Shri Maheshkumar K. Jhawar, Ahmedabad V. The Income Tax Officer, Ward-11(4), Ahmedabad

ITA 2795/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0557 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MONIL SHAH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2795/AHD/2013 / ASSTT. YEAR: 2009-2010 SHRI MA HE SHKUMAR K. JHAWAR PROP. OF K.M. AGENCY 78, NEW CLOTH MARKET O/S.RAIPUR GATE AHMEDABAD. VS ITO, WARD - 11(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MONIL SHAH, AR REVENUE BY : SHRI SATISH SOLANKI, SR.DR / DATE OF HEARING : 10/08/2016 / DATE OF PRONOUNCEMENT: 08/09/2016 $%/ O R D E R ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE LD.C IT(A)-XVI, AHMEDABAD DATED 7.10.2013 PASSED FOR THE ASTT.YEAR 2009-10. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A)H AS ERRED IN CONFIRMING PENALTY OF RS.31,680/- LEVIED UNDER SECTION 271B OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF SALE OF DIFFERENT TYPES OF CLOTH AS A COMMISSION AGENT. HE HAS FILED HIS RETURN OF INCOME ON 20.02.2010 DECLARING A TOTAL INCOME AT RS.2,86,150/-. ON SCRUTINY OF THE ACCOUNT, IT REVE ALED TO THE AO THAT THE ITA NO.2795/AHD/2013 2 ASSESSEE HAS SHOWN GROSS-RECEIPTS OF COMMISSION INC OME AT RS.24,08,874/-. HOWEVER, TDS DETAILS DEMONSTRATED THAT THE ASSESSEE HAD COMMISSION AND BROKERAGE INCOME FROM DIFFERENT PARTIES AT RS.63,20 ,063/-. THE LD.AO HAS OBSERVED THAT TOTAL RECEIPT OF THE ASSESSEE IS MORE THAN RS.40 LAKHS, THEREFORE, HE WAS REQUIRED TO GET HIS ACCOUNTS AUDITED UNDER S ECTION 44AB OF THE ACT. SINCE THE ASSESSEE FAILED TO GET HIS ACCOUNTS AUDIT ED, THEREFORE, THE LD.AO HAS IMPOSED A PENALTY OF RS.31,680/- UNDER SECTION 271B OF THE ACT AT THE RATE OF HALF PERCENT OF THE GROSS-RECEIPT. 4. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. I HAVE GONE THROUGH THE RECORD CAREFULLY. IT EM ERGES OUT FROM THE RECORD THAT IN THE COMMISSION INCOME A SUM OF RS.38 ,31,395/- WAS IN THE NAME OF LOYAL TEXTILE MILLS LTD. THE ASSESSEE DID NOT RECEIVE ANY AMOUNT FROM THIS SOURCE. ACCORDING TO HIM, LOYAL TEXTILE MILL FILED CRIMINAL COMPLAINT AGAINST THE ASSESSEE, AND THEREFORE, HE H AS TREATED IT AS BAD DEBT. THE ASSESSEE WAS OF THE VIEW THAT THIS COULD NEVER BE A COMMISSION INCOME OF THE ASSESSEE, AND THEREFORE, IT WOULD NOT FORM PART OF THE TOTAL INCOME. HENCE, HE WAS NOT SUPPOSED TO GET ITS ACCOUNTS AUDITED. B OTH THE AUTHORITIES HAVE REJECTED THIS PLEA, AND THEY SIMPLY PROCEEDED THAT GROSS RECEIPTS OF THE ASSESSEE IS MORE THAN THRESHOLD LIMIT OF RS.40 LAKH S, AND THEREFORE, HE IS REQUIRED TO GET ITS ACCOUNTS AUDITED. IN MY OPINIO N, IF GROSS RECEIPTS IS MORE THAN THE THRESHOLD LIMIT OF RS.40 LAKHS, THEN ALSO IT IS TO BE SEEN WHAT OPERATED IN THE MINDS OF THE ASSESSEE FOR THE DEFAULT COMMIT TED BY HIM. IN THE PRESENT CASE, THE REASON FOR NOT GETTING THE ACCOUNTS AUDIT ED STATED BY THE ASSESSEE IS THAT A PARTICULAR MAJOR ITEM OF COMMISSION WAS NOT GOING TO BECOME PART OF TOTAL INCOME. TO MY MIND, FOR A LAYMAN, FORMING TH IS TYPE OF BELIEF CANNOT BE RULED OUT. THEREFORE, THE ASSESSEE DOES NOT DESERV ES TO BE VISITED WITH ITA NO.2795/AHD/2013 3 PENALTY, AND THEREFORE, I ALLOW THE APPEAL OF THE A SSESSEE AND DELETE THE PENALTY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 8 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER