Vibhum Stahpatya, RAJKOT-GUJARAT V. The IncomeTax Officer, Central Ward, RAJKOT-GUJARAT

ITA 316/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0116 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

, . .. . . . . . , , , , .. # , , , , & & & & ./ ITA NO. 316/RJT/2012 / ASSESSMENT YEAR:- 2007-08 VIBHUM STHAPATYA, TOP FLOOR, AARTHIK BHAVAN, GONDAL ROAD, NR. AUTOMOTIVE SHOW ROOM, RAJKOT. PAN : AADFV4801 D ( +/ APPELLANT) THE INCOME TAX OFFICER, CENTRAL WARD, 5 TH FLOOR, AMRUTA ESTATE, M.G. ROAD, RAJKOT. ,-+/ RESPONDENT ./ ITA NO. 317/RJT/2012 / ASSESSMENT YEAR:- 2007-08 VITAN STHAPATYA TOP FLOOR, AARTHIK BHAVAN, GONDAL ROAD, NR. AUTOMOTIVE SHOW ROOM, RAJKOT. PAN : AABFV8024 A ( +/ APPELLANT) THE INCOME TAX OFFICER, CENTRAL WARD, 5 TH FLOOR, AMRUTA ESTATE, M.G. ROAD, RAJKOT. ,-+/ RESPONDENT . / APPELLANT SHRI, NIKHIL CHHATBAR, ,-+ 0 / BY RESPONDENT SHRI AVINASH KUMAR, D.R 0 / DATE OF HEARING 02/08/2012 0 / DATE OF PRONOUNCEMENT /08/2012 / / / / ORDER PER T.K. SHARMA, J.M : THESE TWO APPEALS ARE AGAINST TH E COMMON ORDER DATED 16-02- 2012 OF C.I.T.(A)-IV, AHMEDABAD CONFIRMING THE PENAL TY OF RS.25000/- LEVIED BY A.O. U/S 271A OF THE I.T. ACT IN EACH OF THESE TWO CASES FOR THE A SSESSMENT YEAR - 2007-08. 2. BOTH THE ASSESSEE, RAISED IDENTICAL GROUNDS, WE THERE FORE REPRODUCE THE GROUND OF APPEAL IN THE CASE OF M/S VIBHUM STHAPATHYA IN ITA- 316/RJT/2012. THE LD.CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN- 1). CONFIRMING THE PENALTY OF RS.25000/- U/S 271A OF THE IT ACT, 1961, WITHOUT APPRECIATING THE REASONABLE REASON FOR N ON- MAINTENANCE OF BOOKS OF ACCOUNT. 2). CONTENDING THAT BOOKS OF ACCOUNT COULD HAVE BEEN PRE PARED BY THE APPELLANT, WITHOUT DEMONSTRATING THE MANNER AN D METHOD SO AS HOW THE SAME COULD HAVE BEEN DONE. 3).CONFIRMING THE PENALTY U/S 271A OF THE ACT, EVEN T HOUGH, IT IS ADMITTED FACTS THAT BOOKS OF ACCOUNT OF EARLIER YEAR WERE NOT- MAINTAINED AND THEREBY FAILED TO APPRECIATE THE FACT THAT IN THE ABSENCE OF BOOKS OF ACCOUNT OF IMMEDIATE PRECEDING YEAR, I T WAS ITA-316 & 317/RJT/2012 2 NOT POSSIBLE TO STRETCH OUT OPENING BALANCE IN THE BOOKS O F ACCOUNT FOR THE YEAR UNDER CONSIDERATION, AND CONSEQUENTLY THE BOOKS OF ACCOUNT CANNOT BE PREPARED IN THE ABSENCE OF OPE NING BALANCE. 4) CONTENDING THAT TRANSACTIONS RECORDED IN SEIZED MATER IAL FOR THE A.Y.1998-99 TO 2004-05 HAS NO BEARING OVER THE CUR RENT YEAR. THIS CONTENTION IS IN UTTER DISREGARD OF FACTS THERE WAS O NGOING PROJECT SINCE A.Y.1998-99 AND HENCE EXPENDITURE INCURRED DURING A.Y 1998-99 DO FORM PART AND PARCEL OF THE OPENING W ORK-IN- PROCESS OF THE CURRENT YEAR. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF A SSESSEE SHRI NIKHIL CHHATBAR APPEARED AND POINTED OUT THAT THERE EXIST A REASONABL E CAUSE WITHIN THE PERVIEW OF SECTION 273B OF THE I.T. ACT FOR NON-MAINTAINING OF B OOKS OF ACCOUNTS IN THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, THE PENALTY OF RS.25 000/- LEVIED BY A.O. IN CASE OF EACH OF THE ASSESSEE BE CANCELLED. AS AGAINST THIS LD. D.R. POI NTED OUT THAT THERE WAS NO REASONABLE WITHIN ACCOUNTING OF SECTION 273B OF THE IT A CT 1961. ELABORATING HIS ARGUMENT LD. D.R. POINTED OUT THAT SEARCH TOOK PLACE O N 28-11-03. THE SETTLEMENT COMMISSION PASSED THE ORDER IN RESPECT OF BOTH THE ASSESSEE F OR THE ASSESSMENT YEARS FROM 1998-99 TO 2004-05. THEREFORE, BOTH THE ASSESSEE S COULD HAVE PREPARED AND MAINTAINED THE BOOKS OF ACCOUNTS FOR THE ASSESSMENT YEAR IN APPEAL. 4. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THO ROUGH THE REPLY TO THE PENALTY NOTICE SUBMITTED BEFORE THE AUTHORITIES BELOW . THE MAIN CONTENTION OF THE ASSESSEE IS THAT TRANSACTIONS RECORDED IN THE SEIZED MATERI AL FOR THE ASSESSMENT YEARS 1998-99 TO 2004-05 ARE NECESSARY TO WORKOUT THE OPENIN G BALANCE. IN THE ABSENCE OF CREDIT OPENING BALANCE IT WAS NOT POSSIBLE TO MAINTAIN T HE BOOKS OF ACCOUNTS. IN THE ABSENCE OF BOOKS OF ACCOUNTS OF IMMEDIATE PRECEDING YEAR IT WAS NOT POSSIBLE TO STRETCH OUT THE OPENING BALANCE IN THE BOOKS OF ACCOUNTS FOR TH E YEAR UNDER CONSIDERATION AND CONSEQUENTLY THE BOOKS OF ACCOUNT CANNOT BE PREPARED IN THE ABSENCE OF OPENING BALANCE. IN OUR OPINION, THERE EXIST A REASONABLE CAUSE WITHIN THE PERVIEW OF SECTION 273B OF THE I.T. ACT. WE ARE, THEREFORE, CANCELING T HE PENALTY OF RS.25000/- LEVIED BY A.O. IN RESPECT OF EACH OF THE ASSESSEE. 5. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. 0 # 03/08/2012 < 0 THIS ORDER PRONOUNCED IN OPEN COURT ON 03 /08/ 2012 . -SD- -SD- (A.K. GARODIA) (T.K. SHARMA) ( ) ( ) ACCOUNTANT MEMBER JUDICIAL MEMBER # / ORDER DATE 03 /08/2012 /RAJKOT PUJARA/- ITA-316 & 317/RJT/2012 3 0 00 0 ,? ,? ,? ,? @? @? @? @? / COPY OF ORDER FORWARDED TO:- 1. + / APPELLANT- VIBHUM STHAPATYA AND VITAN STHAPATYA, RAJKOT. 2. ,-+ / RESPONDENT- THE INCOME TAX OFFICER- CENTRAL WARD, R AJKOT.. 3. B / CONCERNED C.I.T(CENTRAL)-II, AHMEDABAD. 4. B- / CIT (A)-IV, AHMEDABAD. 5. ? ,, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY ASTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.