Pooja Paper Craft, Ahmedabad V. The ACIT.,Circle-10, Ahmedabad

ITA 270/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9343 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURIEN
• Keywords: Unexplained investment
• Section: 143(3); 133A; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM & SHRI MANISH BORAD, AM. ITA NO. 270/AHD/2014 ASST. YEAR: 2007-08 M/S POOJA PAPER CRAFT, 15, SWASTIK AVENUE, SWASTIK SOCIETY, NAVRANGPURA, AHMEDABAD. VS. ACIT, CIR-10, AHMEDABAD. APPELLANT RESPONDENT PAN AADFP 5875B APPELLANT BY SMT. URVASHI SHODHAN, AR RESPONDENT BY SHRI JAMES KURIEN, SR. DR DATE OF HEARING: 06/02/2017 DATE OF PRONOUNCEMENT: 07/02/2017 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF ASSESSEE FOR ASST. YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) XVI, AHMEDABAD, DA TED 12 TH DECEMBER,2013 VIDE APPEAL NO.CIT(A)-XVI/ACIT-CIR-10 /035/12-13 ARISING OUT OF ORDER DATED 27.03.2012 U/S 271(1)(C) OF THE IT ACT, 1961 (IN SHORT THE ACT). 2. ASSESSEE HAS RAISED VARIOUS GROUNDS FROM 1.1 TO 3.1 BUT THE SOLITARY GRIEVANCE REVOLVES ROUND A SINGLE ISSUE RE LATING TO PENALTY U/S 271(1)(C) OF THE ACT OF RS.13,24,000/- CONFIRMED BY LD. CIT(A). ITA NO. 270/AHD/2014 ASST. YEAR 2007-08 2 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING PAPER TUBE S. RETURN OF INCOME WAS FILED ON 27.10.2007 DECLARING TOTAL INCO ME OF RS.27,91,059/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND ASSESSMENT ORDER U/S 143(3) WAS COMPLETED ON 31.12. 2009 AFTER MAKING ADDITION OF RS.39,33,123/- WHICH INTER ALIA INCLUDED DISALLOWANCE OF RS.21,27,405/-, ADDITION FOR UNACCO UNTED STOCK AT RS.18,00,164/- AND A MINOR DISALLOWANCE U/S 14A OF THE ACT OF RS.5,554/-. INCOME WAS ASSESSED AT RS.67,24,180/- A ND PENALTY PROCEEDINGS U/S 274 R.W.S. 271(1)(C) OF THE ACT WER E INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. PENALT Y ORDER U/S 271(1)(C) OF THE ACT WAS FRAMED ON 27.03.2012 IMPOS ING PENALTY OF RS.13,24,000/- ON THE ADDITIONS OF RS.39,27,569/- R ELATING TO DISALLOWANCE OF PROCESSING CHARGES OF RS.21,27,405/ - AND ADDITION ON ACCOUNT OF UNACCOUNTED STOCK FOR RS.18,00,164/-. AG AINST THE IMPUGNED PENALTY ORDER U/S 271(1)(C) OF THE ACT ASS ESSEE FILED APPEAL BEFORE LD. CIT(A) BUT COULD NOT SUCCEED. 4. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE OUTSET, LD. AUTHORISED REPRESENTATIVE (AR ) PLACED ON RECORD THE COPY OF TRIBUNALS ORDER IN ITA NO.683/A HD/2011 FOR ASST. YEAR 2007-08 DATED 22.07.2016 RELATING TO QUANTUM A PPEAL OF ASSESSEE AND SUBMITTED THAT THE HONBLE TRIBUNAL HA S DELETED DISALLOWANCE OF RS.21,27,405/- RELATING TO PROCESSI NG CHARGES AND AS REGARDS ANOTHER ADDITION FOR UNACCOUNTED STOCK OF R S.18,00,164/- ITA NO. 270/AHD/2014 ASST. YEAR 2007-08 3 HON. TRIBUNAL HAS SCALED DOWN THE ADDITION TO RS.1, 13,395/- IN VIEW OF THE DECISION OF THE TRIBUNAL, IT IS HUMBLY PRAYE D THAT PENALTY U/S 271(1)(C) MAY BE DELETED. 6. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT PENALTY SHOULD BE SUSTAINED TO THE EXTENT OF A DDITION SUSTAINED BY HON. TRIBUNAL. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED ON RECORD AND ALSO GONE THROUGH THE DECISION OF THE CO- ORDINATE BENCH ON QUANTUM ADDITIONS IN ASSESSEES C ASE. SOLITARY GRIEVANCE OF THE ASSESSEE IS AGAINST THE ORDER OF L D. CIT(A) CONFIRMING THE PENALTY OF RS.13,24,000/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT ON FOLLOWING TWO A DDITIONS :- 1. DISALLOWANCE OUT OF PROCESSING CHARGES OF RS.21, 27,405/- 2. ADDITION FOR UNACCOUNTED INVESTMENT AT RS.18,00, 164/- 8. WE FURTHER OBSERVE THAT ASSESSEE WENT IN APPEAL AGAINST THE ABOVE TWO ADDITIONS BEFORE THE TRIBUNAL AND MAJOR R ELIEF HAS BEEN GIVEN BY THE CO-ORDINATE BENCH BY WAY OF DELETING D ISALLOWANCE OF RS.21,27,405/- ON ACCOUNT OF PROCESSING CHARGES AND THE ADDITION OF RS.18,00,164/- HAS BEEN SCALED DOWN TO RS.1,13,395/ - VIDE ORDER IN ITA NO.683/AHD/2011 DATED 22.07.2016. WE FIND THAT AGAINST TOTAL ADDITION OF RS.39,33,123/- ONLY AN AMOUNT OF RS.1,1 3,395/- HAS BEEN SUSTAINED TOWARDS UNACCOUNTED INVESTMENT IN STOCK. AS FAR AS IMPOSITION OF PENALTY U/S 271(1)(C) IS CONCERNED TH E SAME IS NOT ITA NO. 270/AHD/2014 ASST. YEAR 2007-08 4 LEVIABLE ON THE DISALLOWANCE AND ADDITION DELETED B Y THE CO-ORDINATE BENCH AND AS FAR AS THE IMPOSITION OF PENALTY ON TH E REMAINING SUSTAINED ADDITION OF RS.1,13,395/- IS CONCERNED WE FIND THAT LD. ASSESSING OFFICER MADE ADDITION OF RS.18,00,164/- O N THE BASIS OF INFORMATION AND RECORDS PROVIDED BY THE SURVEY TEAM WHICH WAS CONDUCTED IN THE CASE OF ASSESSEE U/S 133A OF THE A CT. THE SURVEY TEAM FOUND THE DISCREPANCY TO THE TUNE OF RS.18,00, 164/- BUT LATER ON WHEN THE WORKING OF SURVEY TEAM WAS RECONCILED WITH THE RECORDS PROVIDED BY THE ASSESSEE IT WAS REVEALED BY ASSESSE E THAT THE DIFFERENCE IN PHYSICAL STOCK V/S BOOKS STOCK IS OF RS.1,13,395/- ONLY. FROM GOING THROUGH THE ABOVE FACTUAL MATRIX WE ARE ABLE TO UNDERSTAND THAT IN THE GIVEN CIRCUMSTANCES FIGURE C ALCULATED BY SURVEY TEAM WAS MORE OF ESTIMATION AND ACTUALLY D IFFERENCE WAS DUE TO IMPROPER RECONCILIATION OF CERTAIN TYPES OF STOCKS. CERTAINLY THERE WAS NO ELEMENT OF FURNISHING INACCURATE PARTI CULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME AS THE WORKING OF ADDITION OF RS.18,00,164/- WAS NOT CORRECT TO A LARGE EXTENT AN D THE CO-ORDINATE BENCH ONLY FOUND MINOR DIFFERENCE OF RS.1,13,395/- AS UNACCOUNTED STOCK WHICH CERTAINLY CANNOT COME UNDER THE CLUTCHE S OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IN VIEW OF OUR ABOVE DISCUSSION AND IN THE LIGHT OF DECISION OF CO-ORDINATE BENCH ON THE Q UANTUM ADDITION, WE ARE OF THE VIEW THAT PENALTY OF RS.13,24,000/- U /S 271(1)(C) IS UNCALLED FOR. THE SAME IS DELETED. 9. OTHER GROUNDS ARE OF GENERAL NATURE, WHICH NEED NO ADJUDICATION. ITA NO. 270/AHD/2014 ASST. YEAR 2007-08 5 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2017 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 07/02/2017 MAHATA/- 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 ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 270/AHD/2014 ASST. YEAR 2007-08 6 1. DATE OF DICTATION: 06/02/2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 06/02/2017 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7/2/17 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: