SARVESH MERCANTILE P.LTD, MUMBAI V. ACIT 2(3), MUMBAI

ITA 6040/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7758 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 06-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 14-10-2013
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO.6040/M/2013 (ASSESSMENT YEAR: 2007 - 2008 ) SARVESH MERCANTILE PVT LTD., M/S. N.S. VIRANI & C O ., C.A.S 28 BHANUSHALI BLDG., 35 MINT ROAD, MUMBAI 400 001. / VS. ACIT - 2(3), AAYAKAR BHAVAN, 5 TH FLOOR, MUMBAI. ./ PAN : AAICS1651C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : MS. POOJA SWARUP, DR / DATE OF HEARING : 06.03 .2017 / DATE OF PRONOUNCEMENT : 17 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 14.10.2013 IS AGAINST THE ORDER OF THE CIT (A) - 6, MUMBAI FOR THE AY 2007 - 2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. (A) THE ASSESSING OFFICER ERRED IN LEVYING PENALTY OF RS. 16,08,885/ - U/S 271(1 )(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS CONCEALED ITS INCOME AND HAS FURNISHED INACCURATE PARTICULARS THEREOF. (B) THE LD CIT (A) ERRED IN CONFIRMING THE O RDER OF THE AO LEVYING PENALTY AS MENTIONED ABOVE. 2. BEFORE US, NONE ATTENDED TO REPRESENT THE CASE OF THE ASSESSEE. AT THE OUTSET, LD DR FOR THE REVENUE SUBMITTED THAT THE NOTICE WAS DULY SERVED ON THE ASSESSEE. THEREFORE, DESPITE THE FACT THAT NOBODY IS PRESENT FOR THE ASSESSEE, CASE COULD BE HEARD. AFTER HEARING THE LD DR AS WELL AS CONSIDERING THE ISSUES INVOLVED IN THE APPEAL, WE PROCEED TO ADJUDICATE THIS APPEAL ON MERITS WITH THE HELP OF THE LD DR FOR THE REVENUE IN THE SUCCEEDING PARAS OF THIS ORDER. 3. THE ONLY ISSUE INVOLVED IN THIS CASE RELATES TO THE LEVY OF PENALTY U/S 2 71(1)(C) OF THE ACT. IN THIS REGARD, LD DR FOR THE REVENUE MENTIONED THAT THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND PROCEEDED TO ESTIMATE THE PROFIT AT THE FLAT RATE OF 8% AND DETERMINED THE ASSESSMENT. MATTER TRAVELLED TO THE FIRST APPELLATE 2 AUTHORITY. ON APPEAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) RESTRICTED SUCH ESTIMATION TO 3% OF THE TURNOVER AS PROFITS. THE DECISION OF THE CIT (A) WAS EVENT UALLY UPHELD BY THE ITAT. CONSEQUENT TO THE SAME, AO LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD, IN RESPONSE TO THE QUERIES FROM THE BENCH REGARDING THE LEVYABILTIY OF PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF THE ADDITIONS MADE INV OLVING THE ESTIMATIONS AND ADHOC ADDITIONS, LD DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AO AND THE CIT (A). 4. AFTER HEARING THE LD DR FOR THE REVENUE AND ON PERUSAL OF THE ORDERS OF THE AO AND THE CIT (A), WE FIND, THERE IS NO DISPUTE ON THE FACT THAT THE ADDITIONS MADE BY THE AO CERTAINLY INVOLVES ESTIMATIONS. IT IS A SETTLED LEGAL PROPOSITION IN SUCH MATTERS THE PENALTY U/S 271(1)(C) OF THE ACT IS NOT EXCISABLE IN RESPECT OF THE AD - HOC ADDITIONS INVOLVING ESTIMATIONS. ACCORDINGLY, WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY. ACCORDINGLY WE ORDER. THUS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON 17 TH MARCH, 20 1 7 . SD/ - SD/ - (SANDEEP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 17.03 .201 7 . . ./ OKK , SR. P S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI