ITO, RAJSAMAND V. M/s. Sihodi Marble Pvt. Ltd., RAJSAMAND

ITA 511/JODH/2013

• Counselvise Citation: 51123314 RSA 2013
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 12-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: SHYAM SINGHVI
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS.511,512,513,514 AND 515/JODH/2013 (A.YS. 2002-03 TO 2006-07) ITO, VS. M/S SIHODI MARBLE PVT. LTD., WARD-1, VILLAGE MADRI DEVSTHAN, RAJSAMAND. DISTT.- RAJSAMAND. PAN NO. AAECS6887J (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI N.A. JOSHI- D.R. ASSESSEE BY : SHRI SHYAM SINGHVI. DATE OF HEARING : 10/12/2013. DATE OF PRONOUNCEMENT : 10/12/2013. O R D E R PER BENCH ALL THESE APPEALS BY THE DEPARTMENT ARE DIRECTED A GAINST THE SEPARATE ORDERS OF THE LD. CIT(A), UDAIPUR EACH DAT ED 23/8/2013 FOR THE ASSESSMENT YEARS 2002-03 TO 2006-07. IN ALL THESE A PPEALS, COMMON ISSUE IS INVOLVED, WHICH RELATES TO DELETION OF PENALTY L EVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT, 1961 (HEREIN AFTER TO BE REFERRED AS 2 THE ACT). THE ONLY DIFFERENCE IS IN THE FIGURES OF THE AMOUNT OF PENALTY U/S 271(1)(C) OF THE ACT INVOLVED IN ALL THESE APPE ALS, OTHERWISE, FACTS ARE IDENTICAL. FOR THE SAKE OF CONVENIENCE AND BREVITY, THE GROUNDS RAISED IN I.T.A. NO. 511/JODH/2013 ARE REPRODUCED AS UNDER:- 1. DELETING THE PENALTY OF RS. 6,55,701/- IMPOSED U/S 271(1)(C) OF THE I.T. ACT BY HOLDING THAT THE HON'BLE ITAT VIDE ORDER DAT ED 15/07/2010 HAS DELETED THE QUANTUM ADDITIONS AND THUS THERE IS NO BASIS FOR PENALTY DESPITE THE FACT THAT THE PENALTY HAS BEEN LEVIED N OT ONLY ON THE QUANTUM ADDITIONS BUT ALSO ON UNDISCLOSED INCOME OF RS. 2,28,641/- DECLARED BY THE ASSESSEE ON ACCOUNT OF UNDISCLOSED SALES/TURNOVER DETECTED DURING THE COURSE OF SEARCH AND THEREBY IM MUNITY BY WAY OF EXPLANATION 5 TO SECTION 271(1)(C) IS NOT AVAILABLE . 2. DELETING THE PENALTY IMPOSED U/S 271(1)(C) IGNOR ING THE FACT THAT THERE IS CONCEALMENT ON THE PART OF ASSESSEE WHICH IS NOT ACCIDENTAL OR UNINTENTIONAL. 2. FACTS RELATED TO THE ISSUE IN BRIEF ARE THAT THE S OURCE OF INCOME OF THE ASSESSEE IS MARBLE BUSINESS AND A SEARCH AND SE IZURES OPERATION WAS CARRIED OUT IN THE RESIDENTIAL AND BUSINESS PREMISE S OF THE GROUP TO WHICH THE ASSESSEE BELONGS. THE ASSESSEE FILED THE RETURN S OF INCOME ON 30/11/2006 DECLARING TOTAL INCOME OF RS. 2,04,564/- FOR THE ASSESSMENT YEAR 2002-03. HOWEVER, THE ASSESSMENT WAS FRAMED U/ S 153A READ WITH SECTION 143(3) OF THE ACT AT AN INCOME OF RS. 13,98 ,130/-. 3 . THE ASSESSEE PREFERRED THE APPEAL AGAINST THE AS SESSMENT ORDER AND THE LD. CIT(A) HAD GIVEN CERTAIN RELIEF AS WELL AS CONFIRMED SOME 3 ADDITIONS. AGAINST THE ORDER OF THE LD. CIT(A), BOT H THE PARTIES I.E. THE ASSESSEE AS WELL AS THE DEPARTMENT PREFERRED APPEAL S TO THE I.T.A.T. JODHPUR BENCH, JODHPUR WHEREIN THE ADDITIONS SUSTAI NED BY THE LD. CIT(A) WERE DELETED. IN THIS CASE, THE ASSESSING OF FICER LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT, THOSE ORDERS LEVYING THE PENALTIES WERE PASSED BY THE ASSESSING OFFICER BEFORE THE OUTCOME OF THE APPEALS PREFERRED BY BOTH THE PARTIES TO THE ITAT JODHPUR BENCH, JODHPUR . AGAINST THE PENALTY ORDERS OF THE ASSESSING OFFICER, THE ASSESSEE PREFE RRED APPEALS TO THE LD. CIT(A), WHO DELETED THE PENALTIES BY OBSERVING THAT THE ITAT VIDE ORDER DATED 15/7/2010 DELETED THE ADDITIONS ON QUANTUM, A S SUCH, THE BASIS ON WHICH, THE PENALTIES WERE LEVIED, IS NOT IN EXISTEN CE. ACCORDINGLY, THE PENALTIES LEVIED BY THE ASSESSING OFFICER WERE DELE TED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- I CIT VS ROY DURLABH JI (1995) 211 ITR (RAJ.) 470. II SUKHDEV CHARITY ESTATE VS. CIT (1987) 63 CTR (R AJ.) 78. III M/S KC BUILDERS & ANOTHERS VS. ACIT (2004) 265 ITR 562 (SC) NOW THE DEPARTMENT IS IN APPEAL 4. LEARNED D.R. ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD. CIT(A). 4 5. IN HIS RIVAL SUBMISSIONS, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT THE ADDITIONS ON THE BASIS OF WHICH PENALTIES U/S 271(1)(C) OF THE ACT WERE LEVIED BY THE ASSESSING OFFICER, HA S ALREADY BEEN DELETED BY THE ITAT JODHPUR BENCH, JODHPUR IN I.T.A. NO. 21 7 TO 221/JU/2009 FOR THE ASSESSMENT YEARS 2002-03 TO 2006-07 VIDE ORDER DATED 15 TH JULY, 2010 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE INSTANT CASE, IT IS NOTICED THAT THE ASSESSEE PREFE RRED APPEAL TO THE LD. CIT(A) AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER AND THE LD. CIT(A) VIDE COMMON ORDER DATED 02/02/2009 ALLOWED S OME RELIEF TO THE ASSESSEE AND CERTAIN ADDITIONS WERE CONFIRMED. BEIN G AGGRIEVED, BOTH THE PARTIES PREFERRED APPEALS TO THE ITAT JODHPUR BENCH , JODHPUR. THE ASSESSEE FILED APPEAL IN I.T.A. NO. 217 TO 221/JU/2 009 WHILE THE DEPARTMENT FILED THE APPEAL IN I.T.A.T. NO. 212 TO 216/JU/2009 FOR THE ASSESSMENT YEARS 2002-03 TO 2006-07 RESPECTIVELY AN D THE ITAT JODHPUR BENCH, JODHPUR VIDE COMMON ORDER DATED 15 TH JULY, 2010 DELETED ALL THE ADDITIONS. THE RELEVANT FINDINGS ARE GIVEN IN PARAS 33 AND 34 OF THE SAID ORDER DATED 15 TH JULY, 2010, WHICH READ AS UNDER:- 5 33. THE ASSESSING OFFICER ALSO MADE ADDITIONS AS UNEXPLAINED DEBTOR BY TREATING THE SALES DIFFERENTL Y THAN THE SALES RECORDED IN THE DIARIES. AS WE HAVE ALREADY ACCEPTE D THAT THE SALES HAVE BEEN CONSIDERED BY THE ASSESSEE IN WORKI NG OUT THE INCOME, THERE CAN BE NO SEPARATE ADDITIONS OF ANY S EPARATE SALES, PARTICULAR WHEN THE PURCHASES ARE ALSO STAND ADMITT ED. THE ADDITION ERRONEOUSLY SUSTAINED BY THE LD. CIT(A) IS , THUS, DIRECTED TO BE DELETED. 34. IN THE OVERALL CONSPECTUS OF THE CASE AND THE FINDINGS AS AFORESAID ON THE ISSUE UNDER DISPUTE COUPLED WITH T HE FACT THAT ADDITIONS U/S 153A OF THE ACT CANNOT BE MADE IN A C ASE LIKE THIS, WE FIND NO JUSTIFICATION IN MAKING ANY ADDITION ON ACCOUNT OF ESTIMATED PROFIT ON THE SALES, UNEXPLAINED INVESTME NT AND UNEXPLAINED DEBTORS IN THE YEARS UNDER APPEAL. AS A RESULT, APPEALS OF THE ASSESSEE STAND ALLOWED AND THAT OF T HE REVENUE STAND DISMISSED. 7 . FROM THE ABOVE FACTS, IT IS ABUNDANTLY CLEAR THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE NOT IN EXISTENCE, THER EFORE, THE PENALTIES WERE NOT LEVIABLE U/S 271(1)(C)OF THE ACT. IN THIS REGARD, THE HON'BLE SUPREME COURT IN THE CASE OF K.C. BUILDERS AND ANOTHER VS. ACIT REPORTED IN (2004) 265 ITR 562 , HAS HELD AS UNDER:- WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER O N THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETE D, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT AN D, THEREFORE, IN SUCH A CASE NO PENALTY CAN SURVIVE AND THE PENALTY IS LI ABLE TO BE CANCELLED. ORDINARILY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. 6 8 . WE, THEREFORE, KEEPING IN VIEW THE RATIO LAID DOW N BY THE HON'BLE SUPREME COURT IN THE AFORESAID REFERRED TO CASE, DO NOT SEE ANY MERIT IN THESE APPEALS OF THE DEPARTMENT. 9. IN THE RESULT, APPEALS OF THE DEPARTMENT ARE DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 10/12/2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10/12/2013 RANJAN* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.