SMT. SANGEETA JAIN, Jaipur V. ITO, Jaipur

ITA 424/JPR/2013

• Counselvise Citation: 42423114 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 22-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Section: 27; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 424/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 SMT. SANGEETA JAIN 2014, PITALIYON KA CHOWK JOHRI BAZAR, JAIPUR CUKE VS. THE ITO WARD- (1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACEPJ 3318 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL , CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28 /10/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 27-02-2013 FOR THE ASSESSME NT YEAR 2007-08 WHEREIN THE SOLITARY GROUND OF THE ASSESSEE IS AS U NDER:- THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) WITH R EFERENCE TO ADDITION OF RS. 1,01,723/- UPHELD ON ESTIMATED B ASIS. ITA NO. 424/JP/2013 SMT. SANGEETA JAIN VS. ITO, WARD- 1 (1), JAIPUR . 2 2.1 BRIEF FACTS LEADING TO THIS PENALTY ARE THAT TH E ASSESSEE DID NOT PRODUCE ANY BOOKS OF ACCOUNT OR RECORD BEFORE THE A O IN SPITE OF THE REPEATED OPPORTUNITIES. THE ASSESSMENT WAS FRAMED U /S 144 OF THE ACT RESULTING INTO AN ADDITION OF RS. 5,89,175/-. THE A O IMPOSED PENALTY OF RS. 1,97,288/- U/S 271(1) OF THE ACT. 2.2 IN QUANTUM APPEAL, THE LD. CIT(A) REDUCED THE A DDITION TO THE EXTENT OF RS. 1,01,723/- BY FOLLOWING OBSERVATIONS . 4.3 I HAVE CAREFULLY PERUSED THE ORDER OF THE AO AND THE SUBMISSIONS OF THE A.R. AND THE ORDER OF THE LD. CI T(A). ON PERUSAL OF THE SAME, IT IS SEEN THAT THE APPELLANT WAS ENGAGED IN THE BUSINESS OF ISSUING BOGUS BILLS FOR COMMISSION AS P ER HER OWN ADMISSION. SHE DID NOT MAINTAIN THE BOOKS OF ACCOUN T TO JUSTIFY CHARGING OF COMMISSION WHICH WAS MUCH BELOW THE MAR KET. DURING THE YEAR, SHE HAD GIVEN ENTRIES WORTH RS. 5, 25,55,559/- AS PER THE AFFIDAVIT FILED DURING THE COURSE OF APPELL ATE PROCEEDINGS IN HER CASE IN QUANTUM APPEAL FOR ASSESSMENT YEAR 2007 -08. THE LD. CIT(A) PASSED AN ORDER ITA NO. 366/09-01 DATED 31-0 1-2012 IN THE QUANTUM APPEAL. SHE OBSERVED IN HER ORDER THAT THE VOLUME OF TRANSACTIONS WAS VERY MUCH AND COMMISSION WAS TAKEN ON BOGUS SALES OF RS. 5,25,55,559/-, SHE HAD VERY LIMITED SO URCES OF INCOME AND SHE WAS A PERSON OF LIMITED FINANCIAL MEANS, TH ERE WAS NO REASON FOR HER TO CHARGE A RATE LESSER THAN THE MAR KET RATE AND TO THAT EXTENT THE CLAIM MADE BY HER IN THE AFFIDAVIT REGARDING RATE OF COMMISSION CHARGED APPEARED TO BE SELF-SERVING. ON THE BASIS OF THESE OBSERVATIONS AN ADDITION ON ACCOUNT OF COMMI SSION FOR PROVIDING BOGUS ENTRIES OF RS. 1,01,723/- WAS CONFI RMED. GIVEN THE ABOVE FACTS, IT IS SEEN THAT THE CASE LAW S RELIED ON BY THE LD. AR ARE DISTINCT FROM THE FACTS OF THE CA SE OF THE APPELLANT. THE CASE OF THE APPELLANT IS NOT A SIMPLE MATTER OF ESTIMATION OF INCOME, INSTEAD IT IS A CASE OF CREATING FRAUDULENT DOCUMENTS AND ITA NO. 424/JP/2013 SMT. SANGEETA JAIN VS. ITO, WARD- 1 (1), JAIPUR . 3 PROVIDING THESE BOGUS ENTRIES TO AID AND ABET OTHER PERSONS IN EVADING TAXES. THE APPELLANT HAS SHOWN INCOME FROM BUSINESS OF SALE AND PURCHASE OF GEMS AND JEWELLERY WHEREAS HER REAL INCOME WAS FROM COMMISSION BY PROVIDING ACCOMMODATION ENTR IES TO PERSONS INTERESTED IN LAUNDERING THEIR UNACCOUNTED MONEY. THEREFORE, I DO NOT CONCUR WITH THE SUBMISSIONS OF THE A.R. THAT THIS IS A CASE WHERE THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME AS PER THE PROVISI ONS OF SECTION 271(1) AND IS LIABLE FOR IMPOSITION OF PENALTY. TH EREFORE, THE DECISION OF THE AO TO IMPOSE PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF SECTION 27 1(1) IS UPHELD. HOWEVER, THE SUBMISSION OF THE APPELLANT IS ACCEPTE D THAT THE PENALTY SHOULD BE RESTRICTED T100% OF THE DIFFERENT IAL TAX AFTER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A). THE A O IS DIRECTED TO CALCULATE THE PENALTY @ 100% OF THE TAX DETERMINED AFTER GIVING APPEAL EFFECT OF THE ORDER OF THE LD. CIT(A). 2.3 AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 2.4 DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ASSESSMENT WAS COMPLETED BY APPLY ING GROSS PROFIT RATE OF 2% ON DECLARED TURNOVER. THE LD. CIT(A) REDUCED THE ESTIMATE ON INCOME BY HOLDING THAT COMMISSION ON ISSUE OF BOGUS BILLS ESTIMATED AT 0.50%. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CON TENDS THAT ON SIMILAR FACTS, ITAT DELHI BENCH IN THE CASE OF SANJAY KUMA R GARG VS. ACIT, 66 DTR 281 HELD THAT 0.2% TO BE APPROPRIATE WHEREAS THE A DE CLARED THE GROSS PROFIT RATE OF 0.31%. THUS REMAINING ADDITION IS BASED ON ESTIMATE WHICH IS SUBJECT TO VARIATION. THEREFORE, PENALTY U /S 271(1)(C) OF THE ACT ITA NO. 424/JP/2013 SMT. SANGEETA JAIN VS. ITO, WARD- 1 (1), JAIPUR . 4 CANNOT BE LEVIED ON ESTIMATE. RELIANCE IS PLACED I N THE CASES AS MENTIONED IN THE LD. CIT(A)S ORDER:- (I) ITO VS. SHRI VINOD KANTILAL SHAH , 2011-TIOL -5 70- ITAT-AHM DATED 5-08-2011 (II) SHIV LAL TAK VS. CIT, 251 ITR 353 (RAJ.) (III) HARIGOPAL SINGH VS. CIT 258 ITR 85 (P&H) (IV) JHAVAR PROPERTIES (P) LTD. VS. ACIT ,123 ITD 429 (MUM). (V) CIT VS. VIJAY KUMAR JAIN 38 DTR 345 (CHATTISGARH) (VI) CIT VS. M.M.RICE MILLS 23 ITR 17 (P&H) (VII) CIT VS. SURESH KUMAR BANSAL, 254 ITR 130 (P&H ) 2.5 THE LD. DR ON THE OTHER HAND VEHEMENTLY CONTEND S THAT IT HAS NOT BEEN DENIED BY THE ASSESSEE THAT SHE WAS INDULGING IN ISSUING BOGUS BILLS. THE LD. CIT(A) HAS GIVEN CLEARLY A FINDING OF FACT BY WHICH MERELY INCOME IS REDUCED BY THE LD. CIT(A) IN THE CASE OF SANJAY KUMAR GARG VS. ACIT (SUPRA). IT CANNOT TAKE AWAY THE FACT THAT THE ASSESSEE WAS INDULGING IN ISSUING BOGUS BILLS. THEREFORE, THE OR DER OF THE LD. CIT(A) MAY BE UPHELD. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE ARGUMENTS OF THE LD. DR ABOUT THE FACT THAT THE ASSESSEE WAS INDULGING IN ISSUING BOG US BILLS AND THE SAME HAS BEEN ACCEPTED BY THE ASSESSEE. THE ONLY REPLY T O PENALTY GIVEN BY THE LD. AR IS TO THE EFFECT THAT ITAT IN THE CASE OF SA NJAY KUMAR GARG VS. ITA NO. 424/JP/2013 SMT. SANGEETA JAIN VS. ITO, WARD- 1 (1), JAIPUR . 5 ACIT (SUPRA) HAS TAKEN 0.2% TO BE THE PROFIT. IN MY CONSIDERED VIEW, THE REPLY OF THE ASSESSEE IS INADEQUATE IN VIEW OF THE FACTS THE ASSESSEE WAS INDULGING IN ISSUING BOGUS BILLS WHICH HAS ATTAINED FINALITY. THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A ) ON THIS ISSUE WHICH IS UPHELD. THUS THE SOLITARY GROUND OF THE ASSESSEE IS DISMISSED. 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/10/2015 . SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 /10/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SANGEETA JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1 (1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 424/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR