Shri Mukeshkumar K. Vyas, Vadodara V. The Dy.CIT, Circle-1(2), Baroda

ITA 361/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1105 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL
• Assessee Lawyers: VIJAY H PATEL
• Keywords: Revised return
• Section: 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA NOS.361 TO 365/AHD/2016 (ASSESSMENT YEARS:2007-08 TO 2011-12) SHRI MUKESHKUMAR K VYAS 507, GAYATRI CHAMBERS, R C DUTT ROAD, ALKAPURI, VADODARA APPELLAN T VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), VADODARA RESPONDENT PAN: AJOPS0018H / BY ASSESSEE : SHRI VIJAY H. PATEL, A.R. / BY REVENUE : SHRI S. L. CHANDEL, SR.D.R. /DATE OF HEARING : 26.05.2016 /DATE OF PRONOUNCEMENT : 14.07.2016 ORDER PER BENCH THESE FIVE APPEALS HAVE BEEN FILED BY ASSESSEE AGAI NST THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPE ALS)-5, BARODA, DATED 24.11.2015 FOR A.Y. 2007-08 AND DATED 30.11.2015 FOR A.YS. 2008-09 TO 2011-12. SINCE, ALL THESE APPEALS PERTAIN TO SAME ASSESSEE AND COMMON ISSUE O F PENALTY U/S.271(1)(C) OF THE ACT INVOLVE, THEREFORE, THESE WERE HEARD ITA NOS.361 TO 365/AHD/16 A.YS. 07-08 TO 11-12 [SHRI MUKESHKUMAR K VYAS VS. DCIT] PAGE 2 TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.361/AHD/2016 FOR A.Y. 2007-08, ASSESSE E HAS RAISED FOLLOWING GROUND: THE LEARNED CIT(A) -5 BARODA HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ORDER PASSED BY THE ASSESSING OFFI CER LEVYING THE PENALTY OF RS.1,17,810/- U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 3. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y.2007 -08 ON 31.10.2007 DECLARING TOTAL INCOME AT RS.4,64,940/-. ASSESSEE WAS A PARTNER IN M/S. RELIABLE INVESTIGATION AND SE CURITY SERVICES UP TO 31.03.2006. THE FIRM WAS DISCONTINUE D W.E.F. 01.04.2006 AND ASSESSEE TOOK OVER THE ASSETS AND TH E LIABILITIES OF THE FIRM W.E.F. 01.04.2006. SINCE ENTIRE ASSETS AND LIABILITIES OF THE FIRM WERE TAKEN OVER BY ASSESSEE, NO RETURN OF INCOME WAS FILED BY THE FIRM. IT WAS NOTICED BY ASSESSING OFF ICER THAT CERTAIN RECEIPTS APPEARING IN THE PAN OF THE FIRM WERE NOT OFFERED TO TAX IN THE HANDS OF ASSESSEE, EVEN THOUGH HE HAD TAKEN OVER THE FIRM W.E.F. 01.04.2006. THE ASSESSEE ALSO CONCEDED THAT FOR THE YEAR UNDER CONSIDERATION, RECEIPTS OF RS.25,39,559/- IN THE PAN OF THE FIRM, WERE NOT ACCOUNTED FOR BY HIM IN HIS RETURN O F INCOME FOR A.Y. 2007-08. THEREFORE, ASSESSING OFFICER HAD REA SON TO BELIEVE THAT INCOME OF MORE THAN RS.1 LAKH HAD ESCAPED ASSE SSMENT AND THE CASE WAS REOPENED U/S.147 OF THE ACT. THE ASSE SSEE FILED A RETURN IN RESPONSE TO NOTICE U/S.147 OF THE ACT, DE CLARING ADDITIONAL INCOME OF RS.3,21,254/- @ G. P. RATE OF 12.65%. ASSESSMENT U/S.143(3) OF THE ACT WAS FINALISED ON D ETERMINING TOTAL INCOME AT RS.8,49,930/-, AFTER ADDITIONS OF R S. 63,743/- ON ACCOUNT OF ESTIMATED ADDITIONAL GROSS PROFIT @ 15% ON TOTAL ITA NOS.361 TO 365/AHD/16 A.YS. 07-08 TO 11-12 [SHRI MUKESHKUMAR K VYAS VS. DCIT] PAGE 3 RECEIPTS. PENALTY PROCEEDINGS U/S. 271(1)(C) OF T HE ACT WERE ALSO INITIATED ON ADDITIONAL INCOME OFFERED AS A RESULT OF NOTICE U/S. 147 OF THE ACT. AFTER AFFORDING THE ASSESSEE AN OPP ORTUNITY OF BEING HEARD, PENALTY OF RS.1,17,810/- WAS LEVIED U/ S. 271(1)(C) OF THE ACT. 4. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) CONFIRMED TH E ORDER OF ASSESSING OFFICER. 5. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF AS SESSEE INTER ALIA SUBMITTED THAT CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ORDER PASSED BY ASSESSING OFFICER FOR LEVY OF PENAL TY OF RS.1,17,810/- U/S. 271(1)(C) OF THE ACT, SO SAME SH OULD BE DELETED. ON THE OTHER HAND, LD. D.R. SUPPORTED THE ORDER OF AUTHORITIES BELOW. 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERI AL ON RECORD, WE FIND THAT ASSESSEE IS ENGAGED IN THE BUS INESS OF PROVIDING SECURITY SERVICE TO VARIOUS CLIENTS. ORI GINAL RETURN FOR A.Y. 2007-08 WAS FILED ON 31.10.2007 DECLARING TOTA L TURNOVER OF RS.83,49,752/- AND TOTAL INCOME OF RS.4,64,940/-. THE CASE WAS RE-OPENED U/S.147 OF THE ACT AND NOTICE SERVED UPON THE ASSESSEE. IN RESPONSE TO SAME, RETURN OF INCOME FI LED DECLARING TURNOVER OF RS.1,10,06,624/- AND TOTAL INCOME OF RS .8,49,930/-, THEREBY DECLARING ADDITION INCOME OF RS.3,84,990/-. ASSESSEE WAS CARRYING ON BUSINESS OF SECURITY SERVICE IN HIS INDIVIDUAL CAPACITY WITH TRADE NAME M/S. ALERT ALIED SERVICES. HE WAS ALSO ITA NOS.361 TO 365/AHD/16 A.YS. 07-08 TO 11-12 [SHRI MUKESHKUMAR K VYAS VS. DCIT] PAGE 4 PARTNER IN FIRM NAMED M/S. RELIABLE INVESTIGATION A ND SECURITY SERVICES, WHICH WAS DISSOLVED ON 31.03.2006 AND ENT IRE BUSINESS WAS TAKEN OVER BY HIM IN HIS INDIVIDUAL CAPACITY W. E.F. 01.04.06. HOWEVER, AS SUCH SOME OF HIS OLD CLIENT WERE NOT AW ARE OF THE FACT OF CHANGE IN CONSTITUTION OF BUSINESS AND ASSESSEE CONTINUED BUSINESS WITH OLD NAME I.E. M/S RELIABLE INVESTIGAT ION AND SECURITY SERVICES. DUE TO SOME IRREGULARITIES AND RECONSTITUTION OF BUSINESS, ASSESSES COULD NOT ACCOUNT FOR GROSS R ECEIPT OF RS. 25,39,559/- AND SO WHILE FILING REVISED RETURN HAS OFFERED ADDITIONAL INCOME OF RS.3,21,254/- AT G.P. RATE OF 12.65% BY CONSIDERING THE RECEIPTS REFLECTED ON FIRMS' PAN. DURING ASSESSMENT PROCEEDING, ASSESSING OFFICER HAS RECALC ULATED GROSS PROFIT RATE AT 15.16% AS AGAINST 12.65% ACCOUNTED F OR BY ASSESSEE. ASSESSING OFFICER MADE ADDITION OF RS. 6 3,743/- AND AFTER INITIATING PENALTY U/S.271(1)(C) OF THE ACT L EVIED PENALTY OF RS. 1,17,810/-. PENALTY WAS LEVIED ON RS. 3,84,997 /- WHICH WAS OFFERED BY ASSESSEE OVER AND ABOVE ORIGINAL RETURN U/S. 139 OF THE AT OF RS. 3,21,254/- AND BEING ADDITION OF RS. 63,7 43/- MADE DURING ASSESSMENT PROCEEDING. ALTHOUGH, PENALTY WA S LEVIED ON AMOUNT OF RS.3,84,997/-, IT WAS ON TWO SEPARATE SET OF INCOME: A) FIRST BEING ADDITIONAL INCOME OF RS.3,21,254/- D ECLARED IN RETURN U/S. 148 OF THE ACT OVER AND ABOVE INCOME DE CLARED IN ORIGINAL RETURN. B) SECOND BEING ADDITION MADE OF RS.63,743/- BASED RECALCULATED ON GROSS PROFIT RATE DURING ASSESSMENT PROCEEDING. WITH REGARD TO ADDITION INCOME, THE STAND OF ASSESS EE HAS BEEN THAT DUE TO RECONSTITUTION OF BUSINESS AND NON INFO RMATION TO THE ASSESSEES CUSTOMERS WHO HAD WRONGLY MENTIONED PAN OF FIRM IN ITA NOS.361 TO 365/AHD/16 A.YS. 07-08 TO 11-12 [SHRI MUKESHKUMAR K VYAS VS. DCIT] PAGE 5 PLACE OF PAN OF INDIVIDUAL, THERE RECEIPT OF RS.25, 39,559/- AND EXPENSES RELATED THERETO WAS NOT PROPERLY ACCOUNTED AND SO SAME WAS OFFERED FOR TAXATION IN RETURN U/S.148 OF THE A CT AT GROSS PROFIT RATE OF 12.65% AMOUNTING TO RS.3,21,254/-. THE TDS CREDIT WAS ALSO NOT CLAIMED ON THIS RECEIPT WHICH I N FACT SHOWS THAT THERE WAS NO ANY MALAFIDE INTENTION OF ASSESSE E. NEXT IS ESTIMATED ADDITION WHICH IS BASIS OF PENALTY. ESTI MATION ADDITION IS NOT SOUND BASIS OF PENALTY. TAKING ALL FACTS AN D CIRCUMSTANCES INTO CONSIDERATION, PENALTY IN QUESTION IS DIRECTED TO BE DELETED. 6.1 SIMILAR ISSUE OF PENALTY AROSE IN OTHER YEARS, FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, PENALTY IN AL L OTHER YEARS ARE DIRECTED TO BE DELETED. 7. AS A RESULT, ALL APPEALS FILED BY ASSESSEE ARE A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF JULY, 2016. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: 14/07/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ()*+ ,--. ./0 / DR, ITAT, AHMEDABAD 1+2345 / GUARD FILE. BY ORDER / . // ./0