TRIBHOVANDAS BHIMJI ZAVERI (DELHI ) P.LTD, MUMBAI V. DCIT CEN CIR 9, MUMBAI

ITA 24/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0628 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH , JM ITA NO. 24 / MUM/20 16 ( ASSESSMENT YEAR : 2009 - 10 ) M/S. TRIBHOVANDAS BHIMJI ZAVERI (DELHI) PVT. LTD., GROUND FLOOR SOMNATH APARTMENTS, RAM MANDI R R.D.VILE PARLE (E) MUMBAI 400 057 VS. DCIT CEN CIR 9 R.NO.806, OLD CGO ANNEX BUILDING, M.K.ROAD, MUMBAI 400 020 PAN/GIR NO. AABCT0165H APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI SUBHASH CHHAJED REVENUE BY SHRI RAM TIWAR I DATE OF HEARING 26 / 12 /201 7 DATE OF PRONOUNCEME NT 09 / 02 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 48, MUMBAI DATED 28/11/2015 FOR A.Y.2009 - 10 IN THE MATTER OF CONFI RMATION OF PENALTY OF RS.1,68,000/ - U/S.271(1)(C) OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. IN THIS CASE ADDITION OF RS.62,21,950/ - WAS MADE BY THE AO ON THE BASIS OF DOCUMENTS COLLECTED DURING THE COURSE OF SEARCH. ASSE SSEE APPROACHED TO THE TRIBUNAL AND TRIBUNAL VIDE ITS ORDER DATED 04/11/2015 REDUCED THE ADDITION BY ESTIMATING PROFIT AT 9% OF RS.62,21,950/ - . ACCORDINGLY, ADDITION OF RS.5,60,000/ - WAS UPHELD. THE AO ALSO LEVIED ITA NO. 24/MUM/2016 M/S. TRIBHOVANDAS BHIMJI ZAVERI (DELHI) PVT.LTD. 2 PENALTY WITH REGARD TO THE ADDITIONS SO M ADE, THE CIT(A) HAS REDUCED THE SAME AND PENALTY WAS RESTRICTED ONLY TO THE EXTENT OF ESTIMATED PROFIT UPHELD BY THE TRIBUNAL AMOUNTING TO RS.5,60,000/ - . ACCORDINGLY, PENALTY OF RS.1,68,000/ - WAS UPHELD BY THE CIT(A). 4. IT WAS ARGUED BY LEARNED AR THAT P ROVISIONS OF SECTION 271(1)(C) ARE NOT ATTRACTED TO THE CASE WHERE THE INCOME OF AN ASSESSEE IS ASSESSED ON ESTIMATION BASIS AND ADDITIONS HAVE BEEN MADE THEREIN. FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - A. C.IT.VS. SANGRUR VANASPATI MILL LTD. 303 ITR 53 (P & H) B. C.IT. VS. RAVAITSINGH&CO. 254ITR191(P&H) C. CIT VS. KRISHI TYRE RETREADING & RUBBER LND.[2014] 360 ITR 580 (RAJ.) D. DCIT VS. KALINDI RAIL NIRMAN ENGG. LTD. [2012J52 SOT 91 (DELHI) E. SUNIL KUMAR SINGHANIA VS. ACIT [2012] 52 SOT 137 (HYDERABAD) 5 . ON THE OTHER HAN D, IT WAS CONTENDED BY LEARNED D R THAT THE TRIBUNAL ITSELF HAS OBSERVED IN PARA 36 THAT ASSESSEE MIGHT NOT HAVE ACCOUNTED FOR THIS TRANSACTION IN THE BOOKS OF ACCOUNTS, THEREFORE, TO THE EXTENT AD DITION HAS BEEN UPHELD BY THE TRIBUNAL, THE CIT(A) WAS JUSTIFIED TO RESTRICT THE PENALTY TO THAT EXTENT. 6 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT QUANTUM ADDITION SO MADE BY THE A O TO THE EXTENT OF RS.62,21,950/ - WAS REDUCED BY THE TRIBUNAL BY ESTIMATING PROFIT AT 9% THEREON WHICH AMOUNT S TO RS.5,60,000/ - . THUS, ON ESTIMATION BASIS, PROFIT OUT OF THE TRANSACTION WAS WORKED OUT AT RS.5,60,000/ - . ITA NO. 24/MUM/2016 M/S. TRIBHOVANDAS BHIMJI ZAVERI (DELHI) PVT.LTD. 3 7 . HONBLE RAJASTHAN HIGH COURT IN T HE CASE OF MAHENDRA SINGH KHEDLA 71 DTR 189 HELD THAT PENALTY U/S.171(1)(C) CANNOT BE LEVIED ON THE ADDITION MADE ON ESTIMATE BASIS. SIMILAR VIEW HAS BEEN TAKEN BY THE MADRAS HIGH COURT IN CASE OF SMT.K. MEENAKSHI KUTTY 258 ITR 494. FURTHERMORE, APPLYING P ROPOSITION OF LAW LAID DOWN IN THE JUDICIAL PRONOUNCEMENTS CITED BY LEARNED AR, IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF IT ACT . ACCORDINGLY, WE DIRECT THE AO TO DELETE THE PENALTY SO IMPOSED ON THE INCOME ESTIMATED BY THE TRIBUNAL. WE DIR ECT ACCORDINGLY. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 09 / 02 /2018 S D/ - ( PAWAN SINGH ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTA NT MEMBER MUMBAI ; DATED 09 / 02 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//