Appeal details
Counselvise Citation
35523114 RSA 2011
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-08-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2002-2003
Appeal Filed On
20-04-2011
Judgement Text
1 ITA 355-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 355/JP/2011 ASSTT. YEAR : 2002-03. M/S. RAM PRATAP KATTA & SONS VS. THE ACIT, CIRCLE- 1, JEWELLERS PVT. LTD., 191, NEAR JAIPUR. TRIPOLIA, SMS HIGHWAY, JAIPUR. PAN : AAACR 6743C. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANISH AGARWAL RESPONDENT BY : SHRI D. K. MEENA DATE OF HEARING : 17.8.2011 DATE OF PRONOUNCEMENT : 19.8.2011. ORDER DATE OF ORDER : 19/08/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST CONFIRMING T HE LEVY OF PENALTY OF RS. 86,719/- RELATING TO ASSESSMENT YEAR 2002-03. 2. ASSESSEE IS A PRIVATE LIMITED COMPANY AND ENGAGE D IN THE TRADING OF GOLD BARS, GOLD AND SILVER JEWELLERY. A SURVEY UNDER SECTION 133A WAS CONDUCTED ON 10.10.2001 AT THE BUSINESS PREMISES OF ASSESSEE. DURING THE COUR SE OF SURVEY CERTAIN ROUGH PAPERS WERE FOUND AND PHYSICAL VERIFICATION OF STOCK WAS CARRIE D OUT. THEREAFTER, RETURN DECLARING TOTAL INCOME OF RS. 19,48,160/- WAS FILED AND THE A SSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON A TOTAL INCOME OF RS. 21,91,070/- BY M AKING ADDITION OF RS. 2,42,910/-. 2 THE ADDITION OF RS. 2,42,910/- WERE ON ACCOUNT OF E XCESS CASH FOUND DURING THE COURSE OF SURVEY AT RS. 57,893/-, EXCESS STOCK OF GOLD ORNAME NTS AT RS. 67,390/-, EXCESS STOCK OF SILVER ORNAMENTS AT RS. 56,400/- AND ADDITION ON AC COUNT OF LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY AT RS. 61,227/-. AS PER STATEMENT OF FACTS, SINCE THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY SHRI PRADEEP KATTA WHO WAS LOOKING AFTER THE INCOME-TAX MATTERS AND AFFAIRS OF THE COMPANY WAS SUFFERING FR OM CANCER, WHO AFTER SURVEY DIED ALSO AND BECAUSE OF THIS REASON NO APPEAL COULD BE FILED AGAINST ADDITION OF RS. 2,42,910/-. THEREAFTER THE PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C) WERE INITIATED AND ON THE BASIS OF EXCESS CASH AND EXCESS STOCK OF GOLD AND SILVER ORNAMENTS ETC., THE AO HELD THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS FOR C ONCEALING THE INCOME AND, THEREFORE, PENALTY IS LEVIABLE. ACCORDINGLY, HE LEVIED A PENA LTY OF RS. 86,719/- WHICH IS CONFIRMED BY LD. CIT (A) ALSO. 3. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE TR IBUNAL. 4. THE LD. COUNSEL OF THE ASSESSEE FILED WRITTEN SU BMISSIONS. 5. ON THE OTHER HAND, LD. D/R PLACED RELIANCE ON TH E ORDER OF AO. 6. AFTER CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW AND WRITTEN SUBMISSIONS, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN ITS APPEA L. IT IS SEEN THAT AN EXPLANATION WAS GIVEN BY THE DIRECTOR SHRI SURESH KHUNTETA WHOSE ST ATEMENT WAS RECORDED DURING THE COURSE OF SURVEY CATEGORICALLY STATED THAT A SUM OF RS. 43,400/- WAS RECEIVED IN CASH AGAINST PAYMENT OF GOODS SOLD WHICH WERE ON APPROVA L. THIS FACT WAS ALSO FOUND NOTED IN LOOSE PAPER NO. 14 FOUND DURING THE COURSE OF SU RVEY. REMAINING AMOUNT OF RS. 14,493/- WAS ALSO ON ACCOUNT OF SALE OF GOODS. HOW EVER, THEY COULD NOT BE ENTERED IN THE BOOKS OF ACCOUNT AS THEY WERE INCOMPLETE. THIS EXP LANATION OF THE ASSESSEE WAS NOT 3 ACCEPTED BY BOTH THE AUTHORITIES BELOW. IF THIS EX PLANATION IS TAKEN INTO CONSIDERATION, THEN IT IS PROVED THAT THIS IS NOT A CASE OF CONCEA LMENT OF INCOME. SINCE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM BY FILING FURTHER SUPPORTING EVIDENCE, THEREFORE, IT CAN BE SAID THAT THIS CAN BE A CASE OF ADDITION BUT AT LEAST THIS IS NOT A CASE OF PENALTY. THE CONTENTION OF THE ASSESSEE OR DIRECTOR WAS NOT FOUND INCORRECT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT ON THE AMOUNT OF RS. 57 ,893/- PENALTY WAS NOT LEVIABLE. 7. REGARDING THE EXCESS STOCK OF GOLD AND SILVER OR NAMENTS, IT IS SEEN THAT THE STOCK AS PER BOOKS OF ACCOUNT WAS 27206.040 GMS AND STOCK FOUND DURING THE COURSE OF SURVEY WAS 27359.993 GMS. IN THIS WAY THERE WAS A DIFFERE NCE OF 153.953 GMS. IN GOLD ACCOUNT AND SIMILARLY THERE WAS A SMALL PORTION OF EXCESS S TOCK OF SILVER ORNAMENTS. IT WAS EXPLAINED THAT THIS IS BECAUSE OF IMPROPER WEIGHMEN T AND DUE TO ERROR IN RECORDING OF WEIGHT AT THE TIME OF SURVEY WHERE THE WEIGHT OF DO RI, STONES EMBEDDED IN THE JEWELLERY WAS NOT DEDUCTED. THE TOTAL DIFFERENCE IS OF 0.55% IN GOLD JEWELLERY AND SIMILARLY VERY SMALL DIFFERENCE IN SILVER JEWELLERY. IN SILVER JE WELLERY ALSO NO DEDUCTION ON ACCOUNT OF IMPURITIES, THREAD AND SEMI PRECIOUS STONES AND BEA DS STUDDED IN THE SILVER ORNAMENTS WERE GIVEN. IF THIS EXPLANATION IS TAKEN INTO CONSI DERATION THEN IT IS SEEN THAT EVEN THERE WAS NO CASE OF ADDITION BUT SINCE ASSESSEE COULD NO T LEAD ANY EVIDENCE BECAUSE OF DEATH OF THE MANAGING DIRECTOR, AND THEREFORE, THE ADDITI ON WAS MADE. IT IS NOT AUTOMATIC THAT IF ANY ADDITION IS MADE THEN PENALTY HAS ALSO TO BE LEVIED. PENALTY IS NOT MANDATORY. BONAFIDE OF THE ASSESSEE HAS TO BE TAKEN INTO CONSI DERATION AND IF BONAFIDE AND EXPLANATION OF THE ASSESSEE AS DISCUSSED ABOVE IS T AKEN INTO CONSIDERATION THEN IT IS SEEN THAT THIS IS AT LEAST NOT A CASE OF LEVY OF PENALTY . ACCORDING, WE DELETED THE PENALTY ON 4 AMOUNT OF RS. 67,300/- AND RS. 56,400/- ADDED ON AC COUNT OF EXCESS STOCK OF GOLD AND SILVER ORNAMENTS. 8. THE REMAINING ADDITION IS ON ACCOUNT OF RS. 61,2 27/- MADE ON THE BASIS OF LOOSE PAPERS, COPIES OF WHICH ARE PLACED IN PAPER BOOK AT PAGE 9 ONWARDS AND IT IS SEEN THAT AT PAGE 9 THERE IS A RECEIPT OF 26.500 GM ON APPROVAL . ON APPROVAL BASIS ADDITION CANNOT BE MADE. PAPER IS VERY CLEAR. AN ADDITION OF RS. 13, 000/- WAS MADE ON THIS ACCOUNT. IF THIS PAPER IS TAKEN INTO CONSIDERATION JUDICIOUSLY THEN EVEN ADDITION IS NOT WARRANTED. THEREFORE, THERE IS NO QUESTION OF LEVY OF PENALTY ON THIS AMOUNT. 9. REGARDING REMAINING LOOSE PAPERS, IT IS SEEN THA T THEY ARE RELATED TO EXPENDITURE ON FURNITURE. AN EXPLANATION WAS FILED BEFORE AO T HAT THESE PAPERS RELATE TO THE DIRECTOR IN WHOSE RESIDENCE THE FURNITURE WAS FITTED, AND IF ANY ADDITION CAN BE MADE, IT CAN BE MADE IN THE HANDS OF DIRECTOR AND NOT IN THE HANDS OF COMPANY. HOWEVER, THE AO WAS NOT SATISFIED. THEREFORE, THE ADDITION WAS MADE. 10. AFTER GOING THROUGH THESE PAPERS, IT IS FOUND T HAT THESE ARE ROUGH CALCULATION OF EXPENDITURE ETC. I.E. IN RESPECT OF SHRI SURESH KHU NTETA. THEREFORE, IN OUR VIEW NO ADDITION EVEN COULD HAVE BEEN MADE IN THE HANDS OF COMPANY, AND IF ANY ADDITION COULD BE MADE IT COULD BE MADE IN THE HANDS OF DIRECTOR. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT PENALTY ON THIS AMOUNT CANNOT BE LEVIED. ACCORDINGLY, WE DELETE THE PENALTY ON THE REMAINING AMOUNT ALSO. T HUS ENTIRE PENALTY IS DELETED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 12. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 .8.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER 5 JAIPUR, D/- COPY FORWARDED TO :- M/S. RAM PRATAP KATTA & SONS JEWELLERS P. LTD., JAI PUR. THE ACIT, CIRCLE-1, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 355/JP/2011) BY ORDER, AR ITAT JAIPUR.
