Shri Jayesh Champaklal Ghael, Surat V. The Income tax Officer,Ward-3(3), Surat

ITA 3022/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9988 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 3022/AHD/2013 / ASSESSMENT YEAR : 2006-07 SHRI JAYESH CHAMPAKLAL GHAEL, C-11, TIRUPATI NAGAR, BEHIND RAJHANS CINEMA, PIPLOD, SURAT-395 007 PAN : ABZPG 2693 M VS ITO, WARD 3 (3), SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI VIMAL I. MEHTA, SR DR / DATE OF HEARING : 21/11/2016 / DATE OF PRONOUNCEMENT: 21/11/2016 / O R D E R THIS IS ASSESSEES APPEAL CHALLENGING IMPOSITION OF PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-T AX ACT, 1961 FOR RS.1,53,230/- PERTAINING TO AY 2006-07. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE; HOWEVER, WRITTEN SUBMISSIONS WERE FILED VIDE LETTER DATED 11.10.2016 WITH A REQUEST TO CONSIDER THE SAME AND DECIDE THE APPEAL ON MERITS. 3. IN THE WRITTEN SUBMISSIONS, IT IS CONTENDED THAT SIMILAR ADDITION WAS MADE IN THE CASE OF ASSESSEE AS WELL AS HIS WIFE SM T. DIPIKA GHAEL. THE ITAT VIDE ITS ORDER DATED 29.06.2016 IN ITA NOS. 72 0 & 721/AHD/2011 HAVE DELETED THE QUANTUM ADDITION IN BOTH THE CASES, I.E ., IN THE CASE OF ASSESSEE AND ASSESSEES WIFE SMT DIPIKA GHAEL. THE RELEVANT PORTION OF THE DECISION OF ITAT IN THE CASE OF ASSESSEE HIMSELF IS AS UNDER :- 5. WE HAVE RIVAL CONTENTIONS. BOTH THE LEARNED REP RESENTATIVES VEHEMENTLY ARGUE AGAINST AND IN SUPPORT OF THE IMPUGNED ADDITI ONS. THERE IS NO DISPUTE THAT ASSESSEE'S IDBI ACCOUNT DO HAVE CASH DEPOSIT O F RS. 10,51,250/-. BOTH THE LOWER AUTHORITIES ACCEPT SOURCE THEREOF TO THE TUNE OF RS. 4.75 LACS ONLY AS TO HAVE COME FROM SALE OF SHOP THEREBY ADDING THE R EMAINING SUM IN QUESTION OF RS. 5,76,250/-. THE ASSESSEE HAS NOT FILED HIS R ETURN OF INCOME IN THE SMC-ITA NO. 3022/AHD/2013 SHRI JAYESH CHAMPAKLAL GHAEL VS. ITO AY : 2006-07 2 PRECEDING FOUR ASSESSMENT YEARS ON THE GROUND THAT HIS TAXABLE INCOME DID NOT EXCEED THE THRESHOLD LIMIT. IT HAS COME ON RECO RD THAT HE HAS DULY FILED PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT AND BALANC E SHEET ALONG WITH CASH FLOW STATEMENT OF ALL THESE FOUR ASSESSMENT YEARS I N SUPPORT OF THE OPENING CASH BALANCE AMOUNTING TO RS. 5,09,460/- AS ON 01-0 4-2005. THE ASSESSING OFFICER DOUBTS AUTHENTICITY OF ALL THESE DOCUMENTS SOLELY ON THE GROUND THAT THERE IS NO CORRESPONDING RETURN OF INCOME IN THE R ELEVANT ASSESSMENT YEAR. THERE IS NO OTHER MATERIAL ON RECORD DISCUSSED IN R EJECTING THE SAID DOCUMENTS. WE DISAGREE WITH THIS APPROACH ADOPTED I N PARA 6(A) OF THE ASSESSMENT ORDER AS SECTION 145(3) OF THE ACT DOES NOT STIPULATE NON FILING OF RETURN TO FORM AS THE SOLE REASON OF REJECTION OF B OOKS. WE ACCEPT ASSESSEE'S CONTENTIONS ON THIS SCORE ALONE TO AGREE WITH HIS O PENING CASH BALANCE OF RS. 5,09,460/- AS ON 01-04-2005. WE COME TO REMAINING S UM OF RS. 66,790/-. IT EMANATES FROM THE CASE FILE THAT ASSESSEE HAS DECLA RED TRADING PROFIT OF RS. 81,464/- @ 8.5% OF THE TURNOVER. OUR OPINION IS THA T THE SAME FORMS THE SOURCE OF THE REMAINING CASH SUM DEPOSITED BY APPLY ING TELESCOPING FORMULA. WE ACCORDINGLY CONCLUDE THAT BOTH THE LOWER AUTHORI TIES HAVE ERRED IN MAKING SECTION 68 ADDITION OF RS. 5,76,250/-. THE S AME STANDS DELETED. ITA 720/AHD/2011 IS ALLOWED. IT IS, THEREFORE, CONTENDED THAT SINCE THE QUANTUM ADDITION HAS BEEN DELETED, THE CONSEQUENTIAL PENALTY DESERVES TO BE D ELETED. 4. LD. DEPARTMENTAL REPRESENTATIVE IS HEARD. 5. I HAVE HEARD THE LD. DR, PERUSED THE MATERIAL AV AILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. SINCE THE QUANTUM ADDITION IN QUESTION ITSELF HAS BEEN DELETED BY THE ITAT VIDE ITS CONSOLIDATED ORDER DATED 29.06.2016 IN ITA NOS. 720 & 721/AHD/2011, THE PENALTY MADE IN RESPECT OF SUCH ADDITION CANNOT SUR VIVE. ACCORDINGLY, THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF RS.1,53,2 30/- IS DELETED AND ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 21 ST NOVEMBER, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 21/11/2016 *BIJU T., SR. PS SMC-ITA NO. 3022/AHD/2013 SHRI JAYESH CHAMPAKLAL GHAEL VS. ITO AY : 2006-07 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD