Mohmed Yunus Abdullah Chakkiiwala, Surat V. The Income Tax Officer, Ward-9(3), Surat

ITA 2232/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9468 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-12-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 03-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI
• Assessee Lawyers: D K PARIKH

Judgement Text

ITA NO.2 232 /AHD/201 3 A SSESSMENT Y EAR: 20 0 3 - 04 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] ITA NO. 2232 /AHD/2013 ASSESSMENT Y EAR : 200 3 - 04 MOHMED YUNUS ABDULLAH CHAKKIWALA ..... .......... .APPELLANT PROP. ABDULLAH TEXTILES, PLOT NO.55 - C, 2 ND FL OOR, OPP. GARDEN SOCIETY, NEAR SHALIMAR SOCIETY, ADAJAN PATIYA, SURAT 9. [PAN: AA VPC 0577 F ] VS. INCOME TAX OFFICER, WARD 9(3), SURAT. ................ RESPONDENT APPEARANCES BY: D .K. PARIKH FOR THE APPELLANT RICHA RASTOGI F OR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 2 8 . 12 .201 6 DATE OF PRONOUNCING THE ORDER : 30 . 01.2017 O R D E R 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14.05.2013, PASSED BY THE LEARNED CIT(A), CONFIRMING P ENALTY OF RS.1,65,365/ - IMPOSED ON THE ASSESSEE UNDER SECTION 271(1 ) (C) OF THE I NCOME TAX ACT, 1961 , FOR THE ASSESSMENT YEAR 200 3 - 04 . 2. THE APPEAL IS TIME BAR R ED BY 14 DAYS . THE ASSESSEE HAS MOVED CONDONATION PETITION. I HAVE HEARD THE PARTIES ON THE S AME. I AM OF THE CONSIDERED VIEW TH A T IT IS A FIT CASE FOR DELAY IN FILING OF APPEAL . A S THE EXPLANATION GIVEN BY THE ASSESSEE T O THE EFFECT THAT THERE WAS SHIFTING OF BUSINESS PREMISES AND FOR THAT REASON THE APPELLATE ORDER C OULD NOT REACH THE ASSESSEE IN TIME AT THE NEW ADDRESS, WAS REASONABLE AND DESERVES TO BE ITA NO.2 232 /AHD/201 3 A SSESSMENT Y EAR: 20 0 3 - 04 PAGE 2 OF 3 ACCEPTED. I , ACCORDINGLY , CONDONE THE DELAY AND PROCEED TO TAKE UP THE MATTER ON MERITS. 3. TO ADJUDICATE UPON THIS A PPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. T HE ASSESSEE I S ENGAGED IN THE B USINESS OF ART SILK CLOTH AND THE MATTER REGARDING ADDITION ON ACCOUNT OF BOGUS CREDITORS TRAVELLED UPTO THE T RIBUNAL AND THEN WAS REMITTED BACK TO THE FILE OF THE ASSESSING O F FICER . THE ASSESSING OFFICER MADE AN ADDITION OF RS.6,93,045/ - BY ESTIMATING 10% OF NET CR E DITORS AS BOGUS. WHILE DOING SO , THE ASSESSING OFFICER HIMSELF WAS CANDID ENOUGH TO ST ATE THAT KEEPING IN VIEW THE HUGE DAT A, IT IS HIGHLY DIFFICULT TO ARRIVE AT THE CONCLUSION AS TO HOW MUCH PERCENTAGE OF THE PURCHASES ARE BOGUS . THE A SSESSING OFFICER, HOWEVER , DID NOT STOP AT THAT. HE ALSO IMPOSED PENALTY U NDER SECTION 271 (1)(C) IN RESPECT OF ADDITION SO MADE. WHILE DO I NG SO , HE TOOK NOTE OF THE HON BLE SUPREME C OURT S JUDGEMENT IN THE CASE OF UNION OF INDIA VS. DHARMEN DRA TEXTILE PROCESSORS (2008) 306 ITR 277 , WHEREIN IT WAS SAID TO HAVE BEEN HELD THAT A WILLFUL CONCEALMENT IS NOT ESSENTIAL FOR ATTRACTING CIVIL LIABILITY OF PENALTY UNDER SECTION 271(1)(C). A GGRIEVED , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEA RNED CIT (A) BUT WITHOUT ANY SUCCESS. A SSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE ME. 4. I HAVE NOTED THAT IN THE IMPUGNED PENALTY O R DER THERE IS NO BASIS WHATSOEVER OF ARRIVING AT THE CONCLUSION THAT AT LEAST 10% PRODUCTION ARE BOGUS NOR AN Y SPECIFIC ITEM OF PU R CHASES IS FOUND TO HAVE BEEN BOGUS. RIGHT NOW I AM NOT DEALING WITH THE QUESTION AS TO WHETHER SUCH ADDITION IS, ON THE FACTS OF THIS CASE , SUSTAINABLE IN LAW OR NOT BUT SUFFICE TO SAY THAT AN ADDITION MADE ON PURE ESTIMATION BASIS A ND WITHOUT ANY SPECIFIC FINDING ABOUT I NCORRECTNESS OF THE STAND OF THE ASSESSEE AS IN THIS CASE CANNOT BE REASON ENOUGH TO JUSTIFY PENALTY UNDER SECTION 271 (1)(C) OF THE ACT . A S RIGHTLY POINTED OUT BY THE LEARNED COUNSEL , HON BLE JURISDICTIONAL HIGH COUR T IN THE CASE OF MANISH D HIRAJLAL MEHTA ITA NO.2 232 /AHD/201 3 A SSESSMENT Y EAR: 20 0 3 - 04 PAGE 3 OF 3 VS. ACIT, TAX APPEAL NOS.461 OF 2000 TO 464 OF 2000 UNREPORTED JUDGEMENT DATED 05.11.2014 HAS HELD, FOLLOWING ITS EARLIER JUDGEMENT IN THE CASE OF CIT V S . KRISHI TYRE RETREADING AND RUBBER INDUSTRIES ( 2014 ) 360 ITR 5 80 THAT WHEN AN ADDITION HAS BEEN MADE PURELY ON ESTIMATE BASIS AND NO POSITIVE FACT OR FINDING HAD B E EN FOUND RENDERING A D DITION AS AN A DDITION BASED ON PURELY GUESS WORK, NO PENALTY UNDER SECTION 271(1)(C) CAN BE LEVIED. SEVERAL DECISION S OF THE DIVISI ON BENCH OF THIS T RIBUNAL SUCH AS IN THE CASES OF RAJLA XMI PRINTS P. LTD. VS. ITO - ITA NO. 809/ AHD/2010, ORDER DATED 15.06.2012 AND SHRI POKHRAJ DOSHI VS ITO ITA NO.426/AHD/2013, ORDER DATED 16. 0 7. 20 13 ALSO CONSISTENTLY HELD SO. IN THIS VIEW OF THE MA T TER AND RESPECTFULLY FOLLOWING BINDING JUDICIAL PRECEDENTS , I HOLD THAT THE LE ARNED CIT(A) W AS INDEED IN ERROR IN UPHOLDING THE IMPUGNED PENALTY. I , THEREFORE , DELE TE THE SAME. 5. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JANUARY, 2017 . SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 30 TH DAY OF JANUARY, 2017 . PBN/* COPIES TO: (1) THE APPELLANT (2) TH E RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD