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

ITA 2233/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9473 (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: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

ITA NO.2 23 3 /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. 223 3 /AHD/2013 ASSESSMENT Y EAR : 200 3 - 04 MOHMED AKHTAR ABDULLAH CHAKKIWALA ..... .......... .APPELLANT PROP. A.C. FABRICS , PLOT NO.55 - B , 1 ST FLOOR, OPP. GARDEN SOCIETY, NEAR SHALIMAR SOCIETY, ADAJAN PATIYA, SURAT 9. [PAN: AA VPC 05 84 E ] VS. INCOME TAX OFFICER, WARD 9(3), SURAT. ................ RESPONDENT APPEARANCES BY: D .K. PARIKH FOR THE APPELLANT RICHA RASTOGI FOR T HE 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 PENAL TY OF RS. 2,18,327/ - 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 SAME. 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 23 3 /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. THIS APPEAL CAME UP FOR HEARING ALONG WITH ANOTHER GROUP CASE I.E. ITA NO. 2232/AHD/2013 IN THE CASE OF MOHMED YUNUS ABDULLAH CHAKKIWALA VS. ITO . LEARNED R EPRESENTATIVES HAVE FAIRLY AGREED THAT WHATEVER I DECIDE IN THE CASE OF MOHMED YUNUS ABDULLAH CHAKKIWALA VS. ITO ( ITA NO. 2232/AHD/2013) WILL APPLY MUTATIS MUTANDIS IN THIS CASE AS WELL. 4. VIDE MY ORDER O F EVEN DATE I HAVE DELETED THE PENALTY IMPOSED IN SIMILAR CIRCUMSTANCES BY HOLDING INTER ALIA AS FOLLOWS : - 3. TO ADJUDICATE UPON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ART SILK CLOTH AND THE MATTER REGARDING ADDITION ON ACCOUNT OF BOGUS CREDITORS TRAVELLED UPTO THE TRIBUNAL AND THEN WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER MADE AN ADDITION OF RS.6,93,045/ - BY ESTIMATING 10% OF NET CREDITORS AS BOGU S. WHILE DOING SO, THE ASSESSING OFFICER HIMSELF WAS CANDID ENOUGH TO STATE THAT KEEPING IN VIEW THE HUGE DATA, IT IS HIGHLY DIFFICULT TO ARRIVE AT THE CONCLUSION AS TO HOW MUCH PERCENTAGE OF THE PURCHASES ARE BOGUS . THE ASSESSING OFFICER, HOWEVER, DID NOT STOP AT THAT. HE ALSO IMPOSED PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF ADDITION SO MADE. WHILE DOING SO, HE TOOK NOTE OF THE HON BLE SUPREME COURT S JUDGEMENT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277, W HEREIN 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). AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. ASSESS EE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE ME. 4. I HAVE NOTED THAT IN THE IMPUGNED PENALTY ORDER THERE IS NO BASIS WHATSOEVER OF ARRIVING AT THE CONCLUSION THAT AT LEAST 10% PRODUCTION ARE BOGUS NOR ANY SPECIFIC ITEM OF PURCHASES IS FOUND TO HAV E 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 AND WITHOUT ANY SPECIFIC FINDING ABOUT INCORR ECTNESS 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. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL, HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MANISH DHIRAJLAL MEHTA 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 VS. KRISHI TYRE RETREADING AND RUBBER INDUSTRIES (2014) 360 ITR 580 THAT WHEN AN ADDITION HAS BEEN MADE PUREL Y ON ESTIMATE BASIS AND NO POSITIVE FACT OR FINDING HAD BEEN ITA NO.2 23 3 /AHD/201 3 A SSESSMENT Y EAR: 20 0 3 - 04 PAGE 3 OF 3 FOUND RENDERING ADDITION AS AN ADDITION BASED ON PURELY GUESS WORK, NO PENALTY UNDER SECTION 271(1)(C) CAN BE LEVIED. SEVERAL DECISIONS OF THE DIVISION BENCH OF THIS TRIBUNAL SUCH AS IN THE CAS ES OF RAJLAXMI 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 16.07.2013 ALSO CONSISTENTLY HELD SO. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING BINDING JUDIC IAL PRECEDENTS, I HOLD THAT THE LEARNED CIT(A) WAS INDEED IN ERROR IN UPHOLDING THE IMPUGNED PENALTY. I, THEREFORE, DELETE THE SAME. 5. I SEE NO REASON S TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY ME IN THE ABOVE CASE . 6. RESPECTFULLY FOLLOWING THE DECISION SO TAKEN BY ME , I ALLOW THIS APPEAL AS WELL. 7 . IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 3 0 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) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD