Shri Simit Sheth L/R of Late Shri Pankaj J.Sheth, Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 2444/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0383 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 14-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Keywords: Bogus purchase

Judgement Text

I.T.A. NO . 2 444 /AHD/201 3 A SSESSMENT Y EAR: 200 5 - 06 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 2444 /AHD/ 20 1 3 ASSESSMENT Y EAR : 200 5 - 06 SIMIT SHETH ................... . APPELLANT L/R. O F LATE SHRI PANKAJ J . SHETH, C/ O. MANISH G. SHETH, 38/101, GAUTAMNAGAR SOC RACE COURSE CIRCLE, VADODARA. [ PAN: A DBPS 9145 C ] VS. INCOME TAX OFFICER , WARD 2(2), BARODA. . ...... . ... . RESPONDENT APPEARANCES BY: URVASHI SHODHAN , FOR THE APPELLANT O.P. MEENA , FOR THE RES PONDENT D ATE OF CONCLUDING THE HEARING : 19 .0 7 .2016 DATE OF PRONOUNCING THE ORDER : 30 . 0 9 .2016 O R D E R 1. BY WAY OF THIS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 2 ND JULY, 2013, PASSED BY THE L EARNED CIT(A) UPHOLDING THE PENALTY OF RS.42,702/ - IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)( C ) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 200 5 - 06 . 2. GRIEVANCE OF THE ASSESSEE , IN SUBSTANCE, IS THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE I MPUGNED PENALTY OF RS.42,702/ - . I.T.A. NO . 2 444 /AHD/201 3 A SSESSMENT Y EAR: 200 5 - 06 PAGE 2 OF 3 3. IN THE PRESENT CASE, ORIGINALLY AN AMOUNT OF RS.11,16,383/ - WA S DISALLOW ED AS BOGUS PURCHASES, AND, ON THAT BASIS, PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS MADE. WHEN FINALLY MATTER TRAVELLED IN APPEAL BEFORE THE TRIBUNAL, WHILE T HIS DISALLOWANCE WAS DELETED, THE ASSESSEE WAS HELD TO BE IN THE BUSINESS OF ISSUING ACCOMMODATION, AND, AN INCOME ESTIMATED @ 12.5 % OF THE VALUE OF BILLS ISSUED WAS BROUGHT TO TAX. AS FOR PENALTY, WHEN MATTER WAS CARRIED IN APPEAL BEFORE THE LEARNED CIT ( A ) , THE LEARNED CIT (A) UPHELD T HE PENALTY IN PRINCIPLE BUT RESTRICTED THE QUANTUM OF PENALTY ON THE BASIS OF INCOME COMPUTED @ 12.5% OF SALE BILL. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE ME. 4. I HAVE HE A RD THE RIVAL C ONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 5. I FIND THAT THE VERY BASIS OF IMPUGNED PENALTY, IN THE LIGHT OF COURSE ADOPTED BY THE TRIBUNAL BY ESTIMATING INCOME @ 12.5% OF S ALE BILL, STANDS VACATED. THE NATURE OF COMPUTATION OF INCOME NOW HAS NOTHING IN PARITY WITH THE DISALLOWANCE ORIGINALLY MADE. IN ANY CASE, EVEN THE INCOME IS COMPUTED PURELY ON ESTIMATE BASIS. IN THIS VIEW OF THE MATTER, IN MY CONSIDERED VIEW , THE PENA LTY MUST STAND DELETED. I ORDER SO. 6 . IN T HE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF SEPTEMBER, 2016. SD/ - PRAMOD KUMAR (ACC OUNTANT MEMBER) DATED: THE 30 TH DAY OF SEPTEMBER , 2016. PBN/* I.T.A. NO . 2 444 /AHD/201 3 A SSESSMENT Y EAR: 200 5 - 06 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD