M/s. Satish Tobacco Industries, Ahmedabad V. The Income tax Officer, Ward-10(4), Ahmedabad

ITA 3088/AHD/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68076 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 18-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: J P SHAH

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.3088/AHD/2009 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2003-04) SATISH TOBACCO INDUSTRIES 208, SARTHAK COMPLEX B/H. URJA HOUSE NR.SWASTIK CHAR RASTA CG ROAD, NAVRANGPURA AHMEDABAD-380 009 / VS. THE INCOME TAX OFFICER WARD-10(4) AHMEDABAD ( !./)* !./ PAN/GIR NO. : AAJFS 6453 L ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI J.P.SHAH, A.R. ,-(+ / . / RESPONDENT BY : SHRI O.P.BATHEJA, SR.DR ' 0 / $1 / / / / DATE OF HEARING : 27/11/2013 23' / $1 / DATE OF PRONOUNCEMENT : 19/12/2013 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XVI, AHMEDAB AD (CIT(A) FOR SHORT) DATED 11/09/2009 PERTAINING TO ASSESSME NT YEAR (AY) 2003- 04. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. AN ORDER IS BAD IN LAW AND LIABLE TO BE QUASHE D. 2. THE LD.AO HAS ERRED IN LAW AND ON FACTS IN IMPO SING PENALTY OF RS.1,93,736/- U/S.271(1)(C) OF THE ACT. ITA NO.3088/AHD /2009 SATISH TOBACCO INDUSTRIES VS. ITO ASST.YEAR 2003-04 - 2 - 3. THE HONBLE CIT(APPEALS) HAVE ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.1,93,736/- U/S.271(1)( C) OF THE ACT IMPOSED BY THE LD.ITO. 4. YOUR APPELLANT CRAVES A LEAVE TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL, IF OCCASION DEMANDS. 2. BRIEFLY STATED FACTS ARE THAT IN QUANTUM PROCEED INGS THE AO MADE ADDITION ON THE BASIS OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY AND NON-DISCLOSURE OF THE INCOME IN RESPECT OF THE INVESTMENT MADE IN PURCHASE OF STOCK. IN QUANTUM PROCEEDINGS THE ADDI TION WAS UPHELD TILL THE STAGE OF TRIBUNAL. THE AO HAD INITIATED PENALT Y PROCEEDINGS AND A PENALTY OF RS.1,93,736/- WAS LEVIED ON ADDITION OF RS.5,10,657/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE ASSESSEES APPEAL. 3. LD.COUNSEL FOR THE ASSESSEE MADE THREE-FOLD SU BMISSIONS. FIRSTLY, HE SUBMITTED THAT IN THE NOTICE ISSUED U/S.271(1)(C ) OF THE ACT DATED 29/03/2006, THE AO HAS GIVEN REASONING FOR INITIATI ON OF PENALTY PROCEEDINGS THAT THE ASSESSEE HAS CONCEALED THE PAR TICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. LD.COU NSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO CLEAR-CUT CHARGE IN THE NOTICE ISSUED U/S.271(1)(C) OF THE ACT. HE PLACED RELIANCE ON TH E DECISION OF COORDINATE BENCH IN ITA NOS.937 & 931/AHD/2008 FOR AYS 1996-97 & 1997-98 IN THE CASE OF JYTO LTD. VS. ACIT, DATED 31 /08/2012 AND ALSO DECISION OF HONBLE JURISDICTIONAL HIGH COURT RENDE RED IN THE CASE OF NEW SAROTHIA ENGINEERING CO. VS. CIT (2006) 282 IT R 642(GUJ.) & CIT VS. MANU ENGINEERING WORKS (1980) 122 ITR 306(GUJ.) . SECONDLY, HE SUBMITTED THAT THE AO LEVIED A PENALTY ON ADDITION WHICH WAS NON- ITA NO.3088/AHD /2009 SATISH TOBACCO INDUSTRIES VS. ITO ASST.YEAR 2003-04 - 3 - EXISTENT. HE DREW OUR ATTENTION TO THE PENALTY ORD ER, WHEREIN THE AO HAS RECORDED THAT THE ASSESSEE HAS CONCEALED THE PARTIC ULARS OF INCOME AND ALSO FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF CAPITAL GAIN ARISES FROM THE SALE OF THE LAND. HE SUBMITTED TH AT THERE IS NO SUCH TRANSACTION DURING THE YEAR AND NO SUCH ADDITION WA S MADE BY THE AO. FINALLY, HE SUBMITTED THAT WHATEVER THE STOCK WAS F OUND DURING THE COURSE OF SURVEY, THE SAME WAS INCLUDED IN THE STOC K. THEREFORE, THERE IS NO QUESTION OF CONCEALING ANY PARTICULARS OF INCOME OR FURNISHING ANY INACCURATE PARTICULARS OF INCOME. LD.COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE DECISION OF HONBLE ITAT AHMEDABAD RENDERE D IN THE CASE OF JYOTI LTD.(SUPRA) HAS BEEN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT. 4. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS O F THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS A CATEGORICAL FIN DING BY THE HONBLE TRIBUNAL THAT THE ASSESSEE HAS CONCEALED THE INVEST MENT MADE IN PURCHASES OF STOCK. THEREFORE, THE ADDITION WAS MA DE U/S.69COF THE IT ACT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JDUGEMENTS RELIED UPON BY THE LD.COU NSEL FOR THE ASSESSEE. IT IS SETTLED PRINCIPLE OF LAW THAT THE PENALTY PRO CEEDINGS AND ASSESSMENT PROCEEDINGS ARE TWO DIFFERENT AND DISTINCT PROCEEDI NGS. THE PENAL PROVISIONS ARE TO BE STRICTLY INTERPRETED. IN THIS CASE, THE AO HAS LEVIED PENALTY ON THE BASIS THAT THE ASSESSEE HAS CONCEALE D THE PARTICULARS OF ITA NO.3088/AHD /2009 SATISH TOBACCO INDUSTRIES VS. ITO ASST.YEAR 2003-04 - 4 - INCOME AND ALSO FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF CAPITAL GAIN ARISES FROM THE SALE OF THE LAND AND T HEREBY COMMITTED THE DEFAULT WITHIN THE MEANING OF SECTION 271(1)(C) OF THE IT ACT. FROM THE RECORDS, IT IS TRANSPIRED THAT NO SUCH ADDITION HAS BEEN MADE BY THE AO. THEREFORE, IN OUR CONSIDERED VIEW, THE PENALTY LEVI ED ON NON-EXISTENT ADDITION CANNOT BE CONFIRMED. IN THIS VIEW OF THE MATTER, THIS GROUND OF THE ASSESSEE IS ALLOWED AND AO IS DIRECTED TO DELET E PENALTY PURPORTEDLY TO HAVE BEEN LEVIED CAPITAL GAIN ARISES FROM THE SA LE OF THE LAND. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19/12/2013 71.., .../ T.C. NAIR, SR. PS 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ ': / CONCERNED CIT 4. ':() / THE CIT(A)-XVI, AHMEDABADS 5. 8 #; ,$ , , / DR, ITAT, AHMEDABAD 6. ;<& =0 / GUARD FILE. 4' 4' 4' 4' / BY ORDER, -8$ ,$ //TRUE COPY// > >> >/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD