M/s. Maheshwari Handling Agency P. Ltd., Gandhidham, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Gandhidham Circle, GANDHIDHAM

ITA 456/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2217 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 24-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BEN CH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GOD ARA, J.M.) ( , , ) ITA NO. 456/RJT/2014 (ASSESSMENT YEAR: 2004-05) M/S. MAHESHWARI HANDLING AGENCY PVT. LTD. PLOT NO.640, WARD NO.12/C, LILASHAH NAGAR, GANDHIDHAM VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM PAN: AABCM8487B (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI C. S. ANJARIA, D.R. DATE OF HEARING : 14-03-201 6 DATE OF PRONOUNCEMENT : 18-03-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-II, RAJKOT, DATED 19.06.2014 FOR A.Y. 2004-05, WHEREBY LEVY OF PENALTY LEVIED U/S.271(1)(C) OF THE ACT BY A.O. WAS UPHELD BY THE LD. CIT(A). 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF CLEARING, FORWARDING, STEVEDORING AND TRANSPORTATION. ASSES SEE FILED ITS RETURN OF INCOME FOR A.Y. 2004-05 ON 01.11.2004 DECLARING LOSS OF RS.26, 90,906/-. THE CASE WAS SELECTED ITA NO 456/RJT/2014 . A.Y. 2004-05 (M/S. MAHESHWARI HANDLING AGENCY PVT. LTD. VS. ACIT ) 2 FOR SCRUTINY AND THEREAFTER, ASSESSMENT WAS FRAMED U/S.143(3) OF THE ACT VIDE ORDER DATED 28.12.2006 AND THE TOTAL INCOME WAS DETERMINE D AT RS. 1,80,94,750/- BY MAKING VARIOUS ADDITIONS AGGREGATING TO RS.2,07,85, 656/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CI T(A) WHO VIDE ORDER DATED 04.06.2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE PREFERRED THE APPEAL BEFORE THE TRI BUNAL. THE TRIBUNAL VIDE ORDER DATED 01.01.2012 IN ITA NO.110/RJT/08 DISMISSED THE APPEAL OF REVENUE. ON THE ADDITIONS THOSE WERE UPHELD, A.O. VIDE ORDER DATED 13.08.2012 HELD THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND THER EBY CONCEALED THE INCOME AND THE ASSESSEE WAS THEREFORE LIABLE FOR PENALTY U/S.271(1 )(C) OF THE ACT AND ACCORDINGLY LEVIED PENALTY OF RS.1,72,554/-. AGGRIEVED BY TH E ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DAT ED 19.06.2014 (IN APPEAL NO. CIT(A)-II/RJT/0067/12-13) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY UPHOLDING THE PENALTY ONLY ON THE CONFIRMATION OF ADDITION OF RS. 2,11,979/- (ON THE ISSUE OF ADDITION ON ACCOUNT OF SUPPRESSED CONTRACT RECEIPTS MADE ON THE BASIS OF DIFFERENCE BETWEEN TDS CERTIFICATES AND THE BOOKS OF ACCOUNTS). AGGRI EVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING EFFECTIVE GROUND: 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS IN LEVYING PENALTY U/S.271(1)(C) OF RS.1,72,554/-. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE SAME TO THE EXTENT OF PENALTY ON ADDITION OF RS.2,01,979/- ON THE BASI S OF DIFFERENCE BETWEEN TDS CERTIFICATES AND BOOKS OF ACCOUNTS. 4. BEFORE US, ON BEHALF OF ASSESSEE, THE ADJOURNMEN T APPLICATION HAS BEEN MOVED BY THEIR AUTHORIZED REPRESENTATIVE. WE ALSO FIND T HAT WRITTEN SUBMISSIONS ALONG WITH PAPER BOOK HAVE BEEN FILED ON BEHALF OF THE ASSESSE E. THE ADJOURNMENT APPLICATION FILED ON BEHALF OF ASSESSEE IS REJECTED AND WE PROC EED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIALS AV AILABLE ON RECORD. 4.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A. O. NOTICED THAT THERE WERE DIFFERENCE IN TOTAL RECEIPTS AS SHOWN BY THE ASSESS EE IN THE BOOKS OF ACCOUNTS AND AS ITA NO 456/RJT/2014 . A.Y. 2004-05 (M/S. MAHESHWARI HANDLING AGENCY PVT. LTD. VS. ACIT ) 3 PER THE TDS CERTIFICATES AND THE DIFFERENCE BEING R S.62,17,115/-. THE A.O. NOTED THAT ASSESSEE HAD FAILED TO RECONCILE AND EXPLAIN T HE DIFFERENCE AND THEREFORE, THE DIFFERENCE WAS TREATED AS SUPPRESSED RECEIPTS OF AS SESSEE AND ON THESE SUPPRESSED RECEIPTS PENALTY U/S.271(1)(C) OF THE ACT WAS LEVIE D BY THE A.O. AND WAS CONFIRMED BY LD. CIT(A) BY HOLDING AS UNDER: 2. THE SECOND ISSUE IS REGARDING CONFIRMATION OF A DDITION OF RS.2,01,979/- ON THE BASIS OF DIFFERENCE BETWEEN TDS CERTIFICATES AND BOOKS OF AC COUNTS. THE LD. CIT(A), AFTER CAREFULLY GOING THROUGH THE DETAILS, HAS OBSERVED THAT THERE IS A SHORTFALL OF RS.2,01,979/- IN THE TDS CERTIFICATES AND THE BOOKS OF ACCOUNTS. THE APPELLA NT HAS NOT BEEN ABLE TO EXPLAIN THE SHORTFALL AND HOW THE SAME HAS BEEN ACCOUNTED FOR A T ANY POINT OF TIME. THE APPELLANT HAS NOT FILED ANY APPEAL AGAINST THIS ADDITION BEFORE T HE HON'BLE ITAT, RAJKOT BENCH. THIS, IN MY OPINION, IS CLEARLY A CASE OF FILING INACCURATE PARTICULARS OF INCOME. THE PENALTY ON THIS ACCOUNT IS CONFIRMED. 5. BEFORE US, LD. D.R. SUPPORTED THE ORDERS OF A.O. AND LD. CIT(A). 6. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IALS ON RECORD. IN THE PRESENT CASE, PENALTY U/S. 271(1)(C) OF THE ACT HAS BEEN LE VIED ON THE DIFFERENCE OF INCOME AS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND T HAT SHOWN IN THE TDS CERTIFICATES. WE FIND THAT ON THE TOTAL DIFFERENCE OF RS.62.17 LA CS, ASSESSEE WAS IN A POSITION TO RECONCILE THE DIFFERENCE EXCEPT TO THE EXTENT OF RS .2,01,979/- AND THUS THE ADDITION OF THE UNRECONCILED AMOUNT OF RS.2,01,979/- WAS CONFIR MED AND ON WHICH PENALTY U/S.271(1)(C) OF THE ACT HAS BEEN LEVIED BY A.O. W E FIND THAT ONE OF THE REASON FOR UPHOLDING THE PENALTY BY LD.CIT(A)IS THAT THE ASSESSEE HAD NOT FILED ANY APPEAL AGAINST THE AFORESAID ADDITION. IT IS SETTLED LAW THAT PEN ALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE TWO INDEPENDENT PROCEEDINGS AND THE PENALTY ORDER CANNOT BE SOLELY BASED ON THE REASONS GIVEN IN THE ORIGINAL ORDER OF ASSESSMENT. FURTHER APART FROM THE FALSITY OF THE EXPLANATION GIVEN BY THE ASSESSEE, T HE DEPARTMENT MUST HAVE BEFORE IT BEFORE LEVYING THE PENALTY, COGENT MATERIAL OR EVID ENCE FROM WHICH IT COULD BE INFERRED THAT ASSESSEE HAS CONSCIOUSLY CONCEALED TH E PARTICULARS OF HIS INCOME OR HAD DELIBERATELY FURNISHED INACCURATE PARTICULARS OF IN COME. IT IS WELL SETTLED THAT THE PARAMETERS OF JUDGING THE JUSTIFICATION FOR ADDITIO N MADE IN THE ASSESSMENT CASE OF THE ITA NO 456/RJT/2014 . A.Y. 2004-05 (M/S. MAHESHWARI HANDLING AGENCY PVT. LTD. VS. ACIT ) 4 ASSSESSEE IS DIFFERENT FROM THE PENALTY IMPOSED ON ACCOUNT OF CONCEALMENT OF INCOME OR FILING INACCURATE PARTICULARS OF INCOME AND THAT CERTAIN DISALLOWANCE/ADDITION COULD LEGALLY BE MADE IN THE ASSESSMENT PROCEEDINGS ON TH E PREPONDERANCE OF PROBABILITIES BUT NO PENALTY COULD BE IMPOSED U/S. 271(1)(C) OF T HE ACT ON THE PREPONDERANCE OF PROBABILITIES AND REVENUE HAS TO PROVE THAT THE CLA IM OF THE ASSESSEE WAS NOT GENUINE OR WAS WITHIN THE INTENTION TO REDUCE ITS TAX LIABI LITY. FURTHER MERELY BECAUSE ADDITIONS HAVE CONFIRMED IN APPEAL OR NO APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ADDITIONS MADE, IT CANNOT BE THE SOLE GROUND FOR CO MING TO THE CONCLUSION THAT ASSESSEE HAS CONCEALED ANY INCOME. IN THE PRESENT CASE, ASSESSEE WAS ABLE TO RECONCILE THE DIFFERENCE BETWEEN THE AMOUNT SHOWN I N ITS BOOKS OF ACCOUNTS AND THAT SHOWN IN THE TDS CERTIFICATES AND OUT OF THE TOTAL ADDITION OF RS.62.71 LACS THE UNRECONCILED AMOUNT WAS ONLY TO THE TUNE OF RS.2.19 LACS. IT IS NOT THE CASE OF THE REVENUE THAT THE EXPLANATION GIVEN BY THE ASSESSEE WITH RESPECT TO RS.2.19 LACS, WHICH HAVE BEEN CONFIRMED IN QUANTUM, HAS BEEN FOUN D TO BE FALSE. IN SUCH A SITUATION, CONSIDERING THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IN THE PRESENT CASE NO CASE FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE A CT HAS BEEN MADE OUT. WE THUS DIRECT THE DELETION OF PENALTY U/S. 271(1)(C) OF TH E ACT. THUS, THE GROUND OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18/03/2016 SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 18 /03/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. ITA NO 456/RJT/2014 . A.Y. 2004-05 (M/S. MAHESHWARI HANDLING AGENCY PVT. LTD. VS. ACIT ) 5 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT