Noble Cloth Stores, Bharuch V. The Income tax Officer,Ward-2, Bharuch

ITA 2889/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9276 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-02-2017
• Assessment Year: 1993-1994
• Appeal Filed On: 09-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Income from undisclosed sources
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC/I BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.2889/AHD/13 (ASSESSMENT YEAR: 1993-1994) NOBLE CLOTH STORES BESIDE MUSAJI CHAHWALA, KATOPOR BAZAR, BHARUCH-392001 APPELLANT VS. THE INCOME-TAX OFFICER, WARD-2, BHARUCH RESP ONDENT PAN: AABFN6020E /BY ASSESSEE : NONE /BY REVENUE : MS. RICHA RASTOGI, SR. D.R. /DATE OF HEARING : 02.02.2017 /DATE OF PRONOUNCEMENT : 08.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 1993-94 ARISES AGAINST CIT(A)-VI, BARODAS EX PARTE ORDER DATED 13.09.2013 , PASSED IN APPEAL NO. CAB-VI/27/2007-08, AFFIRMING ASSESSING OFFICERS AC TION IMPOSING PENALTY OF RS.79,700/- IN PROCEEDINGS U/S.271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 2889/AHD/2013 (NOBLE CLOTH STORES VS. NOBLE CLOTH STORES) A.Y. 1993-94 - 2 - 2. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES B EHEST. CASE FILE REVEALS THAT THE ASSESSEE HAS NEVER PUT IN APPEARAN CE IN THE INSTANT APPEALS HEARINGS. WE HAVE THUS HEARD THE REVENUE SO FAR AS MERITS ARE CONCERNED. 3. WE COME TO RELEVANT FACTS. THE ASSESSEE FIRM WA S IN WHOLESALE AND RETAIL CLOTHING BUSINESS IN THE IMPUGNED ASSESSMENT YEAR. IT FILED RETURN DECLARING RS.2700/- AS INCOME ON 15.07.1994. THE S AME WAS SUMMARILY PROCESSED. THE DEPARTMENT CONDUCTED A SURVEY ACTIO N THEREAFTER AT ASSESSEES BUSINESS PREMISES ON 20.10.1994. IT CAME ACROSS AS SESSEES BILL BOOKS, BOOKS OF ACCOUNTS AND VARIOUS OTHER DOCUMENTS. THIS MADE THE ASSESSING OFFICER TO FORM REASONS TO BELIEVE THAT ASSESSEES TAXABLE INCOME LIABLE TO BE ASSESSED HAD ESCAPED ASSESSMENT. HE ISSUED SECTION 148 NOTI CE DATED 15.11.1994 TO THE ASSESSEE WHO REITERATED THE INCOME ALREADY RETU RNED. THE ASSESSING OFFICER THEN TOOK UP RE-ASSESSMENT. HE NOTICED IN COURSE THEREOF THAT THE ASSESSEE HAD BEEN MAINTAINING VARIOUS FADIA BOOKS, EMBROIDERY BOOKS, VEPARI YADI BOOKS ETC. THE SAME ALLEGEDLY INDICATED SOME CREDIT ENTRIES HAVING DIFFERENTIAL FIGURES IN FADIA BOOKS (RETAIL SALES) VIS--VIS THE CORRESPONDING FIGURES IN WHOLESALE BOOKS. THE ASSESSEE PLEADED T HAT ITS EMBROIDERY AND ABOVE YADI BOOKS WERE NOT NECESSARILY ITS SALE BOOK S. THE ASSESSING OFFICER HOWEVER REJECTED THE SAID CONTENTION. HE FRAMED TH E IMPUGNED RE-ASSESSMENT ON 26.03.1996 MAKING THE QUANTUM ADDITION IN QUESTI ON OF UNACCOUNTED PURCHASES AND SALES AMOUNTING TO RS.6,93,812/- AS W ELL AS UNACCOUNTED SALE CONSIDERATION OUT OF CANCELLED ENTRIES OF RS. 39,03 5/-; RESPECTIVELY. THE CIT(A) DELETED THE ABOVE SECTION 69 ADDITION IN HIS ORDER DATED 24.07.1996 AND DIRECTED THE ASSESSING OFFICER TO ADD GROSS PRO FITS THEREUPON @ 25%. BOTH PARTIES PREFERRED THEIR RESPECTIVE APPEALS BEF ORE THIS TRIBUNAL. A CO- ORDINATE BENCH IN ITS ORDER DATED 31.12.2002 REMITT ED THE ISSUE BACK TO THE CIT(A) TO GIVE A COMPLETE FINDING ON UNACCOUNTED IN VESTMENTS IN PURCHASES AND FURTHER CALCULATE THE UNACCOUNTED INCOME TO BE TREATED AS UNACCOUNTED ITA NO. 2889/AHD/2013 (NOBLE CLOTH STORES VS. NOBLE CLOTH STORES) A.Y. 1993-94 - 3 - INVESTMENTS ALONG WITH GROSS PROFITS TO BE ASSESSED @ 14.88%. THE CIT(A) THEREAFTER PASSED CONSEQUENTIAL ORDER ON 01.02.2006 CONFIRMING UNACCOUNTED INVESTMENTS IN PURCHASE ADDITION FIGURE OF RS.68,84 5/- ALONG WITH GP @ 14.88% ON UNACCOUNTED SALES OF RS.7,32,927/-; THERE BY DETERMINING TOTAL ADDITION AMOUNT TO THE TUNE OF RS.1,77,905/-. THE ASSESSEE DOES NOT APPEAR TO HAVE FILED ANY APPEAL AGAINST THE SAME. 4. WE NOW COME TO THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSEE FILED ITS REPLY BEFORE THE ASSESSING OFFICER THAT I T HAD NOT CONCEALED ITS INCOME NOR FILED ANY INACCURATE PARTICULARS THEREOF IN THE COURSE OF QUANTUM PROCEEDINGS. THE ASSESSING AUTHORITY HOWEVER PLACE D HEAVY RELIANCE ON ABOVE QUANTUM DEVELOPMENTS TO CONCLUDE THAT THE ASS ESSEES ACT AND CONDUCT IN QUESTION AMOUNTED TO CONCEALMENT OF INCOME BY FU RNISHING INACCURATE PARTICULARS. HE THUS IMPOSED THE IMPUGNED PENALTY OF RS.79,700/- AS CONFIRMED IN THE LOWER APPELLATE PROCEEDINGS. 5. WE HAVE HEARD THE REVENUE. RELEVANT FINDINGS PE RUSED. MS. RASTOGI STRONGLY REITERATES THE CIT(A)S FINDINGS AFFIRMING ASSESSING OFFICERS ACTION IN IMPOSING THE IMPUGNED PENALTY. IT HOWEVER EMERG ES THAT THE IMPUGNED ADDITION HAS IN FACT EMANATED FROM VARIOUS DIFFEREN TIAL FIGURES IN ASSESSEES EMBROIDERY/FADIA BOOKS VIS--VIS ITS REGULAR BOOKS OF ACCOUNTS. THE ASSESSEE FAILED TO RECONCILE THE SAID DIFFERENTIAL FIGURES. IT STRONGLY CLAIMED IN THE COURSE OF ABOVE STATED RE-ASSESSMENT THAT THE FORME R BOOKS ARE NOT NECESSARILY IN THE NATURE OF SALE BOOKS SINCE CONTA INING PARTICULARS OF SALES MEASUREMENT ETC. THE ASSESSING OFFICER DECLINED TH E SAME. IT IS THUS CLEAR THAT THE IMPUGNED RE-ASSESSMENT HAS BASED ITS QUANT UM ADDITION ONLY ON ASSESSEES DETAILS ALREADY FILED WITH THE REGULAR R ETURN OF INCOME. IT HAS FURTHER COME ON RECORD THAT THE MAIN ADDITION OF UN ACCOUNTED INVESTMENT /SALES STANDS MODIFIED TO THE EXTENT OF GP RATE @ 1 4.88% (SUPRA). WE ITA NO. 2889/AHD/2013 (NOBLE CLOTH STORES VS. NOBLE CLOTH STORES) A.Y. 1993-94 - 4 - OBSERVE IN THIS PECULIAR BACKDROP THAT THE IMPUGNED ADDITION IN NEITHER INDICATES ANY ACT ON ASSESSEES PART FURNISHING INA CCURATE PARTICULARS OF INCOME OR THAT OF CONCEALMENT OF INCOME SO AS TO BE PENALIZED U/S. 271(1)(C) OF THE ACT. WE ACCORDINGLY ACCEPT ASSESSEES SOLE SUBSTANTIVE GROUND. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE IMPUGNE D PENALTY OF RS.79,700/-. 6. THIS ASSESSEES APPEAL SUCCEEDS. [PRONOUNCED IN THE OPEN COURT ON THIS THE 08 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 08/02/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0