Dy.Commissioner of Income Tax, Circle-5(2), Ahmedabad V. Shri Satish Babulal Shah, Ahmedabad

ITA 3413/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8680 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SUTHARI A
• Assessee Lawyers: N B SHAH

Judgement Text

I.T.A. NO. 3 413 /AHD/201 5 ASSESSMENT Y EAR: 20 08 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM ] I.T.A. NO. 3 413 /AHD/201 5 ASSESSMENT Y EAR : 20 08 - 09 DY. COMMISSIONER OF INCOME TAX , .... ................ APPELLANT CIRCLE 5(2), AHMEDABA D. VS. S ATISH BABULAL SHAH, .......... . RESPONDENT C/54, SILVER ARC BUILDING, KAVI NANALAL MARG, NEAR ELLISBRIDGE CROSSING, NAVRANGPURA, AHMEDABAD 3800 06. [PAN: A DFPS 9266 C ] APPEARANCES BY: DEEPAK SUTHARIA FOR THE APPELLANT N.B. S HAH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 21. 08 .2017 DATE OF PRONOUNCING THE ORDER : 22 . 08 . 2017 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 22 ND SEPTEMBER 2015, P ASSED BY THE L EARNED CIT(A) , AHMEDABAD FOR THE ASSESSMENT YEAR 20 08 - 09 , ON THE FOLLOWING GROUND S : - 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.27,46,460/ - IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. 2 . ON THE FAC TS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING O FFICER. 3. IT IS , THEREFORE , PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. I.T.A. NO. 3 413 /AHD/201 5 ASSESSMENT Y EAR: 20 08 - 09 PAGE 2 OF 3 2. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE INVITED MY ATTENTION TO THE O R DER DATED 15.03.2013 PASSED BY A DIVISION BENCH OF THIS TRIBUNAL IN THE C A SE OF CO - OWNER I.E. ITA NO.2368/AHD/2012 DCIT VS. SHRI HARSH S. SH AH AND SUBMITTED THAT THE ISSUE IN APPEAL IS SQUARELY COVERED BY THE AFORESAID DECISION. IT WAS ALSO SUBMITTED THAT SINCE THE PENALTY IN QUESTION IS IMPOSED IN RESPECT OF THE SAME TRANSACTION IN THE HANDS OF THE CO - OWNER , THE AFORESAID DECISION SQUARELY A PPLIES TO THE FACTS OF THIS CASE AS WELL . 3. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THE SUBMISSIONS SO MADE BY T HE LEARNED COUNSEL FOR THE ASSESSEE BUT NEVERTHELESS RELIED UPON THE STAND OF THE ASSESSING O FFICER. 4. I SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MAT TER THAN THE VIEW SO TAKEN BY THE DIVISION B ENCH ON THE SAME SET OF FACTS IN THE CASE OF THE CO - OWNER . WHILE UPHOLDING THE ACTION OF THE CIT (A) IN DELETING THE PENALTY, THE DIVISION B ENCH HAS INTER ALIA OBSERVED AS FOLLOWS : - 6. AFTER HEARING AND PERUSING THE RECORDS AND THE CASE LAWS RELIED UPON BY BOTH THE PARTIES, WE FIND THAT IN HIS RETURN OF INCOME ASSESSEE HAS CLAIMED BUSINESS LOSS OF RS. 86,72,132/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN RESPECT OF THIS CLAIM, TH E ASSESSEE FILED DETAILS COMPRISING AGREEMENTS BETWEEN THE ASSESSEE AND THE OTHER PARTIES I.E. MR. HAIDER SINDHI AND OTHERS. HOWEVER ASSESSING OFFICER WAS OF THE VIEW THAT THE EVIDENCE WHICH HAS BEEN PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM OF BUSI NESS LOSSES OF RS. 86,72,132/ - CANNOT BE RELIED UPON TO ALLOW THE CLAIM OF THE ASSESSEE. IN THE OPINION OF THE ASSESSING OFFICER THIS LOSS WAS NOTIONAL LOSS ONLY AND HE THEREFORE ADDED THE SAME TO THE INCOME OF THE ASSESSEE. SIMILARLY, ASSESSEE S CLAIM OF FOREIGN TRAVELLING EXPENSES AMOUNTING TO RS. 85,591/ - WAS HELD TO BE NOT RELATED WITH ASSESSEE S BUSINESS BY THE ASSESSING OFFICER AND THE CLAIMED EXPENSES WERE ALSO ADDED BACK TO THE INCOME OF THE ASSESSEE. ON THESE ADDITIONS ASSESSING OFFICER HAS ALSO LE VIED PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE S CASE HAS CONSISTENTLY BEEN THAT THERE IS NO CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE AS IN RESPECT I.T.A. NO. 3 413 /AHD/201 5 ASSESSMENT Y EAR: 20 08 - 09 PAGE 3 OF 3 OF BOTH THESE ADDITIONS ALL THE RELEVANT DOCUMEN TS AND EVIDENCES WERE PRODUCED BEFORE THE ASSESSING OFFICER AND, THEREFORE, IT WAS NOT A FIT CASE FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT. WE FIND MERIT IN THE ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE AS ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDIN GS ARE SEPARATE. SIMPLY, BECAUSE ADDITION HAS BEEN MADE, PENALTY CANNOT BE IMPOSED AUTOMATICALLY. IN THE INSTANT CASE, THERE IS NO DISPUTE ABOUT THE FACT THAT ASSESSEE DISCLOSED ALL RELEVANT DOCUMENTS IN SUPPORT OF HIS CLAIM OF BUSINESS LOSS AND TRAVELLING EXPENSES. IN THE ABSENCE OF A FINDING OF THE ASSESSING OFFICER THAT EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF BOTH THESE ADDITIONS WAS NOT BONAFIDE, PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE LEVIED IN THIS CASE. THEREFORE THE LD. CIT(A) HAS RIGHT LY DELETED THE PENALTY IMPOSED BY A.O. AND THE ORDER PASSED BY HIM IS HEREBY UPHELD. 5. RESPECTFULLY FOLLOWING THE VIEWS SO TAKEN BY THE T RIBUNAL , I CONFIRM THE ACTION OF THE LEANED CIT(A) AND DECLINE TO INTERFERE IN THE MA T TER. 6. IN THE RESULT, APPEAL IS DISMISSED. P R O NOUNCED IN THE OPEN COURT TODAY ON THE 22 ND DAY OF AUGUST 2017. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: AHMEDABAD, THE 22 ND DAY OF AUGUST , 2017. PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD