JASWANT P PATEL ( HUF), MUMBAI V. ITO 25(2)(1), MUMBAI

ITA 4562/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3548 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2006-2007
• Appeal Filed On: 03-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS LATA SUNDER
• Assessee Lawyers: VIPUL J SHAH
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J, BENCH MUMBAI BEFORE SHRI PRAMOD KUMAR, AM & SHRI PAWAN SIN GH, JM ITA NO.4562/MUM/2 014 (ASSESSMENT YEAR : 2006-07) JASWANT P. PATEL (HUF), 46/A, GANJAWALA APARTMENTS, S.V.ROAD, BORIVALI (W), MUMBAI-4000792 VS. ITO 25(2)(1), ROOM NO. 107, C-11, PRATYAKSAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400051. PAN/G IR NO.: AAAHP2465C ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI VIPUL J. SHAH REVENUE BY : MRS. LATA SUNDER (DR) DATE OF HEARING : 11/01/2016 DATE OF PRONOUNCEMENT: 13/01/2016 O R D E R PER PAWAN SINGH, JM: 1. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE COR RECTNESS OF ORDER OF CIT(A)-35, MUMBAI DATED 06.05.2014 IN THE MATTER OF ORDER OF P ENALTY U/S 271(1)(C) OF THE I.T. ACT DATED 30.03.2012 ,FOR ASSESSMENT YEAR (AY) 2006-07. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED HIS RETURN OF INCOME FOR AY- 2006-07, ON 31.12.2008 DECLARING TOTAL INCOME OF RS . 6,98,380/-. AFTER SELECTING THE RETURN OF INCOME FOR SCRUTINY AND SERVING THE S TATUTORY NOTICE, THE INCOME OF ASSESSEE WAS ASSESSED AT RS. 13,95,600/- BY THE ASS ESSING OFFICER (AO) VIDE ORDER DATED 31.12.2008. DURING THE ASSESSMENT, THE BOOK RESULT OF THE ASSESSEE WAS REJECTED BY INVOKING THE PROVISION OF SECTION 1 45 OF THE ACT AND THE ADDITION WAS MADE ON THE BASIS OF ESTIMATED NET PROFIT OF 4% ON THE TOTAL TRANSPORT RECEIPT AND THUS DISALLOWANCE OF RS. 6,97,218/- WAS CALCUL ATED ON TOTAL RECEIPT OF RS. 3,40,52,168/-. AGAINST THE QUANTUM, THE APPEAL WAS PREFERRED BEFORE THE CIT(A), HOWEVER, THE SAME WAS WITHDRAWN AS NOT PRESSED. 3. THE PENALTY NOTICE U/S 274 R.W.S. 271(1) DATED 31. 12.2008 WAS ISSUED AND THE ASSESSEE FILED REPLY TO THE NOTICE SERVED UPON HIM VIDE REPLY DATED 12.07.2010. THE AO INFLICTED MINIMUM PENALTY ON THE BASIS OF AL LEGED EVADED TAX AT RS. 1,50,954/- IN HIS ORDER DATED 30.03.2012 AGAINST TH E ORDER OF PENALTY, THE ASSESSEE ITA NO. 4562/M/14 2 PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE PENAL TY ORDER WAS CONFIRMED BY THE CIT(A) ON THE BASIS THAT THE ASSESSEE HAS WITHD RAWN THE QUANTUM OF APPEAL IN ITS ORDER DATED 06.05.2014 AGAINST WHICH THE PRESEN T APPEAL IS FILED BEFORE US. 4. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE, A R OF THE ASSESSEE HAS ARGUED BEFORE US THAT THE ADDITION IN THE ASSESSMEN T ORDER WAS MADE ON THE BASIS OF ESTIMATION AND THAT THE ASSESSEE HAS NEITHER CON CEALED THE INCOME NOR FILED INACCURATE PARTICULARS AND THE ASSESSMENT ORDER B Y MAKING ADDITION ON THE BASIS OF ESTIMATION AND NOT ON THE BASIS OF THE LIST OF O UTSTANDING SUNDRY CREDITORS. WE HAVE NOTICED THAT THE AO HAD NOT DISALLOWED THE AMO UNT MENTIONED/ CLAIMED OUTSTANDING AGAINST THE SUNDRY CREDITORS, RATHER CO NCLUDED THAT NOBODY FOUND AT THE GIVEN ADDRESS WHEN THE NOTICES SENT AND THAT TH E FAILED TO PRODUCE THE CREDITORS. 5. LD. DR FOR THE REVENUE HAS RELIED UPON AND SUPPORTE D THE FINDING OF AUTHORITIES BELOW. 6. IN STAR INTERNATIONAL PVT. LTD. VS. ACIT, THE CO-O RDINATE BENCH OF LUCKNOW TRIBUNAL HAD HELD THAT: BY MERELY DISBELIEVING ON EXPLANATION BY THE ASSES SEE, THERE HAS TO BE SOME POSITIVE MATERIAL COLLECTED AND REFERRED BY THE ASS ESSING OFFICER WHICH WOULD SHOW THAT EITHER THE ASSESSEE HAS CONCEALED THE PAR TICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS. THERE HAS TO BE S OMETHING FOR COMPARISON TO PROVE THAT WHAT WAS CLAIMED BY THE ASSESSEE WAS FAL SE OR INACCURATE. MERE DISBELIEVING ON THE CLAIM MADE BY THE ASSESSEE IS N OT SUFFICIENT. THE ASSESSING OFFICER COULD HAVE IN THE PRESENT CASE ENQUIRED AND SHOWN THAT THE ADDRESSES OF THE ARTISANS ARE NOT CORRECT, OR THEY HAVE NOT RECE IVED THE PAYMENT OR THAT THEY HAVE DENIED TO HAVE RENDERED ANY SERVICES, OR MONEY ON BEARER CHEQUES HAVE NOT GONE TO THE ARTISANS/MECHANICS OR HAS BEEN RECEIVED BACK BY THE ASSESSEE OR THINGS SIMILAR TO THIS HIGHLIGHTING THE INACCURACY IN THE STORY OR EXPLANATION FURNISHED BY THE ASSESSEE. IN THE ABSENCE OF SUCH F INDING AND MATERIAL RELATING TO THESE, IT IS NOT POSSIBLE TO HOLD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF HIS INCOME BY WAY OF CLAIMING EXPENSES ON COMMISSION OR HAS FILED INACCURATE PARTICULARS RELATING THERETO. AS A RESULT, PENALTY SO CONFIRMED BY THE LEARNED CIT(A) CANNOT BE UPHELD. IT IS ACCORDINGLY CANCELLE D. ITA NO. 4562/M/14 3 7. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN PRINCIPAL THE FACT OF THE P RESENT CASE ARE SIMILAR TO THE STAR INTERNATIONAL AND THUS THE FINDING RENDERED T HEREIN CAME IN RESCUE TO THE ASSESSEE. 8. THE HONBLE APEX COURT IN CIT VS. RELIANCE PETRO PR ODUCT HAS HELD: THE WORD INACCURATE MEANS THAT THE DETAILED SUPP LIED IN THE RETURN ARE NEITHER CORRECT, NOR EXACT OR CORRECT, NOT ACCORDING TO TRU TH OR ERRONEOUS BUT MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISH INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. 9. IN THE PRESENT CASE, THE ASSESSEE HAS GIVEN THE LIS T OF SUNDRY CREDITOR AND STRESS DURING THE ASSESSMENT THAT THE CREDITORS WERE GENUI NE AND HAD BEEN REGULARLY HAVING BUSINESS WITH THEM. MOREOVER, THE ADDITION W AS NOT ON THE BASIS OF THE AMOUNT SHOWN AGAINST THE NAMES OF LIST OF SUNDRY CR EDITORS AND THE SAME WERE MADE ON THE BASIS OF ESTIMATION, HENCE THERE WAS NO CONCEALMENT ON THE PART OF ASSESSEE WHICH MAY ATTRACT THE PENALTY AS ENVISAGED U/S 271(1) ( C) OF THE ACT. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ACCE PTED. ORDER PRONOUNCED IN THE OPEN CO URT ON THIS 13/01/2016. SD/- SD/- (PRAMOD KUMAR) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 13 /01/2016 SK, PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY/