Coronation Flour Mills, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

ITA 2350/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6856 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-04-2011
• Assessment Year: 1984-1985
• Appeal Filed On: 06-08-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K
• Keywords: Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Revised return; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 2350/AHD/2009 ASSESSMENT YEAR :1984-85 M/S CORONATION FLOUR MILLS, 38B, GIDC INDUSTRIAL ESTATE, AHMEDABAD V/S . ITO, WARD 6(4), AHMEDABAD PAN NO. A A B FC4095J (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI TUSHAR HEMANI, A.R. /BY RESPONDENT SHRI A. K. PANDEY, SR. D.R. /DATE OF HEARING 12.03.2013 /DATE OF PRONOUNCEMENT 09.05.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHI CH HAS EMANATED FROM THE ORDER OF CIT(A)-XI, AHMEDABAD, DATED 19.03 .2009 FOR A.Y. 1984-85. THE SOLE GROUND OF APPEAL IS AGAINST IMPOSING PENAL TY U/S.271(1)(C) OF RS.61,603/-. 2. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S.1 43(3) ON 31.03.1984 WHEREIN THE ADDITION OF RS.18,65,188/- WAS MADE ON THE BASIS OF INCRIMINATING DOCUMENT SEIZED DURING THE COURSE OF SEARCH ON 01.0 1.1985 FROM THE FACTORY/OFFICE PREMISES OF THE ASSESSEE AS WELL AS RESIDENCE PREMISES OF BOTH THE PARTNERS. OUT OF THIS, THE ITEM NO.3 ADDITION WAS MADE ON ACCOUNT PROFIT ITA NO. 2350/AHD/09 A.Y. 84-85 PAGE 2 WORKED OUT FROM SEIZED DOCUMENTS AT RS.11,49,133/-. THE ASSESSEE CHALLENGED THE QUANTUM ADDITION BEFORE THE CIT(A) W HO HAS FINALLY DETERMINED THE INCOME UNDER THIS ACT AT RS.5,30,000/- WHICH WA S CONFIRMED BY THE ITAT ALSO. THEREFORE, THE A.O. WORKED OUT THE CONCEALED INCOME AT RS.5,45,602/- ON THE BASIS OF VARIOUS ORDERS. THE LD. A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD. THE APPELLANT ALSO REPLIED VIDE ORDER DATED 13.04.2006, WHICH HAS BEEN CONSIDERED BY THE LD. A.O. THE ASSESSEES REPLY WAS NOT FOUND CONVINCING TO HIM. THEREFORE, HE IMPOSED PENALTY U /S.271(1)(C) @ 100% OF TAX SOUGHT TO BE EVADED AT RS.3,45,358/-. THE LD. A.O. RECTIFIED THE PENALTY ORDER VIDE ORDER DATED 21.04.2006 AND FINALLY THE P ENALTY IMPOSED AT RS.61,603/- WHICH IS ALSO 100% OF TAX SOUGHT TO BE EVADED. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAD CONFIRMED THE PENALTY BY OBSERVING THAT THE DISCLOSURE PETITI ON FILED BY THE APPELLANT U/S.273A AFTER THE SEARCH COMPLETED WHILE FILING TH E DISCLOSURE PETITION ALSO THE APPELLANT DID NOT DISCLOSE THE CORRECT INCOME. THE REFORE, IT IS ONLY AFTER THE ASSESSMENT PROCEEDING AND AFTER THE APPELLANT PROCE EDING UNACCOUNTED INCOME OF RS.5,30,000/- WAS CONFIRMED AGAINST THE L OSS RETURNED BY THE APPELLANT AND THEREAFTER THE INCOME WAS ASSESSED AT RS.1,25,222/- ON WHICH PENALTY WAS LEVIED. HE FURTHER OBSERVED THAT THE A PPELLANT HAD NOT RECORDED THE SAID UNACCOUNTED INCOME IN THE BOOKS OF ACCOUNT . THE APPELLANT DID NOT FURNISH THE CORRECT PARTICULARS OF INCOME AND THERE BY CONCEALING THE ABOVE SAID INCOME HAD BEEN CONFIRMED BY THE APPELLANT AUT HORITY. 4. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT IN THIS CASE, SEARCH AND SEIZURE WAS CARRIED OUT ON 01.01.1985 ITA NO. 2350/AHD/09 A.Y. 84-85 PAGE 3 IN INITIALLY TOTAL ADDITION WAS MADE AT RS.11,49,41 3/- ON ESTIMATED BASIS. THE LD. CIT(A) RE-CALCULATED THE PROFIT ON THE BASIS OF SEIZED DOCUMENTS. THE APPELLANT ALSO RECONCILED THE DIFFERENCE BETWEEN PR OFIT AS PER ITS WORKING AND THAT OF A.O. THE SAID RECONCILIATION WAS THEN DISC USSED WITH A.O. WHO OBJECTED WITH ONLY FIVE ITEMS. THE SAID RECONCILIA TION WAS THEN DISCUSSED AND AGREED WITH REST OF THE ITEMS ON THE BASIS OF RECON CILIATION. THE LD. CIT(A) HAD RESTRICTED THE ADDITION OF RS. 5,30,000/-. HOWEVER , HONBLE ITAT IN QUANTUM APPEAL HAD OBSERVED THAT APPELLANT HAD OFFERED RS.2 ,56,870/- AND A.O. HAD OBJECTED ONLY FIVE ITEMS AGGREGATING TO RS.2,67,892 /-. SUMMONING BOTH THE FIGURES WAS RS.5,24,762/- AND THE ADDITION WAS AT R S.5,30,000/-. THE HONBLE ITAT HAS NOT GIVEN ANY FURTHER RELIEF TO THE APPELL ANT. LD. COUNSEL FURTHER ARGUED THAT THE ADDITION WAS MADE ON THE BASIS OF E STIMATION OF ITS INCOME ON THE BASIS OF SOME LOOSE PAPERS AND JOTTINGS. THERE WAS NO CONCRETE BASE FOR THE SAID ADDITION ON WHICH PENALTY HAS BEEN LEVIED BY THE A.O. THE AMOUNT OF SUCH ADDITION HAS BEEN CHANGED THRICE BY AO WHICH A MPLY PROVED THAT IT WAS BASED MERELY ON ESTIMATION. HE FURTHER RELIED IN C ASE OF CIT VS. VALMIKBHAI H. PATEL 280 ITR 487 (GUJ) & NAVJIVAN OIL MILLS VS CIT 252 ITR 417 (GUJ) AND REQUESTED TO DELETE THE PENALTY. AT THE OUTSET, LD . SR. D.R. RELIED UPON THE ORDERS OF THE CIT(A) AND A.O. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSMENT WAS MADE BY THE LD. A.O. ON THE BASIS OF BLACK DIARY S-15 AND LOOSE PAPERS. THE A.O. MADE ADDITION OF R S.11,49,113/- ON ACCOUNT OF MAINLY PREMIUM APPROPRIATE FROM THE PAREL BUSINE SS CALCULATED ON THE BASIS OF LOOSE PAPERS AND NOTE BOOKS, WHICH HAS BEEN REDU CED BY THE CIT(A) TO THE ITA NO. 2350/AHD/09 A.Y. 84-85 PAGE 4 EXTENT OF RS.5,30,000/-. THE PETITION FILE U/S.273 A HAD NOT BEEN ACCEPTED BY THE CIT(A). THE ASSESSMENT WAS COMPLETED ON 31.03. 1984 WHEREAS REVISED RETURN WAS FILED ON 09.10.1985 BY THE ASSESSEE. AF TER THAT NO REVISED ORDER WAS PASSED BY THE LD. A.O. HOWEVER, THE LD. A.O. A CCEPTED THE REVISED RETURN U/S.154 OF THE IT ACT. THEREFORE, HE HAD NOT IMPOS ED THE PENALTY ON DISCLOSURE MADE U/S.273A OF RS.4,00,000/-. THE REM AINING ADDITION OF RS.1,25,222/- WAS BASED ON THE INCRIMINATING DOCUME NTS FOUND DURING THE COURSE OF SEARCH. ON THAT BASIS, THE PENALTY WAS I MPOSED BY THE A.O. THE LD. A.O. HAS ALREADY INITIATED PENALTY IN ORDER DATED 2 3.03.1987. THE LD. COUNSEL FOR THE APPELLANT IS NOT RIGHT THAT THERE WAS NO SA TISFACTION RECORDED BY THE A.O. U/S.271(1)(C). FURTHER, WHATEVER COPY OF THE ASSESSMENT ORDER FILED BY THE APPELLANT APPEARS TO BE DEFECTIVE AS AT PAGE NO .66 OF THE PAPER BOOK. THE FINDING OF THE A.O. IS MENTIONED AS UNDER: PENALTY PROCEEDINGS U/S. 271(1)(C) ARE ALREADY INITIATED. THIS ORDER CONTAINED TOTAL PAGE NOS. 68, WHEREAS COPY OF ASSESSMENT ORDER ENCLOSED AND FURNI SHED WITH THE APPEAL MEMO IS CONTAINED 37 PAGES ONLY WHEREIN THE LD. A.O . MENTIONED AS PENALTY PROCEEDINGS U/S.271(1)(C) ARE HEREBY INITIATED. BOTH THE ORDERS ARE DATED 23.03.1987. WHATEVER CASE LAWS RELIED UPON BY THE LD. A.R. ARE NOT SQUARELY APPLICABLE BECAUSE IN CASE OF CIT VS. VALMIKBHAI H. PATEL (SUPRA), THERE WAS A LOSS ON ACCOUNT OF CYCLONE AND RAIN AND ASSESSEE WAS IN SALT BUSINESS. THEREFORE, THE ADDITION WAS MADE ON ESTIMATED BASIS . IN CASE OF NAVJIVAN OIL MILLS VS CIT (SUPRA), THE ADDITION WAS ON ESTIMATED BASIS. HOWEVER, IN APPELLANTS CASE, THE ADDITION WAS BASED ON THE INC RIMINATING DOCUMENT ITA NO. 2350/AHD/09 A.Y. 84-85 PAGE 5 SEIZED DURING THE COURSE OF SEARCH. THEREFORE, WE HAVE CONSIDERED VIEW THAT LD. CIT(A) WAS RIGHT IN CONFIRMING THE PENALTY U/S. 271(1)(C). 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 09.05.2013 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;