Falcon Submersible Pvt. Ltd., RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Circle-5, RAJKOT-GUJARAT

ITA 331/RJT/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9192 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 331/RJT/2014 ( ASSESSMENT YEAR: 2006-07) FALCON SUBMERSIBLE PVT. LTD. 7-PARSANA SOCIETY, SORATHIYAWADI, RAJKOT / VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 5, RAJKOT ./ ./ PAN/GIR NO. : AAACF3196P ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MR. MEHUL RANPURA, A.R. / RESPONDENT BY : MR. PRAVEEN VERMA, SR. D.R. DATE OF HEARING 01/07/2019 !'# / DATE OF PRONOUNCEMENT 08/07/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS)-IV, RAJKOT (CIT(A) IN SHORT), DATED 25.03.2014 ARISING IN THE PENALTY ORDER DATED 02.03.2012 PASSE D BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF THE IN COME TAX ACT, 1961 (THE ACT) CONCERNING AY 2006-07. ITA NO. 331/RJT/2014 [FALCON SUBMERSIBLE PVT. LTD. VS. ACIT] A.Y. 2006 -07 - 2 - 2. AS PER GROUNDS OF APPEAL, THE ASSESSEE HAS CHALL ENGED THE IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE ACT ON THE QUANTUM ADDITIONS TOWARDS PROFIT ELEMENT ON UNACCOUNTED SAL E TRANSACTIONS. 3. IN THE COURSE OF THE HARING, THE LEANED AR FOR T HE ASSESSEE POINTED OUT THAT PENALTY AMOUNT OF RS.3,83,920/- ON LY IS IN DISPUTE AS AGAINST THE PENALTY OF RS.12,06,600/- MENTIONED IN THE GROUNDS OF APPEAL. 4. THE LEARNED AR FOR THE ASSESSEE REFERRED TO THE DECISION OF THE CO-ORDINATE BENCH OF ITAT IN ITA NO. 169/RJT/20 11 ORDER DATED 28.11.2018 IN RESPECT OF QUANTUM ADDITIONS. THE LEARNED AR FOR THE ASSESSEE POINTED OUT THAT THE CO-ORDINAT E BENCH HAS APPROVED THE ESTIMATIONS OF NET PROFIT @ 7% AS ADOP TED BY THE CIT(A) AS AGAINST 4.89% AS DECLARED BY THE ASSESSEE ON OTHER RECORDED SALES. THE LEARNED AR ALSO SUBMITTED THAT THE NET PROFIT IS MERELY AN ESTIMATION AND THEREFORE NO PENALTY ON SUCH ESTIMATION IS PROPER. 5. ON CONSIDERATION OF THE SUBMISSIONS OF THE ASSES SEE AND THE ORDERS OF THE LOWER AUTHORITIES, WE FIND NO SUBSTAN CE IN THE PLEA OF THE ASSESSEE FOR DELETION OF PENALTY. THE FACT TOW ARDS EXISTENCE OF UNRECORDED SALES CANNOT BE DISPUTED IN VIEW OF THE FINDINGS OF THE CO-ORDINATE BENCH IN QUANTUM PROCEEDINGS. NOW WHAT IS LEFT IS ESTIMATION OF NET PROFIT THEREON. THE REVENUE HAS ESTIMATED 7% PROFIT AND IMPOSED PENALTY FOR CONCEALMENT OF SUCH ESTIMATED INCOME WHEREAS THE ASSESSEE CANVASSES FOR ADOPTION OF 4.89% AS FAIR ESTIMATE. THEREFORE, THE ENTIRE ISSUE BEING T HE REALM OF ESTIMATION FOR QUANTIFICATION OF CONCEALMENT, WE GI VE BENEFIT OF ITA NO. 331/RJT/2014 [FALCON SUBMERSIBLE PVT. LTD. VS. ACIT] A.Y. 2006 -07 - 3 - DOUBT TO THE ASSESSEE AND RESTRICT THE IMPOSITION O F PENALTY TO BE QUANTIFIED AT THE NET PROFIT BY APPLYING 4.89% OF T HE UNRECORDED SALES DESPITE APPROVAL OF 7% NET PROFIT FOR THE PUR POSES OF QUANTUM PROCEEDINGS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 08/07/2019 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 08/07/201 9