The DCIT, Circle-1, Surat V. M/s. Basser Diamond Mfg.Pvt.Ltd., Surat

ITA 2578/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6811 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 11-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAVAL
• Keywords: Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND N. S. SAINI, AM) ITA NO. 2578/AHD/2009 A. Y.: 2004-05 THE D. C. I. T., CIRCLE-1, ROOM NO.108, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS M/S. BESSAR DIAMOND MANUFACTURING PVT. LTD., 3A, SARVODAY SOCIETY, OPP. HOTEL OASIS, VARACHHA ROAD, SURAT PA NO. AABCB 5109 M (APPELLANT) (RESPONDENT) C. O. NO. 268/AHD/2009 (IN ITA NO. 2578/AHD/2009:A.Y.: 2004-05) M/S. BESSAR DIAMOND MANUFACTURING PVT. LTD., 3A, SARVODAY SOCIETY, OPP. HOTEL OASIS, VARACHHA ROAD, SURAT VS THE D. C. I. T., CIRCLE-1, ROOM NO.108, AAYAKAR BHAVAN, MAJURA GATE, SURAT PA NO. AABCB 5109 M (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY SHRI ROBIN RAVAL, SR. DR ASSESSEE BY SHRI MANISH J. SHAH, AR O R D E R PER BHAVNESH SAINI: THE DEPARTMENTAL APPEAL AS WELL AS THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AG AINST THE ORDER OF THE LEARNED CIT(A)-I, SURAT DATED 14 TH JULY, 2009 FOR ASSESSMENT YEAR 2004-05, CHALLENGING THE DELETION OF PART OF THE PE NALTY AND SUSTAINING PART OF THE PENALTY U/S 271 (1) ( C ) OF THE IT ACT . ITA NO.2578/AHD/2009 AND C. O. 268/AHD/2009 BESSAR DIAMOND MANUFACTURING PVT. LTD. 2 2. IN THE PENALTY ORDER, THE AO HAS STATED THAT AS SESSMENT WAS COMPLETED U/S 143(3) OF THE IT ACT ON 12-12-2006 BY MAKING THE FOLLOWING ADDITIONS WHICH WERE CONFIRMED BY THE LEA RNED CIT(A): (I) ON ACCOUNT OF CLOSING STOCK OF WIP RS.79,34,89 5/- (II) ON ACCOUNT OF FALL IN GP RS. 7,81,777/- (III) DISALLOWANCE OUT OF LATE PAYMENT OF PF AND ESI RS.11,48,285 2.1 THE AO VIDE SEPARATE ORDER IMPOSED PENALTY U/S 271 (1) (C) OF THE IT ACT. THE LEARNED CIT(A) FOLLOWING THE DECISI ON IN THE CASE OF J. H. PARABIA TRANSPORT PVT. LTD. 284 ITR 361 CANCELLE D THE PENALTY WITH RESPECT TO ADDITION OF WIP AND ADDITION ON ACCOUNT OF GP. HOWEVER, THE LEARNED CIT(A), WITH REGARD TO THE DISALLOWANCE OUT OF PF AND ESI CONFIRMED THE PENALTY U/S 271 (1) ( C ) OF THE IT A CT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE ASSESSEE PREFERRED APPEAL BEFORE ITAT AHME DABAD D BENCH IN ITA NO. 3483/AHD/2007 AND THE TRIBUNAL VID E ORDER DATED 12-02-2010 DELETED ALL THE 3 ADDITIONS ON WHICH PE NALTY HAS BEEN IMPOSED. COPY OF THE ORDER OF THE TRIBUNAL IS FILED ON RECORD AND GIVEN TO THE LEARNED DR. THE LEARNED DR DID NOT DIS PUTE THE SAME. 4. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW PENALTY IS NOT LEVIABLE ON ANY OF THE ITEMS AS NOTED ABOVE. ON ALL THE 3 ITEMS ON WHICH PENALTY WAS IMPOSED REMAINED THE SUBJECT M ATTER IN THE QUANTUM APPEAL AND THE TRIBUNAL DELETED ALL THE 3 A DDITIONS. THUS, THE VERY FOUNDATION OF LEVYING PENALTY HAS GONE, TH EREFORE, NOTHING SURVIVES IN FAVOUR OF THE REVENUE FOR LEVYING PENAL TY ON THE ABOVE 3 ITA NO.2578/AHD/2009 AND C. O. 268/AHD/2009 BESSAR DIAMOND MANUFACTURING PVT. LTD. 3 ITEMS. WE ACCORDINGLY, CONFIRM THE ORDER OF THE LEA RNED CIT(A) IN DELETING PENALTY ON 2 ITEMS. HOWEVER, THE ORDER OF THE LEARNED CIT(A) IS SET ASIDE ON PENALTY WITH REGARD TO ADDITION MAD E ON ACCOUNT OF DISALLOWANCE OF LATE PAYMENT OF PF AND ESI AND WE C ANCEL THE PENALTY ACCORDINGLY. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-04-2011 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 21-04-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD