Bansidhar Cotton Processing Pvt.Ltd., Gandhinagar V. The Income Tax Officer, Ward-1, Gandhinagar

ITA 538/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6131 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 21-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.538/AHD/2014 (ASSESSMENT YEAR:2007-08) BANSIDHAR COTTON PROCESSING PVT. LTD., 4/12, JAWAHAR MARKET, DEHGAM, DIST. GANDHINAGAR 382305 APPELLANT VS. INCOME TAX OFFICER, WARD 1, GANDHINAGAR RESPONDENT PAN: AAACB8431B /BY ASSESSEE : MR. S. N. DIVETIA, A.R. /BY REVENUE : MR. PRASOON KABRA, SR. D.R. /DATE OF HEARING : 17.04.2017 /DATE OF PRONOUNCEMENT : 19.04.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08 ARISES AGAINST THE CIT(A), GANDHINAGAR, AHMEDABADS ORDER DATED 02.12 .2013, PASSED IN APPEAL NO. CIT(A)-GNR/06/2012-13, UPHOLDING ASSESSI NG OFFICERS ACTION IN IMPOSING PENALTY OF RS.12,49,879/- IN ORDER DATED 2 3.03.2012, IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT, 1961; IN SHORT THE ACT. ITA NO. 538/AHD/2014 ( BANSIDHAR COTTON PROCESSING PVT. LTD. VS. ITO) A.Y. 2007-08 - 2 - WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE IMPUGNED PENALT Y PERTAINS TO FIVE ADDITIONS OF COTTON BALES STOCK, OIL CAKE SALE, WAS H OIL, EXCESS STOCK OF COTTON SEEDS AND RAW COTTON AMOUNTING TO RS.64,827/-, RS.1 ,18,208/-, RS.28,928/-, RS.4,57,841/- & RS.30,43,441/-; AS MADE BY THE ASSE SSING OFFICER IN ASSESSMENT ORDER DATED 28.12.2009 AND UPHELD IN CIT (A)S QUANTUM APPELLATE ORDER DATED 21.09.2010. SHRI DIVETIA FIL ES BEFORE US THIS TRIBUNALS QUANTUM DECISION AGAINST THE SAME ITA NO.2972/AHD/2 010 AND REVENUES CROSS APPEAL NO. 3126/AHD/2010; DECIDED ON 12.05.20 16 DELETING THE LATTER TWO ADDITIONS. LEARNED DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH IN NOT DISPUTING CORRECTNESS THEREOF. WE THUS DELETE THE IMPUGNED PENALTY RELATING TO THE LATTER TWO ISSUES IN VIEW OF QUANTUM FINDING S. 3. WE NOW PROCEED TO DEAL WITH THE FORMER THREE ISS UES. THE FIRST ISSUE HEREIN IS THAT OF THE IMPUGNED PENALTY RELATING TO THE QUANTUM ISSUE OF STOCK OF COTTON BALES. THIS ASSESSEE IS A COMPANY ENGAGE D IN COTTON GINNING AND PRESSING BUSINESS. THE DEPARTMENT AUTHORITIES COND UCTED A SURVEY IN ITS CASE ON 26.02.2007. THE ASSESSEES STOCK REGISTER STATE D 4022.61 QUINTALS OF COTTON BALES AS AGAINST PHYSICAL VERIFICATION STATI NG THE SAME TO BE 5521.60QUINTALS. THE ASSESSEE ATTRIBUTED THE DIFFE RENCE OF 1485.76QUINTALS TO THE FACT THAT THE SAME ALTHOUGH HAD BEEN SOLD TO M/ S. KHIMJI VISHRAM & SONS VIDE BILLS NO. 377 TO 385 ON 23.02.2007, HOWEVER, T HE SAME HAS NOT BEEN LIFTED FROM ITS PREMISES. THE ASSESSING OFFICER HO WEVER ADDED THE DIFFERENCE AMOUNT OF RS.73.45LACS AFTER OBSERVING THAT NO PURC HASER WOULD KEEP THE STOCK AT SELLERS PREMISES AFTER MAKING THE NECESSA RY PAYMENTS. THE CIT(A) DELETED THE SAID ADDITION TO THE TUNE OF RS.72.80LA CS THEREBY SUSTAINING THE REMAINING AMOUNT OF RS.64,827/-. THE ASSESSEE DID NOT PREFER ANY APPEAL THEREAFTER ON THIS ISSUE. THE REVENUES SUBSTANTIV E GROUND IN ITS QUANTUM APPEAL (SUPRA) STOOD DECLINED. ITA NO. 538/AHD/2014 ( BANSIDHAR COTTON PROCESSING PVT. LTD. VS. ITO) A.Y. 2007-08 - 3 - 4. THE SECOND RELEVANT ISSUE PERTAINING TO THE IMPU GNED PENALTY IS THAT OF OIL CAKE SALE OF RS.1,18,208/-. THE SURVEY PARTY F OUND SHORTFALL OF OIL CAKES HAVING VALUE OF RS.11.82LACS WHEREAS ASSESSEES BOO K DISCLOSED THE EXCESS STOCK NOT PHYSICALLY LOCATED. THE ASSESSING OFFICE R THEREFORE ESTIMATED 10% PROFIT RESULTING IN QUANTUM ADDITION HEREINABOVE AS CONFIRMED UPTO THIS TRIBUNAL. 5. THE THIRD QUANTUM ISSUE PERTAINING TO THE IMPUGN ED PENALTY IS THAT OF SALE OF WASH OIL OF RS.28,928/-. THE SAME AROSE FR OM PHYSICAL VERIFICATION OF WASH OIL WHEREIN THE STOCK FOUND WAS OF RS.11.51LAC S AS AGAINST THAT SHOWN IN THE BOOKS OF RS.14.40LACS RESULTING IN ESTIMATIO N OF PROFITS @10% IN QUESTION. WE REITERATE THAT ALL THESE THREE ADDITI ONS STAND CONFIRMED. 6. WE NOW ADVERT TO ASSESSING OFFICERS PENALTY ORD ER. HE HOLDS THE ASSESSEE TO HAVE CONCEALED ITS INCOME BY HEAVILY RE LYING UPON THE ABOVESTATED QUANTUM DEVELOPMENTS. THE CIT(A) CONFI RMS THE SAME. 7. HEARD BOTH THE PARTIES STRONGLY REITERATING THEI R RESPECTIVE STANDS. THERE CAN HARDLY BE ANY DISPUTE ABOUT HONBLE APEX COURTS DECISION IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) THAT QUANTUM AND PENALTY ARE SEPARATE PROCEEDINGS WHEREIN EACH A ND EVERY DISALLOWANCE/ADDITION MADE IN THE FORMER DOES NOT N ECESSARILY RESULT IN COMING INTO OPERATION OF THE LATTER PENAL PROVISION . WE KEEP IN MIND THE SAID FINE DISTINCTION TO ONCE AGAIN REVERT BACK TO THE T HREE ISSUES IN QUESTION. IT APPEARS THAT THE ASSESSEE HAD IN FACT FILED NECESSA RY BILLS OF ITS PURCHASER TO PROVE THAT THE STOCK IN QUESTION DULY STOOD SOLD EX CEPT TO THE TUNE OF RS.64,827/- IN QUESTION OUT OF THE TOTAL DIFFERENTI AL AMOUNT OF RS.73.45LACS. THE ADDITION LEFT BEHIND IS NOT EVEN 1% OF THE TOTA L ADDITION AMOUNT ORIGINALLY MADE BUT DELETED IN APPELLATE PROCEEDING S. IT IS THUS A CASE OF MERE ITA NO. 538/AHD/2014 ( BANSIDHAR COTTON PROCESSING PVT. LTD. VS. ITO) A.Y. 2007-08 - 4 - ERROR IN RE-CONCILIATION THAN THAT TO CONCEALMENT O F INCOME. THE SAME APPEARS TO BE THE CASE QUA THE SECOND ISSUE OF OIL CAKE ADD ITION WHEREIN THE ASSESSEE PLEADED THAT 2193BAGS OF 50KGS. WERE WRONGLY INCLUD ED IN THE STOCK ACCOUNT OF 60KGS. BY MISTAKE. WE NOTICE THAT THIS PLEA WAS NOT SPECIFICALLY REJECTED IN ASSESSMENT ORDER BUT THE ASSESSING OFFICER PROCEEDE D TO ESTIMATE 10% GP AS PER THE ASSESSEES SURVEY STATEMENT. THIS IS ALSO THEREFORE NOT AN INSTANCE OF NO EXPLANATION BUT THAT OF LACK OF SUPPORTIVE EVIDE NCE. COMING TO THE THIRD ISSUE OF WASH OIL STOCK ADDITION OF RS.28,928/-, WE NOTICE THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM OF NORMAL PRODUCTI ON YIELD OF THE SAID OIL AND THE ASSESSING OFFICER ONCE AGAIN PROCEEDED TO ESTIM ATE 10% GROSS PROFIT WITHOUT EVEN TAKING INTO ACCOUNT THE ASSESSEES EXP LANATION BASED ON SALE OF BAGARU. ALL THESE FACTS INDICATE THAT THE ASSESSEE HAD INDEED FILE NECESSARY EXPLANATION IN COURSE OF THE QUANTUM PROCEEDINGS WH ICH WAS NEITHER ACCEPTED NOR SPECIFICALLY REJECTED. WE QUOTE ABOVE SETTLED LAW TO CONCLUDE THAT THE SAID QUANTUM ADDITION INSTANCES COULD NOT BE TREATED AS EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME ATTRACTING THE IMPUGNED PENAL PROVISION U/S.271(1)( C) OF THE ACT. WE ACCORDINGLY DELETE THE IMPUGNED PENALTY. 8. THE ASSESSEE SUCCEEDS IN ITS INSTANT APPEAL. [PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF APRIL, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 19/04/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ITA NO. 538/AHD/2014 ( BANSIDHAR COTTON PROCESSING PVT. LTD. VS. ITO) A.Y. 2007-08 - 5 - ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0