M/s. PMS Diesels, Phagwara V. Addl. Commissioner of Income Tax, Phagwara

ITA 361/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5722 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-03-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TARUN BANSAL LD
• Keywords: Gross profit estimation

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.361(ASR)/2017 ASSESSMENT YEAR:2006-07 M/S PMS DIESELS VILLAGE:- JAMALPUR G.T. ROAD, PHAGWARA PAN:AAAFP9505H VS. ASST. CIT, PHAGWARA RANGE PHAGWARA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARUN BANSAL (LD. ADV. ) RESPONDENT BY: SH. CHARAN DASS (LD. DR) DATE OF HEARING: 21.03.2018 DATE OF PRONOUNCEMENT: 22.03.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORD ER DATED 03.04.2017 PASSED BY THE LD. CIT(A)-2, JALANDHAR, U/S 250(6) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CONFIRMING PENALTY, LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. ITA NO.361/ASR/2017 (A.Y.2006-07) M/S. PMS DIESELS, PHAGWARA VS. ACIT 2 2. THAT THE LD. AO AS WELL AS CIT(A) HAD GRAVEL Y ERRED IN LAW AND FACTS OF THE CASE BY MOST ARBITRARILY IMPOSING PENALTY U/S 271(1)(C) OF THE ACT IN THE HANDS OF THE ASSESSEE F IRM W.R.T. THE ALLEGE UNCLAIMED FICTITIOUS LIABILITIES, BRUSHING A SIDE THE EXPLANATION OF THE ASSESSEE FIRM IN THE LIGHT OF TH E SETTLED POSITION OF LAW AND HAS ALSO NOT SEEN THE PROPOSITI ON OF LAW U/S 41(1). 3. THAT THE LD. AO HAS NOT ESTABLISHED THE FOLLOWI NG CONDITIONS, BEFORE IMPOSING PENALTY, HENCE, THE IMP OSITION OF PENALTY IS BAD-IN-LAW:- (I) AO NOT ESTABLISHED THAT LIABILITY DID NOT EXIST. (II) AO NOT ESTABLISHED THAT A PARTICULAR EXPENDITURE IS NOT JUSTIFIABLE FROM A COMMERCIAL POINT OF VIEW AND NOT BROUGHT ON RECORD ANY EVIDENCE OF CONCEALMENT. 4. THAT THE LD. AO HAS HELD THE LIABILITY AS BOG US, THEN THE QUESTION OF REMISSION OR CESSION THEREOF DOES NOT A RISE. 5. THAT THE LD. AO HAS WRONGLY CONFIRMED THE PENALT Y ON ADDITION MADE ON BROUGHT FORWARD BALANCE AND THERE IS NO MENSREA. 6. THAT THE LD. AO, AS WELL AS, LD. CIT(A) HAS WRON GLY CONFIRMED THE PENALTY U/S 271(1)(C) ON ESTIMATED GP RATE, AS CALCULATED BY LD. A.O IN QUANTUM ORDER. 7. THAT THE ORDER OF LD. A.O IS BAD IN LAW, AS WELL AS, ON FACTS. 8. THAT APPELLANT CRAVES TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DIS POSED OFF. 9. THAT THE ORDER MAY KINDLY BE MODIFIED OR ANOTHER CONSEQUENTIAL RELIEF BE ALLOWED. IN ADDITION TO THE AFORESAID GROUNDS, THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND OF APPEAL WHICH IS REPRODU CED HEREIN BELOW. THAT NO PENALTY CAN BE IMPOSED/CONFIRMED U/S 271(1 ) (C), WHEN THE ADDITIONS ON WHICH THE PENALTY IS IMPOSED ARE ALREADY DELETED BY HONBLE ITAT VIDE ORDER DATED 30 .08.2017 IN THE CASE OF APPELLANT, IN QUANTUM ORDER. ITA NO.361/ASR/2017 (A.Y.2006-07) M/S. PMS DIESELS, PHAGWARA VS. ACIT 3 3. THE BASIC CONTENTION OF THE LD. AR IS THAT ALTHOUGH THE PENALTY WAS IMPOSED BY THE ASSESSING OFFICER, WHICH WAS PA RTLY CONFIRMED UNDER THE HEAD OF UNCLAIMED FICTITIOUS/BOGUS LIABILITIES OF RS.5,44,568/- (RS/.11,59,663-6,15,095) AND SECONDLY ADDITION MADE ON ACCOUNT OF LOW GROSS PROFIT RATE (RS.4,73,392/), BY REDUCING THE PENALTY AMOUNT TO RS.3,63,255/- OUT OF TOTAL PENALTY OF RS.4,99,720/- I MPOSED BY THE AO U/S 271(1) (C) OF THE I.T. ACT. THE LD. AR HAS D RAWN OUR ATTENTION TO THE ORDER PASSED BY THE CO-ORDINATE BENCH AT AMRITSAR, IN WHICH THE ADDITION OF RS.11,59,663/- QUA UNCLAIMED/FICTITIOUS LIABILITIES AND ADDITION OF RS.4,7 3,392/- ON ACCOUNT OF LOW GROSS PROFIT RATE HAS ALREADY BEEN DELETE D VIDE ITS ORDER DATED 30 TH AUGUST, 2017. WE HAVE PERUSED THE ORDER PASSED IN ITA NO.114(ASR)/2014 ALONG WITH OTHER ITAS BY THE CO-ORDINATE BENCH AT AMRITSAR, THE CO-ORDINATE BENCH V IDE PARA NO.15 OF ITS ORDER DATED 30.08.2017 DELETED THE ADD ITION OF RS.11,58,963/- MADE BY THE ASSESSING OFFICER U/S 41(1) OF THE ACT AND IN PARA NO.20 DELETED THE ADDITION OF RS.4,73 ,392/-. THE SAID ORDER PASSED BY THE CO-ORDINATION BENCH AT AMRITSAR IS NOT UNDER CHALLENGE BEFORE ANY OTHER HIGHER COURTS AND EV EN OTHERWISE, THE LD. DR HAS REFUTED THE SAID CLAIM OF TH E ASSESSEE, THEREFORE, WE ARE OF THE VIEW THAT ONCE THE QUANTUM ORDER HAS BEEN QUASHED AND/OR THE ADDITION HAS BEEN DELETED, IN THAT ITA NO.361/ASR/2017 (A.Y.2006-07) M/S. PMS DIESELS, PHAGWARA VS. ACIT 4 EVENTUALITY NO PENALTY CAN BE LEVIED AND/OR SURVIVE, HENCE, WE ORDER FOR DELETION OF THE PENALTY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 .03.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:22.03.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S PMS DIESELS, PHAGWARA (2) THE ASST. CIT, PHAGWARA (3) THE CIT(A)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER