M/s. Synpol Products Pvt.Ltd., Ahmedabad V. The Dy.CIT.,Circle-8, Ahmedabad

ITA 3710/AHD/2007

• Counselvise Citation: 371020514 RSA 2007
• Duration Of Justice: 5 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-07-2013
• Assessment Year: 1993-1994
• Appeal Filed On: 21-09-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: S N SOPARKAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI A. MOHAN ALANKAMONY, AM AND SHRI KUL B HARAT, JM) ITA NO.3710/AHD/2007 A. Y.: 1993-94 M/S. SYNPOL PRODUCTS PVT. LTD., 77, C. V. M.S. A. VASANT LTD., ODHAV, AHMEDABAD P. A. NO. AADCS 9255 P VS THE D. C. I. T., CIRCLE-8, AAYAKAR BHAVAN, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S.N. SOPARKAR, AR RESPONDENT BY SHRI J. P. JHANGID, SR.DR DATE OF HEARING: 25-07-2013 DATE OF PRONOUNCEMENT: 13-09-2013 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A)-XIV, AHMEDABAD IN APPEAL NO. CIT(A)-XIV/C.8/108-A/06-07 DATED 07-0 8-2007, FOR THE ASSESSMENT YEAR 1993-94, PASSED U/S 250 READ WITH S ECTION 271(1) ( C) OF THE INCOME TAX ACT. 2. THE ASSESSEE HAS RAISED TWO GROUNDS OF APPEAL WH EREIN GROUND NO.2 IS GENERAL IN NATURE AND DOES NOT SURVIVE FOR ADJUDICATION. THE LONE SURVIVING GROUND NO.1 IS REPRODUCED HEREIN UNDER:- 1. THE LD. CIT (A) ERRED IN LAW AND ON FACTS IN C ONFIRMING PENALTY LEVIED BY THE AO U/S 271(1) (C) BY THE AO OF RS.2,0 9,323/- THAT IS WHOLLY UNSUSTAINABLE IN LAW AND ON FACTS. BOTH THE LOWER AUTHORITIES HAVE FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAS NEITHER FURNISHED INACCURATE PARTICULARS NOR CONCEA LED ANY INCOME. THE PENALTY LEVIED BEING WITHOUT ANY MERITS AND JUS TIFICATION REQUIRES TO BE QUASHED. ITA NO.3710/AHD/2007 (AY 1993-94) M/S. SYNPOL PRODUCTS PVT. LTD. VS DCIT, CIR-8 AHMED ABAD 2 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF SYNTHETIC RESINS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 1993-94 ON 26-12-1993 ALONG WIT H TAX AUDIT REPORT IN FORM 3CA AND 3CD, AUDITED ACCOUNTS AND OTHER RELEVA NT DETAILS DECLARING TOTAL INCOME OF RS.64,15,510/-. THE CASE WAS PROCES SED U/S 143(1) (A) OF THE ACT RESULTING IN REFUND OF RS.8,10,588/- WHICH WAS ADJUSTED AGAINST THE DEMANDS OF EARLIER YEARS. FINALLY, ASSESSMENT ORDER IN THIS CASE WAS PASSED BY THE LEARNED AO U/S 143(3) OF THE ACT ON 2 5-03-1996 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.1,65,60,950/ - WHEREIN THE LEARNED AO MADE ADDITION OF RS.18,38,811/- ON ACCOUNT OF DIFFERENCE IN PRODUCTION EXPENSES AND RS.39,70,914/- ON ACCOUNT O F STOCK DIFFERENCE, BASED ON THE DOCUMENTS IMPOUNDED DURING THE PERIOD OF SEARCH CONDUCTED ON 30-07-1992 AND 31-07-1992 IN THE BUSIN ESS PREMISES OF THE ASSESSEE COMPANY AT ODHAV AND IN THE BUSINESS PREMI SES OF M/S. BLUE- BELL POLYMERS PVT. LTD. AT CHHATRAL. THEREAFTER, TH E DICT(OSD), CIR-8, AHMEDABAD VIDE HIS ORDER DATED 28-02-2007 IMPOSED P ENALTY OF RS.2,09,323/- U/S 271 (1) (C ) OF THE ACT FOR FURNI SHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON APPEAL BY THE ASSESSE E BEFORE THE LEARNED CIT(A), THE LEARNED CIT(A) SUSTAINED THE PE NALTY IMPOSED FOR RS.2,09,323/- BY THE LEARNED AO. THE RELEVANT FINDI NGS OF THE LEARNED CIT(A) ARE REPRODUCED HEREIN UNDER FOR REFERENCE: - 2.1 THE FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY FILED ITS RETURN SHOWING TOTAL INCOME OF RS.64,15,510/- AND T HE ASSESSMENT WAS COMPLETED ON 25-03-1993 DETERMINING TOTAL INCOM E AT RS.1,65,60,950, AFTER CONSIDERING VARIOUS SEIZED MA TERIALS FOUND DURING THE SEARCH. AFTER THE DECISION OF HON. ITAT, THE RESULTANT INCOME COMES TO RS.68,61,600/-. VIDE THIS ORDER, TH E ITAT HAS SUSTAINED THE ADDITION OF RS.18,38,811/- AGAINST TH E SUPPRESSED PRODUCTION, WHICH WAS ON ACCOUNT OF DIFFERENCE BETW EEN THE EXCISE REGISTER AND SEIZED PRODUCTION RECORDS. HOWEVER, AF TER GIVING TELESCOPIC BENEFIT TO THE EXTENT OF RS.14,74,772/-, THE ADDITIONAL INCOME BROUGHT TO TAX ON ACCOUNT OF EVIDENCE DURING THE SEARCH WAS ITA NO.3710/AHD/2007 (AY 1993-94) M/S. SYNPOL PRODUCTS PVT. LTD. VS DCIT, CIR-8 AHMED ABAD 3 FINALLY COMPUTED AT RS.3,64,039/-. THE AO HAS ACCOR DINGLY LEVIED PENALTY IN RESPECT OF THIS ADDITION. 2.2 THE APPELLANT HAS SUBMITTED, DURING THE COURSE OF APPELLATE PROCEEDINGS, THAT THE PENALTY U/S. 271 (1) (C) IS N OT LEVIABLE IN ITS CASE FOR THE FOLLOWING REASONS:- I) PENALTY PROCEEDINGS U/S. 271 (1) (C) IS BARRED B Y LIMITATION II) THE AO HAS NOT CONSIDERED THE SUBMISSIONS OF TH E APPELLANT & HAS LEVIED THE PENALTY WITHOUT GIVING A NY OPPORTUNITY TO THE APPELLANT. III) THE ADDITION MADE WAS ONLY ON ESTIMATE BASIS A ND FOR THIS, PENALTY IS NOT LEVIABLE. IN SUPPORT OF ITS CONTENTIONS, THE APPELLANT PLACED RELIANCE ON THE FOLLOWING CASE LAWS:- I) NATIONAL TEXTILES V. CIT, 114 TAXMAN 203 (GUJ) II) NAVJIVAN OIL MILLS V. CIT, 252 ITR 417 (GUJ) 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION OF THE APPELLANT AND I AM NOT INCLINED TO AGREE WITH T HE VIEWS OF THE APPELLANT. THE HON. ITATS ORDER DATED 30-12-2005 WAS RECEIVED IN THE OFFICE OF THE CIT&, ABAD -4, AHMEDABAD ON 9/8/ 2006 AND HENCE THE ORDER PASSED ON 28 TH FEB., 2007 IS WELL WITHIN THE TIME. HENCE, IT IS NOT BARRED BY LIMITATION. THE AO HAS G IVEN SUFFICIENT OPPORTUNITY TO THE APPELLANT BEFORE LEVYING THE PEN ALTY, AS IS EVIDENT FROM THE PENALTY ORDER ITSELF. THE ADDITION IS NOT BASED ON ESTIMATE, BUT THERE WERE VARIOUS PAPERS FOUND DURING THE SEAR CH, WHICH SHOWED THAT THE APPELLANT WAS SUPPRESSING THE PRODU CTION, AS THERE WAS DIFFERENCE BETWEEN EXCISE RECORDS AND THE SEIZE D RECORDS AND ALSO THERE WERE EXCESS STOCK FOUND OF RAW MATERIALS AND CHEMICALS. THE ADDITIONS WERE BASED ON THESE EVIDENCES AND NOT MERELY ON ESTIMATE BASIS. HENCE, IT IS APPARENT FROM THE FACT S MENTIONED IN THE ASST. ORDER AND THE ORDER PASSED BY THE HON. ITAT I N QUANTUM PROCEEDINGS THAT THE APPELLANT HAS SUPPRESSED THE P RODUCTION. I, THEREFORE, HOLD THAT THE AO WAS QUITE JUSTIFIED IN LEVYING THE PENALTY U/S. 271( C) OF AMOUNTING TO RS.2,09,323/-. THE CAS E LAWS AS RELIED UPON BY THE APPELLANT WOULD IN NO WAY HELPFUL TO TH E APPELLANT, AS THE FACTS IN THOSE CASES ARE QUITE DISTINCT. THE AC TION OF THE AO IS HEREBY UPHELD AND THE PENALTY IS CONFIRMED. ITA NO.3710/AHD/2007 (AY 1993-94) M/S. SYNPOL PRODUCTS PVT. LTD. VS DCIT, CIR-8 AHMED ABAD 4 3.1 AGAINST THESE FINDINGS OF THE LEARNED CIT(A), T HE ASSESSEE IS IN APPEAL BEFORE US. 3.2 DURING THE COURSE OF HEARING BEFORE US, THE LE ARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW W HILE AS THE LEARNED DR RELIED ON THE ORDERS REVENUE. 4. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT ASSESSEES Q UANTUM APPEAL BEFORE THE TRIBUNAL IN ITA NO.5299/AHD/1996 [ALONG WITH IT A NO.5019/AHD/1995, 5298/AHD/1996, ITA NO.4824/1995 AND CO NO.10/AHD/20 00 PAPER BOOK PAGE 04 TO 34], THE TRIBUNAL HAD SUSTAINED THE ADDI TION FOR RS.3,64,039/- WITH RESPECT TO ADDITION MADE DUE TO DIFFERENCE IN PRODUCTION SHEET AND EXCISE RECORDS. FROM THE FACTS OF THE CASE, WE FIN D THAT THIS DISCREPANCY AROSE BECAUSE PROPER RECONCILIATION OF RECORDS COUL D NOT BE ARRIVED AT BY THE ASSESSEE DUE TO THE CUMBERSOME PROCESS OF PRODU CTION. THEREFORE, RELYING ON THE DECISION CITED BY THE ASSESSEE, SUPR A, WE ARE OF THE CONSIDERED VIEW THAT THIS IS NOT A FIT CASE FOR LEV Y OF PENALTY. ACCORDINGLY, WE HEREBY DELETE THE PENALTY LEVIED BY THE LEARNED AO WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-09-2013 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA DEKA/ DEKA/ DEKA/ DEKA/- -- - ITA NO.3710/AHD/2007 (AY 1993-94) M/S. SYNPOL PRODUCTS PVT. LTD. VS DCIT, CIR-8 AHMED ABAD 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 12-08-13/16-08-13 DIRECT ON COMPUTER 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 12-08-13/16-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DISPATCH OF THE ORDER: