Shri Ashokkumar C. Dharewa (HUF), Surat V. The Income Tax Officer, Ward-3(3), Surat

ITA 2200/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6120 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDAN HEARING CONCLUD
• Assessee Lawyers: RAMESH KUMAR MA LPANI

Judgement Text

ITA NO. 2 200 / AHD/201 3 ASSESSMENT Y EA R: 20 0 8 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO. 2200 /AHD/20 13 ASSESSMENT Y EAR: 200 8 - 09 ASHOK KUMAR C. DHAREWA (HUF) ... .......... . APPELLANT A - 601, SHILP BUILDIN G, B/H. SIDDHI VINAYAK TEMPLE, VESU, SURAT 395 007. [PAN: A ABHD 5827 P ] VS. INCOME TAX OFFICER , WARD 3(3), SURAT . ... .. ......... RESPONDENT APPEARANCES BY RAMESH KUMAR MALPANI FOR THE A PPELLANT K . MADHUSUDAN FOR THE R E SP ONDENT HEARING CONCLUDED ON: 0 8 .02 .2017 ORDER PRONOUNCED ON : 26 . 0 4 .2017 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGE D CORRECTNESS OF THE ORDER DATED 20 TH JUNE 2013, UPHOLDING THE PENA LTY OF RS. 68,633 / - IMPOSED O N THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT 1961 , FOR THE ASSESSMENT YEAR 200 8 - 09 . 2. GRIEVANCES RAISED IN THIS APPEAL ARE AS FOLLOWS : - 1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, HON BLE C IT(A) HAS ERRED IN UPHOLDING THE PENALTY OF RS. 68,633 / - LEVIED BY LD. ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. ASSESSING OFFICER HAS ERRED IN UPHOLDING THE PENALT Y ORDER PASSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT AND CONSEQUENT PENALTY LEVIED OF RS. 68,633 / - . ITA NO. 2 200 / AHD/201 3 ASSESSMENT Y EA R: 20 0 8 - 09 PAGE 2 OF 3 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT WHATEVER WE DECIDE ON THE ASSESSEE S APPEAL FOR THE ASSESSMENT YEAR 2007 - 08, WHICH WE HAD HEARD ALONGWITH THIS APPEAL, WILL APPLY MUTATIS MUTANDIS FOR THIS ASSESSMENT YEAR AS WELL. VIDE OUR ORDER OF EVEN DATE, WE HAVE ALLOWED THE SAID APPEAL OF THE ASSESSEE, AND THE SAME RESULT MUST FOLLOW HERE AS WELL. IN OUR SAID ORDER, WE HAVE, INTER ALIA , OBSERV ED AS FOLLOWS: 3. TO ADJUDICATE ON THIS GRIEVANCE OF THE ASSESSEE, A FEW MATERIAL FACTS WILL HAVE TO BE TAKEN NOTE OF. THE ASSESSEE IS SOLE PROPRIETOR OF A CONCERN BY THE NAME OF SHUBHAM POLYMERS AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN PACKING MATERIAL. THE BUSINESS PREMISES OF THE ASSESSEE WAS SUBJECTED TO A SEARCH BY CENTRAL EXCISE DUTY AUTHORITIES, AND, DURING THIS SEARCH OPERATION, IT WAS FOUND THAT THE SAME PREMISES IS ALSO USED OFFICE OF ANOTHER CONCERN, BY THE NAME OF SWASTIK POLYMERS, OWNED BY ASSESSEE S BROTHER. THE CENTRAL EXCISE AUTHORITIES CONCLUDED THAT THE ASSESSEE HAS EVADED THE CUSTOM DUTY BY SUPPRESSING THE CLEARANCE VALUE OF ITS PRODUCTS. THE UNDERSTATEMENT WAS SAID TO BE RS 51,00,908 OVER AND ABOVE THE EXEMPTION LI MIT OF RS 1,50,00,000. BASED ON THE INPUTS FROM THIS SEARCH OPERATION, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SALE IS UNDERSTATED BY RS 1,13,24,749 AS THE ASSESSEE HAS STATED THE SALE OF R 87,76,159 WHEREAS ALLEGED SUPPRESSION IN CLEARANCE VALUE PL US THE BASIC EXEMPTION LIMIT WORKS OUT TO RS 2,01,00,908. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO RESTRICTED THE ADDITION TO RS 2,27,573 FOR BOTH THE CONCERNS TAKEN TOGETHER, ON THE BASIS OF ESTIMATED PROFIT COMPONENT. IN A PPEAL, A COORDINATE BENCH OF THE TRIBUNAL HAS, VIDE ORDER DATED 17TH OCTOBER 2016, UPHELD THE ORDER OF THE CIT(A). THE MATTER, HOWEVER, DID NOT REST THERE. THE ASSESSING OFFICER HAS ALSO IMPOSED PENALTY OF RS 46,305 UNDER SECTION 271(1)(C) IN RESPECT OF TH E SAID QUANTUM ADDITION, AND HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IN APPEAL, LEARNED CIT(A) CONFIRMED THE SAID PENALTY, AND, IN HIS BRIEF OPERATIVE PORTION OF THE ORDER, HAS OBSERVED AS FOLLOWS: I HAVE GONE THROUGH THE A SSESSMENT ORDER, THE PENALTY ORDER AND THE SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT THE APPELLANT HAS NOT DISCLOSED INCOME OF RS 2,27,573 IN THE HANDS OF THE PROPRIETORSHIP CONCERN. THE APPELLANT HAS ACCEPTED BEFORE THE EXCISE AUTHORITIES AND THE DEPA RTMENT THAT THE INCOME DISCLOSED IN THE HANDS OF THE SWASTIK POLYMERS ACTUALLY BELONGED TO SHUBBHAM POLYMERS, A PROPRIETORSHIP CONCERN OF THE APPELLANT. IN HIS STATEMENT, THE APPELLANT HAS AGREED THAT HE SOLD BOPP BAGS ONLY, WHICH WERE MANUFACTURED BY M/S SHUBHAM POLYMERS THROUGH THEIR TRADING FIRM OF SWASTIK POLYMERS. AS THE APPELLANT HAS FILED INACCURATE PARTICULARS OF HIS INCOME AND THUS TRIED TO EVADE ITS TAXABLE INCOME OF RS 2,27,573, THE ORDER OF THE AO IMPOSING THE PENALTY OF RS 46,305 UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT IS UPHELD. THE APPEAL IS DISMISSED. ITA NO. 2 200 / AHD/201 3 ASSESSMENT Y EA R: 20 0 8 - 09 PAGE 3 OF 3 4. THE ASSESSEE IS NOT SATISFIED WITH THE STAND SO TAKEN BY THE CIT(A) AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DU LY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. WE FIND THAT THE IN THE PRESENT CASE THE ASSESSEE WAS NOT UNDER ANY OBLIGATION TO MAINTAIN ANY EXCISE RECORDS, AND YET THE ASSESSEE WAS SUBJECTED TO PROCEEDINGS BY THE EXCIS E DUTY ON ACCOUNT OF TECHNICALITY OF THE BUSINESS OF THE ASSESSEE AND ITS SISTER CONCERN BEING CLUBBED TOGETHER AND TAKEN AS THAT OF ONE UNIT. THE ASSESSEE S EXPLANATION THAT INCOME WHICH IS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE IS STATED TO HAVE BEE N INCLUDED ALREADY IN THE HANDS OF THE SISTER CONCERN, THOUGH NOT ACCEPTED IN QUANTUM PROCEEDINGS, IS NOT COMPLETELY DEVOID OF ANY MERITS. IN ANY EVENT, IT IS A CASE OF AGGREGATION OF TURNOVER BY THE EXCISE AUTHORITIES AND THE ASSESSEE COULD NOT BE EXPECTE D TO FORESEE THE SAME AT THE TIME OF FILING HIS INCOME TAX RETURN. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DONOT THINK IT WAS A FIT CASE FOR IMPOSITION OF PENALTY. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY OF RS 46,305. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 4. RESPECTFULLY FOLLOWING THE VIEWS SO TAKEN BY US IN THE IMMEDIATELY PRECEDING YEAR, WE DELETE THE IMPUGNED PENALTY OF RS 68,633 FOR THIS ASSESSMENT YEAR AS WELL. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF APRIL , 2017 . SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 26 TH DAY OF APRIL , 201 7 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD