Shri Chandanbhai Bhojrajmal Ramchandani, Ahmedabad V. The ACIT.,Circle-12, Ahmedabad

ITA 321/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1450 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SHRI CHANDANBHAI BHOJRAJMAL (PROP. GULABDAS SILK PALACE), 1 ST FLOOR, PRANDEEP COMPLEX, OPP: GOPAL TOWER, MANINAGAR, AHMEDABAD - 380008 PAN: AEIPR7158C (APPELLANT) VS THE ACIT, CIRCLE - 12, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI D.V. SINGH , SR. D . R. ASSESSEE BY: S H RI SANJAY R. SHAH , A.R. DATE OF HEARING : 11 - 04 - 2 016 DATE OF PRONOUNCEMENT : 10 - 06 - 2 016 / ORDER P ER : S . S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2005 - 06 , AR IS ES FROM ORDER OF THE CIT(A) - 6, AHMEDABAD DATED 23 - 10 - 2015 IN APPEAL N O. CIT(A) - 6/139/14 - 15 , AFFIRMING PENALTY OF RS. 2,00,348/ - OUT OF RS. 6,01,045/ - AS IMPOSED BY THE ASSESSI NG OFFICER IN ORDER DATED ON 26 - 02 - 2014, IN I T A NO . 321 / A HD/20 16 A SSESSMENT YEAR 200 5 - 06 I.T.A NO. 321 /AHD/20 16 A.Y. 2005 - 06 PAGE NO SHRI CHANDANBHAI BHOJRAJMAL VS. ACIT 2 PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE RUNS A PROPRIETARY CONCERN M/S. GULABDAS SILK PALACE ENGAGED IN RETAIL SARI BUSINESS. THE DEPARTMENT HAD CONDU CTED A SURVEY ON 11 - 02 - 2005. IT NOTICED STOCK DISCREPANCY TO THE TUNE OF RS. 15,00,210/ - FOR WHICH TH E ASSESSEE ALLE GEDLY AGREED TO DISCLOSE THE S AME AS INCO M E OF THE RELEVANT PREVIOUS YEAR. HE FILED RETURN ON 25 - 10 - 2005 ADMITTING INCOME OF RS. 3,42,09 0/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. HE FRAMED A REGULAR ASSESSMENT O N 27 - 09 - 2007 COMPUTING TOTAL INCOME OF AS RS. 19,55,320/ - AFTER MAKING DISALLOWANCES/ADDITIONS INCLUDING THE ABOVE STATED STOCK DISCREPANCY U/S. 69B OF THE ACT. HE ALSO INITIAT ED THE IMPUGNED PENALTY PROCEEDINGS ALLEGING CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR OF INCOME. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) IN HIS ORDER DATED 02 - 06 - 2009 DELETED THE ABOVE STATED SECTION 69B ADDITION. THE REVENUE FILED APPEAL IT A 2314/AHD/2009 BEFORE THE TRIBUNAL. A CO - ORDINATE BENCH IN ITS ORDER DATED 01 - 06 - 2012 ADOPTED ESTIMATION METHOD TO RESTRICT THE ABOVE EXCESS STOCK ADDITION OF RS. 15 LACS TO RS. 5 LACS ONLY. QUANTUM PROCEEDINGS IN FIRST ROUND ATTAINED FINALITY . 3. A PERUSAL OF THE CASE FILE REVEALS THAT THE CIT IN THE MEAN TIME ISSUED SECTION 263 NOTICE PROPOSING TO REVISE THE ABOVE STATED REGULAR ASSESSMENT. HE DIRECTED THE ASSESSING OFFICER ON 12 - 011 - 2009 TO FRAME A FRESH ASSESSMENT AFTER CONDUCTING NECESSARY I.T.A NO. 321 /AHD/20 16 A.Y. 2005 - 06 PAGE NO SHRI CHANDANBHAI BHOJRAJMAL VS. ACIT 3 INQ UIRES ON THE ISSUE OF TREATMENT OF ABOVE STATED EXCESS STOCKS IN ASSESSEE S BOOKS OF ACCOUNTS. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL PROCEEDINGS. HE MADE SUPPRESSED SALES ADDITION OF RS. 23,06,711/ - IN HIS ORDER DATED 29 - 12 - 2010 AN D ALSO INITIATED SECTION 271(1)(C) PENALTY PROCEEDINGS. 4. THE ASSESSEE PREFERRED APPEAL . THE CIT(A) IN HIS ORDER DATED 21 - 10 - 2013 REITERATED TRIBUNAL S ORDER ADDING A SUM OF RS. 5 LACS AS UNDISCLOSED EXCESS STOCK (SUPRA). HE REDUCED THE REMAINING ADDITION OF RS. 23,06 ,711/ - TO RS. 95,212/ - ONLY MADE ON ACCOUNT OF UNDISCLOSED SALES AFTER E STIMATING GP @ 8.45%. QUANTUM PROCEEDINGS ATTAINED FINALITY AT THIS STAGE. 5. THE ASSESSING OFFICER RESUMED THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSEE STATED THEREIN THAT BOTH OF THE QUANTUM ADDITIONS HAD BEEN MADE ON ESTIMATION BASIS . THE ASSESSING OFFICER IN PENALTY ORDER DATED 26 - 02 - 2014 REJECTED THE SAME TO CONCLUDE THAT THE QUANTUM PROCEEDINGS INDICATED AN INSTANCE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME THEREBY RESULTING IN CONCEALMENT OF TAXABLE INCOME. HE ACCORDINGLY LEVIED MAXIMUM PENALTY @ 300% AMOUNTING TO RS. 6,01,045/ - . THE CIT(A) RESTRICTS THE SAME TO THAT MINIMUM IMPOSED @ 100% COMING TO RS. 2,00,348/ - . 6. WE HAVE HEARD BOTH TH E PAR T I ES. CASE FILE PERUSED. RELEVANT FACTS NARRATED IN PRECEDING PARAGRAPHS ARE NOT REPEATED FOR THE SAK E OF BREVITY. THERE IS NO DISP UTE THAT BOTH THE LOWER AUTHORITIES PE NALIZE I.T.A NO. 321 /AHD/20 16 A.Y. 2005 - 06 PAGE NO SHRI CHANDANBHAI BHOJRAJMAL VS. ACIT 4 THE ASSESSEE U/S. 271(1)(C) OF THE ACT QUA THE TWO ADDITIONS OF EXCESS STOCK FOUND DURING SUR VEY AMOUNTING TO RS. 5 LACS AND GP ESTIMATED ON CORRESPONDING UNACCOUNTED SALES COMING TO RS. 95,212/ - (SUPRA). IT HAS COME ON RECORD THAT THIS TRIBUNAL ADOPTED ESTIMATION METHOD IN RESTRICTING THE FORMER ADDITION OF RS. 15 LACS TO R S. 5 LACS. SO IS THE CASE OF LATTER ADDITION SINCE THE ONLY EXCEPTION IS THAT THIS TIME THE CIT(A) ADOPTED GROSS PROFITS @ 8.45%. W E OBSERVE IN THESE PECULIAR FAC TS THAT IT I S NOT A CASE OF EITHER CONCEALMENT OR FURNISHING OF INACCURATE PAR TICU LA RS OF INCOME SIN C E THE QUANTUM PROCEEDINGS HAVE MULTI - FOLDED PROCEEDINGS RESULTING ESTIMATED ADDITIONS NOT BASED ON ANY CONCRETE INCRIMINATING MATERIAL. RATHER THE SAME FORMED THE PRECISE REASON OF ADOPTED ESTIMATION METHOD AS INDICATED HEREINABOVE. WE ACCEPT ASSESSEE S ARGUMENTS AND REJECT THOSE RAISE AT REVENUE S BEHEST SEEKING TO DEFEND THE IMPUGNED PENALTY OF RS. 2,00,348/ - IN QUESTION . THE SAME STANDS DELETED. 7. THIS ASSESSEE S APPEAL IS ACCEPTED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 10 - 06 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 10 /06 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE I.T.A NO. 321 /AHD/20 16 A.Y. 2005 - 06 PAGE NO SHRI CHANDANBHAI BHOJRAJMAL VS. ACIT 5 3. CONCERNED CIT 4. CIT (A) 5. DR, I TAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,