ACIT (OSD) RG 1, MUMBAI V. ALKA INDIA LTD, MUMBAI

ITA 3939/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7569 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARTHA SARATHI NAIK
• Assessee Lawyers: ADITYAMAHESWARI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI. D.K. AGARWAL (JM) AND SHRI. N.K. BILLA IYA (AM) ITA NO.3939/MUM/2011 ASSESSMENT YEAR: 2002-03 ITO 8(1)(1), ROOM NO.259A, AAYAKAR BHAVAN, MUMBAI 400 020. VS. ALKA INDIA LTD., E-211, CRYSTAL PLAZA, OPP. INFINITE MALL, NEW LINK ROAD, ANDHERI (W), MUMBAI 400 053 . PAN: AABCA6702F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARTHASARATHI NAIK RESPONDENT BY : ADITYA MAHESWARI DATE OF HEARING: 14.3.2012 DATE OF PRO NOUNCEMENT: 21-3-2012 O R D E R PER N.K. BILLAIYA, A.M: THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT (A)-VI, AHMEDABAD, DATED 3.3.2011 FOR THE ASSESSMENT YEAR 2 002-03. 2. THE ONLY GRIEVANCE RAISED BY THE REVENUE IS DELE TION OF THE PENALTY BY THE LD. CIT (A) TO THE TUNE OF RS. 6,42,676/- U/S 2 71(1)(C) OF THE ACT. FACTS AT THE TIME OF THE ASSESSMENT U/S 143 (3) R.W .S. 145(3) OF THE ACT VIDE ORDER DATED 23.3.2005: 3. THE RETURN OF INCOME WAS FILED ON 31.10.2002 AT TOTAL LOSS OF RS. 11,69,788/- AND THE SAME WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICES WERE ISSUED. DURING THE COURSE OF ASSESSMENT PROCE EDINGS ASSESSEE WAS PUT CERTAIN QURIES RELATING TO SOME OBSERVATIONS MADE B Y THE AUDITORS IN THE NOTES 2 ITA NO.3939/MUM/2011 ALKA INDIA LTD., FORMING PARTS OF ACCOUNTS OF 3CD REPORT. THE ASSE SSEE WAS ALSO REQUIRED TO PRODUCE BILLS / VOUCHERS, STOCK REGISTERS FOR VERIF ICATION. THE ASSESSEE FAILED TO COMPLY WITH THE REQUISITION OF THE ASSESSING OFFICE R. THE ASSESSING OFFICER ALSO QUESTIONED THE GENUINENESS OF CERTAIN PURCHASES AND SALES AND AFTER CONSIDERING THE EXPLANATIONS AND SUBMISSIONS OF THE ASSESSEE RE JECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND DISALLOWED THE LOSS AS CLAIMED BY THE ASSESSEE TO THE TUNE OF RS. 46,52,532/- AND TRANSFORMED THE NET LOSS RET URNED INTO TOTAL ASSESSED INCOME AT A POSITIVE FIGURE OF RS. 34,43,960/-. TH E TOTAL DISALLOWANCES OF RS. 46,52,532/- WAS MADE BY ESTIMATING PURCHASE PRICE A ND SALES PRICE OF VARIOUS ITEMS . THE ASSESSMENT WAS COMPLETED U/S 143[3] R.W.S 145[3] OF THE ACT . AT THE FIRST APPELLATE STAGE THE LD. CIT (A) AFTER C ONSIDERING THE FACTS OF THE CASE , ESTIMATED THE GP RATE @ 6% AND DELETED THE ADDITION OF RS. 30,62,255/-. AGAINST THIS ORDER BOTH THE REVENUE AND THE ASSESSE E WENT IN APPEAL BEFORE THE ITAT, AHMEDABAD. ITAT, AHMEDABAD A BENCH VIDE IT S ORDER ITA NO.1212 & 1447/AHD/2006 (AY: 2002-03) DATED 16 TH MARCH, 2009 DID NOT FIND ANY ERROR IN THE ESTIMATION OF GP @ 6% AND ACCORDINGLY DISMISSED BOTH THE APPEALS , HOLDING THAT THE ESTIMATION MADE BY THE LD CIT [ A ] WAS A PPROPRIATED ON THE FACTS AND CIRCUMSTANCES OF THE CASE . 4. PURSUANT TO THIS ORDER OF THE ITAT THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. ACCORDINGLY NOTICES WERE SERVED UPON THE ASSESSEE. IN THE PENALTY PROCEEDINGS THE ASSESSEE STRONGLY OBJECTED TO THE NOTICE AND SUBMITTED THAT NEITHER IT HAS CONCEALED ANY INCOME NOR IT HAS FILED 3 ITA NO.3939/MUM/2011 ALKA INDIA LTD., ANY INACCURATE PARTICULARS AND MERELY BECAUSE IT WA S NOT IN A POSITION TO FURNISH STOCK REGISTER / BILLS / VOUCHERS , IT CANNOT BE S AID THAT IT HAS CONCEALED INCOME LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. THE A SSESSEE FURTHER CONTENDED THAT WHATEVER DISCREPANCIES WERE FOUND BY THE ASSESSING OFFICER AT THE TIME OF THE ASSESSMENT , ALL THAT HAVE BEEN TAKEN CARE OF BY ES TIMATING THE PROFIT WHICH WAS PEGGED @ 6% BY THE LD. CIT (A) AND WHICH ORDER OF T HE LD. CIT (A) HAS BEEN CONFIRMED BY THE ITAT. 5. HOWEVER, THE CONTENTION OF THE ASSESSEE DID NOT FIND ANY FAVOUR FROM THE AO. HE WAS CONVINCED THAT THE ASSESSEE HAS IN FACT FURNISHED INACCURATE PARTICULARS OF INCOME / CONCEALED INCOME TO THE E XTENT OF RS. 18,00,215/- AND WENT ON TO LEVY PENALTY OF RS. 6,42,676/- WHICH IS 100% OF THE TAX SOUGHT TO BE EVADED , U/S 271(1)(C) OF THE ACT. 6. AGGRIEVED BY THIS ORDER, ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT (A) AND REITERATED ITS STAND AS TAKEN BEFORE THE ASSESS ING OFFICER. THE LD. CIT (A) WAS CONVINCED THAT PENALTY ON ESTIMATED ADDITION TO GP RATE SHOULD NOT BE LEVIED AND ACCORDINGLY CANCELLED THE PENALTY. 7. WE HAVE CONSIDERED THE FACTS BEFORE THE LOWER AU THORITIES, HEARD THE RIVAL SUBMISSIONS. NOWHERE IT HAS BEEN DISPUTED THAT THE ASSESSING OFFICER ESTIMATED THE PROFIT AT THE ASSESSMENT STAGE. THE LD. CIT (A ) RE-ESTIMATED THE PROFIT AT THE APPELLATE STAGE AND THE ITAT CONFIRMED THE ESTI MATION MADE BY THE LD. CIT (A). THIS BEING A CASE OF MERELY AN ESTIMATION OF PROFIT AND THE LD. CIT (A) HAS CANCELLED THE PENALTY ON A VALID GROUND THAT PENALT Y FOR CONCEALMENT CANNOT BE 4 ITA NO.3939/MUM/2011 ALKA INDIA LTD., LEVIED ON ESTIMATED ADDITIONS. WE DO NOT FIND ANY INFIRMITY OR ERROR IN THE ORDER OF THE LD. CIT (A). ORDER OF THE LD. CIT (A) IS CO NFIRMED AND THE APPEAL BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF MARCH, 2012. SD/- SD/- (D.K. AGARWAL) (N.K. BILLA IYA) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATE : 21-3-2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR A BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI