA TOWER, JAWAHAR ROAD, RAJKOT PAN: AAMPL3899E (APPELLANT) VS THE ITO, WARD: 5(1), RAJKOT (RESPO NDENT) REVENUE BY : S H RI PRASOON KABRA , D . R. ASSESSEE BY: S H RI RANJIT LALCHANDANI , A.R. DATE OF HEARING : 07 - 04 - 2 016 DATE OF PRONOUNCEMENT : 29 - 04 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2010 - 11 , AR ISES FROM ORDER OF THE CIT(A) - 2, RAJKOT DATED 07 - 10 - 2015 IN APPEAL NO. CIT(A) - 2/0165/13 - 14 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 22 / RJT /20 16 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 22 /RJT /20 16 A.Y. 2010 - 11 PAGE NO HIMATLAL VASANJI LODHIA VS. ITO 2 2. THE ASSESSEE S SOLITARY SUBSTAN T I VE GROUND CHALLENGES SECTION 271(1) (C) PENALTY OF RS. 55,333 / - IMPOSED BY THE ASSESSING OFFICER IN ORDER DATED 18 - 09 - 2013 AND CONFIRMED IN THE LOWER APPELLATE PROCEEDINGS. BOTH THE LD. REPRESENTATI VES REITERATE THEIR RESPECTIVE ARGUMENTS AGAINST AND IN SUPPORT OF THE PENALTY IN QUESTION DURING THE COURSE OF HEARING. 3. THIS ASSESSEE IS ENGAGED IN GOLD, BULLION AND JEWELLERY BUSINESS. THE ASSESSING OFFICER IN THE COURSE OF SCRUTINY NOTICED HIS GR OSS PROFIT OF RS. 18,97,225/ - ON SALES OF RS. 1,95,185/ - @ 9.68%. HE CAME ACROSS ASSESSEE S CLOSING STOCK OF GOLD ORNAMENTS OF RAJKOT WEIGHING 9154.340 VALUED AT RS. 1,08,43,224.19/ - @ RS. 1184.50 PER GRAM AS AGAINST THAT OF SURAT CITY STOCK OF 1273.60 GR AMS VALUED AT RS. 14,59,953.15 @ 1146.32 GRAMS. THE ASSESSING OFFICER SOUGHT TO KNOW THE ABOVE STATED RATE DIFFERENCE IN CLOSING STOCK OF GOLD ORNAMENTS. THE ASSESSEE RESPONDED THE SAME IN LETTER DATED 20 - 12 - 2 012 CLARIFYING THAT HIS ABOVE STATED VALUATIO N FOLLOWED AVERAGE COST PRINCIPLE AND THERE WERE SOME MISTAKES IN THE COMPUTATION OF CLOSING STOCK. WE FIND AT PAGE 4 OF THE PAPER BOOK AND AGREED FOR THE IMPUGNED QUANTUM CALCULATION ADDITION OF RS. 1,79,080/ - . HE FURTHER REQUESTED FOR NOT INITIATING A NY PENALTY PROCEEDINGS. THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT ON 05 - 03 - 2013 MAKING THE CORRESPONDING ADDITION OF CLOSING STOCK. HE INITIATED THE IMPUGNED SECTION 271(1) (C) PENALTY PROCEEDINGS I.T.A NO. 22 /RJT /20 16 A.Y. 2010 - 11 PAGE NO HIMATLAL VASANJI LODHIA VS. ITO 3 SPECIFICALLY ALLEGING FURNISHING OF INACCURATE PAR TICULARS OF INCOME AT ASSESSEE S BEHEST. THERE IS NO DISPUTE THAT THE QUANTUM PROCEEDINGS ATTAINED FINALITY AT THIS STAGE. 4 WE COME TO IMPUGNED PENALTY PROCEEDINGS. THE ASSESSEE FILED HIS REPLY INTER ALIA STATING THAT IT WAS A CASE OF AGREED ADDITION F OLLOWED BY PAYMENT OF TAX AND INTEREST. THE ASSESSING OFFICER REJECTED THE SAME IN PENALTY ORDER DATED 18 - 09 - 2013 AFTER CITING CHRONOLOGY OF QUANTUM PROCEEDINGS TO HOLD THAT THE ASSESSEE HAS FURNISHED IN ACCUR ATE PARTICULAR OF INCOME AND ALSO CONCEALED HIS INCOME LIABLE TO BE ASSESSED. ALL THIS RESULTED THE IMPUGNED PENALTY OF R S. 55,333/ - . THE CIT(A) AFFIRMS ASSESSING OFFICER S FINDINGS. 5. WE HAVE HEARD RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT THE BOTH THE LOWER AUTHORITIES HAVE IMPOSED THE IMPU GNED PENALTY AFTER NOTICING DIFFERENCE IN ASSESSEE S CLOSING STOCK OF GOLD ORNAMENTS AT RAJKOT AND SURAT (SUPRA). WE REITERATE THAT THE ASSESSING OFFICER IN THE INSTANT CASE HAD INITIATED THE IMPUGNED PENALTY ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME WHEREAS HE OBSERVES IN PENALTY ORDER THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS ALSO CONCEALED HIS INCOME. HE APPEARS TO HAVE ADDED THE LATTER LIMB HEREINABOVE WITHOUT ISSUING ANY NOTICE ON THIS ASPECT. WE OBSERVE IN THESE FACTS AND CIRCUMSTANCES THAT BOTH THE LOWER AUTHORITIES HAVE PENALIZED THE ASSESSEE ON THE LATTER LI MB WITHOUT FOLLOWING DUE COURSE OF LAW AND PRINCIPLE OF NATURAL JUSTICE. WE FURTHER QUOTE HON BLE APEX COURT DECISION IN CIT VS. RELIANCE I.T.A NO. 22 /RJT /20 16 A.Y. 2010 - 11 PAGE NO HIMATLAL VASANJI LODHIA VS. ITO 4 PETRO - PR ODUCTS PVT. LTD 322 ITR 158 (SC) HOLDING THAT EACH AND EVERY DISALLOWANCE/ADDITION MADE IN QUANTUM PROCEEDINGS DOES NOT NECESSARILY LEAD TO IMPOSITION OF SUCH A PENALTY SINCE BOTH THE PROCEEDINGS ARE INDEPENDENT. WE ACCORDINGLY ACCEPT ASSESSEE S ARGUMENTS . THE IMPUGNED PENALTY OF RS. 55,333/ - IS DELETED. 6. THIS ASSESSEE S APPEAL IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 29 - 04 - 201 6 SD/ - SD/ - (ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 29 /04 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT