VIPINCHANDER AGGARWAL HUF, MUMBAI V. ITO 22(2)-2, NAVI MUMBAI

ITA 5384/MUM/2010

• Counselvise Citation: 538419914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2004-2005
• Appeal Filed On: 01-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARTHSHASTRI NAIK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI P.M.JAGTAP (A.M) & SHRI N.V.VASUDEVAN (J.M) ITA NO.5384/MUM/2010(A.Y. 2004-05) VIPINCHANDER AGGARWAL (HUF) 32, DIVYA SWAPNA CHS, DR. C.G. ROAD, CHEMBUR, MUMBAI 400 074. PAN:AAAHV 1833Q (APPELLANT) VS. THE ITO 22(2)2, VASHI, NAVI MUMBAI. (RESPONDENT) APPELLANT BY : SHRI VISHWAS MEHENDALE RESPONDENT BY : SHRI PARTHSHASTRI NAIK DATE OF HEARING : 28/09/2011 DATE OF PRONOUNCEMENT : 30/09/2011 ORDER PER N.V.VASUDEVAN, J.M, THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 29/3/10 OF CIT(A) 33, MUMBAI RELATING TO A.Y 2004-05. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A), WHEREBY THE CIT (A) CONFIRMED THE ORDER OF THE AO IMPOSING PENALTY ON THE ASSESSEE UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS IMPOSED BY THE AO ON THE A SSESSEE ARE AS FOLLOWS: THE ASSESSEE IS AN HUF. IN THE COURSE OF ASSESSME NT PROCEEDINGS THE AO NOTICED THAT ASSESSEE HAD CLAIMED SOME SALES RE TURN FROM SHRI RAM METAL AND KAARLO METAL & TUBES. AO FURTHER FOUND THAT ASSESSEES CLAIM TO HAVE RESOLD SUCH GOODS AND INCURRED LOSS AMOUNTING TO RS.5,07,426/- ON ITA NO.5384/MUM/2010(A.Y. 2004-05) 2 SUCH RESALE WAS NOT PROVED. THE ASSESSEE WAS ASKED TO SUBSTANTIATE ITS CLAIM. THE ASSESSEE HAD FILED ONLY CONFIRMATIONS. I T WAS OBSERVED BY THE AO THAT IN THE CASE OF SHRI RAM METAL ADDRESS WAS STAT ED AS C. P. TANK ROAD, BOMBAY 400 004 WHICH WAS INCOMPLETE ADDRESS AND THE REFORE SAME WAS NOT VERIFIABLE. IN THE CASE OF KAARLO METAL & TUBES, TH E AO OBSERVED THAT THAT PARTY HAD FILED IN RESPONSE TO SUMMONS A COPY OF TH E LEDGER ACCOUNT OF ASSESSEES ACCOUNT WHICH DID NOT REFLECT ANY SALES RETURN. IN THE LIGHT OF THESE FACTS, AO WAS OF THE VIEW THAT SUCH LOSS WAS NOT ALLOWABLE. HOWEVER, SINCE ULTIMATELY PROFIT HAD BEEN ESTIMATED THEREFOR E NO SEPARATE ADDITION WAS MADE. ON APPEAL, ID. C1T(A) OBSERVED THAT SIN CE NO SEPARATE ADDITION BEEN MADE THEREFORE ACTION OF THE AO WAS CONFIRMED. ON FURTHER APPEAL BY THE ASSESSEE THE HONBLE ITAT IN ITA NO.1375/M/08 S ET ASIDE THE CIT(A) HELD AS UNDER: WE FIND THAT AO HAD SPECIFICALLY OBJECTED THAT ADD RESS OF SHRI RAM METAL IS NOT COMPLETE DESPITE THIS FACT THAT IT WA S NOT ASSERTED BEFORE HIM THAT SUCH ADS WAS CORRECT. HOWEVER, AT THE SAME TIME AC HAS ALSO NOT MADE ANY FURTHER ENQUIRIES ON THE BASIS - OF C ONFIRMATION WHICH EVEN GAVE THE P.A NO. SIMILARLY, THE CONTENTION THA T NO LOSS WAS INCURRED IN CASE OF SALES RETURN FROM KAARLO METAL & TUBES HAS NOT BEEN CONSIDERED BY THE AC. EVEN THE FACT OF IMPLICA TION OF SALES TAX SET OFF AND REFUND WAS NOT CONSIDERED BY THE AC. THEREF ORE, IN THE INTERESTS OF JUSTICE, WE SET ASIDE THE ORDER OF THE ID. C1T(A) IN THIS RESPECT AND REMIT THE MATTER TO THE FILE OF THE AC FOR RE-EXAMINATION OF THE ISSUE. ASSESSEE SHOULD COOPERATE WITH THE PROCE EDINGS AND PROVIDE NECESSARY DETAILS. AO MAY, IF SO, DESIRED SUMMON TH E PARTIES FOR VERIFICATION OF THE SALES RETURN AND SHOULD DECIDE THE ISSUE AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL P URPOSE. 3. IN RESPECT OF THE ADDITION TREATING THE SALES RE TURN OF RS. 5,07,426/- AS UNPROVED LOSS THE AO IMPOSED PENALTY ON THE ASSESSE E WHICH WAS CONFIRMED BY THE CIT(A). SINCE THE ADDITION ON THE BASIS OF WHICH PENALTY HAS BEEN IMPOSED ON THE ASSESSEE HAS ALREADY BEEN SET ASIDE BY THE TRIBUNAL WE DEEM IT APPROPRIATE TO SET ASIDE THE ORDER OF THE CIT(A) CONFIRMING THE ORDER OF THE ITA NO.5384/MUM/2010(A.Y. 2004-05) 3 AO IMPOSING PENALTY ON THE ASSESSEE AND REMAND THE ISSUE OF IMPOSING PENALTY TO THE AO FOR FRESH CONSIDERATION IN THE LI GHT OF THE DECISION WHICH HE MAY TAKE IN THE QUANTUM PROCEEDINGS PURSUANT TO THE ORDER OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS. FOR STATISTICAL PURPOS ES THE APPEAL OF THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON T HE 30 TH DAY OF SEPT. 2011. SD/- SD/- (P.M.JAGTAP ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED. 30 TH SEPT.2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RF BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.5384/MUM/2010(A.Y. 2004-05) 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28/9/11 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 28/9/11 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER