THE INTERNATIONAL MINERAL INDUSTRIES LTD, MUMBAI V. ITO WD 9(3)(3), MUMBAI

ITA 410/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93110 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 18-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-01-2013
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBEY
• Assessee Lawyers: A L SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.410/M/2013 (AY: 2008 - 2009 ) THE INTERNATIONAL MINERAL INDUSTRIES LTD., 601, 6 TH FLOOR, SANNA BLDG, LINKING ROAD, SARASWATI CHOWK, SANTACRUZ (W), MUMBAI 54. / VS. THE INCOME TAX OFFICER, WARD 9(3)(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AAACT6608A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI A.L. SHARMA / RESPONDENT BY : SHRI SACHCHIDANAND DUBEY, DR / DATE OF HEARING : 11.06.2015 / DATE OF PRONOUNCEMENT :30 .06.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 14.1.2013 IS AGAINST THE ORDER OF THE CIT (A) - 20, MUMBAI DATED 19.11.2012 FOR THE ASSESSMENT YEAR 2008 - 09. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER HAS ERRED IN PASSING THE ORDER U/S 271(1)(C) ON 23.6.2011 WITHOUT TAKING THE PRIOR APPROVAL OF THE ADDL. CIT AND THUS, THE IMPUGNED ORDER IS NULL & VOID AND THE SAME IS LIABLE TO BE QUASHED / ANNULLED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD AO HAS ERRED IN IMPOSING A PENALTY OF RS. 3,04,360/ - U/S 271(1)(C) OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MINING & MANUFACTURING OF MARBLE SLABS, TILES AND ALLIED PRODUCTS. THERE WAS AN ACTION U/S 133 A OF THE ACT AND FOUND DISCREPANCY IN STOCK. AS PER THE DEPARTMENTAL VALUATION, THERE WAS A STOCK TO THE TUNE OF RS. 42,73,512/ - . IN THIS REGARD, ASSESSEE EXPLAINED THAT THE SHORTAGE IS DEEMED TO NON - CONSIDERATION OF SOME STOCK LYING UNDER WATER IN THE MI NES. OTHERWISE, IT IS THE STAND OF THE 2 ASSESSEE THAT THERE IS NO SUPPRESSION OF STOCK. NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, AO PROCEEDED TO MAKE AN ADDITION APPLYING THE GP RATE OF 34% OF THE SAID SHORTAGE THAT WORKS OUT TO 17,18,460/ - . A GGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) REDUCED THE SAID ADDITION TO RS. 10,14,532/ - ON THE ESTIMATION BASIS. NO APPEAL WAS FILED BY THE ASSESSEE ON THE MERITS BEFORE THE TRIBUNAL ON THE SAID CONFIRMING OF RS. 10,14,532/ - . ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS AND LEVIED PENALTY OF A SUM OF RS. 3,04,360/ - U/S 271(1)(C) OF THE ACT ON THE SAID INCOME OF RS. 10,14,532/ - VIDE ORDER DATED 23.6.2011. CIT (A) CONFIRMED THE SAME VIDE THE ORDER DATED 19.11.2012. AGGRIEVED, ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE A SSESSEE NARRATED THE ABOVE FACTS AND MENTIONED THAT THE SHORTAGE OF STOCK IS A MATTER OF DISPUTE. HE FURTHER SUBMITTED THAT D ESPITE THE EXPLANATION GIVEN BY THE ASSESSEE, AO REJECTED THE EXPLANATION AND LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT WITHOUT G OING TO THE DEBATABILITY OF THE ISSUE OF AD - HOCISM AND THE ESTIMATIONS ADOPTED BY THE AO AND THE CIT (A), THE PENALTIES ARE CONFIRMED IN THE MECHANICAL MANNER. LD COUNSEL ALSO SUBMITTED THAT THE OFFICERS HAVE NOT BROUGHT ON TO THE RECORDS ANY COMPARABLE C ASES OR INCRIMINATING MATERIAL ABOUT THE SAID SUPPRESSION OF STOCK. IN THESE CIRCUMSTANCES AND ON THE FACTS OF THE CASE, THE PENALTY LEVIED MAY BE DELETED. 5. ON THE OTHER HAND, LD DR DUTIFULLY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE H EARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED ON TO THE RECORD. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RECORD, WE FIND THAT THERE IS NO ASCERTAINABILIY OF ALLEGATION OF SUPPRESSI ON OF STOCK, WHICH IS THE CORE ISSUE OF DISPUTE. THE GP RATE OF 34% ADOPTED BY THE AO, IS NOT BORNE ON ANY INCRIMINATING MATERIAL IMPOUNDED DURING THE SURVEY ACTION. CIT (A) FURTHER REDUCED THE GP RATE TO RS. 10,14,532/ - AGAIN WITHOUT ANY TANGIBLE MATER IAL, WHICH ARE INCRIMINATING IN THE NATURE. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE BENEFIT OF DOUBT SHOULD BE GIVEN TO THE ASSESSEE. FURTHER, WE FIND THE EXISTENCE OF DEBATABILITY ON THE ISSUES RAISED BY THE 3 AO, THIS IS A SETTLED ISSUE THA T THE PENALTY SHOULD NOT BE LEVIED U/S 271(1)(C) OF THE ACT ON THE ISSUES WHERE THERE IS A SCOPE DEBATABLITY AND UNCERTAINTY. AS SUCH, THE ESTIMATED INCOME DO NOT ATTRACT PENAL PROVISIONS U/S 271(1)(C) OF THE ACT. ACCORDINGLY, WE FIND IT IS NOT A FIT CAS E FOR LEVY OF PENALTY. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2015. SD/ - SD/ - (I.P. BANSAL) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 30 .6 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI