Narmada Fabrics Pvt.Ltd., Bharuch V. The Dy.CIT., Bharuch Circle, Bharuch

ITA 690/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6012 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-07-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained investment
• Section: 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.690/AHD/2011 A.Y.2004-05 M/S. NARMADA FABRICS P. LTD., A-1, 419, 420, GIDC, ANKLESHWAR. PAN: AAACN 6493P VS DCIT BHARUCH CIRCLE, BHARUCH. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI M.K. SINGH, SR.D.R., ASSESSEE(S) BY : SHRI M.K. PATEL, A.R. / // / DATE OF HEARING : 21/07/2014 / DATE OF PRONOUNCEMENT: 25/07/2014 / O R D E R SHRI MUKUL KUMAR SHRAWAT (JUDICIAL MEMBER) THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LEARNED CIT(A)-VI, BARODA DATED 02.12.2010. THE GRO UND RAISED BEFORE US IS REPRODUCED BELOW: (1) THAT ON FACTS, AND IN LAW, THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) HAS GRIEVOUSLY ERRED IN CONFIRMING THE LE VY OF PENALTY OF RS.13,85,356/- U/S.271(1)(C) OF THE ACT. 2. AT THE OUTSET, LEARNED AR HAS INFORMED THAT FOR A.Y.2004-05, ITAT A BENCH AHMEDABAD IN THE CASE OF THE ASSESSE E, VIDE ORDER DATED 24.12.2010 TITLED AS M/S. NARMADA FABRICS PVT. LTD. (ITA NO.405/AHD/2008) A.Y. 2004-05 HAS RESTORED THE ISSU E OF TOTAL ADDITION AT RS.45,45,100/- BACK TO THE STAGE OF THE AO TO DE CIDED AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. LEA RNED AR HAS ALSO INFORMED THAT THE SAID ASSESSMENT ORDER WAS AN EX-P ARTE ORDER PASSED ITA NO.690/AHD/2011 M/S. NARMADA FABRICS PVT. LTD. VS. DCIT BHARUCH, CI RCLE, BHARUCH FOR A.Y. 2004-05 - 2 - U/S.144 OF IT ACT. THERE WERE TWO ADDITIONS WHICH W ERE CHALLENGED BEFORE THE TRIBUNAL, MENTIONED ON FORM NO.36 AS FOL LOWS: (I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S)-VI, BHARUCH HAS GRIEVOUSLY ERRED IN CONFIRMING THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT DETERMINING THE TOTAL INCOME AT RS.45,45 ,100/- WITHOUT GIVING ADEQUATE OPPORTUNITY TO APPELLANT. (II) THE LEARNED CIT(APPEALS) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION MADE ON ACCOUNT OF ALLEGED UNACCOUNTED SALES AMOUNTING TO RS.22,08,803/- AND UNACCOUNTED PURCHAS E OF RS.16,52,816/-. 3. THEREAFTER IN CONSEQUENCE THEREUPON AN ASSESSMEN T WAS MADE U/S.143(3) R.W.S. 254 OF IT ACT, DATED 23.12.2011 A ND THE LOSS WAS DETERMINED AT RS.11,63,268/-. THE ADDITION IN RESPE CT OF UNACCOUNTED SALES WAS MADE. THE ASSESSEE HAD ADMITTED THE PURCH ASE OF GREY FABRICS MEASURING 1,50,256 METERS FROM THE LOCAL MARKET IN CASH AT RS.16,52,816/- WHICH WAS ALLEGEDLY SHOWN IN THE LOT REGISTER AS PURCHASED FROM M/S. KING FABRICS. THE ASSESSEE WAS UNABLE TO IDENTIFY AND PROVE THOSE PURCHASES. THE AO HAS TREATED THE I MPUGNED AMOUNT AS UNACCOUNTED INVESTMENT IN THE PURCHASES. THERE WAS AN ANOTHER ISSUE OF SHORTAGE OF STOCK AMOUNTING TO RS.22,08,803/- WHICH WAS PLEADED TO BE SET OFF AS PER LAW. DUE TO ALL THESE REASONS, THE E ARLIER ASSESSMENT WHICH WAS PASSED U/S.144 DATED 28.12.2006 WAS MODIFIED. N OW, THE LEARNED AR HAS INFORMED THAT IN SECOND ROUND AGAIN AN ORDER U/ S.271(1)(C) WAS PASSED ON 15 TH JUNE, 2012 AND A PENALTY OF RS.3,75,100/- FOR A.Y. 2004- 05 HAS BEEN IMPOSED. HE HAS, THEREFORE, PLEADED THA T THE PENALTY ORDER IN QUESTION DATED 16.03.2009 STOOD MERGED WITH THE SUB SEQUENT ORDERS PASSED AFTER GIVING EFFECT TO THE DIRECTIONS OF THE RESPECTED TRIBUNAL. 4. FROM THE SIDE OF THE REVENUE, LEARNED DR HAS NOT HING MUCH TO ADD BUT TO PLACE RELIANCE ON THE ORDERS PASSED IN T HE FIRST ROUND OF PROCEEDINGS. ITA NO.690/AHD/2011 M/S. NARMADA FABRICS PVT. LTD. VS. DCIT BHARUCH, CI RCLE, BHARUCH FOR A.Y. 2004-05 - 3 - 5. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE CASE THAT IN CONSEQUENCE OF THE DIRECTIONS OF THE TRIBUN AL A FRESH ASSESSMENT HAS BEEN MADE U/S.143(3) R.W.S. 254 OF IT ACT DATED 23.12.2011 AND THEREUPON A PENALTY U/S.271(1)(C) FOR A.Y. 2004-05 IS LEVIED VIDE ORDER DATED 15 TH JUNE, 2012 AT RS.3,75,100/-, WHICH IS ALSO STATED TO BE DISPUTED IN APPEAL, WE HEREBY HOLD THAT THE PENALTY IMPOSED AS PER THE FIRST ROUND OF PROCEEDINGS GOT MERGED WITH THE SUBSEQUENT ROUND OF PROCEEDINGS; HENCE, THE IMPUGNED PENALTY ORDER NOW IN QUESTION D ATED 16.03.2009 PASSED U/S.271(1)(C) IMPOSING THE PENALTY OF RS.13, 85,356/- GOT MERGED WITH A FRESH PENALTY ORDER. THEREFORE, THE RESULT I S THAT THE PENALTY IN QUESTION DOES NOT SURVIVE ANY MORE. ON THESE FACTS WITHOUT HAVING ANY DISCUSSION ON MERITS, WE HEREBY ALLOW THIS GROUND O F THE ASSESSEE FOR THE TECHNICAL REASONS STATED HEREINABOVE. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. SD/- SD/- (ANIL CHATURVEDI) (MUK UL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/07/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD