VBC Jewellery, CHENNAI V. ACIT, CHENNAI

ITA 2257/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8726 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: A S SRIRAMAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.2255 & 2256MDS/2015 ( / ASSESSMENT YEARS: 2009-10 -2010-11) M/S. VBC JEWELLERS, 76, G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017. VS THE ASSISTANT COMMISSIONER OF INCOME TAX , NON-CORPORATE CIRCLE-2, CHENNAI-34. PAN:AAFFV2851D ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NOS.2257 & 2258MDS/2015 ( / ASSESSMENT YEARS: 2009-10 -2010-11) M/S. VBC JEWELLERY, 78, G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017. VS THE ASSISTANT COMMISSIONER OF INCOME TAX , NON-CORPORATE CIRCLE-2, CHENNAI-34. PAN:AAAFV5601N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.A.S.SRIRAMAN, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 16 TH JUNE, 2016 /DATE OF PRONOUNCEMENT : 22 ND AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THESE FOUR APPEALS ARE FILED BY THE DIFFERENT ASSESSEES AGGRIEVED BY THE SEPARATE ORDERS OF THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI BO TH DATED 18.09.2015 IN ITA NOS.136 & 137 AND 138 &139 / 2 ITA NOS.2255 TO 2258/MDS/2015 CIT(A)-2/2013-14 PASSED UNDER SECTION 271(1)(C) & 250(6) OF THE ACT. M/S. VBC JEWELLERS. ITA NOS.2255 & 2256/MDS/2015: ( A.Y. 2009-10 & 2010-11): 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEALS, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLO WS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE PENALTY OF ` 7,50,000/- & ` 3,80,000/- FOR THE ASSESSMENT YEARS 2009-10 & 2010-11 LEVIED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. M/S. VCB JEWELLERY. ITA NOS.2257 & 2258/MDS/2015: ( A.Y. 2009-10 & 2010-11): 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEALS, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLO WS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE PENALTY OF ` 7,70,000/- & ` 3,80,000/- FOR THE ASSESSMENT YEARS 2009-10 & 2010-11 LEVIED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 4. SINCE BOTH THE ASSESSEES ARE INTERRELATED FIRMS AND THE ISSUES IDENTICAL PERTAINING TO TWO SUCCESSIVE YEARS , THEY ARE CONSOLIDATED AND HEARD TOGETHER FOR THE SAKE OF CON VENIENCE. 3 ITA NOS.2255 TO 2258/MDS/2015 5. BRIEF FACTS OF THE CASE ARE THAT BOTH THE ASSESS EES ARE FIRMS ENGAGED IN THE BUSINESS OF JEWELLERY. A SURVE Y WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEES ON 8.9.2009. DURING THE COURSE OF SURVEY, BOTH THE ASS ESSEES HAD MADE DISCLOSURES WITH RESPECT TO EXCESS STOCK O F GOLD / SILVER FOUND IN THE COURSE OF SURVEY. ACCORDINGLY, ADDITIONS WERE MADE IN THE CASE OF BOTH THE ASSESSEES FOR TH E RELEVANT ASSESSMENT YEARS. SUBSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED AND PENALTY LEVIED ON THE ASSESSEES BECAU SE THE ENTIRE ADDITION WAS MADE DUE TO SURVEY PROCEEDINGS WHICH OTHERWISE COULD NOT HAVE BEEN DETECTED. 6. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER SIMPLY BY RELYING ON VARIOUS DECISIONS WITH OUT ELABORATING ON THE INTRICACIES OF THE FINDINGS OF T HE SURVEY PROCEEDINGS. 7. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE DISCREPANCY AROSE ON ACCOUNT OF IMPURITY ARISING OUT OF THE STOCK AND RELATED ARITHMETIC COM PUTATIONS. IT 4 ITA NOS.2255 TO 2258/MDS/2015 WAS FURTHER SUBMITTED THAT THE ADDITIONS FOR ALL TH E ASSESSMENT YEARS FOR BOTH THE ASSESSEES WERE ACCEPT ED IN ORDER TO AVOID PROTRACTED LITIGATIONS. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER ARGUED BY STATING THAT THE A SSESSEE HAD FILED THEIR RESPECTIVE RETURN OF INCOME ACCEPTI NG THE DISCREPANCY FOUND DURING THE COURSE OF SURVEY AND THEREFORE THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS IN THE RETURN OF INCOME IN O RDER TO ATTRACT THE PENAL PROVISIONS OF SECTION 271(1)(C) O F THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER RELIE D IN THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. RAM THANGA NAGAI MALIGAI IN ITA NO.2183/MDS/2014 DA TED 10.06.2015 WHEREIN IT WAS HELD THAT ON SUCH OCCASIO NS PENALTY UNDER SECTION 271(1)(C) OF THE ACT CANNOT B E LEVIED. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE AND REQUESTED FOR SUSTAINING THE SAME. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. CONSIDER ING THE 5 ITA NOS.2255 TO 2258/MDS/2015 FACTS & CIRCUMSTANCES OF THE CASE, WE FIND MERIT IN THE CONTENTIONS OF THE LEARNED AUTHORIZED REPRESENTATIV E. IN THE CASE OF BOTH THE ASSESSEES, SOME DISCREPANCIES WITH RESPECT TO THE STOCK WERE OBSERVED BY THE LEARNED ASSESSING OFFICER DURING THE COURSE OF SURVEY WHICH AROSE OUT OF THE IMPURITY IN THE STOCK WHICH ARE GOLD AND SILVER AND THAT REQUIR ES ACCURATE ARITHMETIC COMPUTATION TO RECONCILIATION. FURTHER T HE ASSESSEES HAD ACCEPTED TO THE COMPUTATIONS MADE BY THE LEARNED ASSESSING OFFICER AND DID NOT AGITATE IN OR DER TO AVOID PROLONGED LITIGATION AND ACCORDINGLY FILED TH EIR RESPECTIVE RETURNS OF INCOME. ON AN IDENTICAL SITUA TION, THIS BENCH OF THE TRIBUNAL CITED SUPRA HAD DELETED THE P ENALTY BY OBSERVING AS FOLLOWS:- 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM TH E FACTS OF THE CASE, IT IS APPARENT THAT THE ASSESSEE HAS NOT CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTIC ULARS IN THE RETURN OF INCOME FILED BEFORE THE REVENUE. T HE EXCESS STOCK FOUND AT THE TIME OF SEARCH WAS TAKEN INTO ACCOUNT FOR ARRIVING AT THE INCOME OF THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR AS OBSERVED BY LD. ASSESSING OFFICER IN HIS ASSESSMENT ORDER. THE LD. CIT (A) ALSO OBSERVED IN HIS ORDER THAT THE APPELLANTS CASE DO NOT FALL UNDER EXPLANATION (3) TO SECTION-271(1) (C) OF THE INCOME TAX ACT BECAUSE CONCEALMENT OF INCOME STARTS ONLY AFTER THE RETURN OF INCOME WAS FILED OR SUBSEQUENT TO FILING OF BELATED RETURN OF INCOME WH EN THE DEPARTMENT DETECTS CERTAIN INCOME AS ESCAPED. CONSIDERING THE FACTS OF THE CASE, THE DECISIONS CI TED BY THE LD. CIT (A) IS ALSO SQUARELY APPLICABLE TO THE CASE OF 6 ITA NOS.2255 TO 2258/MDS/2015 THE ASSESSEE AND THEREFORE, WE DO NOT FIND IT NECES SARY TO INTERFERE WITH HIS ORDER. THEREFORE, IN PARITY WITH THE DECISION OF THIS TRIB UNAL CITED SUPRA, WE HEREBY DIRECT THE LEARNED ASSESSING OFFIC ER TO DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) O F THE ACT IN THE CASE OF BOTH THE ASSESSEES FOR ALL THE RELEVANT ASSESSMENT YEARS. 10. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSE SSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 22 ND AUGUST, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 22 ND AUGUST, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .