MUKESH KUMAR KHANDELWAL, Alwar V. ITO, Alwar

ITA 529/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5136 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 30-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: P C PARWA
• Keywords: Loose papers
• Section: 133A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 529/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1998-99. SHRI MUKESH KUMAR KHANDELWAL, PROP. M/S. NITIN HOSIERY, BICHU KI GALI BAZAZA BAZAR, ALWAR. CUKE VS. THE INCOME TAX OFFICER, WARD 1(4), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ACOPK 3182 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P C PARWA (C.A) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21.07.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 22/07/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), ALWAR DATED 25.06.2014 PERTAINING TO ASSESSMENT YEAR 1998 -99. THE ASSESSEE HAS RAISED THE SOLITARY GROUND WHICH READS AS UNDER :- THAT THE LD. ASSESSING OFFICER HAS ERRED IN LAW A S WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN IMPOSING A PENALTY OF RS. 23,849/- WITHIN THE MEANING OF SECTION 271(1)(C) OF THE I. T AX ACT 1961 AND LD. CIT (A) HAS ERRED IN CONFIRMING A SUM OF RS. 12,395 /- OUT OF THE SAME. 2. BRIEFLY STATED THE FACTS ARE THAT A SURVEY ACTIO N WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE UNDER SECTION 133A OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 20.10.1997. DURING THE COURSE OF SURVEY, THE ASSESSEE ADMITTED THE UNRECORDED SALES OF RS. 10,79,219/- AN D SURRENDERED THE SAME FOR TAXATION. HOWEVER, THE AO WHILE FRAMING THE ASSESS MENT, OBSERVED THAT THE 2 ITA NO. 529/JP/2014 MUKESH KUMAR KHANDELWAL VS. ITO EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED FOR THE REASON THAT IT IS NOT ESTABLISHED WHOLLY AND EXCLUSIVELY THAT THERE WERE NO OTHER UNACCOUNTED SALES OTHER THAN ADMITTED BY THE ASSESSEE DURING THE COURSE OF SURVEY. THE POSSIBILITY OF FURTHER UNRECORDED SALES IS NOT RULED OUT AND PROCEEDED TO MAKE ADDITION OF RS. 1,29,500/- AND ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTIO N 271(1)(C) OF THE ACT SEPARATELY AND IMPOSED PENALTY OF RS. 23,849/-. THE ASSESSE E AGGRIEVED BY THIS PENALTY UNDER SECTION 271(1)(C) OF THE ACT, PREFERRED AN AP PEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS, CONFIRMED THE PENALTY OF RS. 12,395/- ON THE BASIS THAT LD. CIT (A) CONFIRMED THE ADDITION OF RS. 40,000/- IN QUANTUM APPEAL. THE ASSESSEE AGGRIEVED BY THIS ORDER, PREFERRED THE PRESENT APPE AL BEFORE THE TRIBUNAL. 3. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT THOU GH THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE CONFIRMATION OF ADDITION OF RS. 40,000/- BY THE LD. CIT (A), HOWEVER, THE LD. CIT (A) CONFIRMED THE ADDITION TO THE EXTENT OF RS. 40,000/- TO MEET THE ENDS OF JUSTICE. THE LD. COUNSEL SUBMITTED THAT THERE WAS NO MATERIAL AVAILABLE BEFORE THE AUTHORITIES BELOW IN MAKING TH E ADDITION AND CONFIRMING THE SAME. THE LD. COUNSEL REITERATED THE SUBMISSIONS AS MADE IN WRITTEN BRIEF. IT IS CONTENDED THAT THE ASSESSEE HIMSELF ON THE BASIS OF LOOSE PAPERS ADMITTED THE UNRECORDED SALES OF RS. 10,79,219/- ON WHICH HE OFF ERED INCOME OF RS. 62,055/-. THE LOWER AUTHORITIES HAVE NOT REFERRED TO ANY LOOS E PAPERS OVER AND ABOVE THAT ADMITTED BY THE ASSESSEE OF RS. 10,79,219/- AS MENT IONED IN THE ASSESSMENT ORDER. THE AO ONLY FOR THE POSSIBILITY OF FURTHER UNRECORD ED SALES, MADE HIGHER ESTIMATION OF TURNOVER AND MADE ADDITION OF RS. 1,29,500/-. T HE LD. CIT (A) RESTRICTED THE ADDITION TO RS. 40,000/- TO MEET THE ENDS OF JUSTIC E. FROM THE ORDERS OF THE AUTHORITIES BELOW IT CAN BE INFERRED THAT THE ADDIT ION IS SUSTAINED PURELY ON THE BASIS 3 ITA NO. 529/JP/2014 MUKESH KUMAR KHANDELWAL VS. ITO OF ESTIMATION, NOT SUPPORTED BY ANY MATERIAL EVIDEN CE AND FOR SUCH ESTIMATED ADDITION, THERE CANNOT BE ANY CHARGE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, HE UR GED THAT THE PENALTY BE DELETED. 3.1. ON THE CONTRARY, THE LD. D/R VEHEMENTLY SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. THE LD. D/R SUBMITTED THAT THE A SSESSEE HAS NOT FILED ANY APPEAL AGAINST THE FINDINGS OF LD. CIT (A) WHEREIN QUANTUM ADDITION WAS CONFIRMED TO THE EXTENT OF RS. 40,000/-. HE THUS SUBMITTED THAT THE ASSESSEE HAS ACCEPTED THE FACTUM OF UNRECORDED SALES OVER AND ABOVE THE SALES OFFERED FOR TAXATION DURING THE COURSE OF SURVEY. 3.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. UNDISPUTED FACTS THAT ARE BORNE OUT OF THE RECORDS ARE THAT BOTH THE AUTHORIT IES BELOW HAVE NOT GIVEN ANY SPECIFIC INSTANCE OF UNRECORDED SALES OR FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH SPECIFIC MATERIAL W ITH REGARD TO THE UNRECORDED SALES OR FURNISHING OF INACCURATE PARTICULARS OF IN COME, IN OUR CONSIDERED VIEW, THE PROVISIONS OF SECTION 271(1)(C) CANNOT BE INVOKED. IT IS SETTLED POSITION OF LAW THAT QUANTUM PROCEEDINGS AND PENALTY PROCEEDINGS BOTH AR E SEPARATE AND DISTINCT PROCEEDINGS. THE REQUIREMENT OF LAW FOR INITIATING PROCEEDINGS UNDER SECTION 271(1)(C), THE AO HAS TO BRING ON RECORD MATERIAL D EMONSTRATING THAT THE ASSESSEE HAS EITHER FURNISHED INACCURATE PARTICULARS OF INCO ME OR CONCEALED THE INCOME. IN THE CASE IN HAND, THE ADDITION WAS MADE PURELY ON E STIMATION BASIS ON CONJECTURES AND SURMISES WITHOUT BRINGING ANY MATERIAL ON RECOR D SUGGESTING THAT THE ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME. HENCE, WE ARE UNABLE TO SUSTAIN THE REASONING GIVEN BY THE AUTHOR ITIES BELOW FOR IMPOSING THE 4 ITA NO. 529/JP/2014 MUKESH KUMAR KHANDELWAL VS. ITO PENALTY AND CONFIRMING THE SAME. THE AO IS HEREBY D IRECTED TO DELETE THE PENALTY. THE GROUND RAISED IN THE APPEAL IS ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22/07/201 6. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 22 /07/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI MUKESH KUMAR KHANDELWAL, AL WAR. 2. THE RESPONDENT- THE ITO WARD 1(4), ALWAR. 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 529/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 529/JP/2014 MUKESH KUMAR KHANDELWAL VS. ITO