M/s. Mada Mal Tilok Chand, Maur V. The Income-tax Officer, Bathinda

ITA 384/ASR/2012

• Counselvise Citation: 38420914 RSA 2012
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 03-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A K JUNEJA ITP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.384(ASR)/2012 ASSESSMENT YEAR:2008-09 PAN :AAIFM5796K M/S. MADA MAL TILOK CHAND, VS. INCOME TAX OFFICER, MAUR. WARD 1(2), BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. A.K. JUNEJA, ITP RESPONDENT BY:SH. TARSEM LAL, DR DATE OF HEARING: 10 /12/2012 DATE OF PRONOUNCEMENT:12/12/2012 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), BATHINDA, DATED 25.07.2012 FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LD. CIT(A) BATHINDA CONFI RMING THE PENALTY U/S 271(1)(C) IS AGAINST FACTS AND LAW. 2. THAT THE LD. CIT(A) ERRED ON FATS AND LAW IN CON FIRMING THE PENALTY U/S 271(1)(C) ON ACCOUNT OF THE REASONS THA T THE LD. AO HAS GIVEN THE FINDING IN THE BODY OF THE ASSESSMENT ORDER ITSELF THAT WHILE GOING THROUGH THE COPY OF TRADING ACCOUN T OF SARSON ITA NO.384(ASR)/2012 2 & BINOLA WHICH WAS REPRODUCED FROM THE BOOKS OF ACC OUNT AND FILED ALONGWITH THE RETURN OF INCOME, IT WAS FOUND THAT THE ASSESSEE HAD ALLEGEDLY UNDERVALUED THE CLOSING STOC K. THERE IS NO FINDING IN THE ASSESSMENT ORDER BY THE AO THAT T HE ALLEGED UNDER VALUATION OF CLOSING STOCK WAS DETECTED FROM SOME DOCUMENTS WHICH WERE NOT PART OF THE BOOKS OF ACCOU NT/RETURN OF INCOME. 3. ALTERNATIVELY, WITHOUT PREJUDICE TO THE ABOVE SA ID GROUND OF APPEAL THE PENALTY ORDER U/S 271(1)(C) DESERVES TO BE QUASHED: I) THE LD. AO INITIATED THE PENALTY PROCEEDINGS ON BOT H THE GROUNDS THAT THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME/FURNISHED INACCURATE PARTICULARS OF INCOME, WHICH SHOWS THAT NO PROPER OPPORTUNITY OF HEARING WAS GIV EN TO THE ASSESSEE AND THE LD. AO WAS NOT SURE THAT ON WH ICH GROUND HE HAS INITIATED THE PENALTY PROCEEDING. II) THE LD. AO WHILE IMPOSING PENALTY U/S 271(1)(C) HAS GIVEN THE FINDING THAT THE ASSESSEE HAD CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCO ME WHICH FURTHER SHOWS THAT THE AO WAS NOT SURE EVEN W HILE IMPOSING PENALTY U/S 271(1)(C) REGARDING THE CHARGE ON ACCOUNT OF WHICH PENALTY U/S 271(1)(C) WAS IMPOSED. OR ANY OTHER GROUND WHICH MAY BE TAKEN AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO IMPO SED PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 ON AC COUNT OF UNDER-VALUATION OF CLOSING STOCK.. THE UNDER VALUATION WAS DONE AT RS.1,20,937/- IN SARSON ACCOUNT AND RS.44,500/- IN BINOLA ACCOUNT. THE SAID PENALTY WAS CONFIRMED BY THE LD. CIT(A) SINCE THE ASSESSEE HAD NOT SUBMIT TED ANY EXPLANATION FOR THE UNDER-VALUATION OF THE CLOSING STOCK. THE LD. C IT(A) RELYING UPON THE ITA NO.384(ASR)/2012 3 DECISIONS OF VARIOUS COURTS OF LAW ACCORDINGLY CON FIRMED THE PENALTY LEVIED BY THE A.O. 3. THE LD. COUNSEL FOR THE ASSESSEE, SH. A.K. JUNEJ A, ITP ARGUED AND RELIED UPON THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC) A N ALSO ON THE DECISION OF CIT VS. MANU ENGINEERING WORKS 122 ITR 306 (GUJ .). HE FURTHER ARGUED THAT THE LD. CIT(A) HAS DIRECTED THE AO TO READJUST THE INCOME OF THE ASSESSEE FOR THE FOLLOWING YEAR WITH THE IMPUGNED ADDITION OF RS.1,65,438/- BEING THE ADDITION ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK OF BINOLA AND SARSON. THEREFORE, HE ARGUED THAT THERE IS NO C ONCEALMENT OF PENALTY AND THE PENALTY SO LEVIED BE CANCELLED IN VIEW OF HIS A RGUMENTS AND DECISIONS RELIED UPON. 4. THE LD. DR, ON THE OTHER HAND, ARGUED AT THE OU TSET RELYING UPON EXPLANATION -1 & 2 TO SECTION 271(1)(C) OF THE ACT THAT THE ASSESSEE HAS FAILED TO OFFER ANY EXPLANATION AND HAS OFFERED EXP LANATION WHICH HAS NOT BEEN FOUND SATISFACTORY BY THE AO. HE INVITED OUR A TTENTION TO PAGE 1 & 2 OF AOS ORDER WHERE THE ASSESSEE HAS SHOWN OPENING STO CK, PURCHASES, SALES AND CLOSING STOCK IN THE FORM OF TRADING ACCOUNT, W HICH DOES NOT SHOW ANY PROFIT WHEREAS THE OPENING STOCK HAS BEEN VALUED @ 2022/10, PURCHASE HAS BEEN DECLARED BY THE ASSESSEE @ 1990/- AND SALES HA VE BEEN MADE @ 2426/- ITA NO.384(ASR)/2012 4 WHICH IS EVIDENT AT PAGE 2 OF AOS ORDER. THESE FAC TS ARE NOT DENIED BY THE ASSESSEE AND EVEN BY THE LD. AR. THEREFORE, DEFINIT ELY THERE IS ELEMENT OF PROFIT WHICH HAS NOT BEEN DECLARED BY THE ASSESSEE. HAD THE ACCURATE PROFIT BEEN DECLARED THERE WOULD HAVE BEEN AN INCREASE IN THE CLOSING STOCK, WHICH HAS NOT BEEN DECLARED BY THE ASSESSEE. ACCORDINGLY, THERE IS UNDER VALUATION OF CLOSING STOCK. THEREFORE, THE ARGUMENTS MADE & C ASES RELIED UPON BY THE LD. AR WILL NOT HELP THE ASSESSEE, SINCE NO EXPLAN ATION IN THIS REGARD HAS BEEN OFFERED BY THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ARGUMENTS MADE BY THE LD. DR APPEARS TO BE CONV INCING FOR THE FACTS THAT THE ASSESSEE IN THE TRADING ACCOUNT HAS NOT SH OWN ANY PROFIT AS PER FACTS AVAILABLE ON RECORD AND THE ASSESSEE HAS EARNED PRO FIT OUT OF THE SAID PURCHASE AND SALE. IF THE ASSESSEE HAD EARNED PROFI T AS MENTIONED HEREINABOVE AS PER PAGE 1 & 2 OF AOS ORDER THEN T HERE WOULD HAVE BEEN INCREASE IN THE CLOSING STOCK. ACCORDINGLY, THE ASS ESSEE HAS SHOWN UNDER VALUATION OF CLOSING STOCK WHICH FINDINGS OF THE AO ARE CORRECT FINDINGS. THE LD. COUNSEL FOR THE ASSESSEE EVEN COULD NOT OFFER A NY EXPLANATION BEFORE US IN THIS REGARD WHEN SPECIFICALLY ASKED TO OFFER EXP LANATION BEFORE THIS BENCH. IN THE FACTS AND CIRCUMSTANCES, IT IS A CLEAR CUT C ASE OF CONCEALMENT OF INCOME AND FOR WHICH THE LD. CIT(A) HAS VERY CATEGO RICALLY GIVEN HIS ITA NO.384(ASR)/2012 5 FINDING. THE CASES RELIED UPON BY THE LD. COUNSEL F OR THE ASSESSEE WILL NOT HELP THE ASSESSEE. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY CONFIRMED THE PENALTY LEVIE D BY THE A.O. THUS, THE APPEAL OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.384(ASR)/2012 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH DECEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12 TH DECEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. MADA MAL TILOK CHAND, MAUR 2. THE ITO 1(2), BATHINDA. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.