SILVER HERITAGE, Jaipur V. ITO, Jaipur

ITA 244/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4866 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 14-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH DHK
• Assessee Lawyers: SHRAVAN GUPTA
• Keywords: Business income

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 244/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SILVER HERITAGE, 237, SONKHIYON KA RASTA, KISHANPOLE BAZAR, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 1(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AANFS 8854 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAVAN GUPTA (ADV.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21/12/2016 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 22/12/2016 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21/12/2015 PASSED BY THE LD CIT(A)-I, JAIPUR FOR TH E A.Y. 2008-09 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND LAW THE LD. CIT(A) HAS GROSSLY ERRED IN HOLDING THAT PENALTY U/S 271(1)(C) OF RS. 36,739/- HAS BEEN CORRECTLY IMPOSED. THE PENALTY HAS BEEN IMPOSED WRONG, ILLEGAL AND AGAINST THE FACT ON RECORD. ITA 244/JP/2016_ SILVER HERITAGE VS ITO 2 2. THAT IN ASSESSMENT ORDER OF LD. A.O. HAS NOT MENTIONED THE REASON FOR INITIATING THE PENALTY PROCEEDINGS, AND FURTHER ADDITION WAS MADE ON ESTIMATE BASIS, HENCE IN THE CIRCUMSTANCES PENALTY U/S 271(1)(C) IS NOT JUSTIFIED AND ORDER DESERVES TO BE QUASHED. 3. THAT PENALTY ORDER ITSELF IS ILLEGAL AND DESERVES TO BE QUASHED. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE FIRM IS ENGAGED IN THE BUSINESS OF EXPORT OF SILVER AND GOL D JEWELLERY AND FOR THIS PURPOSE PURCHASES OF SILVER AND GOLD JEWELLERS SETTED WITH SEMI- PRECIOUS STONES ARE MADE FROM LOCAL MARKET. DURING THE YEAR, ASSESSEE DECLARED TOTAL SALES OF RS. 87,91,436/- AND GROSS P ROFIT @ 24.65%. THE ASSESSING OFFICER ESTIMATED THE GROSS PROFIT @ 26% I NSTEAD OF 24.65% AS DECLARED BY THE ASSESSEE. 2.1. AGAINST THE ABOVE SAID ADDITION/ORDER, THE ASS ESSEE PREFERRED APPEALS UP TO THE HONBLE ITAT AND THE HONBLE ITAT H AS CONFIRMED THE ESTIMATION OF PROFIT @ 26% BY HOLDING THAT THE ASSES SING OFFICER COMPLETED THE ASSESSMENT TO THE BEST OF HIS JUDGMEN T AND MADE A BONAFIDE ESTIMATE, WHICH IS NOT SHOWN TO BE BIASED, H IS ESTIMATE WAS REASONABLE, THEREFORE CANNOT BE DISTURBED. ITA 244/JP/2016_ SILVER HERITAGE VS ITO 3 3. THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271( 1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) OF RS. 36,73 9/-. AGAINST THE SAID ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, HAS ALSO CONFIRMED THE LEVY OF PENALTY. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE ME. LD. AR O F THE ASSESSEE HAS REITERATED THE ARGUMENTS AS MADE BEFORE THE LD. CIT(A) AND PRAYED TO DELETE THE PENALTY. 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDERS OF THE LOWER AUTHORITIES. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL AVAILABLE ON THE RECORD. THE BOOK RESULT OF THE ASSESSEE WAS R EJECTED ON THE BASIS THAT THE PURCHASES FROM THREE PARTIES WERE NOT VERIF IABLE. HOWEVER, THE ADDITION WAS MADE ONLY ON THE BASIS OF ENHANCING THE GP RATE FROM 24.65% TO 26%. HOWEVER, THE SALES UNVERIFIABLE FROM THREE PARTIES WERE AMOUNTING TO RS. 17,76,220/-. THE COORDINATE BEN CH OF THE ITAT HAS CONFIRMED THE ADDITION BY HOLDING THAT THE PAST HISTORY OF THE CASE IS A BEST GUIDE FOR ESTIMATION OF THE GROSS PROFIT. THE REFORE, THE COORDINATE BENCH HAS UPHELD THE ESTIMATION @ 26% AND THAT RESU LTED INTO THE ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED. THUS, THE ADDITION WAS ITA 244/JP/2016_ SILVER HERITAGE VS ITO 4 ONLY ON ESTIMATE BASIS AND THERE WAS NO SPECIFIC FIN DING THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME OR CONCEALED THE INCOME, THEREFORE, IN MY CONSIDERED VIEW, NO PENALTY U/S 271(1)(C) CAN BE SUSTAINED ON SUCH ADDITIONS, WHICH WAS MERELY BAS ED ON ESTIMATE BASIS. SUCH VIEW ALSO GOT SUPPORT FROM THE VARIOUS C ASE LAWS I.E. CIT VS AERO TRADERS (P) LTD. 38 DTR 150 (DEL), CIT VS. VIJAY KUMAR JAIN 38 DTR 345 (CHATTISGARH), CIT VS. MAHENDRA SINGH KHEDLA 71 DTR 189 (RAJ), WHEREIN IT WAS HELD THAT NO PENALTY ON ADDITIO N MADE ON ESTIMATE BASIS CAN BE SUSTAINED. IN VIEW OF THE ABOVE, I DELE TE THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. C IT(A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/12/2016. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22 ND DECEMBER, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SILVER HERITAGE, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 1(4), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) ITA 244/JP/2016_ SILVER HERITAGE VS ITO 5 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 244/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR