THE ITO WD 6(3)-2, MUMBAI V. M/S. LADDHA LIME P. LTD, MUMBAI

ITA 4635/MUM/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48765 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-03-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 09-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI V. DURGA RAO (JM) I.T.A.NO.4635/MUM/2008 (A.Y. 2001-02) INCOME-TAX OFFICER-6(3)(2), ROOM NO.514, 5 TH FLOOR, AAYKAR BHAVAN, MUMBAI-400 020. VS. M/S.LADDHA LIME P. LTD., RL-77, MILAP NAGAR, MIDC, DOMBIVLI (E), DIST. THANE. PAN: AAACL6143L APPELLANT RESPONDENT APPELLANT BY MR. RAJARSHI DWIVEDY. RESPONDENT BY MR. JI TENDRA JAIN. O R D E R PER R.S. SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 11-04-2008 DELETING THE PENALTY AMOUNTING TO RS.3,01,270/- IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT IN RELATION TO THE ASSTT. YEAR 2001-02. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, A TRADER IN CLOTH, FURNISHED ITS RETURN DECLARING INCOME OF RS.9,296/- . THE AO REJECTED THE BOOK REJECTS BY INVOKING THE PROVISIONS OF SEC. 145(3). THEREAFTER, HE MADE ADDITION BY APPLYING GROSS PROFIT RATE OF 10% ON AN ESTIMATE BASIS. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO REDUCED THE ESTIMATE OF GROSS PROFIT TO 2.5%. THE ASSESSEE WAS UNSUCCESSFUL BEFORE THE T RIBUNAL. THE RESULT IS THAT THE GROSS PROFIT RATE AT 2.5% HAS ATTAINED FINALITY . THEREAFTER, PENALTY WAS IMPOSED U/S.271(1) QUA THE TRADING ADDITION. THE L D. CIT(A) PREFERRED TO DELETE THE PENALTY. ITA NO.4635/M/08 LADDHA LIME P.LTD. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE SOLE BASIS ON WHI CH PENALTY WAS IMPOSED BY THE AO IS THE APPLICATION OF GROSS PROFIT RATE ON ESTIM ATE BASIS. THIS GROSS PROFIT RATE OF 10% AS APPLIED BY THE AO HAS BEEN EVENTUALLY RED UCED TO 2.5%. IT IS A SIMPLE CASE OF MAKING A TRADING ADDITION ON ESTIMATE BASIS WHICH, IN OUR CONSIDERED OPINION, DOES NOT CALL FOR THE IMPOSITION OF PENALT Y U/S 271(1)(C). THE HONBLE DELHI HIGH COURT IN CIT VS. AERO TRADERS PVT. LTD. (2010) 322 ITR 316 (DEL.) HAS HELD THAT WHERE INCOME IS DETERMINED ON ESTIMATE BA SIS, NO PENALTY CAN BE IMPOSED U/S.271(1). SIMILAR VIEW HAS BEEN TAKEN BY SEVERAL HIGH COURTS INCLUDING THE HONBLE PUNJAB & HARYANA HIGH COURT I N CIT V. HARI GOPAL SINGH VS. CIT (2002) 258 ITR 85 (P& H). IN VIEW OF THE ABOVEN OTED PRONOUNCEMENTS OF LAW BY THE HONBLE HIGH COURTS, WE FIND THAT THE VIEW T AKEN BY THE LD. CIT(A) IN THE IMPUGNED ORDER IS UNIMPEACHABLE. THE SAME IS, THERE FORE, UPHELD. 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THE 11TH DAY OF MAY, 2011. SD/- SD/- (V. DURGA RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 11TH MAY , 2011. NG: COPY TO : ITA NO.4635/M/08 LADDHA LIME P.LTD. 3 1.DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-XXVI,MUMBAI. 4 CIT, MUMBAI CITY-6,MUMBAI. 5.DR,A BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA NO.4635/M/08 LADDHA LIME P.LTD. 4 DETAILS DATE INITIALS DESIGNA TION 1. DRAFT DICTATED ON 03-05-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 03-05-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *