M/s. Akjay Marketing Pvt.Ltd., Ahmedabad V. The ACIT.,Circle-1, Ahmedabad

ITA 2767/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4392 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 07-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: S N DIVETIA
• Keywords: Opportunity of being heard; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 2767/AHD/2012 ASSESSMENT YEAR :2005-06 AKJAY MARKETING PVT. LTD. 805-806, SAFAL PRELUDE, PRAHLADNAGAR, OFF.S.G. HIGHWAY, AHMADABAD - 380015 V/S . THE ACIT, CIRCLE-1, AHMADABAD. PAN NO. A A ACA9700C (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI S. N. DIVETIA, A.R. /BY RESPONDENT SHRI P. L. KUREEL, SR. D.R. /DATE OF HEARING 11.07.2013 /DATE OF PRONOUNCEMENT 06.09.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHI CH HAS EMANATED FROM THE ORDER OF CIT(A)-XXI, AHMEDABAD, DATED 02.1 1.2012 FOR ASSESSMENT YEAR 2005-06. THE SOLE GROUND OF APPEAL IS AGAINST CONFIRMING THE PENALTY U/S. 271(1)(C) OF THE IT ACT AT RS. 2,67,710/-. 2. THE A.O. OBSERVED THAT IN THIS CASE THE RETURN O F INCOME FILED BY THE ASSESSEE ON 29.10.2005 DECLARING TOTAL LOSS OF RS.9 ,90,545/- SUBSEQUENT TO THE ORDER U/S. 143(3) OF THE IT ACT, 1961, WAS PASS ED ON 30.08.2007 DECLARING TOTAL LOSS OF RS.1,96,180/- AFTER MAKING FOLLOWING ADDITIONS/DISALLOWANCES: I. DISALLOWANCE ON ACCOUNT OF PROFESSIONAL FEES: RS .6,76,141/-. ITA NO. 2767/AHD/12 A.Y. 05-06 PAGE 2 II. DISALLOWANCE OF GRATUITY: RS.21,739/-. III. DISALLOWANCE OF MISC. EXPENSES: RS. 28,320/-. BEFORE IMPOSING PENALTY U/S. 271(1)(C), THE LD. A.O . GAVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHICH WA S AVAILED BY IT VIDE LETTER DATED 21.02.2011. IT ALSO RELIED UPON VARIOUS CASE LAWS MENTIONED IN HIS REPLY BEFORE THE A.O. AND REQUESTED TO DROP THE PEN ALTY U/S. 271(1)(C). BUT THE LD. A.O. HAS NOT BEEN CONVINCED WITH THE SUBMIS SION MADE BY THE APPELLANT. HE HELD THAT THE APPELLANT HAD INACCURA TELY CLAIMED AMOUNT OF RS. 6,76,141/- AS PROFESSIONAL FEES IN ITS RETURN OF IN COME. THIS AMOUNTED TO FURNISHING OF INACCURATE PARTICULARS OF INCOME AS P ER THE JURISDICTIONAL HIGH COURT IN CASE OF A.M. SHAH & CO. VS. CIT [2000] 108 TAXMANN 137 (GUJ .). HE IMPOSED PENALTY @ 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED ON ACCOUNT OF FILING OF INACCURATE PARTICULARS OF INCO ME WHICH WORKED OUT TO RS. 2,67,710/-. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD CONFIRMED THE PENA LTY BY OBSERVING AS UNDER: 4.13 I HAVE CAREFULLY PERUSED THE PENALTY ORDER, ORDER OF LEARNED CIT(A)-VI, AHMEDABAD CONFIRMING THE ORDER U /S. 143(3) AND ALSO THE SUBMISSIONS MADE BY THE APPELLANT IN THIS REGARD. I FIND THAT THE APPELLANT HAS NOT FURNISHED EVIDENCES IN SUPPOR T OF THE ABOVE DISALLOWANCES EITHER AT THE LEVEL OF ASSESSING OFFI CER OR AT THE LEVEL OF CIT(A)-VI, AHMEDABAD. IT IS UNUSUAL FOR A PRIVA TE LIMITED COMPANY NOT TO MAINTAIN REQUISITE BOOKS/DETAILS IN SUPPORT OF VARIOUS ITEMS DEBITED IN ITS PROFIT AND LOSS ACCOUNT. IN M Y VIEW, THIS IS NOT A ITA NO. 2767/AHD/12 A.Y. 05-06 PAGE 3 MERE OMISSION OR NEGLIGENCE ON THE PART OF THE APPE LLANT. THE APPELLANT HAS NOT BEEN ABLE TO DISCHARGE ITS PRIMAR Y BURDEN OF PROOF FOR ADMISSIBILITY OF THE STATED EXPENDITURE BEFORE THE AO. IT IS ALSO APPARENT THAT THE APPELLANT HAS FAILED TO OFFER EXP LANATION FOR THE DISALLOWANCES MADE BEFORE THE AO AND BEFORE THE CIT (A). CONSEQUENTLY, I AM IN AGREEMENT WITH THE AO THAT TH E APPELLANT HAS FILED INACCURATE PARTICULARS OF ITS INCOME. THE PE NALTY IMPOSED BY THE AO AMOUNTING TO RS.2,67,710/-. 4. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THE LD. CIT(A) CONFIRMED THE PENALTY ON THE BASIS OF FINDING GIVEN FOR THE QUANTUM ADDITION. HE HAS NOT DECIDED THE PENALTY AND NO SPECIFIC FINDING HAS BEEN GIVEN BEFORE PASSING THE ORDER. HE FURTHER ARGUED THAT WHATEVER DISALLOWANCE MADE BY THE A.O., HAD BE EN CLAIMED IN THE RETURN OF INCOME. HE FURTHER RELIED UPON THE DECISION OF CO-ORDINATE C BENCH, AHMADABAD, IN ITA NO. 164/AHD/2010 FOR A.Y. 2004-05 AND ARGUED THAT LD. CIT(A)S ORDER IS VITIATED AS THE LD. CIT(A) HAD NO T CONSIDERED THE ASSESSEES REPLY. THE ASSESSEE INCURRED VARIOUS EXPENSES AND C LAIMED IN THE P&L ACCOUNT ON THE BASIS OF EVIDENCES. THEREFORE, HE R EQUESTED TO SET ASIDE THE CASE FOR CIT(A) TO DECIDE THE PENALTY ON MERIT. AT THE OUTSET, LD. SR. D.R. HEAVILY RELIED UPON THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS SUBMITTED HIS REPLY BEFOR E THE LD. CIT(A) AND NO SPECIFIC FINDING HAS BEEN GIVEN BY THE CIT(A) WHETH ER THE PENALTY ON SUCH ADDITION IS LEVIABLE OR NOT. HE HAD SIMPLY RELIED UPON THE ORDER OF THE A.O. THAT THE ASSESSEE HAD NOT DISCHARGED THE BURDEN OF PROOF FOR ADMISSIBILITY OF ITA NO. 2767/AHD/12 A.Y. 05-06 PAGE 4 THE STATED EXPENDITURE BEFORE THE A.O. THUS, WE, I N THE INTEREST OF JUSTICE, SET ASIDE THE ISSUE FOR DE NOVO TO THE CIT(A) WITH ABOV E REMARKS. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. THIS ORDER PRONOUNCED IN OPEN COURT ON 06.09.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;