M/s. Mahendrakumar Kanaiyalal, Banaskantha V. The Income tax Officer,Ward-1, Palanpur

ITA 2563/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9944 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 31-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2563/AHD/2013 / ASSESSMENT YEAR : 2007-08 M/S. MAHENDRAKUMAR KANAIYALAL, C-48, NEW MARKET YARD, PALANPUR, DIST: BANASKANTHA PAN : AADFM 4207 G VS THE ITO, WARD-1, PALANPUR / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI PRAVIN KUMAR, SR. DR / DATE OF HEARING : 16/11/2016 / DATE OF PRONOUNCEMENT: 17/11/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XX, AH MEDABAD DATED 23.08.2013 FOR ASSESSMENT YEAR 2007-08. 2. THE SOLITARY GROUND RAISED IS TO THE EFFECT THAT THE CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.72,800 /- QUA THE ADDITION ON ACCOUNT OF VALUATION OF STOCK, IGNORING THE SUBMISS IONS AND CASE LAWS RELIED ON BY THE ASSESSEE. 3. NONE APPEARED FOR THE ASSESSEE AT THE TIME OF HE ARING. THE ISSUE BEING SMALL, THE APPEAL IS DECIDED EX-PARTE QUA THE ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE MATERIAL AVAILABLE ON RECOR D. 4. THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF TRADI NG OF AGRICULTURAL PRODUCE AND ACTING AS COMMISSION AGENT. RETURN OF I NCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 30.10.2007 DECLARI NG TOTAL INCOME OF RS.12,002/-. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER MADE GP BY INCREASING THE VALUATION OF CLOS ING STOCK. PENALTY PROCEEDINGS WERE INITIATED. THE ASSESSEE VIDE ITS REPLY DATED 07.02.2012 SMC-ITA NO. 2563/AHD/2013 M/S. MAHENDRAKUMAR KANAIYALAL VS ITO AY : 2007-08 2 CONTENDED THAT THE STOCK WAS VALUED AS PER CONSISTE NT PAST PRACTICE AND NO INACCURATE PARTICULARS WERE FURNISHED. THE AO, HOW EVER, IMPOSED THE PENALTY WHICH WAS CONFIRMED BY THE LD. CIT(A). 5. I HAVE HEARD THE LD. DR, WHO SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW, AND PERUSED THE MATERIAL AVAILABLE ON RECORD . IN MY CONSIDERED VIEW, THIS IS NOT A FIT CASE FOR IMPOSING THE PENAL TY U/S 271(1)(C) OF THE ACT INASMUCH AS THE VALUATION OF STOCK WITH AN ESTIMATE . BESIDES, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRI ES LTD, REPORTED IN (2013) 358 ITR 295 (SC), HAS HELD THAT THE ADDITION ON ACC OUNT OF VALUATION OF CLOSING STOCK AT THE MOST AMOUNTS TO POSTPONEMENT O F LIABILITY. THE ASSESSEE IN ITS GROUNDS OF APPEAL HAS RELIED UPON THE FOLLOW ING JUDGMENTS OF HONBLE HIGH COURT OF GUJARAT:- I. NATIONAL TEXTILES CORP. VS. CIT, 249 ITR 125 (GUJ.) II. CIT VS. JALARAM OIL MILLS, 253 ITR 192 (GUJ) III. NEW SORATHIA ENGG. CO. VS. CIT, 282 ITR 642 (GUJ.) IV. A.M. SHAH VS. CIT, 238 ITR 415 (GUJ.) V. CIT VS. MANU ENGG., 122 ITR 506 (GUJ.) THE AFORESAID JUDGMENTS AS RELIED UPON BY THE ASSES SEE, IN MY CONSIDERED VIEW, MAKE THE CASE NOT FIT FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. THE PENALTY OF RS.72,800/- LEVIED BY THE AO U/S 271(1)(C) IS ACCORDINGLY DELETED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 17 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 17/11/2016 *BIJU T., SR. PS SMC-ITA NO. 2563/AHD/2013 M/S. MAHENDRAKUMAR KANAIYALAL VS ITO AY : 2007-08 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD