M/s. Mayank Electronics Co., Anand V. The Dy.CIT.,Anand Circle, Anand

ITA 315/AHD/2012

• Counselvise Citation: 31520514 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-05-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 02-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND SHRI S.S. GODARA JUDICIAL MEMBER ITA S NO . 315 /AHD/ 2012 A. Y .20 0 1 - 02 M/S. MAYANK ELECTRONICS CO. 8, SARDAR PATEL SHOPPING CENTRE, NR. MAIN KUMAR SHAL A, ANAND. PAN: AACFM 9711G VS DCIT, ANAND CIRCLE, ANAND (APPELLANT) (RESPONDENT) REVENUE BY : S HRI M.K. SINGH, SR. D.R. , ASSESSEE(S) BY : NONE / DATE OF HEARING : 22 / 0 5 /201 5 / DATE OF PRONOUNCEMENT: 12 / 0 6 /201 5 / O R D E R PER S.S. GODARA , JUDICIAL MEMBER THIS ASSESSEE S APPEAL FOR A.Y. 200 1 - 0 2 , ARISE S FROM ORDER O F CIT(A) - IV, BARODA DATED 5.12.2011 PASSED I N CASE NO .CAB/IV - A - 112/09 - 10 UPHOLDING PENALTY OF RS. 3 LACS IN PROCEEDINGS UNDER SECTION 271(1) ( C ) OF THE INCOME TAX ACT , IN SHORT THE ACT . 2. THE ASSESSEE S AUTHORIZED REPRESENTATIVE HAS FILED AN ADJOURNMENT PETITION DATED 18.5.2015. HOWEVER, THERE IS NOBODY TO PURSUE THE SAME IN THE COURSE OF HEARING. IN THESE ITA NO. 315 /AHD/20 1 2 M/S. MAYANK ELECTRONICS CO. FOR A.Y. 200 1 - 0 2 - 2 - CIRCUMSTANCES, WE REJECT THIS PRAYER AND PROCEED TO DECIDE THE CASE ON MERITS. 3. THE ASSESSEE - FIRM IS A WHOLESALE DEALER IN MIRRORS AND OTHER GLASSES . IT FILED ITS RETURN ON 22.10.2001 ADMITTING INCOME OF RS.3,39,700/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. HE NOTICED THE ASSESSEE TO HAVE SHOWN G.P. @5.88% ON SALES OF RS.2,83,27,467/ - AS AGAINST THE SAME DECLARED @11.41% ON TURNOVER OF RS.2,05,76,588 / - IN THE PRECEDING ASSESSMENT YEAR . THE ASSESSEE ATTRI BUTED THE SAME TO SEVERE DAMAGE AND BREAKAGE OF ITS GLASS STOCK TO A MAJOR EARTHQUAKE O N 26.1.2001. IT ALSO PLEADED TO HAVE CLAIMED INSURANCE WHICH WAS LATER ON WITHDRAWN FOR WANT OF DISPARITIES. THE A SSESSING OFFICER TOOK A SER IOUS NOTICE OF THIS WITHDRAWAL AND LACK OF TALLYING BETWEEN MONTH - WISE AND AUDITED SALES AND PURCHASE , CONDUCTED THOR OUGH INQUIRIES WITH ALL CONCERNED FOR REJECTING ASSESSEE S BOOKS CLAIMING BREAKAGE AND DAMAGE OF ITS GLASS STOCK . HE FRAMED ASSESSMENT VIDE ORDER DATED 29.3.2004 ADOPTING GROSS PROFIT RATE FROM 1.4.2000 TO 25.1.2001 TO BE @16.39% AND FROM 26.1.2001 TO 31.3.2001 AS THAT @5.88%. HE PROCEEDED TO FINALIZE THE FORMER GROSS PROFIT RATE FOR WHOLE OF THE RELEVANT PREVIOUS Y EAR RESULTING IN ADDITION OF RS.29,78,320/ - . PENALTY PROCEEDINGS ALSO STOOD INITIATED AGAINST THE ASSESSEE ALLEGING CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. ITA NO. 315 /AHD/20 1 2 M/S. MAYANK ELECTRONICS CO. FOR A.Y. 200 1 - 0 2 - 3 - 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) IN HIS ORDER DATED 3.1.2005 ADOPTED TELESCOPING AND SUSTAINED ADDITION OF RS.15,13,225/ - ONLY. THE MATTER CAME TO THE TRIBUNAL. THE ASSESSEE APPEARS TO HAVE AGGRIEVED TO 50% OF THE AMOUNT SUSTAINED IN THE LOWER APPELLATE PROCEEDINGS. THIS REDUCED THE GROSS PROFIT ADDITION TO RS.7,56 ,613/ - . THE QUANTUM PROCEEDINGS ATTAINED FINALITY AT THIS STAGE. 5. THE ASSESSING OFFICER TOOK UP PENALTY PROCEEDINGS. HE INTER ALIA OBSERVED IN PENALTY ORDER DATED 18.11.2009 THAT THE ASSESSEE COULD NOT PRODUCE SUBSTANTIVE EVIDENCE OF GLASS STOCK DAMAGE AND BREAKAGE, ITS CLAIM SUFFERED FROM DISCREPANCIES AND WAS NOT BASED ON SUFFICIENT EVIDENCE ETC. HE TREATED THE PRESENT CASE GIVING RISE TO THE GROSS PROFIT ADDITION IN QUESTION AS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S.271(1)(C) OF THE ACT. THE IMPUGNED PENALTY STOOD IMPOSED ACCORDING LY. THE CIT(A) HAS ALSO CONFIRMED THE SAME. THIS LEAVES THE ASSESSEE AGGRIEVED. 6. WE HAVE HEARD THE REVENUE AND GONE THROUGH THE CASE FILE. RELEVANT FACTS OF THE CASE STAND NARRATED HEREINABOVE. THE I MPUGNED PENALTY HAS ARISEN FROM AN ESTIMATED GROSS PROFIT ADDITION MADE AFTER REJECTION OF ASSESSEE S BOOKS CLAIMING DAMAGE AND BREAKAGE OF ITS GLASS STOCKS DUE TO A MAJOR EARTHQUAKE IN THE YEAR 2001. IT HAS ALREADY COME ON RECORD THAT ITA NO. 315 /AHD/20 1 2 M/S. MAYANK ELECTRONICS CO. FOR A.Y. 200 1 - 0 2 - 4 - THE ASSESSEE HAS RAI SED INSURANCE CLAIM AS WELL WHICH WAS WITHDRAWN DUE TO CERTAIN DISCREPANCIES. THESE FACTS INDICATE THAT ASSESSEE S CLAIM WAS NOT A BOGUS ONE . AT THE BEST, IT FAILED TO SUBSTANTIATE THE SAME BY WAY OF LEADING COGENT EVIDENCE. THE GROSS PROFIT ADDITION IN QU ESTION HAS FINALLY COME DOWN TO 8.5% UPTO THE TRIBUNAL INSTEAD OF 16.39% MADE IN THE COURSE OF ASSESSMENT. THE FACTS ALSO REMAIN S THAT IT IS BASED ON ESTIMATION ONLY WITHOUT ANY CONCRETE EVIDENCE. WE REITERATE SETTLED POSITION OF LAW THAT QUANTUM AND PENAL TY PROCEEDINGS STAND ON DIFFERENT FOOTINGS AND EACH AND EVERY ADDITION DOES NOT LEAD TO AUTOMATIC IMPOSITION OF PENALTY AS HELD BY THE HON BLE APEX COURT IN THE CASE OF RELIANCE PETRO CHEMICALS REPORTED AS 328 ITR 158 . THE REVENUE FAILS TO REBUT THIS SETTL ED PREPOSITION. WE ACCEPT THE ASSESSEE S SOLE SUBSTANTIVE GROUND IN THESE CIRCUMSTANCES AND HOLD THAT THE PRESENT IS NOT A CASE FALLING WITHIN THE FOUR CORNERS OF SECTION 271(1)(C) OF THE ACT. THE IMPUGNED PENALTY OF RS.3 LACS IS DELETED. 7. THE ASSESSEE S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 12 TH JUNE , 201 5 AT AHMEDABAD. SD/ - SD/ - ( G.D. AGRAWAL ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER A HMEDABAD; DATED 12 / 06 / 20 1 5 ITA NO. 315 /AHD/20 1 2 M/S. MAYANK ELECTRONICS CO. FOR A.Y. 200 1 - 0 2 - 5 - PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD