Shri Parasmal Siremal Bohra, Ahmedabad V. The Income Tax Officer, Ward-2(2), Now Ward-1(2)(5), Ahmedabad

ITA 2611/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9753 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Assessee Lawyers: PARIMAL SINGH PARMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER PARASMAL SIREMAL BOHRA, 113, SARABHAI NI. WADI, GHEEKANTA AHMEDABAD - 380001 PAN: ADBPB4175F (APPELLANT) VS INCOME TAX OFFICER, ARD - 1(2)(5), PRATYAKSH KAR BHAVAN, AHMEDABAD - 380015 (RESPONDENT) REVENUE BY : S H RI D.V. SINGH, CIT - D . R. ASSESSEE BY: S H RI PARIMAL SINGH PARMAR , A.R. DATE OF HEARING : 04 - 01 - 2 016 DATE OF PRONOUNCEMENT : 20 - 01 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2011 - 12 , AR ISES FROM ORDER OF THE CIT(A) - 10, AHMEDABAD DATED 16 - 07 - 2015 IN APPEAL NO. CIT(A) - 10 / ITO.WD.2(2)/443/14 - 15 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1 961; IN SHORT THE ACT . I T A NO . 2611 / A HD/20 15 A SSESSMENT YEAR 2011 - 12 I .T.A NO. 2611 /AHD/20 15 A.Y. 2011 - 12 PAGE NO PARASMAL SIREMAL BOH RA VS. ITO 2 2. THE ASSESSEE S SOLE SUBSTANTIVE GROUND CHALLENGES CORRECTNESS OF SECTION 271(1) (C ) PENALTY OF RS. 3,50,000/ - ON NET PROFIT ADDITION OF RS. 11,18,727/ - MADE BY ESTIMATING THE SAME @ 1.6% OF THE TURN OVER; AS IMPOSED BY THE ASSE SSING OFFICER IN PENALTY ORDER DATED 26 - 08 - 2014 AND CONFIRMED IN LOWER APPELLATE PROCEEDINGS. 3. FACTS OF THE CASE AS SUMMARIZED IN PENALTY ORDER ARE IN A NARROW COMPASS. THE ASSESSING OFFICER IN SCRUTINY NOTICED THE ASSESSEE AS NOT TO HAVE DECLARED TO TAL DEPOSITS OF RS. 6,99,20,413/ - IN THREE SAVING BANK ACCOUNTS MAINTAINED WITH ICICI BANK LTD, SD ROAD, SIKANDRABAD. THE ASSESSEE AT THIS STAGE STATED THAT THE SAME REPRES EN TED HIS TOTAL TURNOVER IN STEEL PATAS BU SINESS. THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS IN RELATION THERETO. HE CLAIMED TO HAVE BEING RUN THREE PROPRIETARY BUSINESS CONCERNS IN THE NAME AND STYLE M/S. BHAWANI STEEL, BHAWANI METAL AND BHAWANI STEEL AGENCY HAVING DEPOSITED SALE PROCEEDS IN TH E ABOVE STATED BANK ACCOUNTS. T HE ASSESS ING OFFICER ESTIMATED NET PROFITS @ 1.6% OF RS. 6,99,20,413/ - COMING TO RS. 11,18,727/ - AND MADE CONSEQUENTIAL ADDITION. HE FURTHER INITIATED IMPUGNED PENALTY PROCEEDINGS ALLEGING CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS. THE ASSESSEE DOES NO T SEEM TO HAVE FILED ANY APPEAL AGAINST THE SAME. QUANTUM PROCEEDINGS ACCORDINGLY ATTAINED FINALITY . 4. WE COME TO THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSING OFFICER REJECTING ASSESSEE S EXPLANATION INTER ALIA ON FACTS OR LAW CLAIMING IT TO BE A CASE OF NET PROFIT ESTIMATION NOT AMOUNTING I .T.A NO. 2611 /AHD/20 15 A.Y. 2011 - 12 PAGE NO PARASMAL SIREMAL BOH RA VS. ITO 3 TO EITHER CONCEALMENT OR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER QUOTED CHRONOLOGY OF EVENTS AND REJECTED THE SAME HEREBY IMPOSING THE IMPUGNED SECTION 271(1)(C) IN QUESTION OF RS . 3,50,000/ - . THE CIT(A) AFFIRMS ASSESSING OFFICER S ACTION. 5. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. FACTS NARRATED HEREINABOVE ARE NOT REPEATED FOR THE SAKE OF BREVITY. THE INSTANT CASE IS THAT ESTIMATION OF NET PROFITS. WE FIND FROM PE NAL TY ORDER THAT ASSESSEE S NET PROFIT IN PRECEDING ASSESSMENT YEAR WAS @ 1.11%. THIS IS NOT THE REVENUE S CA S E THAT THE SAME DOES NOT PERTAIN STEEL PATAS BUSINESS OR THAT THE ASSESSEE IS NOT ENGAGED IN THIS VOCATION. WE OBSERVE IN THESE FACTS AND CIR CUMSTANCES THAT THE ASSESSEE HAS DECLARED HIS TURNOVER DURING SCRUTINY ONLY WHICH HAS RESULTED IN ESTIMATION OF ABOVE STATED THAT PROFIT. THERE CAN HARDLY BE ANY QUARREL ABOUT THE SETTLED LAW THAT QUANTUM AND PENALTY PROCEEDINGS STAND DIFFERENT FOOTING AN D EACH AND EVERY DISALLOWANCE /ADDITION DOES NOT LEAD TO AUTOMATIC IMPOSITION OF PENALTY AS HELD BY HON BLE APEX COURT IN CIT VS. RELIANCE PETRO - PRODUCTS 322 ITR 158 (SC). A CO - ORDINATE BENCH OF THE TRIBUNAL IN ITA 2641/AHD/2011 DCIT VS. M/S PAVASIA EXPO RT DEALS WITH A SIMILAR SITUATION INVOLVING PENALTY U/S. 271(1)(C) ARISING FROM AN ESTIMATED NET PROFITS ADDITION TO CONCLUDE THAT THE SAME DOES NOT AMOUNT TO CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME ENVISAGED THEREIN. WE TAKE INTO A CCOUNT ALL THESE FACTS AND CIRCUMSTANCES AS WELL AS JUDICIAL PRECEDENT TO HOLD THAT THE IMPUGNED PENALTY ARISING FROM ESTIMATED I .T.A NO. 2611 /AHD/20 15 A.Y. 2011 - 12 PAGE NO PARASMAL SIREMAL BOH RA VS. ITO 4 NET PROFIT ADDITION I S NOT SUSTAINABLE IN LAW. THE SAME ACCORDINGLY STANDS DELETED. 6. THIS ASSESSEE S APPEAL IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 01 - 201 6 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 20 /01/2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,