M/s. Venkateshwar Transports, RAJKOT-GUJARAT V. The Deputy Commissioner of Income Tax, Circle-1, RAJKOT-GUJARAT

ITA 329/RJT/2013

• Counselvise Citation: 32924914 RSA 2013
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J B JHAVERI
• Assessee Lawyers: J C RANPURA
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 329/RJT/2013 ASSESSMENT YEAR : 2006-07 M/S. VENKTESHWARA TRANSPORTS C/O. VINODRAY & CO., 310, KUBER COMP., OPP. JILLA PANCHAYAT, DR. YAGNIK ROAD, RAJKOT PAN : AAEFV 3323 P ( / APPELLANT) THE DCIT, CIRCLE-1, RAJKOT / RESPONDENT / ASSESSEE BY SHRI J.C. RANPURA, CA / REVENUE BY SHRI J.B. JHAVERI, DR / DATE OF HEARING 28.01.2014 !'# / DATE OF PRONOUNCEMENT 29.01.2014 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 19.06.2013 OF LD. CIT(A)-I, RAJKOT CONFIRMING THE PENALTY OF RS.24,00 0/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 FOR THE A SSESSMENT YEAR 2006-07. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM DOING BUSINESS AS A TRANSPORT COMMISSION AGENT. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSING OFFICER FINALIZED THE ASSESSEE U/S 144 OF THE INCOME-TAX ACT ON 10.12.2008 WHEREIN HE REJECTED THE BOOKS OF ACCOUNT S AND ADOPTED NET PROFIT @ 8% OF GROSS RECEIPT OF RS.7,51,46,594/- AND THEREBY DE TERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.60,11,728/- AS AGAINST DECLARED INCO ME OF RS.1,50,000/-. IN THIS ASSESSMENT ORDER, THE ASSESSING OFFICER ALSO INITIA TED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) RESTRICTED THE ADDITION OF RS.60,11,728/- TO RS.80, 000/- ON THE BASIS OF PAST HISTORY OF THE CASE. SUBSEQUENTLY, THE ASSESSING OFFICER VIDE ORDER DATED 24.02.2011 LEVIED PENALTY OF RS.24,000/- U/S 271(1)(C) OF THE INCOME- TAX ACT ON ADDITION TO THE EXTENT OF RS.80,000/- SUSTAINED BY THE LD. CIT(A) BEING 100% OF TAX SOUGHT TO BE EVADED ON INCOME OF RS.80,000/-. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE PENALTY, FOLLOWING THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF UNION OF 2 455-RJT-2013 KADVA PATEL SEVA SAMAJ (SMC) INDIA & ORS V. DHARMENDRA TEXTILE PROCESSORS & ORS. (2009) 306 ITR 277. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSESSEE IS NOW I N APPEAL BEFORE THIS TRIBUNAL. 3. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E, SHRI J.C. RANPURA, CA APPEARED AND PRODUCED A COPY OF THE ORDER OF LD. CI T(A) IN QUANTUM APPEAL, WHEREIN THE LD. CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.80,000/- CONSIDERING PAST HISTORY OF THE ASSESSEE. THE RELEVANT OBSERVATIONS OF LD. CIT(A) IS CONTAINED IN PARAGRAPH 9 WHICH READS AS UNDER:- 9 . IF THAT IS EXAMINED VIS--VIS PAST RECORDS OF T HE APPELLANT, IT IS NOTICED THAT IN SIMILAR CIRCUMSTANCES ASSESSMENT FO R A.Y. 2005-06 WAS MADE AND INCOME RETURNED FOR THAT YEAR WAS RS.1,96,500/- TOTAL DISALLOWANCE MADE BY THE AO IN THAT YEAR WAS RS.77,584, WHICH WAS ON ACCOUNT OF UNVERIFIABLE EXPENSES, THE COMMISSION INCOME WAS NOT DISTURBED. THE INCOME RETURNED IN THIS YEAR WAS RS.1,50,000 WHICH IS MORE OR LESS SIM ILAR. THEREFORE, AS PER THE DECISION OF THE ITAT, ANY ADDITION WHICH IS REQUIRE D TO BE MADE SHOULD BE ON THE BASIS OF PAST RECORDS AND, AS IN THE EARLIER YE AR DISALLOWANCE OF RS.77,584 WAS MADE WHEN THE INCOME RETURNED WAS RS.1,96,500, THIS YEAR ADDITION OF RS.80,000 WOULD SUFFICE. THEREFORE, THE AO IS DIREC TED TO WORK OUT THE INCOME BY ADDING RS.80,000 TO THE RETURNED INCOME. RELYING ON THE AFORESAID REASONING, THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT IN THE QUANTUM APPEAL THE LD. CIT(A) CONFI RMED THE ADDITION ONLY TO THE EXTENT OF RS.80,000/- WHICH IS CONFIRMED ON THE BASIS OF P AST HISTORY OF THE CASE I.E. ASSESSMENT YEAR 2005-06. HE ALSO POINTED OUT THAT T HIS IS NOTHING BUT AN AD-HOC ADDITION FOR WHICH PENALTY U/S 271(1)(C) IS NOT LEV IABLE. THE LD. COUNSEL OF THE ASSESSEE ALSO POINTED OUT THAT IN THE ASSESSMENT YE AR 2005-06, IN RESPECT OF ADDITION MADE, NO PENALTY U/S 271(1)(C) WAS INITIAT ED; THEREFORE, LD. CIT(A) OUGHT TO HAVE CANCELLED THE PENALTY. 4. AS AGAINST THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE, LD. DEPARTMENTAL REPRESENTATIVE POINTED T HAT SINCE THE ADDITION TO THE EXTENT OF RS.80,000/- IS CONFIRMED BY THE TRIBUNAL, THE ASSESSING OFFICER RIGHTLY LEVIED THE PENALTY OF RS.24,000/- AND LD. CIT(A) RIGHTLY C ONFIRMED THE SAME. THEREFORE, THE VIEW TAKEN BY THE LD. CIT(A) BE UPHELD. 5. RIVAL SUBMISSIONS WERE CONSIDERED. IT IS WELL SE TTLED LAW THAT PENALTY U/S 271(1)(C) IS NOT AUTOMATIC. I HAVE ALSO GONE THROUG H PARAGRAPH 9 OF THE ORDER OF LD. 3 455-RJT-2013 KADVA PATEL SEVA SAMAJ (SMC) CIT(A) IN QUANTUM APPEAL AND FROM THIS IT CAN BE SE EN THAT IN QUANTUM PROCEEDINGS LD. CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.80,000/- WHICH IS NOTHING BUT AN AD-HOC ADDITION. THIS ADDITION OF RS.80,000/- IS CO NFIRMED ON THE BASIS OF PAST HISTORY OF THE CASE I.E. THE ADDITION MADE IN THE ASSESSMEN T YEAR 2005-06. ADMITTEDLY, IN THAT ASSESSMENT YEAR NO PENALTY U/S 271(1)(C) WAS L EVIED. KEEPING IN VIEW OF THIS CONSPICUOUS FACTS OF THE CASE, I AM OF THE VIEW THA T, ON THIS AD-HOC ADDITION, PENALTY U/S 271(1)(C) IS NOT LEVIABLE. I, THEREFORE, CANCEL THE PENALTY OF RS.24,000/- CONFIRMED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 29.01.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S. VENKTESHWARA TRANSPORTS, DR. YAG NIK ROAD, RAJKOT 2. / RESPONDENT- THE DCIT, CIRCLE-1,RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT, RAJKOT-1, RAJKOT 4. * * 2- / CIT(A)-I, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT