Shri Ikbalhusein Ibrahimbhai Kureshi, Baroda V. The Income tax Officer, Ward-5(1), Baroda

ITA 621/AHD/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0491 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-11-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 15-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, J.M. AND D.C. AGRAWAL, A.M. ITA NO.621/AHD/2008 ASST. YEAR:2002-03 SHRI IKBAL HUSSEIN IBRAHIMBHAI KURESHI, KHANGAH MOHALLA, BARODA 390017. V/S . INCOME-TAX OFFICER, WD-5(1), BARODA. PAN NO. ADRPK4025 B (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SUNIL TALATI RESPONDENT BY:- SHRI C. K. MISHRA, SR. D.R. O R D E R PER D.C.AGRAWAL, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 6.11.2007 WHEREIN HE HAS CONFIRMED THE LEVY O F PENALTY OF RS.8,10,000/-. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO N OTICED THAT THE PURCHASES OF RAW SKINS MADE BY THE ASSESSEE ARE NO T VERIFIABLE TO THE EXTENT OF RS.26,33,935/-. HE NOT ONLY MADE THE ADDI TION BUT ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). IN RES PONSE TO SHOW CAUSE NOTICE ISSUED BY THE AO THE ASSESSEE ASKED THE AO T O KEEP THE ITA NO.621/AHD/2008 AY 2002-03 2 PROCEEDINGS IN ABEYANCE TILL THE DECISION OF THE TR IBUNAL BUT THE AO DECIDED TO LEVY THE PENALTY FINDING THAT EXPLANATIO N FURNISHED BY THE ASSESSEE IS NOT SATISFACTORY. THE LD. CIT(A) CONFIR MED THE PENALTY ON THE GROUND THAT THE CRITERIA SHOWN IN THE BALANCE SHEET ARE FOUND TO BE NOT GENUINE. THE AO RECORDED THE STATEMENT OF ACCOUNTAN T AND FOUND THAT PURCHASES BY THE ASSESSEE BY CHEQUES ARE NOT GENUIN E. 3. BEFORE US THE LD. AR SUBMITTED THAT APPEAL HAS B EEN FILED ON QUANTUM ADDITION WHICH HAS ALSO BEEN HEARD ON EVEN DATE. THE AO HAS NOT DOUBTED THE SALES MADE BY THE ASSESSEE. THEREFO RE, IT IS NOT A CASE OF ANY CONCEALMENT. THE ADDITION WAS MADE BECAUSE ASSE SSEE WAS NOT ABLE TO GET HIS PURCHASES VERIFIED. FINALLY HE SUBMITTED THAT ADDITION HAS BEEN MADE ONLY ON ESTIMATE BASIS. HE SUBMITTED THAT PENA LTY COULD NOT BE LEVIED MERELY ON THE BASIS OF ESTIMATE. HE REFERRED TO THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN HARIGOPAL SI NGH VS. CIT (2002) 258 ITR 85 AND THAT OF DELHI HIGH COURT IN A DDL. CIT VS. MOTORLITE MFG. CO. (2002) 254 ITR 713 (DEL) FOR TH E PROPOSITION THAT IF ADDITIONS ARE MADE ON ESTIMATE BASIS, NO PENALTY CO ULD BE LEVIED. 4. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS O F AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR LEVY OF PENALTY. ADDITION HAS BEEN MADE BY HOLDING THAT PURCHASES AR E NOT GENUINE AND FINALLY ONLY ESTIMATED ADDITION ON ACCOUNT OF UNVER IFIABLE PURCHASES SURVIVED. ACCORDINGLY ADDITION IS ON MERELY ESTIMAT E BASIS, THEREFORE, THERE IS NO CASE FOR LEVY OF PENALTY IN VIEW OF THE DECISION OF HONBLE ITA NO.621/AHD/2008 AY 2002-03 3 PUNJAB & HARYANA HIGH COURT IN HARIGOPAL SINGH VS. CIT (SUPRA) AND HONBLE DELHI HIGH COURT IN ADDL. CIT VS. MOTORLITE MFG. CO. (SUPRA). SIMILAR VIEW HAS BEEN TAKEN BY HONBLE PUNJAB & HAR YANA HIGH COURT IN ITO VS. CHIRANJILAL COTTON INDUSTRIES AND OTHERS (2 002) 254 ITR 181 (P& H). IN VIEW OF THE ABOVE, WE CANCEL THE PENALTY LEV IED BY THE AND CONFIRMED BY LD. CIT(A). 6. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 13/11 /2009 SD/- SD/- ( MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 13/11/2009 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD