ACIT, Jaipur V. M.R.K.PIPES LTD., Jaipur

ITA 636/JPR/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5963 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMLENDU VERMA
• Assessee Lawyers: S L PODDAWR
• Section: 271(1)(c); 251

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 636/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 THE DCIT CIRCLE 4 JAIPUR CUKE VS. MISS. MRK PIPES LTD. PARASRAMPURIA CHAMBERS ROAD NO.1, VKI, SIKAR ROAD , JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCM 9497 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI VIMLENDU VERMA , (CIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. PODDAWR, ADVOCATE LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 01/10/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 03/10/2019 VKNS'K@ ORDER PER: SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF CIT(A)-2, JAIPUR DATED 27.02.2019 FOR THE A SSESSMENT YEAR 2013-14 WHEREIN THE REVENUE HAS RAISED FOLLOWING G ROUND. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN DELETING THE PENALTY LEV IED U/S 271(1)(C) AMOUNTING TO RS. 1,35,94,869/- HOLDING THAT PENALTY U/S 271(1)(C) CANNOT BE LEVIED AGAINST ESTIMATED ADDITION. ITA NO. 636/JP/2019 DCIT, CIRCLE4, JAIPUR VS MRK PIPES LTD. , JAIPUR 2 2.1 APROPOS GROUND NO. 1 OF THE REVENUE, THE AO IMP OSED THE PENALTY OF RS. 1,35,94,869/- ON TRADITION ADDITION OF RS. 4,19,01,278/- BY INCREASING THE GROSS PROFIT AT 10% ON ESTIMATIO N BASIS. 2.2 IN FIRST APPEAL, THE LD. CIT(A) HAS TAKEN INTO C ONSIDERATION THE DECISIONS OF HON'BLE RAJASTHAN HIGH COURTS IN THE C ASE OF SHRI SHIV LAL TAK WHEREIN IT WAS HELD THAT ESTIMATION OF INCOME IS NEITHER A CASE OF ADDITION NOR DISALLOWANCE BUT IT IS A CASE OF SUBSTI TUTION ON WHICH PENALTY U/S 271(1)(C) IS NOT LEVIABLE. AND ALSO THE DECISION IN THE CASE OF KRISHI TYRE RETREATING AND RUBBER LTD (2014) 44 TA XMANN.COM 9 (RAJ) WHEREIN IT WAS HELD THAT THE ISSUE PERTAINS TO THE PENALTY IMPOSED U/S 271(1)(C) BY THE AO ON AMOUNT OF RS. 1 00,000/- WHICH WAS SUSTAINED AS ADDITION AND CONFIRMED BY THE CIT( A) . ON PERUSAL OF THE FACTS IT TRANSPIRED THAT THE ADDITION HAS BEEN SUSTAINED PURELY ON ESTIMATE BASIS AND NO POSITIVE FACT OR THINGS HAS B EEN FOUND SO AS TO EVEN MAKE THE SAID ADDITION. IT IS PURE GUESS WORK A ND ON SUCH GUESS WORK OR ESTIMATION, NO PENALTY U/S 271(1)(C) CAN BE SAID TO BE LEVIAVBLE. FOR IMPOSING PENALTY U/S 271(1)(C) THE A O HAS TO CLEARLY PROVE THE CONDUCT OF THE ASSESSEE WHICH IN THIS CASE , HAS NOT BEEN ITA NO. 636/JP/2019 DCIT, CIRCLE4, JAIPUR VS MRK PIPES LTD. , JAIPUR 3 PROVED. MERELY, BECAUSE THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED OR ESTIMATED ADDITION WAS MADE, NO PENALTY IS LEVIABLE. THE ASSESSEE OFFERED AN EXPLANATION WHICH COULD NOT BE T ERMED AS NOT BONA FIDE. IN THE ABSENCE OF ANY CORROBORATIVE EVID ENCE TO PROVE THE CHARGE OF CONCEALMENT, THE PENALTY COULD NOT BE IMP OSED. THE LD. CIT(A) HAS FURTHER OBSERVED THAT FROM THE ABOVE DECI SION OF HON'BLE COURT, IT IS CLEAR THAT ON ESTIMATED ADDITION, NO P ENALTY IS LEVAIBALE. THE LD. CIT(A) NOTED THAT THE FACT OF THE PRESENT CASE IS SIMILAR AS HERE ALSO. HE NOTED THAT THE AO ESTIMATED THE PROFIT WITH OUT POINTING OUT ANY SPECIFIC INSTANCE OF SUPPRESSION OF PROFIT. THUS THE LD. CIT(A) CONCLUDED THAT THAT THE ENTIRE ADDITION MADE BY THE AO IS ON ESTIMATION BASIS AND HE THUS DELETED THE ADDITION MADE BY THE AO. 2.3 DURING THE COURSE OF HEARING THE LD. DR SUPPORT ED THE ORDER OF THE AO 2.4 ON THE OTHER HAND, THE LD.AR OF THE ASSESSEE R ELIED ON THE ORDER OF THE LD. CIT(A) AND CITED THE FOLLOWING CASE LAWS AS TO THE ADDITION MADE BY THE AO ON ESTIMATION BASIS. (I) SHIV LAL TAK VS CIT , 251 ITR 353 (RAJ.) ITA NO. 636/JP/2019 DCIT, CIRCLE4, JAIPUR VS MRK PIPES LTD. , JAIPUR 4 (II) CIT VS KRISHI TYRE RETRADING AND RUBBER IND. (2014), 44 TAXMANN. COM 9 (RAJ.) (III) CIT VS MAHENDRA SINGH KHIEDLA (2012) 252 CTR 453 (IV) HARIGOPAL SINGH VS CIT 258 ITR 85 (P&H) (V) CIT VS VIJAY KUMAR JAIN 38 DTR 345 (CHATTISGARH) (VI) CIT VS M.M. RICE MILS,253 ITR 17 (PUN. & HAR) (VII) CIT VS AERO TRADERS (P) LTD. (2010), 322 ITR 316 (DEL.) (VII) CIT VS SHRI NARAIN JAMANALAL & CO. (1989) 232 ITR 311, 313 (M.P.) 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IMPERATIVE TO REPEAT THE FACTS OF THE CASE AS THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION THE D ECISIONS OF HON'BLE HIGH COURTS (SUPRA) FOR DELETING THE ADDITION MADE BY THE AO ON ESTIMATION BASIS. THE AO HAS NOT PINPOINTED ANY SPEC IFIC INSTANCE OF SUPPRESSING THE PROFIT BY THE ASSESSEE. IN VIEW OF T HE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE DECISIONS OF HON'BLE ITA NO. 636/JP/2019 DCIT, CIRCLE4, JAIPUR VS MRK PIPES LTD. , JAIPUR 5 JURISDICTIONAL HIGH COURTS (SUPRA), WE CONCUR WITH TH E FINDINGS OF THE LD. CIT(A). THUS THE SOLITARY GROUND OF THE REVENUE IS DI SMISSED. 3. THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSIED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 03/10/2019 . SD/- SD/- FOE FLAG ;KNO LANHI XKSLKBZ (VIKRAM SINGH YADAV) (SANDEEP GOSAIN) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03/10/2019. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT, CIRCLE-4 JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-M/S. MRK PIPES LTD., JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO.636/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR