Prem Chand, Sunam V. ACIT, Sangrur

ITA 466/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80815 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 466/CHD/2014 ASSESSMENT YEAR : 2007-08 SHRI PREM CHAND, VS THE A.C.I.T., S/O SHRI KRISHAN CHAND, CIRCLE I, PROP. M/S BRIJ RICE MILLS, LUDHIANA. KHADIAL ROAD, SUNAM. PAN : ABHPC5448E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 21.07.2014 DATE OF PRONOUNCEMENT : 05.08.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PATIAL A DATED 28.02.2014 RELATING TO ASSESSMENT YEAR 2007-08 AGAI NST THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX APP EAL, PATIALA IS NOT JUSTIFIED IN UP HOLDING THE PENALTY ON THE ADDITION IN HUSK ACCOUNT AS SUSTAINED BY THE HON'BLE ITAT, CHANDIGARH. 2. THAT THE LEARNED CIT (APPEAL) PATIALA IS NOT J USTIFIED IN CONFIRMING THE PENALTY ON THE ESTIMATED ADDITION OF THE VALUE OF HUSK OF RS.2,54,900/- WITHOUT CONSIDERING THE FACTS THAT TH E ADDITION IN HUSK ACCOUNT IS ONLY ON ESTIMATED BASIS. 3. THAT LEARNED CIT (APPEAL) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY OF CONCEALMENT ON THE ADDITION OF RS.21,661/- BEING PILFERAGE OF RICE. 2 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT A SSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED AT A TOTAL INCOM E OF RS. 17,02,210/- AND AGRICULTURE INCOME OF RS. 70,000/- AS AGAINST RETURNED INCOME OF RS. 250,315/- AND AGRICULTURE IN COME OF RS. 70,000/-. THE ASSESSING OFFICER VIDE ORDER PASSED UNDER SECTION 143(3) DATED 22.12.2009, MADE THE FOLLOWING ADDITIO NS, WHICH WERE PARTLY CONFIRMED BY COMMISSIONER OF INCOME TAX (APP EALS) AND TRIBUNAL : 5. PENALTY PROCEEDINGS WERE INITIATED UNDER SECTION 271(1)(C) OF THE ACT. AFTER THE APPEAL OF THE ASSESSEE WAS DECI DED BY THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WH Y PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED O N ACCOUNT OF THE ADDITIONS SUSTAINED BY THE COMMISSIONER OF INCOME T AX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HAD SUSTAI NED THE ADDITION ON ACCOUNT OF UNDERSTATEMENT OF HUSK SOLD AT RS. 254,900/-, ON ACCOUNT OF LOW HOUSE HOLD EXPENSES AT RS. 80,000 /- AND HAD UPHELD THE ADDITION OF RS. 23,461/- ON ACCOUNT OF D IFFERENCE IN STOCK SR., NO. PARTICULARS OF ADDITION ADDITION MADE BY THE A.O. ADDITION CONFIRMED IN CIT(A) ORDER ADDITION CONFIRMED IN I TAT 1. ADDITION ON ACCOUNT OF UNDERSTATEMENT OF HUSK SOLD. 10,11,835/- 2,54,900/- 2,54,900/- 2. ADDITION MADE ON ACCOUNT OF LOW HOUSE HOLD EXPENSES. 4,16,600/- 80,000/- 50,000/- 3. ADDITION ON, ACCOUNT OF DIFFERENCE IN STOCK OF BASMATI RICE & BARDANA 23,461/- 23,461/- - 21,661/- 3 OF BASMATI RICE & BARDANA. THE ASSESSING OFFICER H ELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME TO THE TUNE OF RS. 358,361/- AND LEVIED PENALTY UNDER SECTION 271(1)(C ) OF THE ACT AT RS. 109,660/-. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE PENALTY ON ACCOUNT OF LOW HOUSEHOLD EXPENSES AND PA RTLY ON ACCOUNT OF DIFFERENCE IN STOCK OF BASMATI RICE AND BARDANA AND CONFIRMED THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE ESTIMATED ADDITION OF THE VALUE OF HUSK AND PILFERAGE OF RICE . THE ASSESSEE IS IN APPEAL AGAINST THE SAID LEVY OF PENALTY UNDER SE CTION 271(1)(C) OF THE ACT. 7. SHRI SUDHIR SEHGAL APPEARED FOR THE ASSESSEE AND SHRI MANJIT SINGH APPEARED FOR THE REVENUE AND PUT FORWARD RIVA L CONTENTIONS 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIA BLE IN CASES WHERE THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE SAID PENALTY UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN LEVIED FOR FURNISHING OF INACCURATE PARTICULAR S OF INCOME ON TWO ACCOUNTS. THE FIRST ADDITION MADE IN THE CASE OF THE ASSESSEE WAS OF UNDERSTATEMENT OF VALUE OF HUSK SOLD WHEREIN THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD SOLD RICE HUSK TO VARIOUS PARTIES, OUT OF WHICH THE RICE HUSK SOLD TO INDIAN ACRYLIC LTD. WAS AT A HIGHER RATE OF RS. 253/- PER QUINTAL AND TO OT HER PARTIES WAS SOLD @ RS. 60/- TO RS. 80/- PER QUINTAL. THE ASSES SING OFFICER MADE ADDITION ON ACCOUNT OF THE SAID DIFFERENCE. H OWEVER, THE TRIBUNAL RESTRICTED THE ADDITION TO RS. 254,900/- B Y ESTIMATING THE 4 RATE OF PADDY HUSK SOLD IN CASH. THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US IS WHETHER IN SUCH CIRCUMSTANCES T HE ASSESSEE IS LIABLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) O F THE ACT. THE ASSESSEE HAD FURNISHED COMPLETE PARTICULARS BEFORE THE AUTHORITIES BELOW. HOWEVER, THE ADDITION IN THE HAND OF THE AS SESSEE WAS MADE BY ESTIMATING THE VALUE OF RICE HUSK. IN SUCH CIRC UMSTANCES WHERE NO CONCRETE EVIDENCE WAS FOUND AGAINST THE ASSESSEE AND THE ADDITION BEING BASED ON ESTIMATION, THERE IS NO MER IT IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORD INGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED FOR CONCEALMENT UNDER SECTION 271(1)(C) OF THE ACT ON THE ADDITION OF RS. 254,900/-. 9. SIMILARLY THE SECOND ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS ON ACCOUNT OF NON-FURNISHING OF COMPLE TE EVIDENCE BY THE ASSESSEE IN RESPECT OF THE STOCK OF RICE. HOWE VER, NO EVIDENCE WAS FOUND AGAINST THE ASSESSEE AND IN THE ABSENCE O F PROPER EXPLANATION, THE SAID ADDITION WAS MADE IN THE HAND S OF THE ASSESSEE. IN SUCH CIRCUMSTANCES ALSO, WE FIND NO M ERIT IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON TH E SAID ADDITION OF RS. 21,661/-. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOW LA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH AUGUST,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR/ITAT/CHD