AKASH GEMS P LTD., Jaipur V. DCIT, Jaipur

ITA 335/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99497 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Keywords: Principle of natural justice; Condonation of delay
• Section: 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 335/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 M/S. AKASH GEMS (P) LTD. 14, VISHNU PURI, JAGATPURA, MALVIYA NAGAR, JAIPUR CUKE VS. THE DCIT CENTRAL CIRCLE- 2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAECA 6775 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL , CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA , JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20/11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)- CENTRAL, JAIPUR DATED 05-12-2012 CHALLEN GING THE IMPOSITION OF PENALTY OF RS. 66,000/- U/S 271AAA. 2.1 THE APPEAL IS DELAYED BY 21 DAYS FOR WHICH THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY EXPLAINING THAT THE DELAY IS NOT CAUSED BY ASSESSEES DEFAULT. RELEVANT APPEAL PAPER S DULY SIGNED WERE HANDED OVER TO THE COUNSEL IN TIME, HOWEVER, DUE TO INADVERTENT ERROR OF COUNSELS RECORD KEEPER, THE APPEAL COULD NOT BE FI LED IN TIME BY HIS ITA NO. 335/JP/2013 M/S. AKASH GEMS (P) LTD. VS. DCIT CENTRAL CIRCLE- 2, JAIPUR . 2 OFFICE. THE ASSESSEE HAS RELIED ON THE DECISION OF HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. KHEMRAJ LAKSHMICHAND, 114 ITR 75 FOR THE PROPOSITION THAT IF THE DELAY HAS OCCURRED ON ACCOU NT OF COUNSELS PART, THE ASSESSEE NEEDS NOT SUFFER FOR SUCH DEFAULT. 2.2 THE LD. DR IS HEARD ON CONDONATION. 2.3 AFTER HEARING BOTH THE PARTIES, WE ARE OF THE V IEW THAT THE DELAY IN FILING APPEAL IS NOT ATTRIBUTABLE TO THE ASSESSEE W HO WAS PREVENTED BY SUFFICIENT REASONS. THEREFORE, THE SAME IS CONDONED IN THE INTEREST OOF JUSTICE AND RESPECTFULLY FOLLOWING THE DECISIONS OF HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. KHEMRAJ LAKSHMICHAND ( SUPRA). 3.1 ON MERITS, IT IS CONTENDED THAT SEARCH ACTION U /S 132 OF THE ACT WAS CARRIED OUT ON 23-08-2007, DURING THE COURSE THEREO F, THE ASSESSEE SURRENDERED AN AMOUNT OF RS. 4.21 CRORES ON ACCOUNT OF EXCESS VALUATION OF STOCK. ASSESSEE ACCORDINGLY, FILED THE RETURN OF INCOME. HOWEVER, THE AO MADE FURTHER OTHER ADDITIONS AMOUNTING TO RS. 10 ,71,49,564/-. 3.2 IN FIRST APPEAL, THE ASSESSEE GOT SUBSTANTIAL RELIEF. 3.3 THE SECOND APPEAL IN THIS BEHALF WAS PREFERRED BY BOTH I.E. THE ASSESSEE AND REVENUE WHERE THE ITAT, JAIPUR BENCH V IDE ITS ORDER DATED 6-10-2011 SUSTAINED THE ADDITION ONLY TO THE TUNE OF RS. 6.60 LACS OUT OF TOTAL ADDITION OF RS. 1.38 CRORES BEING DIFFERENCE IN STOCK VALUATION. WHILE GIVING THE EFFECT TO ITAT ORDER, THE AO IMPOS ED PENALTY OF RS. ITA NO. 335/JP/2013 M/S. AKASH GEMS (P) LTD. VS. DCIT CENTRAL CIRCLE- 2, JAIPUR . 3 13.14 LACS U/S 271AAA OF THE ACT WHICH AFTER ITAT O RDER WAS REDUCED TO RS. 66,000/- BY THE LD. CIT(A). 3.4 AGGRIEVED, THE ASSESSEE IS BEFORE US. 3.5 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT OUT OF STOCK VALUATION ADDITION OF RS. 1.38 CRORES, A MEAGER AMO UNT OF RS. 6.60 LACS HAS BEEN RETAINED WHICH IS ESSENTIALLY A MATTER OF OPINION. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ELIY LILLY & COMPANY (INDIA) P. LTD., 312 ITR 225 HAS HELD THAT PENALTY IS NOT AN A UTOMATIC OR MANDATORY FALLOUT OF THE ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS, THEREFORE, THE SAME SHOULD NOT BE LEVIED IN ROUTINE MANNER. TH E LD. CIT(A) WHILE UPHOLDING THE PENALTY OF RS. 66,000/- HAS IMPLIED T HAT PENALTY U/S 271AAA IS AUTOMATIC. 3.6 THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AU THORITIES. 3.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW, THE IM PUGNED ADDITION IS ON ACCOUNT OF STOCK VALUATION. THE VALUE OF GEMS AND P RECIOUS AND SEMI PRECIOUS STONES IS ALWAYS A SUBJECT MATTER OF DIFFE RENCE OF OPINION DEPENDING ON VARIOUS FACTORS. ALL THE PENALTY PROC EEDINGS ARE SUBJECT TO PROVISIONS OF SEC. 274(1) WHICH PRESCRIBES MANDATOR Y ADHERENCE TO PRINCIPLES OF NATURAL JUSTICE AND ADEQUATE OPPORTUN ITY OF BEING HEARD; IT IMPLIES REASONED IMPOSITION BASED ON REJECTION OF A SSESSEES EXPLANATION. ITA NO. 335/JP/2013 M/S. AKASH GEMS (P) LTD. VS. DCIT CENTRAL CIRCLE- 2, JAIPUR . 4 LD. CIT(A) HAS SUSTAINED THE PENALTY IMPLYING BY TH E ORDER AS IF LEVY THEREOF IS OF AUTOMATIC CONSEQUENCE. IN OUR CONSIDE RED OPINION, SUCH A SMALL DIFFERENCE IN STOCK VALUATION IS BASED ON OPI NION AND IT CANNOT BE SUBJECTED TO PENALTY U/S 271AAA OF THE ACT IN MECHA NICAL. IN VIEW OF THESE FACTS AND RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE APEX COURT IN THE CASE OF CIT VS. ELIY LILLY & COMPANY (INDIA ) P. LTD., (SUPRA), THE PENALTY IS DELETED. 4.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20 / 11/2015. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S.AKASH GEMS (P) LTD. , JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT , CENTRAL CIRCLE- 2, JAIP UR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 335/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR