JAYA MARKETING, MUMBAI V. ASS CIT 12(3), MUMBAI

ITA 2375/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1761 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2003-2004
• Appeal Filed On: 04-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN LD
• Assessee Lawyers: NITESH JOSHI LD
• Keywords: Gross profit estimation; Rejection of books of accounts
• Section: 143(3); 147

Judgement Text

ITA NOS.2375-77/MUM/2017 JAYA MARKETING ASSESSMENT YEARS-2003-04 TO 2005-06 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.2375 TO 2377/MUM/2017 ( / ASSESSMENT YEARS: 2003-04. 2004-05 & 2005-06) JAYA MAR K E TING 402, DEV CORPORA CADBURY JUNCTION EASTERN EXPRESS HIGHWAY THANE (W) 400 602 / VS. ASSISTANT COMMISSIONER OF INCOME TAX RANGE 17(2) 1 ST FLOOR, AAYKAR BHAWAN M.K.ROAD, CHURCHGATE MUMBAI-400 021 ./ ./PAN/GIR NO. AADFJ-5774-D ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : NITESH JOSHI, LD. AR REVENUE BY : A.MOHAN, LD. SR. DR / DATE OF HEARING : 21/08/2018 / DATE OF PRONOUNCEMENT : 07/09/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEALS BY ASSESSEE FOR ASSESSMENT YEA RS [AY] 2003- 04 TO 2005-06 CONTEST THE IMPOSITION OF PENALTY U/S 271(1)(C) AS LEVIED BY LD. ASSESSING OFFICER [AO] AND CONFIRMED BY LD. FIR ST APPELLATE AUTHORITY. SINCE IDENTICAL ISSUES ARE INVOLVED, WE DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE & BRE VITY. ITA NOS. 2375 & 2376/MUM/2017, AY 2003-04 & 2004-05 ITA NOS.2375-77/MUM/2017 JAYA MARKETING ASSESSMENT YEARS-2003-04 TO 2005-06 2 2. IN AY 2003-04, THE ASSESSEE BEING RESIDENT FIRM HAS BEEN ASSESSED U/S 143(3) READ WITH SECTION 147 ON 31/12/2009 AFTER QUANTUM ADDITIONS OF RS.746.35 LACS ON ACCOUNT OF LOW GROSS PROFIT DECLARED BY THE ASSESSEE. CONSEQUENTLY, PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED IN THE QUANTUM ASSESSMENT ORDER FOR FURNI SHING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. TH E ASSESSEE HAS BEEN SADDLED WITH IMPUGNED PENALTY OF RS.274.28 LAC S AGAINST THE SAME VIDE PENALTY ORDER DATED 21/10/2011 WHICH, UPO N CONFIRMATION BY LD. FIRST APPELLATE AUTHORITY ON 07/12/2016, IS UND ER APPEAL BEFORE US. THE AMOUNT OF PENALTY IMPOSED FOR AY 2004-05, AGAIN ST SIMILAR ADDITION, STANDS AT RS.307.60 LACS WHICH HAS ALSO BEEN CONFIR MED BY LD. FIRST APPELLATE AUTHORITY VIDE APPELLATE ORDER DATED 07/1 2/2016. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [ AR], SHRI NITESH JOSHI, AT THE OUTSET, DREW OUR ATTENTION TO THE FACT THAT THE ASSESSEE CONTESTED THE QUANTUM ADDITIONS WITH SUCCESS BEFORE THIS TRIBUNAL VIDE ITA NOS.5131, 6474-75/MUM/2011 ORDER DATED 24/08/20 17 WHEREIN THE QUANTUM ADDITIONS HAVE BEEN DELETED FOR AYS 2003-04 & 2004-05 AND THEREFORE, THE IMPUGNED PENALTY DO NOT SURVIVE. THE COPY OF THE CITED ORDER HAS BEEN PLACED BEFORE US. THE LD. DR COULD N OT CONTROVERT THE AFORESAID FACT BUT SUBMITTED THAT THE SAME HAS NOT YET ATTAINED FINALITY. 4. UPON CAREFUL CONSIDERATION OF CITED ORDER, WE FI ND THAT THE QUANTUM ADDITIONS FOR BOTH THE YEARS HAVE BEEN DELETED BY T HE TRIBUNAL IN THE FOLLOWING MANNER:- 51. IN THE A.Y. 2003-04 AND 2004-05 AO HAD AFTER RE OPENING THE ASSESSMENT AND REJECTED THE BOOKS OF ACCOUNTS AND MADE TRADING ADDITION BASED ON THE ASSESSMENT FRAMED FOR A.Y.2005-06. FOLLOWING THE RE ASONING GIVEN HEREINABOVE, WE DO NOT FIND ANY JUSTIFICATION FOR REJECTION OF B OOKS OF ACCOUNTS AND ADDITION SO ITA NOS.2375-77/MUM/2017 JAYA MARKETING ASSESSMENT YEARS-2003-04 TO 2005-06 3 MADE BY APPLYING THE G.P. RATE SO ARRIVED AT IN A.Y .2005-06. ACCORDINGLY ADDITIONS MADE IN BOTH THE YEARS ARE DELETED. IN VIEW OF THE ADMITTED POSITION, THE IMPUGNED PENA LTY DOES NOT SURVIVE AND THEREFORE, BY DELETING THE SAME, WE ALLOW BOTH THE APPEALS. ITA NO. 2377/MUM/2017, AY 2005-06 5. IN THIS AY, THE ASSESSEE HAS BEEN SADDLED WITH P ENALTY OF RS.206.56 LACS VIDE ORDER DATED 27/01/2015 AGAINST ASSESSED INCOME OF RS.792.83 LACS AS AGAINST RETURNED INCOME OF RS. 124.35 LACS FILED BY THE ASSESSEE. THE LD. AR, DRAWING OUR ATTENTION TO THE COMPUTATION CHART AS PLACED BEFORE US, SUBMITTED THAT THE ONLY SURVIVING ADDITION PURSUANT TO THE CITED ORDER OF THE TRIBUNAL IS ESTI MATED ADHOC ADDITIONS AGAINST CERTAIN EXPENSE. THE PERUSAL OF THE SAID CH ART SHOWS THAT AGAINST TOTAL EXPENDITURE OF RS.36,46,403/- AS CLAI MED BY THE ASSESSEE DURING IMPUGNED AY UNDER VARIOUS HEADS, LD. AO ESTI MATED ADDITION OF RS.16,99,445/- AGAINST THE SAME, WHICH WAS THE SUBJ ECT MATTER OF APPEAL BEFORE THIS TRIBUNAL. THE FATE OF THE SAME, AS PER THE ORDER, WAS AS FOLLOWS:- THE ADDITIONS AGAINST RS.10,79,771- HAS BEEN CONFIR MED PARTLY TO THE EXTENT OF RS.5,98,209/-, WHICH IN TERMS OF CITED OR DER IS THE SOLE SURVIVING ADDITION WHICH COULD BE SUBJECT MATTER OF PENALTY A GAINST THE ASSESSEE. HOWEVER, WE FIND THAT THESE ADDITIONS ARE ADHOC ADDITIONS FOR WANT OF NO. HEAD AMOUNT (RS.) 1. ADDITIONS DELETED BY THE TRIBUNAL 1,28,805/- 2. ADDITIONS PARTLY CONFIRMED BY THE TRIBUNAL 10,79 ,771/- 3. SENT BACK TO LD. AO FOR RE-VERIFICATION 4,90,869 /- TOTAL 16,99,445/- ITA NOS.2375-77/MUM/2017 JAYA MARKETING ASSESSMENT YEARS-2003-04 TO 2005-06 4 PROPER DOCUMENTATION AND SUPPORTING VOUCHERS WHICH COULD NOT BE PRODUCED BY THE ASSESSEE TO THE SATISFACTION OF THE LD. AO. HOWEVER, THE AFORESAID ESTIMATED ADDITION, PER SE, IN OUR OPINION, DO NOT WARRANT IMPOSITION OF PENALTY SINCE THE SAME DID NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THEREFORE, BY DELETING THE SAME, WE ALLOW ASSESSEES APPEAL. I T HAS ALREADY BEEN NOTED THAT THE ADDITIONS OF RS.4,90,869/- HAS BEEN SENT BACK TO LD.AO, AGAINST WHICH PENALTY PROCEEDINGS HAVE SEPARATELY B EEN INITIATED THEREIN AND THEREFORE, THE ASSESSEE IS FREE TO AGITATE THE SAME TO THAT EXTENT AT AN APPROPRIATE LEVEL. CONCLUSION 6. ALL THE APPEALS STANDS ALLOWED IN TERMS OF OUR A BOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH SEPTEMBER, 2018 SD/- SD/- (JOGINDER SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 07.09.2018 SR.PS:-THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. * !$+ , + , / DR, ITAT, MUMBAI 6. ,-. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI