M/s. Kukra Chain & Jewellery Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 2980/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3767 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R MISHRA
• Assessee Lawyers: B L GUPTA ITP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SH. N. K. SAINI, ACCOUNTANT MEMBER ITA NO. 2980/DEL/2017 : ASSTT. YEAR : 2006 - 0 7 KUKRA CHAIN & JEWELLERY PVT. LTD., 2501/8, FIRST FLOOR , BEDANPURA, KAROL BAGH, NEW DELHI - 110005 VS DCIT, CENTRAL CIRCLE - 23, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A BCK7968H ASSESSEE BY : SH. B. L. GUPTA, ITP REVENUE BY : SH. B. R. MISHRA , SR. DR DATE OF HEARING : 06.02 .201 8 DA TE OF PRONOUNCEMENT : 07 . 0 2 .201 8 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 24.03.2017 OF LD. CIT(A) - 31 , NEW DELHI . 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE SUSTENANCE OF PENALTY OF R S. 8,01,096 / - LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE ADDITION ON THE BASIS OF WHICH THE IMPUGNED PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A) HAD BEEN DELETED BY THE ITAT BENCH SMC , NEW DELHI IN ITA NO. 4098/DEL/2015 VIDE ORDER DATED 02.01.2018 . THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR. 4. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED ITA NO. 2980 /DEL /201 7 KUKRA CHAIN & JEWELLERY PVT. LTD. 2 FACT THAT THE ADDITION ON THE BASIS OF WHICH THE PENALTY WAS LEVIED BY THE AO HAS BEEN DELETED BY THE ITAT VIDE AFORESAID REFERRED TO ORDER DATED 02.01.2018 IN ITA NO. 4098/DEL/2015 BY OBSERVING IN PARA 4 WHICH READ AS UNDER: I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERA TION OF THE ENTIRE FACTUAL MATRIX AS SET OUT IN THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERING THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, I FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, ADDITION ON FACTS WAS NOT WARRANTE D. IT IS NOTED THAT IN THE FACTS OF THE PRESENT CASE, BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED. THE EXPLANATION OF THE ASSESSEE CONSISTENTLY ON RECORD IS THAT A NEW PERSON WAS HANDLING SALES AT THE RETAIL COUNTER WHO MADE MISTAKES COUPLED BY THE FACTS THAT THERE WAS SOME MISTAKES IN THE SCALE USED. THESE ARGUMENTS CONSISTENTLY ON RECORD ARE NOT IMPROBABLE ARGUMENTS. IT IS SEEN THAT THE TOTAL AMOUNT AS MENTIONED IN THE BILLS HAS NOT BEEN VARIED BY THE REVENUE. IN THE ABSENCE OF REJECTION AND BOOKS OF ACCOUNT S OF THE ASSESSEE IN THE PECULIAR FACTS AND CONSIDERING THE EXPLANATION QUA THE PENCILED FIGURES AND SCORING OF THE FIGURES IN INK IN THEIR RESPECTIVE BILLS WHICH HAVE BEEN ATTACHED AT PAPER BOOK PAGE 01 - 29. THE EXPLANATION THAT THE MISTAKE IS ON ACCOUNT O F RECORDING WRONG RATE AS WEIGHT HAD BEEN ADDRESSED DESERVES TO BE ACCEPTED. ONCE, THE PURCHASES AND SALES HAVE BEEN ACCEPTED AND THE OPENING AND THE CLOSING STOCK STANDS ACCEPTED IN THE CIRCUMSTANCES AS PER SETTLED LEGAL POSITION THEREON ACCEPTING THE EXP LANATION OF THE ASSESSEE, THE ADDITION HAS TO BE DELETED. ACCORDINGLY, THE ADDITION IS DIRECTED TO BE DELETED. 5 . O N A SIMILAR ISSUE THE HON BLE SUPREME COURT IN THE CASE OF K. C. BUILDERS & OTHERS VS ACIT (2004) 265 ITR 562 HELD AS UNDER: WHERE THE A DDITIONS MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A CASE NO PENALTY CAN SURVIVE AND THE PENALTY IS LIABLE TO BE CANCELLED. ORDINARILY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. ITA NO. 2980 /DEL /201 7 KUKRA CHAIN & JEWELLERY PVT. LTD. 3 6 . IN THE PRESENT CASE ALSO , THE ADDITIONS ON THE BASIS OF WHICH PENALTY WAS LEVIED BY THE AO ARE NOT IN EXISTENCE, T HEREFORE, THE PENALTY U/S 271(1)(C) OF THE ACT LE VIED BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS DELETED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . (ORD E R PRONOUNCED IN THE COU RT ON 07 /0 2/2018 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 07 /02/2018 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR