Shri Biren Ashokbhai Patel, Mehsana V. Income Tax officer, Ward-1, Mehsana

ITA 335/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8177 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 13-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GRISHMA SONI
• Keywords: Presumptive income; Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 335/AHD/2015 (ASSESSMENT YEAR: 2010-11) SHRI BIREN ASHOKBHAI PATEL 8, PRAKAH SOCIETY, RADHANPUR ROAD, MEHSANA-384002 V/S INCOME TAX OFFICER, WARD- 1, MEHSANA (APPELLANT) (RESPONDENT) PAN: AUTPP9450E APPELLANT BY : SMT. GRISHMA SONI, AR RESPONDENT BY : SMT. PRAJNA PARAMITA, SR. D. R. ( )/ ORDER DATE OF HEARING : 16 -11-201 7 DATE OF PRONOUNCEMENT : 17-11-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. C IT(A), GANDHINAGAR, AHMEDABAD DATED 19.12.2014 PERTAINING TO A.Y. 2010- 11. ITA NO. 335/ AHD/2015 . A.Y. 2010-1 1 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 68,613/- LEVIED BY THE A.O. U/S. 271(1)(C) OF THE ACT. 3. RIVAL SUBMISSIONS HEARD AND CASE RECORD CAREFULLY P ERUSED. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESSMENT ORDER DAT ED 30.11.2012 FRAMED U/S. 143(3) OF THE ACT. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE ASSESSEE WAS ASKED TO PRODUCE BANK STATEMENT AND ON VERIFICATION OF THE SAME, THE A.O. NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS. 17,80,500/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF THE CA SH DEPOSITED. ASSESSEE EXPLAINED THAT HE IS DOING THE PERSONAL BUSINESS OF ELECTRICAL HOUSE WIRE ON RETAIL BASIS AND HIS TURNOVER IS AT RS. 38,73,010/- WITH PURCHASES AMOUNTING TO RS. 38,82,244/-. IT WAS EXPLAINED THAT THE CASH DEPOSITED IN THE BANK ACCOUNT RELATES TO THE RECEIPT FROM ELECTRICAL HOUS E WIRING BUSINESS. PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF THE SAID BUSI NESS WAS ALSO PRODUCED FOR VERIFICATION. 5. THOUGH THE A.O. ACCEPTED THE ELECTRICAL WIRING BUSI NESS OF THE ASSESSEE BUT WAS OF THE FIRM BELIEF THAT THE PRESUMPTIVE TAXATIO N AS PER SECTION 44AF OF THE ACT WOULD APPLY AND ACCORDINGLY TREATED THE PRO FIT OF THE ELECTRICAL WIRING BUSINESS AT 5% OF THE TOTAL SALES OF RS. 38, 73,010/- AND MADE THE ADDITION OF RS. 1,93,651/-. ITA NO. 335/ AHD/2015 . A.Y. 2010-1 1 3 6. IN OUR CONSIDERED OPINION, ONCE THE BUSINESS OF THE ASSESSEE HAS BEEN ACCEPTED BY THE A.O. AND TAXED THE PROFIT ON THE BA SIS OF PRESUMPTIVE TAXATION, WE DO NOT FIND ANY REASON FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 7. PROCEEDING FURTHER, THE A.O. NOTICED THAT THE ASSES SEE HAS SOLD AN OPEN LAND SITUATED AT PANCHOT, MEHSANA FOR A CONSIDERATI ON OF RS. 94,000/-. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AND ON VE RIFICATION OF THE DETAILS, THE A.O. FOUND THAT THE PURCHASE CONSIDERATION OF T HE SAID LAND WAS RS. 37,200/- THEREFORE, THE ASSESSEE HAS EARNED SHORT T ERM CAPITAL GAIN OF RS. 56,800/-. 8. WHEN THE ASSESSEE WAS CONFRONTED WITH THIS FACT, HE REPLIED THAT SINCE THE LAND WAS HELD FOR MORE THAN 12 MONTHS, HE WAS UNDER A BONA FIDE BELIEF THAT LIKE SHARE INVESTMENTS WHERE LONG TERM CAPITAL GAIN IS EXEMPT IF THE SHARES ARE HELD FOR MORE THAN 12 MONTHS, THE CAPITA L GAINS ON THE SAID PLOT OF LAND IS ALSO EXEMPT BEING HELD FOR MORE THAN 12 MONTHS. BUT WHEN THE CORRECT LAW AS CONFRONTED TO THE ASSESSEE, HE ACCEP TED THE GAINS AS SHORT TERM CAPITAL GAIN AND PAID THE TAXES ACCORDINGLY. 9. ON THE AFOREMENTIONED FACTS, WHICH RELATE TO THE BO NA FIDE BELIEF OF THE ASSESSEE SUPPORTED BY SOME PROVISION OF THE ACT, TH OUGH THE SAID PROVISION IS NOT AT ALL APPLICABLE ON THE FACTS OF THE CASE, THE BELIEF OF THE ASSESSEE CANNOT BE BRUSHED ASIDE LIGHTLY. IN OUR CONSIDERED OPINION, WHEN THE CORRECT PROVISIONS OF THE LAW WERE BROUGHT TO THE N OTICE OF THE ASSESSEE, HE IMMEDIATELY ACCEPTED THE SAME AND PAID THE TAXES AC CORDINGLY. ON SUCH ITA NO. 335/ AHD/2015 . A.Y. 2010-1 1 4 FACTS, WE DO NOT FIND IT A FIT CASE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 10. WE ACCORDINGLY DIRECT THE A.O. TO DELETE THE PENALT Y SO LEVIED AND ALLOW THE APPEAL. ORDER PRONOUNCED IN OPEN COURT ON 17 - 11- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 17 /11/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD