AWADHESH BANSJRAJ PANDEY, MUMBAI V. INCOME TAX OFFICER 31(1)(2), MUMBAI

ITA 4784/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6095 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Assessee Lawyers: SHYAM C AGRAWAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH MUMB AI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 4784/MUM/2018 (ASSESSMENT YEAR 2008-09 ) AWADHESH BANSIRAJ PANDEY C/O SHYAM C. AGRAWAL & CO., 3/910 L NAVJIVAN SOC. LAMINGTON ROAD, MUMBAI- 400008 PAN: AIOPP4899A VS. THE ITO- 31(1)(2) CIT, 7 TH FLOOR, PRATYAKSHKAR BHAVAN, BANDRA (E), MUMBAI-400051. APPELLANT RESPONDE NT APPELLANT BY : SHRI SHYAM C. AGRAWAL (AR) RESPONDENT BY : SHRI MICHAEL JERALD (DR) DATE OF HEARING : 05.02.2020 DATE OF PRONOUNCEMEN T : 05.02.2020 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-52, MUMBAI [LD. CIT(A)] DATED 22.08.2015, WHICH ARISES FROM THE PENALTY LEVIED UNDER SECTION 271(1) (C) DATED 26.10.2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : IN THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LA W THE LEARNED C.I.T (A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) RS.104 288/- WITHOUT APPRECIATING THE FACTS. A. THE APPELLANT HAS NEITHER CONCEALED ANY PARTICUL ARS OF INCOME NOR SUBMITTED ANY INACCURATE PARTICULARS OF INCOME. B. PENALTY U/S 271(1)(C) IS INVALID SINCE IN THE AS SESSMENT ORDER A.O HAS NOT MENTIONED AS TO WHICH LIMB PENALTY WAS IMPOSED. C. THE PENALTY PROCEEDINGS ARE DISTRICT FROM ASSESS MENT PROCEEDINGS. D. THE NO PENALTY CAN BE LEVIED WHERE THE INCOME IS ESTIMATED. ITA NO. 4784 MUM 2 018-AWADHESH BANSIRAJ PANDEY 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,17,004/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT, ON THE BASIS OF AIR INFORMAT ION, THE ASSESSING OFFICER NOTED THAT THERE WAS HUGE CASH DEPOSIT IN T HE BANK ACCOUNT OF THE ASSESSEE WITH STATE BANK OF INDIA. THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE CASH DEPOSIT. IN RESPONSE TO THE SHOW-CAUSE, THE AS SESSEE STATED THAT HE HAS SOLD 1500 MIXER GRINDER AT THE PROFIT MARGIN OF RS. 300/- PER PIECE AND HAS OFFERED THE SAID AMOUNT FOR TAXATION. THE CONTENTIO N OF ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER, THE ASSESSING OFFICE R ADDED PROFIT ON SALE OF 1500 MIXER GRINDER AND ADDED A SUM OF RS. 4,50,000/ - TO THE INCOME OF ASSESSEE. ON APPEAL BEFORE THE LD. CIT(A), THE ADDI TION WAS UPHELD. HOWEVER, ON FURTHER APPEAL BEFORE THE TRIBUNAL, THE ADDITION WAS RESTRICTED TO RS. 3,37,500/- BY ADOPTING NET PROFIT ON SALE OF MIXER GRINDER AT RS. 225/- PER PIECE. THE ASSESSEE WAS ALLOWED EXPENSE S OF RS. 75/- PER MIXER GRINDER. 3. THE ASSESSING OFFICER INITIATED THE PENALTY ON THE ADDITION RESTRICTED TO RS. 3,37,500/- VIDE NOTICE DATED 07.10.2016. THE ASSESS EE FILED ITS REPLY DATED 24.10.2016 AND CONTENDED THAT HE HAS NEITHER CONCEA LED ANY PARTICULAR OF INCOME NOR FURNISHED ANY INACCURATE PARTICULARS. IN THE ASSESSMENT, THE ASSESSING OFFICER ESTIMATED THE ADDITION OF RS. 4,5 0,000/-, HOWEVER, ON FURTHER APPEAL BEFORE TRIBUNAL, THE ADDITION WAS RE STRICTED TO RS. 3,37,000/- ONLY. THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY ASS ESSING OFFICER. THE ITA NO. 4784 MUM 2 018-AWADHESH BANSIRAJ PANDEY 3 ASSESSING OFFICER LEVIED THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. ON FURTHER APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFICER WAS AFFIRMED. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE SUB MITS THAT THE ASSESSEE NEITHER CONCEALED ANY PARTICULAR OF INCOME NOR FURN ISHED ANY INACCURATE PARTICULARS THEREOF. THE ASSESSING OFFICER WHILE PA SSING THE ASSESSMENT ORDER MADE ADDITION ON ESTIMATE BASIS. ON FURTHER A PPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 6485/MU/2012 DATED 03.02.2016, THE ADD ITION WAS RESTRICTED TO RS. 3,37,500/- BY ADOPTING PROFIT ON ESTIMATION BAS IS @ RS. 225/- AFTER ALLOWING ADMINISTRATIVE EXPENSES OF RS. 75/- PER MI XER GRINDER/PER PIECE, THUS ADMITTEDLY THE ADDITION IS ON ADHOC BASIS. IT IS SETTLED LAW THAT NO PENALTY IS LEVIABLE ON ADDITION MADE ON ESTIMATION BASIS. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF ASSESSING OFFICER. IT IS SETTLED POSITION UNDER THE LAW THE NO PENALTY UNDER SECTION 271(1) IS LEVEABLE ON ESTIMATED ADDITIONS M ADE IN THE ASSESSMENT ORDER. 6. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE T HAT THE ASSESSING OFFICER INITIATED AND LEVIED THE PENALTY ONLY ON THE ADDITI ON MADE ON ACCOUNT OF ITA NO. 4784 MUM 2 018-AWADHESH BANSIRAJ PANDEY 4 PROFIT MARGIN ON SALE OF MIXER GRINDER. THE ASSESSI NG OFFICER ESTIMATED THE PROFIT @ RS. 300/- PER PIECE ON SALE OF 1500 MIXER GRINDER. THE ASSESSING OFFICER ESTIMATED THE PROFIT OF RS. 4,50,000/-. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS UPHELD. HOWEVER, ON FURTHE R APPEAL BEFORE THE TRIBUNAL, THE ADDITION WAS RESTRICTED TO RS. 3,37,5 00/- IN ITA NO. 6485/MUM/2012 DATED 03.02.2016. WE HAVE FURTHER NOT ED THAT IN REPLY TO THE SHOW CAUSE, THE ASSESSEE STATED THAT NO PENALTY IS LEVIABLE ON ADDITION MADE ON ESTIMATION OF INCOME AND RELIED UPON THE DE CISION OF JODHPUR TRIBUNAL IN ITO VS. GURUNANAK OIL AGENCY [(2013) 15 4 TTJ, JODHPUR]. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY ASSESSIN G OFFICER. THE ASSESSING OFFICER LEVIED THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. THE LD. CIT(A) AFFIRMED THE ACTION OF ASSESSING OFF ICER. THERE IS NO DISPUTE THAT ADDITION ON WHICH PENALTY WAS INITIATED WAS BA SED ON ESTIMATION BASIS. THE ADDITION WAS FURTHER REDUCED BY TRIBUNAL BY ALL OWING ADMINISTRATIVE AND OTHER EXPENSES AND ESTIMATED THE PROFIT @ RS. 2 25/- PER PIECE/PER MIXER GRINDER. IT IS SETTLED POSITION THAT NO PENALTY IS LEVIABLE ON ADHOC/ESTIMATED ADDITION. HENCE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ENTIRE PENALTY LEVIED UNDER SECTION 271(1)(C) VIDE ORDER DATED 26. 10.2016. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/02/2020. SD/- SD/- SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATE: 05 .02.2020 ITA NO. 4784 MUM 2 018-AWADHESH BANSIRAJ PANDEY 5 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI