The DCITS.K. Circle, Himatnagar V. M/s. G.H. Vijapura & Co.,(JV), Himatnagar

ITA 2412/AHD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57130 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-01-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 04-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIVASTAVASR
• Keywords: Revised return
• Section: 133A

Judgement Text

ITA NO.2412/AHD/20 07 A.Y. 2003-04 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENCH,AHMEDAB AD. (BEFORE SHRI G.C. GUPTA,VICE PRESIDENT AND SHRI B. R.BASKARAN, A.M.) I.T.NO. 2412/AHD/2007 (ASSESSMENT YEAR: 2003-04) THE DEPUTY COMMISSIONER OF INCOME TAX, SABARKANTHA CIRCLE, HIMATNAGAR (APPELLANT) VS. M/S.G.H. VIJAPURA & CO., NR.AMBER CINEMA ROAD, HIMATNAGAR (RESPONDENT) PAN: AABFG 3656M APPELLANT BY : SHRI P. K.SRIVASTAVA,SR.D.R. RESPONDENT BY : NONE DATE OF HEARING : 17-1-2012 DATE OF PRONOUNCEMENT : 25-1-2012 ( (( ( )/ )/)/ )/ ORDER PER: SHRI B.R.BASKARAN, ACCOUNTANT MEMBER:- THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 01-03-2007 PASSED BY LD CIT (A)-IX, AHMEDABAD AND IT RELATES TO THE A SSESSMENT YEAR 2003-04. THE ASSESSEE HAS FILED PETITION FOR ADJOURNMENT OF THE CASE. HOWEVER, WE REJECT THE SAID REQUEST SINCE THE INSTANT APPEAL IS PENDING FOR QUI ET A LONG TIME. ACCORDINGLY, WE PROCEED TO DISPOSE THE SAME EX-PARTE, QUA THE ASSESSEE. 2. THE PENALTY OF RS.15,03,400/- LEVIED U/S 271 (1)(C) OF THE ACT, HAVING BEEN DELETED BY LD CIT (A), THE REVENUE IS IN APPEAL BEFORE US C HALLENGING THE SAID RELIEF. 3. THE FACTS RELATING TO THE ISSUE ARE SET OUT IN BRIEF. THE ASSESSEE HEREIN IS ENGAGED IN ROAD CONSTRUCTION ACTIVITIES. IT FILED HIS RETURN O F INCOME FOR THE YEAR UNDER CONSIDERATION ITA NO.2412/AHD/20 07 A.Y. 2003-04 2 ON 31.10.2003 DECLARING A TOTAL INCOME OF RS.87,87, 769/-. THERE AFTER IT FILED A REVISED RETURN ON 04-02-2005 DISCLOSING A TOTAL INCOME OF R S.1,28,64,249/-. THE ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS.1,29,64,490/-. T HE CASE OF THE AO IS THAT THE ASSESSEE HAS FILED THE REVISED RETURN ONLY AFTER INITIATION OF ENQUIRIES BY HIM ON THE EXPENSES CLAIMED BY THE ASSESSEE AND IN PURSUANCE OF SUCH EN QUIRIES ONLY, THE ADDITIONAL INCOME WAS OFFERED IN THE REVISED RETURN. ACCORDINGLY, TH E AO TOOK THE VIEW THAT THE OFFER OF ADDITIONAL INCOME IS AS A CONSEQUENCE OF DETECTION OF CONCEALMENT AND HENCE IT CANNOT BE CONSIDERED AS VOLUNTARY. THE AO WAS ALSO UNDER THE IMPRESSION THAT THE REVISED RETURN FILED ON 04.02.2005 WAS TIME BARRED. ON MERITS, THE ASSESSEE OFFERED EXPLANATIONS ON THE ADDITIONAL INCOME OFFERED, BUT IT WAS NOT CONVINCIN G TO THE AO. ACCORDINGLY THE AO LEVIED PENALTY ON THE ADDITIONAL INCOME OF RS.40,90 ,704/-. THE ASSESSEE COULD SUCCEED IN ITS APPEAL FILED BEFORE LD CIT(A). HENCE THE REVEN UE IS IN APPEAL BEFORE US. 4. THE LD. D.R. SUBMITTED THAT THE AO HAS IMPO UNDED THE BOOKS OF ACCOUNTS OF THE ASSESSEE ON 17-1-2005 AND THERE AFTER ISSUED NOTICE S U/S. 133A (6) OF THE ACT TO SOME PARTIES IN ORDER TO VERIFY THE PAYMENTS MADE TO THE M. SUBSEQUENTLY THE ASSESSEE WAS ALSO GIVEN SHOW CAUSE NOTICE DT. 4-2-2005 CALLING FOR CE RTAIN DETAILS WITH REGARD TO THE STOCK AND OTHER EXPENSES. AS A CONSEQUENCE OF THE VERIFI CATION PROCESS INITIATED BY THE AO, THE ASSESSEE HAS FILED THE REVISED RETURN ON 4-2-2005 B Y OFFERING THE ADDITIONAL INCOME IN RESPECT OF ITEMS ON WHICH QUERIES WERE RAISED BY TH E AO. ACCORDINGLY THE LD. DR SUBMITTED THAT THE ADDITIONAL INCOME OFFERED IN THE REVISED RETURN CANNOT BE TERMED AS VOLUNTARY BUT ONLY AFTER ITS DETECTION BY THE AO AN D HENCE PENALTY IS LEVIABLE ON THE ADDITIONAL INCOME SO OFFERED BY THE ASSESSEE. 5. WE HAVE THE LD. DR AND CAREFULLY PERUSED THE REC ORD. IT MAY BE NOTED THAT THE FACT THAT THE ASSESSEE FURNISHED THE PARTICULARS OF INCOME BEFORE ITS DETECTION BY THE DEPARTMENT OR AFTER THE DETECTION WILL BE RELEVANT ONLY WHEN THE COMMISSIONER IS CONSIDERING THE WAIVER OF PENALTY ON AN APPLICATION MADE BY THE ASSESSEE U/S. 273A. SUCH CONSIDERATIONS ARE FOREIGN TO THE SCOPE OF SECTION 271(1)(C) AS HELD IN THE CASE OF CIT VS. J.K.A. SUBRAMANIYA CHETTIAR) (1977) 110 ITR 602 AT PAGE 609. IN ADDITION TO THE ABOVE, THE FILING OF A REVISED RETURN VOLUNTARILY BY THE A SSESSEE WHEN HE KNEW THAT THE ITA NO.2412/AHD/20 07 A.Y. 2003-04 3 DEPARTMENT WAS CONDUCTING INVESTIGATIONS AGAINST HI M WILL NOT EXONERATE THE ASSESSEE FROM THE LIABILITY TO PAY PENALTY U/S. 271(1)(C). I T WAS SO HELD IN THE CASE OF CIT VS. K. MAHIM) (1984) 149 ITR 737 (KER). 6. NOW LET US CONSIDER THE EXPLANATIONS OFFERED BY THE ASSESSEE IN RESPECT OF THE ADDITIONAL INCOME OFFERED BY IT. FROM THE PENALTY ORDER, WE NOTICE THAT THE AO HAS LEVIED PENALTY IN RESPECT OF FOLLOWING 5 ITEMS OF INCOME:- (1) UNDER VALUATION OF STOCK RS. 14.80,915/- (2) NON-GENUINE/INFLATED CASH EXPENSES TOWARDS MUKADAM PAYMENTS RS. 6,92,675/- (3) NON GENUINE/INFLATED CASH EXPENSES TOWARDS TRANSPORT CONTRACT PAYMENTS RS. 8, 85,000/- (4) NON-GENUINE/INFLATED CASH EXPENSES TOWARDS LABOUR CONTRACT PAYMENTS RS. 7,61,50 0/- (5) CASH EXPENSES TOWARDS KITCHEN AND TELEPHONE EXPENSES FOR PERSONAL USE RS. 1,77,477/- WITH REGARD TO THE UNDER VALUATION OF STOCK, IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT IT WAS NOT A CASE, WHERE ANY UNDECLARED STOCK WAS FOUN D TO BE AVAILABLE WITH THE ASSESSEE. IT WAS SUBMITTED THAT THE ASSESSEE HAD SHOWN THE ST OCK VALUE AT 99,055 IN ITS BOOKS OF ACCOUNT, BUT IN THE STATEMENT FILED WITH THE BANK T HE STOCK VALUE WAS SHOWN AT RS.15,80,000/-. THUS, IT IS A CASE OF VOLUNTARY OF FER OF THE DIFFERENCE BETWEEN THE BANK STATEMENT AND THE BALANCE SHEET. THE EXPLANATIONS OF THE ASSESSEE WITH REGARD TO NEXT THREE ITEMS ARE EXTRACTED BY THE LD CIT(A) IN HIS O RDER AS UNDER:- 1. AS REGARDS THE ADDITION OF RS.6,92,675/-, THE AS SESSEE OFFERED THE SAME TO BUY PEACE AS IT WAS NOT POSSIBLE TO TRACE CHANDRAMO HAN MUKADAM, AS FOR A LONG PERIOD THERE WERE NO DEALINGS WITH HIM, BUT IT DID NOT MEAN AND IT WAS NOT ACCEPTED THAT THE EXPENSES WERE NOT INCURRE D. 2. AS REGARDS THE ADDITION OF RS.8,85,000/-, AND TH E PARTIES CONCERNED, BHAVIN CARTING CONTRCTOR, VISHAL TRANSPORT, YUSUFBH AI MOMIN, SAMATBHAI VASRA AND MEHBOOBBHAI TAMBADIA, KINDLY SE E THE SUBMISSIONS IN PARAS 3.2 TO3.5. ALL RELEVANT INFORMATION INCLUD ING PAN NOS. WERE FURNISHED, AND IN THE LAST THREE CASES THE TRANSACT IONS WITH THEM WERE ACCEPTED IN EARLIER OR SUBSEQUENT YEARS, WHICH PROV ES THAT THE PARTIES WERE ITA NO.2412/AHD/20 07 A.Y. 2003-04 4 GENUINE. HOWEVER, THE APPELLANT OFFERED THESE AMOUN TS FOR DISALLOWANCE NOT KNOWING THE LEGAL POSITION, ONLY TO BUY PEACE. 3. AS REGARDS THE ADDITION OF RS.7,61,000/- AND CON CERNED PARTIES,. RAFIQBHI MANSURI, SUNIL PANDEY, A.G.SHAIKH ND JAYANTILAL D. PATEL, YOUR HONOUR WILL KINDLY NOTICE FROM PARA 3.6 THAT IN ALL THESE CASES THERE WAS, IN FACT, NO EXPENDITURE INCURRED DURING THE YEAR UNDER APPEAL, AND ONLY PAYMENTS WERE MADE AGAINST THE OPENING OUTSTANDING BALANCES. THERE WAS THEREFORE NO QUESTION OF ANY DISALLOWANCE HERE, STILL UNDER S OME MISCONCEPTION; THESE AMOUNTS WERE OFFERED FOR DISALLOWANCE. THE LAST ADDITION RELATED TO ESTIMATED DISALLOWANCE MADE TOWARDS PERSONAL USE FROM OUT OF KITCHEN AND TELEPHONE EXPENSES. 7. IT IS A SETTLED PROPOSITION OF LAW THAT THE A DDITION MADE IN THE ASSESSMENT PROCEEDINGS WOULD NOT AUTOMATICALLY GIVE RISE TO PENALTY, SINCE THE PROCEEDINGS FOR IMPOSITION OF PENALTY ARE ESSENTIALLY INDEPENDENT PROCEEDINGS. T HE HONBLE SUPREME COURT IN THE CASE OF ANANTHRAM VEERSINGHAIAH & CO., VS. CIT (1980) 12 3 ITR 457, 462 HAS OBSERVED THAT THE FINDINGS RECORDED IN THE ASSESSMENT ORDER CONST ITUTE GOOD EVIDENCE IN THE PENALTY PROCEEDINGS; BUT THOSE FINDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSES OF PENALTY PROCEEDINGS. THUS, FOR THE PURPOSE OF LEVYI NG THE PENALTY IN A GIVEN CASE, THE ENTIRETY OF THE FACTS IN THE GIVEN CIRCUMSTANCES MU ST BE TAKEN INTO ACCOUNT. THE EXPLANATION TO SECTION 271(1)(C) PUTS INITIAL ONUS ON THE ASSESSEE AND IF THAT IS DISCHARGED, THE ONUS IS SHIFTED TO THE DEPARTMENT W HICH HAS TO REBUT THE EXPLANATION OFFERED BY THE ASSESSEE AS BEING FALSE OR UNACCEPTA BLE. 8. LET US NOW CONSIDER THE EXPLANATIONS OFFERED BY THE ASSESSEE IN THE LIGHT OF THE PROPOSITION OF LAW DISCUSSED ABOVE. WE NOTICE THAT THE ADDITIONAL INCOME OFFERED ON ACCOUNT OF STOCK VALUE DIFFERENCE WAS NOT ON ACCOUN T OF ANY EXCESSIVE STOCK FOUND; BUT ON THE BASIS OF STATEMENT SUBMITTED TO THE BANK WHI CH CANNOT BE TAKEN AS A CONCLUSIVE PROOF OF AVAILABILITY OF ANY EXCESS STOCK. THE DISA LLOWANCE MADE FROM KITCHEN AND TELEPHONE EXPENSES TOWARDS PERSONAL USE IS MERELY A GUESS WORK MADE ON ESTIMATED BASIS. WITH REGARD TO THE OTHER THREE ADDITIONS THE ASSESSEE HAS FURNISHED DETAILED EXPLANATIONS SUBMITTING THE DETAILS WITH REGARD TO THE PARTIES AND IT HAS BEEN SPECIFICALLY MENTIONED THAT THE SAID INCOME WERE OFFERED TO BUY PEACE, EVEN THOUGH THERE IS NO ITA NO.2412/AHD/20 07 A.Y. 2003-04 5 NECESSITY TO OFFER THE SAME FOR THE REASONS STATED IN THE EXPLANATIONS. IT IS PERTINENT TO NOTE THAT THE SAID EXPLANATIONS WERE NOT FOUND TO B E FALSE. ACCORDINGLY WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED BURDEN CAST U PON HIM UNDER EXPLANATION 1 TO SECTION 271(1)(C). IN VIEW OF FOREGOING DISCUSSIONS , WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD. CIT (A) IN DELETING THE IMPUGNE D PENALTY. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 25-1-2012 SD/- SD/- ( G.C. GUPTA) (B.R.BASKARAN) VICE PRESIDENT ACCOUNTAN T MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO.2412/AHD/20 07 A.Y. 2003-04 6 1.DATE OF DICTATION 16 - 1 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 16 / 1 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 18 - 1 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 25 - 1 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 25 - 1 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25 - 1 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..