PRAVEEN KUMAR, CHENNAI V. ITO NON CORPORATE WARD 5 (4), CHENNAI

ITA 2558/CHNY/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 6807 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 24-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J PAVITRAN KUMAR
• Assessee Lawyers: D ANAND
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 2558/CHNY/2017 / ASSESSMENT YEAR : 2012-13 SHRI. PRAVEEN KUMAR, 41/42, SRINIVASAN IYER STREET, CHENNAI 600 001.RAHUL NAHAR, NO. 20 (OLD NO. 16), ERULAPPAN STREET, SOWCARPET, CHENNAI 600 079. [PAN: AAPPP 5054Q] VS. THE INCOME TAX OFFICER, NON- CORPORATE WARD 5(4), CHENNAI. ( / APPELLANT) ( / RESPONDENT) ' ( / APPELLANT BY : SHRI. D. ANAND, ADVOCATE +,' ( / RESPONDENT BY : SHRI. J. PAVITRAN KUMAR, JCIT ( /DATE OF HEARING : 17.09.2019 ( /DATE OF PRONOUNCEMENT : .12.2019 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 5, CHENNAI, IN ITA NO. 162/C IT(A)-5/2015-16 DATED 12.09.2017 FOR ASSESSMENT YEAR 2012-13, WHEREIN THE CIT(A) SUSTAINED THE PENALTY OF RS. 61,406/- LEVIED BY THE AO U/S. 271(1 )(C) OF THE ACT. :-2-: ITA NO.2558/CHNY/2017 2. SHRI. PRAVEEN KUMAR, THE ASSESSEE, AN INDIVIDU AL, A WHOLESALE DEALER IN COSMETICS & CONFECTIONERY IN THE NAME OF M/S. PITHA MBAR MARKETERS. WHILE MAKING THE ASSESSMENT FOR ASSESSMENT YEAR 2012-13, THE AO FOUND THAT THE ASSESSEE HAS SHOWN OF RS. 3,79,830/- AS AN OUTSTAND ING AS ON 31.03.2012 IN RESPECT OF M/S. RUCHI SOYA INDUSTRIES LTD. HE OBTA INED CONFIRMATION LETTER FROM THAT COMPANY AND FOUND THAT THERE WAS NILL BALANCE AS ON 31.03.2012. SINCE, THE ASSESSEE COULD NOT RECONCILE AND AGREED TO OFFER TH E DIFFERENCE AS AN ADDITIONAL INCOME, THE AO COMPLETED THE ASSESSMENT ADDING, INT ER ALIA, THIS SUM AS AN INCOME AND INITIATED PENALTY PROCEEDINGS U/S. 271(1 )(C). DURING THE PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THAT HE HAD RUN NING ACCOUNTS WITH M/S. RUCHI SOYA INDUSTRIES LTD. AND ALL THE TRANSACTIONS IN THIS ACCOUNT WAS MADE VIA BANK AND DUTY ACCOUNTED FOR. THE PURCHASES MADE FR OM THE PARTIES WERE DULY REFLECTED IN THE SALES TAX RETURNS FILED FOR THE RE LEVANT ASSESSMENT YEAR WHICH WAS ALSO ON RECORD. THE ASSESSEE COULD NOT RECONCILE T HE DIFFERENCE AT THE FAG END OF THE YEAR DUE TO TIME CONSTRAINS ETC. HOWEVER, THE AO REJECTED THE ASSESSEES EXPLANATION AND LEVIED THE PENALTY @ 100% OF TAX ON THE INCOME SOUGHT TO BE EVADED. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BE FORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THA T ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD. AR SUBMITTED THAT CERTAIN CREDIT AND DEB IT NOTES PASSED BY THE COMPANY, M/S. RUCHI SOYA INDUSTRIES LTD. WHICH WERE NOT MADE AVAILABLE TO THE ASSESSEE AND HENCE, THE IMPUGNED DIFFERENCE AROSE. THE ASSESSEE IS HAVING A :-3-: ITA NO.2558/CHNY/2017 CONTINUOUS BUSINESS ACCOUNT WITH THE COMPANY, THE D IFFERENCE WAS MINIMAL COMPARED TO THE TURNOVER. CONSIDERING THE ASSESSEE S POSITION VIS-A-VIS, M/S. RUCHI SOYA INDUSTRIES LTD. WITH WHOM SUBSTANTIAL BU SINESS IS UNDERTAKEN, IT IS NOT POSSIBLE FOR THE ASSESSEE TO INSIST RECONCILIATION ETC. TAKING THE OVERALL POSITION OF THE ASSESSEE VIS-A-VIS, M/S. RUCHI SOYA INDUSTRI ES LTD. AND THE TURNOVER OF THE ASSESSEE, THE LD. AO SHOULD NOT HAVE LEVIED THE PEN ALTY. THE LD. AO AS WELL AS THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE ACCOUNTS DULY TALLIED WITH OTHER ENTITIES AND THERE WAS NO CASH TRANSACTIONS. THE LEVY OF PENALTY U/S. 271(1)(C) IS UNWARRANTED. HENCE, THE AR PLEADED TH AT THE APPEAL BE ALLOWED. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. THE ASSESSEE IS AN INDIVIDUAL AND A WHOLESALE DEALE R IN COSMETIC AND CONFECTIONERY. HE HAS CONTINUOUS BUSINESS TRANSACT IONS WITH M/S. RUCHI SOYA INDUSTRIES LTD. AND SHOWN THE IMPUGNED BALANCE IN H IS BOOKS OF ACCOUNT. HE PLEADED THAT CERTAIN CREDIT OR DEBIT NOTES PASSED B Y THE COMPANY WERE NOT MADE AVAILABLE TO HIM AND HENCE THE IMPUGNED DIFFERENCE AROSE. CONSIDERING THE FACT THAT THE ENTIRE TRANSACTION BETWEEN THEM AND OTHERS WERE THROUGH BANKING CHANNEL, THE PURCHASES AND SALES WERE DULY ACCOUNTE D AND REFLECTED IN THE RETURNS FILED BEFORE THE SALES TAX AUTHORITIES AS W ELL AS INCOME TAX AUTHORITIES AND THE ASSESSEES POSITION VIS-A-VIS M/S. RUCHI SOYA I NDUSTRIES LTD. ETC., THE ASSESSEES EXPLANATION APPEARS TO BE PLAUSIBLE AND HENCE WE ARE OF THE VIEW THAT THE LEVY OF THE PENALTY U/S. 271(1)(C) IN THIS CASE IS NOT WARRANTED. :-4-: ITA NO.2558/CHNY/2017 THEREFORE, WE DIRECT THE AO TO DELETE THE PENALTY L EVIED AT RS. 61,406/-. CORRESPONDING GROUNDS OF THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON DECEMBER , 2019 AT CHENNAI. ( . ' ) (DUVVURU RL REDDY) $% /JUDICIAL MEMBER ( ) (S. JAYARAMAN) % /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: DECEMBER, 2019 JPV (+3454 /COPY TO: 1. ' / APPELLANT 2. +,' /RESPONDENT 3. 6 ) ( /CIT(A) 4. 6 /CIT 5. 4+ /DR 6. 9 /GF