M/s Heera Moti Spices Pvt. Ltd., Chandigarh V. DCIT, Chandigarh

ITA 589/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8244 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 13-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 588 & 589/CHD/2016 ASSESSMENT YEAR : 2009-10 M/S HEERA MOTI SPICES PVT. LTD., VS THE DCIT, 1054, INDUSTRIAL AREA, PHASE-II, CENTRAL CIRCLE-1 , CHANDIGARH. CHANDIGARH. PAN: AABCH4813J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL & SHRI ASHOK GOYAL RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 16.02.2017 DATE OF PRONOUNCEMENT : 01.03.2017 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OFF BOTH THE APPEALS BY TH E SAME ASSESSEE AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS)-3 GURGAON DATED 18.02.2016 FOR ASSESSMENT YEARS 2009-10 CHALLENGING THE LEVY OF PENALTY UNDER SECTIONS 271(1)(C) AND 271AAA OF INCO ME TAX ACT. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 2 ITA 588/2016 3. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY UNDE R SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF ADDITION MADE OF RS. 13,96,996/- OF SUNDRY CREDITORS. THE LD. CO UNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE FILED APPE AL ON QUANTUM BEFORE ITAT CHANDIGARH BENCH AND VARIOUS GROUP APPEALS HAVE BEEN DECIDED VIDE ORDER DATED 17.01.2017. IN THE CASE OF THE ASSESSEE, THE APPEA L OF THE ASSESSEE FOR ASSESSMENT YEAR UNDER APPEAL I.E. 2009-10 HAS BEEN DECIDED IN ITA 570/2013 IN WHICH T HE ADDITION OF RS. 13,96,998/- HAVE BEEN RESTORED TO T HE FILE OF ASSESSING OFFICER WITH DIRECTION TO DECIDE THE ISSUE AFRESH. THE FINDINGS OF THE TRIBUNAL IN PARA 57 ARE REPRODUCED AS UNDER : 57. ON GROUND NOS. 5 TO 8, ASSESSEE CHALLENGED THE ADDITION OF RS. 13,96,998/-. THE LD. CIT(APPEALS) FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2003-04 ON ACCOUNT OF FRESH CREDITOR CONFIRMED THE ADDITION. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THIS ISSUE IS SAME AS IS CONSIDERED AND DECIDED IN THE CASE OF ASSESSEE M/S HIMLAND AGRO FOODS LTD. VS DCIT, CHANDIGARH IN ITA NO. 743/2013 FOR ASSESSMENT YEAR 2005-06. IT IS, THEREFORE, COVERED MATTER. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDINGLY SET ASIDE AND MATTER IS RESTORED TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO FOLLOW THE ORDER IN ASSESSMENT YEAR 2005-06 (SUPRA) AND DECIDE THE ISSUE ACCORDINGLY. THESE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 3 4. IN THIS VIEW OF THE MATTER, IT IS CLEAR THAT THE SUBJECT MATTER OF THE LEVY OF PENALTY I.E. ADDITION ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITOR OF RS. 13,96,996/- HAVE BEEN RESTORED TO THE FILE OF ASSES SING OFFICER FOR FRESH ADJUDICATION, THEREFORE, NO BASIS IS LEFT FOR LEVY OF THE PENALTY AGAINST THE ASSESSEE ON THI S ADDITION. THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE AND PENALTY IS CANCELLED. HOWEVER, ASSESSING OFFIC ER IS FREE TO TAKE STEPS FOR INITIATION OF THE PENALTY AG AINST ASSESSEE IN ACCORDANCE WITH LAW AFTER PASSING THE O RDER ON QUANTUM ADDITION. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ITA 589/2016 6. THE AUTHORITIES BELOW HAVE LEVIED THE PENALTY UNDER SECTION 271AAA OF THE ACT ON ADDITION OF RS. 32,94,380/- ON ACCOUNT OF SEIZED MATERIAL BECAUSE ASSESSEE FAILED TO SUBSTANTIATE THE MANNER WITH RES PECT TO EARNING OF UNDISCLOSED INCOME AND PAYMENT OF TAX ALONGWITH INTEREST IN RESPECT OF UNDISCLOSED INCOME . THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THI S ADDITION WAS ALSO SUBJECT MATTER OF APPEAL BEFORE I TAT CHANDIGARH BENCH IN ITA 570/2013 FOR ASSESSMENT YEA R 2009-10 (SUPRA) AND APPEAL HAS BEEN DECIDED VIDE OR DER DATED 17.01.2017 AND ON THIS ADDITION, SUBSTANTIAL ADDITION HAVE BEEN DELETED BY THE TRIBUNAL IN PARA 55 OF 4 THE ORDER, SAME IS REPRODUCED AS UNDER : 55. ON GROUND NO. 4, ASSESSEE CHALLENGED THE ADDITION OF RS. 32,94,380/-. THIS ISSUE IS SIMILAR TO THE MONEY TRANSACTION JAMA AND NAAM AS IN ASSESSMENT YEAR 2008-09, WHICH HAVE BEEN GENERATED FROM ACCOUNTING SOFTWARE DELTA-3. THE ASSESSING OFFICER OBSERVED THAT THERE WERE INTEREST CALCULATIONS ON THE BASIS OF NUMBER OF DATES AND IN TOTALITY, THE BALANCE FROM THESE DOCUMENTS WERE FOUND TO BE RS. 32,94,380/- WHICH HAVE BEEN ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(APPEALS) FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2008-09, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 56. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF THE VIEW THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2008-09 ON GROUND NO. 5. THE ASSESSING OFFICER HAS REPRODUCED THE SEIZED PAPER IN THE ASSESSMENT ORDER. IN THE FIRST SEIZED PAPER, NOTED IN PARA 8 OF THE ASSESSMENT ORDER, ASSESSING OFFICER HAS MENTIONED JAMA AMOUNT OF RS. 22,75,336/- AND AGAINST NAAM RS. 32,58,279/-. THE BALANCE AMOUNT (LENA BAAKI NAAM) IS RS. 9,82,943/-. THE INTEREST IS ALSO MENTIONED AT RS. 16,657/-. THE ASSESSING OFFICER, HOWEVER, MADE ADDITION OF RS. 3,81,779/- ON THIS ISSUE BY FOLLOWING SECTION 292C OF THE ACT. ANOTHER PAPER SEIZED IS REFERRED TO IN PARA 8.1 OF THE ASSESSMENT ORDER IN WHICH JAMA AMOUNT HAS BEEN SHOWN AT RS. 34,200/- AND AGAINST NAAM AT OF RS. 28,77,197/- HAS BEEN SHOWN. THE BALANCE (LENA BAAKI) IS MENTIONED AT RS. 28,42,997/-, INTEREST IS ALSO SHOWN. THE 5 ASSESSING OFFICER FOLLOWING SECTION 292C OF THE ACT, MADE THE ADDITION OF RS. 28,77,197/-. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2008-09. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED AN AMOUNT OF RS. 19,45,700/- IS SAME AMOUNT CONSIDERED IN A.Y. 2008-09 IN PARA 10.1 OF ORDER, THEREFORE, IT IS DUPLICATE AMOUNT. THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE IS CORRECT IN THIS REGARD. HOWEVER, FOLLOWING THE REASONS FOR DECISION FOR ASSESSMENT YEAR 2008-09, WE RESTRICT THE ADDITION AS REGARDS FIRST SEIZED PAPER, TO RS. 3,81,779/- AS IS MADE BY THE ASSESSING OFFICER BECAUSE IT CANNOT BE ENHANCED FURTHER. AS REGARDS THE SECOND SEIZED PAPER IS CONCERNED, JAMA AMOUNT IS ONLY RS. 34,200/- THEREFORE, AS AGAINST ADDITION OF RS. 28,77,197/-, THE ADDITION IS RESTRICTED TO RS. 34,200/-. THE ASSESSING OFFICER SHALL PASS THE CONSEQUENTIAL ORDER ACCORDINGLY. THIS GROUND IS, THEREFORE, PARTLY ALLOWED BY FOLLOWING REASONS FOR ASSESSMENT YEAR 2008-09. 7. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT ON FIRST SEIZED PAPER, ADDITION IS RESTRICTED TO RS. 3,81,779/- AND ON SECOND SEIZED P APER, ADDITION IS RESTRICTED TO RS. 34,200/-. HE HAS, THEREFORE, SUBMITTED THAT PENALTY COULD BE LEVIED O N THESE AMOUNTS ONLY. IN THIS VIEW OF THE MATTER, WE SET ASIDE AND MODIFY THE ORDERS OF AUTHORITIES BELOW BECAUSE ON QUANTUM ADDITION, SUBSTANTIAL RELIEF HAS BEEN GIVEN TO THE ASSESSEE BY REDUCING THE ADDITION S TO 6 RS. 3,81,779/- AND R 34,200/-. THE ASSESSING OFFIC ER IS DIRECTED TO RE-COMPUTE THE PENALTY AMOUNT UNDER SECTION 271AAA OF THE ACT ON THESE ADDITIONS SO RESTRICTED IN THE QUANTUM ADDITIONS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA 588/2016 IS ALLOWED AND IN ITA 589/2016 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST MARCH, 2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD