Shri Jayesh Jayantilal Thakker, Ahmedabad V. The Income tax Officer,Ward-14(1), Ahmedabad

ITA 2793/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1851 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 13-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: S N DIVETIA
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.2793/AHD/2009 ASSESSMENT YEAR: 2005-06 DATE OF HEARING:15.12.09 DRAFTED:16.12.09 SHFI JAYESH JAYANTILAL THAKKER, 52, VAIBHAV PARK SOCIETY, GHODASAR, AHMEDABAD, PAN NO.ABIPT3718P V/S . INCOME TAX OFFICER, WARD-14(1), AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S.N.DIVETIA, AR RESPONDENT BY:- SMT. NEETA SHAH, SR. DR DATE OF ORDER RESERVED: 15-12-2009 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XXI, AHMEDABAD IN APPEAL NO. C IT(A)-XXI/9A/WD.14(1)/09-10 DATED 07-08-2009. THE ASSESSMENT WAS FRAMED BY THE INCOME-TAX OFFICER, WARD- 14(1), AHMEDABAD U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28-12-2007 FOR THE ASSESSMENT YEAR 2005-06. THE PENALTY UNDER DISPUTE U/S. 271(1)(C) R.W.S 154 WAS LEVIED BY THE ITO WARD-14(1), AHMEDABAD VIDE HIS ORDERS DATED 13-03-2009. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN L EVYING THE PENALTY U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.56,660/- ON ACCOUNT OF FURN ISHING OF INACCURATE PARTICULARS OF ITA NO.2793/AHD/2009 A.Y. 2005-06 SHFI JAYESH J THAKKAR V.ITO WD-14(1) ABD PAGE 2 INCOME. WE HAVE CONSIDERED THE RIVAL CONTENTIONS C AREFULLY AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDERS OF THE LOW ER AUTHORITIES. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE IS A COMMISSION AGENT OF LIFE CORPORATION OF INDIA (LIC) DRAWING INCOME FROM COMMISSION AND SALARY. THE ASSESSEE HAS DECLARED C OMMISSION INCOME AT RS.4,67,015/- AND CLAIMED COMMISSION EXPENSES AT RS .1,59,340/- ALONG WITH THE UNIFORM ALLOWANCE AT RS.5,951/- AND SCHOOL FEES AT RS.3,500/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER MADE THE A DDITION OF THE ABOVE EXPENSES AND INITIATED PENALTY PROCEEDINGS U/S.271( 1) OF THE ACT. THE ASSESSEE CLAIMED DURING THE ASSESSMENT PROCEEDINGS THAT HE H AS FILED DETAILS OF EXPENSES ON ACCOUNT OF COMMISSION PAID TO VARIOUS PARTIES LIKE SHRI GIRISH S THAKKAR,SHRI JAYESH A THAKKAR AND SHRI SANJAY JAIN AND THE STATEMENTS O F THOSE PERSONS WERE RECORDED BUT ACCORDING TO THE AO THEY COULD NOT JUSTIFY THE COMMISSION RECEIPTS FROM THE ASSESSEE. THE ASSESSEE DURING THE COURSE OF PENALTY PROCEEDINGS EXPLAINED THAT COMMISSION PAID BY THE ASSESSEE TO THE VARIOUS PART IES AS NARRATED ABOVE IS GENUINE AND CONSIDERING THE NATURE AND VOLUME OF BU SINESS THE EXPENDITURE OF COMMISSION IS FAIR AND REASONABLE. HE STATED THAT EVEN THESE PARTIES HAVE ADMITTED TO HAVE RECEIVED THE COMMISSION BUT THE AO DISALLOW ED ONLY ON SURMISE AND CONJECTURE THAT THIS IS NOT EXPLAINED. THE AO LEVI ED THE PENALTY BY TREATING THE SAME AS CONCEALED INCOME ON ACCOUNT OF FURNISHING OF INA CCURATE PARTICULARS OF INCOME. 4. AFTER GOING THROUGH THE CASE RECORDS WE FIND THA T THE ASSESSEE HAS FILED EXPLANATION AND THE SAME IS NOT NEGATIVE BY THE REV ENUE BY ANY STRETCH OF IMAGINATION. ONCE THE EXPLANATION IS NOT FOUND TO BE FALSE PENALTY CANNOT BE LEVIED. WE FURTHER FIND THAT THE TRIBUNAL HAS ONLY MADE DIS ALLOWANCE ON ESTIMATE BASIS BY GIVING FOLLOWING FINDING IN ASSESSEES OWN CASE IN ITA NO.1775/AHD/2008 DATED 12- 09-2008 FOR ASSESSMENT YEAR 2005-06 IN PARA-3 AS UNDER:- 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND, PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE WRITTEN SUBMISSIONS FILED BEF ORE THE CIT(A) COPY OF WHICH IS AVAILABLE ON RECORD. WE NOTED THAT THE ASS ESSEE HAD CLAIMED VARIOUS EXPENSES AGAINST THE COMMISSION INCOME WHICH INCLUD ED COMMISSION PAID TO S/SHRI GIRISH THAKKAR, JAYESH THAKKAR AND SANJAY JA IN TOTALING TO RS.58,500/- , WHEREAS THE BALANCE OF RS.95,615/- PERTAINED TO D IFFERENT PARTIES. THE ASSESSEE PRODUCED EACH OF THEM BEFORE THE AO AND TH EIR STATEMENTS WERE ITA NO.2793/AHD/2009 A.Y. 2005-06 SHFI JAYESH J THAKKAR V.ITO WD-14(1) ABD PAGE 3 RECORDED ON 4.1.2007 BY THE AO. THOUGH THE AFORESAI D THREE PARTIES WERE PRODUCED VOLUNTARILY BY THE ASSESSEE AND THEIR STAT EMENTS WERE RECORDED, THE COPY OF THE SAME WAS NOT FURNISHED NOR OPPORTUNITY FOR CROSS EXAMINATION WAS ALLOWED TO THE ASSESSEE BEFORE RELYING UPON THE SAI D STATEMENTS. WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN HOLDING T HAT THE SAID THREE PARTIES WERE NOT GENUINE PARTIES. FURTHER, WE FIND THAT THE ASSESSEE HAS RECEIVED HE FIRST YEAR COMMISSION AMOUNTING TO RS.60,394/- AND RS.1,23,872/- FROM LIC. CONSIDERING THE NATURE AND VOLUME OF BUSINESS CARRI ED ON BY THE ASSESSEE AND KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE THAT HE ASSESSEE HAS RECEIVED THE FIRST YEAR COMMISSION AMOUNTING TO RS.60,394/- AND RS.1,23,872/- FROM LIC, HE CIT(A) OUGHT TO HAVE ALL OWED 50% OUT OF RS.1,59,340/- I.E. RS.79,670/- AND ACCORDINGLY, WE ALLOW THE DEDUCTION OF RS.79,670/- AND CONFIRM THE DISALLOWANCE OF RS.79,6 70/-. THUS, THE ASSESSEE GETS A FU9RTHER RELIEF OF RS.15,945/-. IN THE CIRCUMSTANCES, WE DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) JUST ON THE BASIS OF ESTIMA TES MADE BY THE TRIBUNAL. EVEN THE EXPLANATION OF THE ASSESSEE IS NOT NEGATIVE BY THE REVENUE AND ACCORDINGLY WE DELETE THE PENALTY. WE ALLOW THE APPEAL OF THE ASS ESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18/12/2009 SD/- SD/- (DR.O.K.NARAYANAN) (MAHAVIR S INGH) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 18/12/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- XXI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD