The ACIT, Circle-2, Bhavnagar V. M/s. Western Ship Breaking Corporation, Bhavnagar

ITA 694/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62939 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-08-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 04-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: S N SOPARKAR
• Keywords: Unexplained cash credit
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NOS. 694 & 105/AHD/2009 ASSESSMENT YEAR :1995-96 ACIT, CIRCLE-2, BHAVNAGAR V/S . M/S. WESTERN SHIP BREAKING CORPORATION SUTARWAD, BHAVNAGAR PAN NO. AA A FW1902F (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI RAHUL KUMAR SR. D.R. /BY RESPONDENT SHRI S.N.SOPARKAR, A.R. /DATE OF HEARING 01.08.2012 /DATE OF PRONOUNCEMENT 07.09.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THESE ARE TWO APPEALS AT THE BEHEST OF REVENUE WHIC H HAVE EMANATED FROM THE ORDERS OF CIT(A)-XX, AHMEDABAD, DATED 30.0 9.2008 & 27.11.2008 FOR ASSESSMENT YEAR 1995-96 AGAINST THE DELETION OF RS.16,32,840/- AND PENALTY U/S. 271(1)(C) AT RS.6,53,140/- ON SAME ADD ITION. AS THE ASSESSEE AND ASSESSMENT YEAR ARE SAME, ONE IS QUANTUM APPEAL AND ANOTHER PENALTY OF QUANTUM ADDITION ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 694/AHD/2009 2. IN THIS CASE, ORIGINAL ASSESSMENT ORDER U/S. 143 (3) OF THE IT ACT WAS ASSESSED ON 31.3.1998 BY THE A.O. AND TOTAL INCOME WAS DETERMINED AT ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 2 RS.64,01,370/-. IN THE SAID ORDER AN ADDITION OF R S.16,32,840/- WAS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITOR IN THE NAME OF FOLLOWING FUNCTIONS: I) M/S SHANTI CORPORATION 2,31,268 II) M/S AIR SEA TRADING CO. 5,48,887 III) M/S MAHAVIR SALES CORPORATION 8,52,68 5 TOTAL 16,32,840 THE HONBLE ITAT, RAJKOT BENCH, VIDE ORDER NO.ITA N O.334/RJT/2004 AND ITA NO.435/RJT/2004 DTD. 06.02.2006 HAS SET ASIDE THE O RDER WITH THE DIRECTION TO GIVE CROSS EXAMINATION WITH THOSE THREE PARTIES MAY BE ALLOWED TO THE ASSESSEE. THE LD. AO ISSUED VARIOUS NOTICES TO THE PARTNERS OF THE FIRM ON GIVEN ADDRESS BUT OUT OF 14 PARTNERS NONE WAS APPEA RED FOR CROSS EXAMINATION OF THE ABOVE THREE PARTIES. THE LD. A. O. SERVED SUMMON U/S131 ON 07.12.2006 AND CASE WAS FINALLY FIXED FOR 15.12. 2006 ON ADDRESS AVAILABLE ON RECORD. BUT, NO PARTNER WAS AVAILED THE OPPORTU NITY OF CROSS EXAMINATION. SIMULTANEOUSLY, THE SUMMON U/S. 131 WAS ALSO ISSUED TO SHRI NADIM JAFARALI VAKIL, C/O. AIR SEA TRADING CO. OF BHAVNAGAR, DEEPA K SHANTILAL MAGIA PROP. OF SHANTI CORPORATION & SHRI DILIPBHAI MAGANLAL MAG IA C/O. M/S. MAHAVIR CORPORATION TO MAKE AVAILABLE TO THEM FOR CROSS EXA MINATION ON 15.12.2006. SHRI NADIM JAFARALI VAKIL ATTENDED THE OFFICE ON 15 .12.2006 AND REMAINING TWO PARTIES DID NOT ATTEND THE OFFICE. SHRI NADIM JAFA RALI VAKIL WAS ADHERE ON HIS STATEMENT GIVEN U/S. 131 DATED 26.03.1991 BEFORE TH E INCOME TAX AUTHORITY. THE LD. A.O. DECIDED THE SET ASIDE PROCEEDING U/S. 143(3) READ WITH SECTION 254 OF THE IT ACT ON 26.12.2006 ON THE BASIS OF FAC TS AND DETAILS OF ORIGINAL ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 3 ASSESSMENT ORDER AND ADDITION OF RS.16,32,840/- WAS MADE IN THE INCOME OF THE ASSESSEE U/S. 68 OF THE IT ACT AS UNEXPLAINED C ASH CREDIT 3. THE MATTER WENT IN APPEAL BEFORE THE LD. CIT(A)- XX, AHMADABAD, VIDE HIS ORDER DATED 27.11.2008, HAD ALLOWED THE APPEAL PARTLY BY OBSERVING AS UNDER: 3.10 I HAVE CAREFULLY CONSIDERED THE RECORDS I.E. ORIGINAL ASSESSMENT ORDER, EARLIER ORDER OF CIT(APPEALS) AND THE ORDER OF THE ITAT. THE DEPARTMENTS STAND IS THAT THESE THREE P ARTIES HAD STATED BEFORE THE ADI THAT THEY HAD GIVEN ONLY ENTRIES OF SALES TO THE APPELLANT AND AGAINST THAT THEY HAD ISSUES CHEQUES IN FAVOUR OF THE APPELLANT. AT THE SAME TIME IT IS ALSO ACCEPTED BY THE ASSESSING OFFICER THAT THE TRANSACTION OF SALE WAS SUPPORTED BY THE BILLS, DEL IVERY CHALLAN, GATE PASS, WAY BRIDGE RECEIPT ETC. THUS THE APPELLANT H AS ACTUALLY ACCOUNTED FOR SALES IN THE TRADING ACCOUNT AS INCOME AGAINST WHICH THESE PAYMENTS ARE RECEIVED. THE ASSESSING OFFICER, THER EFORE, IN THE ABOVE REFERRED PARA OF THE ORIGINAL ASSESSMENT ORDER OBSE RVED THAT THE SALES MENTIONED AGAINST THE THREE PARTIES WAS ACTUALLY MA DE TO OTHERS WHICH WERE UNKNOWN PARTIES AND ACCORDING TO HIM, THEREFOR E, THE SALES TO THOSE UNKNOWN PARTIES WERE NOT RECORDED. THUS IT I S ACCEPTED BY THE A.O. THAT THE SALES SHOWN AGAINST THESE PARTIES WER E ALREADY SHOWN BY THE APPELLANT IN ITS BOOKS. IN THE CIRCUMSTANCES, IT IS FOUND THAT THE INCOME BY WAY OF SALES IS ALREADY ACCOUNTED FOR. A CCORDINGLY, IN VIEW OF THE ABOVE REFERRED DECISION OF THE ITAT, DELHI I N THE CASE OF AMBICA STEELS LTD., I DO NOT FIND ANY JUSTIFICATION FOR HO LDING THAT THE AMOUNT RECEIVED FROM THREE PARTIES WAS REPRESENTING CASH C REDIT WITHIN THE MEANING OF SECTION 68. IN ANY CASE, SUCH ADDITION AMOUNTS TO DOUBLE TAXATION WHICH IT IS NOT PROPER. HOWEVER, AT THIS POINT OF TIME I MAY OBSERVE THAT IN SUCH CIRCUMSTANCES WHEN THE SALES A RE ACTUALLY MADE TO OTHERS WHICH ARE RECORDED IN THE NAME OF THE HERE P ARTIES MIGHT BE ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 4 INCLUDING SOME EXTENT OF SUPPRESSION OF THE SALES B ECAUSE IN THE CASE OF SALES IN THE NAME OF UNDISCLOSED PARTIES THE TRA NSACTIONS ARE NOT VERIFIABLE. THEREFORE, I HOLD THAT THOUGH THERE IS NO JUSTIFICATION FOR ADDITION U/S.68, THE ADDITION FOR SUPPRESSION OF SA LES CONSIDERATION WOULD MEET THE END OF JUSTICE AND ACCORDINGLY IN TH E GIVEN SET OF FACTS, I HOLD THAT 25% OF THE ADMITTED SALES VALUE IS NOT RE CORDED IN THE BOOKS OF THE APPELLANT. ACCORDINGLY THE ADDITION TO THE EXTENT OF 25% OF SALES RECORDED IN THE NAME OF THREE PARTIES WHICH WOULD B E AROUND RS.4.15 LAKHS IS HEREBY CONFIRMED. THUS, THE ADDITION MADE AT RS.16.32 LAKHS IS REDUCED TO RS.4.15 LAKHS. 4. NOW THE REVENUE IS BEFORE US AGAINST THE ORDER O F CIT(A). LD. D.R. VEHEMENTLY ARGUED THAT EVEN IN THE SECOND ROUND OF PROCEEDING, THE APPELLANT COULD NOT COME FORWARD BEFORE THE A.O. ALONG WITH T HREE CASH CREDITORS FOR CROSS EXAMINATION. THE LD. A.O. ISSUED THE SUMMONS AT THE TIME OF RE- ASSESSMENT PROCEEDING. SHRI NADIM JAFARALI VAKIL A TTENDED THE PROCEEDING ON 15.12.2006 BUT NONE OF THE PARTNERS OF THE APPEL LANT FIRM WERE PRESENT ON 15.12.2006 TO CROSS EXAMINE SHRI VAKIL. HOWEVER, T WO CASH CREDITORS DID NOT ATTEND PROCEEDING IN RESPONSE TO SUMMON U/S. 131 OF THE IT ACT TO MAKE AVAILABLE FOR CROSS EXAMINATION. THEREFORE, THE LD . A.OS. ACTION IS REQUIRED TO BE CONFIRMED. FROM THE OTHER SIDE, LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THE LD. CIT(A) THOROUGHLY DEALT THIS ISSUE AN D CONSIDERED ALL THE EVIDENCE ON PAGE NOS. 4 TO 7 AND DELETED THE ADDITION. THE LD. CIT(A) FAIRLY ESTIMATED THE INCOME AT RS.4.15 LACS. HE FURTHER ARGUED THAT THE AMOUNT CREDITED TO THE RESPECTIVE PARTIES WAS CREDITED TO THE TRADING ACCO UNT OF SALE PROCEEDS FOR SALE MADE TO THEM AND OFFERED INCOME ON IT. HE REL IED ON CO-ORDINATE C ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 5 BENCH, AHMADABAD, DECISION IN CASE OF VISHAL EXPORTS OVERSEAS LIMITED VS. ASSTT. COMMISSIONER OF INCOME-TAX IN ITA NOS. 792/AHD/2005 AND 1684/AHD/2004 IN WHICH THE ASSESSEE HAD ALREADY OFFERED SALES REA LIZATION AS SALES AND SUCH INCOME WAS ACCEPTED BY THE A.O. TO BE THE INCOME OF THE ASSESSEE FOR RESPECTIVE ORDERS. THE ADDITION OF TH E SAME AMOUNT ONCE AGAIN U/S. 68 OF THE ACT WOULD TANTAMOUNT TO DOUBLE TAXAT ION OF THE SAME INCOME. THE CO-ORDINATE BENCH HAS ACCEPTED THE ASSESSEES I NCOME ON THE BASIS OF CREDIT OF SALE IN THE PROFIT AND LOSS ACCOUNT AND N OT ADDITION U/S. 68 OF THE IT ACT WHICH WAS CONFIRMED BY THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO. 2471 TO 2476 OF 2009, ORDER DATED 03.07.2012. THUS , HE REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE PERUSED THE ORIGINAL ASSESSMENT, CIT(A) ORDER AGAINST ORIGINAL ADDITION, ITAT ORDER, AGAIN RE-ASSESSMENT ORDER, CI T(A) ORDER AND CASE RELIED UPON BY THE APPELLANT AND HEARD THE ARGUMENT OF BOT H SIDES. THE APPELLANT HAD DISCLOSED TRANSACTION WITH THESE THREE PARTIES IN THE SALE. THE PAPER BOOK AT SERIAL NOS. 16 TO 107 SHOWED THAT THESE ARE THE SALE TRANSACTION WITH THESE PARTIES ON WHICH TRUCK NO. AND WEIGHT HAS BEEN MENT IONED BY THE APPELLANT AND THESE HAD BEEN ACCOUNTED FOR BY THE APPELLANT I N THE TRADING ACCOUNT AS INCOME AGAINST WHICH THESE PAYMENTS WERE RECEIVED. THE LD. A.O. HAD NOT BROUGHT ON RECORD ANY MATERIAL THAT ACTUAL SALE WAS MADE TO UNKNOWN PARTIES WHEREAS CASH WAS RECEIVED FROM ABOVE THREE PARTIES AS DISCUSSED. AS RELIED UPON BY THE APPELLANT WHEN THE APPELLANT HAD DISCLO SED THE SALE IN THE P&L ACCOUNT AND AGAIN ADDITION U/S. 68 IS MADE, TANTAMO UNT TO DOUBLE TAXATION. ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 6 THE LD. CIT(A) HAD REASONABLY ESTIMATED THE INCOME OF ADDITION OF RS.16.32 LACS AT RS.4.15 LACS. THUS, WE CONFIRM THE ORDER O F THE CIT(A) AND DISMISS THE REVENUES APPEAL. ITA NO. 105/AHD/2009 6. THE SOLE GROUND OF REVENUES APPEAL IS AGAINST C ANCELING THE PENALTY OF RS.6,53,140/- LEVIED U/S. 271(1)(C) OF THE IT ACT. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSESSEE FIRM IS ENGAGED IN SHIP B REAKING ACTIVITIES AT ALANG, ALANG SHIP BREAKING YARD, DIST: BHAVNAGAR. THE ASS ESSEE FIRM HAS FILED ITS RETURN OF INCOME ON 30.10.1995, DECLARING TOTAL INC OME OF RS.11,85,800/-. THE ASSESSMENT U/S 143(3) WAS FINALIZED ON 31.03.19 98 DETERMINING THE TOTAL INCOME OF RS.64,01,370/-. IN THE SAID ASSESSMENT A N ADDITION OF RS.16,32,840/- WAS MADE ON ACCOUNT OF UNEXPLAINED C ASH CREDIT IN THE NAME OF 1 M/S SHANTI CORPORATION 2,31,268 2 M/S AIR SEA TRADING CO. 5,48,887 3 M/S MAHAVIR SALES CORPORATION 8,52,685 TOTAL 16,32,840 ON VERIFICATION OF THE CASE RECORDS, IT IS SEEN THA T DURING THE REGULAR ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO FURNIS H A COPY OF ACCOUNT OF THE SAID PARTIES AND TO PRODUCE THE SAID PARTIES BE FORE THE ASSESSING OFFICER TO VERIFY THE LOAN TRANSACTIONS AND TO PROVE GENUIN ENESS OF THE SAID TRANSACTIONS. THE ONUS LIES ON THE ASSESSEE TO PRO VE THE GENUINENESS OF THE TRANSACTION THE ASSESSEE FIRM FAILS TO COMPLY WITH THIS AND STATED THAT THE TRANSACTION PERTAINED TO THESE PARTIES WERE VERY OL D AND TO DISTANT PAST, SO HE ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 7 WAS UNABLE TO PRODUCE THE PARTY. THE ASSESSEE FIRM HAS FILED COPIES OF ACCOUNTS BILLS, DELIVERY CHALLANS, WEIGH BRIDGE REC EIPTS ETC. THE ASSESSEE HAS MADE CREDIT ENTRIES IN BOOKS OF ACCOUNTS IN RESPECT OF THE AMOUNT RECEIVED FROM THESE PARTIES. THE COMMISSION U/S. 131-D ISSU ED TO THE ADIT (INV.), BHAVNAGAR ON 11.03.98 TO VERIFY THE VERACITY OR GEN UINENESS OF THE CLAIM. THE ADIT (INV.), BHAVNAGAR VERIFIED AND EXAMINED THE SA ID PARTIES AND STATED THAT THEY WERE BILLING AGENT AND DURING THE PREVIOUS YEA R RELEVANT TO A.Y.95-96, THEY MADE TRANSACTION WITH THE ASSESSEE FIRM. THE ADIT (INV.), BHAVNAGAR THEREAFTER, GAVE OPPORTUNITY TO CROSS-EXAMINED THE SAID PARTY BUT ASSESSEE FAILED TO TURN UP FOR CROSS-EXAMINATION WITH THE SA ID PERSONS. THE A.O. THEREFORE, TREATED THE TRANSACTION IS UNEXPLAINED C ASH CREDIT APPEARING IN THE NAME OF ABOVE THREE PARTIES. THE ORDER U/S.143 (3) PASSED ON 31.03.98 WITH ADDITION OF RS.16,32,840/- IS UNEXPLAINED CASH CRED IT U/S.68 OF THE ACT, 1961. AGGRIEVED BY THIS ORDER, THE ASSESSEE FIRM FILED AN APPEAL BEFORE THE CIT(A), AHMADABAD. THE LD. CIT(A) VIDE HIS ORDER D ATED 21.08.2000 RESTORED THE ISSUE BACK TO THE FILE OF THE A.O. TO GIVE ADEQ UATE OPPORTUNITY TO THE ASSESSEE FIRM TO REBUTE THE AVERMENTS MADE BY THOSE PARTIES AND ALSO TO CROSS EXAMINE THEM. THEREAFTER, TO DECIDE THE ISSU E. THE A.O. GAVE SUFFICIENT TIME AND OPPORTUNITY TO THE ASSESSEE FIR M TO PROVE GENUINENESS OF THE TRANSACTION AND TO PRODUCE THE PARTIES CONCERNE D. SINCE THE ASSESSEE FIRM HAS NOT OFFERED ANY EXPLANATION AND NOT APPEAR ED BEFORE THE A.O. FOR CROSS-EXAMINATION, THE A.O. HAD MADE ASSESSMENT U/S .143(3) WITH ADDITION OF RS.16,32,840/- ON 18.03.2002 DETERMINING THE TOTAL INCOME OF RS.57,25,130/- ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 8 AS UNEXPLAINED CASH CREDITS U/S.68 OF THE INCOME-TA X ACT, 1961. THE FIRM HAD PREFERRED AN APPEAL BEFORE CIT(A) AGAINST THE ORDER U/S.143(3) DTD. 18.03.2002. LD. CIT(A), AHMEDBAD VIDE ITS ORDER DTD . 29.03.2004 ALLOWED ASSESSEES APPEAL IN PART AND REDUCE THE ADDITIONS OF RS.16,32,840/- TO 1,80,600/-. AGGRIEVED BY THIS ORDER REVENUE HAD FI LED AN APPEAL TO THE ITAT. THE HONBLE ITAT, RAJKOT VIDE ITS ORDER DTD. 06.02. 2006 HAS SET-ASIDE THE MATTER WITH DIRECTION TO GIVE OPPORTUNITY OF CROSS- EXAMINATION WITH THOSE PARTIES MAY BE ALLOWED TO THE ASSESSEE AND THEREAFT ER TO DECIDE THE ISSUE. THE A.O. STARTED ASSESSMENT PROCEEDINGS AND ISSUED SUMMONS TO THE SAID PARTIES AND THE ASSESSEE FIRM REMAIN PRESENT O N DATE OF HEARING FOR CROSS-EXAMINATION AND SERVED UPON THEM. SHRI NADIM VAKIL, A PARTNER OF THE FIRM M/S. AIR SEA TRADING CO., BHAVNAGAR HAD ATTEND ED AND STATED THAT THERE NO CHANGE IN HIS STATEMENT EARLIER HE HAD GIVEN ON OATH AND RECORDED U/S.131 (A) DURING THE REGULAR ASSESSMENT F.Y.1994-95 RELAT ED TO A.Y.1995-96. THAT HE HAD MADE TRANSACTION WITH THE ASSESSEE FIRM. TH E OTHER TWO PARTIES HAD NOT REMAINED PRESENT AND NOT COMPLIED WITH SUMMONS. THE ASSESSEE FIRM NEITHER HAS AVAILED THE OPPORTUNITY AND HAS NOT OFF ERED ANY EXPLANATION NOR APPEARED BEFORE THE A.O. FOR CROSS-EXAMINATION. ON 15.12.2006, THE A.O. HAS THEREFORE, FINALIZED THE ASSESSMENT ORDER U/S.143(3 ) R.W.S. 254 OF THE INCOM- TAX ACT, 1961 ON 26.12.2006 DETERMINING THE TOTAL I NCOME OF RS.59,05,730/- WITH ADDITION OF RS.16,32,840/- AS UN-EXPLAINED CAS H CREDIT U/S.68 OF THE INCOME-TAX ACT, 1961 AND INITIATED PENALTY PROCEEDI NGS U/S.271(1)(C) OF THE INCOME-TAX ACT, 1961. SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE FOR PENALTY ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 9 U/S.271(1)(C) ALONG WITH ASSESSMENT ORDER ON 26.12. 2006. THE APPELLANT WAS GIVEN REASONABLE OPPORTUNITY BEING HEARD BY THE A.O . BUT NO ONE ATTENDED FROM THE SIDE OF THE APPELLANT BEFORE THE A.O. THE REFORE, HE LEVIED THE PENALTY AT RS.6,53,140.- BEING 100% OF THE TAX SOUGHT TO BE EVADED. 7. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE CIT(A)-XX, AHMEDABAD, WHO DELETED THE PENALTY BY OBSERVING AS UNDER: 4. I HAVE CONSIDERED THE ORDER UNDER REFERENCE, TH E ASSESSMENT ORDER PASSED ON 30-3-1993 AND THE SUBSEQUENT ORDERS . IT IS SEEN THAT THE PENALTY HAS BEEN LEVIED BY THE A.O. FOR THE REA SON THAT THE PARTIES FROM WHOM THE AMOUNTS WERE RECEIVED BY WAY OF CHEQU ES HAD EXPLAINED THAT THEY WERE BILLING AGENTS AND THAT AG AINST CHEQUES ISSUED BY THEM, THEY RECEIVED CASH AND THAT THE APPELLANT HAD SOLD GOODS TO OTHER PARTIES. HOWEVER, AT THE SAME TIME IT IS NOT IN DISPUTE THAT THE CONCERNED AMOUNT OF SALE HAS BEEN ACCOUNTED AS INCO ME IN THE BOOKS AND DEBITED TO THESE PARTIES ACCOUNT. THE CHEQUES ISSUED BY THE RESPECTIVE PARTIES HAVE NOT BEEN DENIED. THUS THE APPELLANT HAS SHOWN RELEVANT INCOME AND THERE WAS CONSCIOUS/DELIBERATE ACT OF CONCEALMENT OF INCOME. PENALTY PROCEEDINGS ARE SEPARATE PROCEE DINGS DISTINCT FROM ASSESSMENT PROCEEDINGS. THEREFORE, CONSIDERING THE RATIO OF THE SUPREME COURT DECISION IN THE CASE OF K.C. BUILDERS AND OF THE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILE WHICH WE RE RELIED UPON BY THE APPELLANT, I HOLD THAT THERE WAS NO JUSTIFICATION F OR HOLDING THAT THE APPELLANT HAD DELIBERATELY CONCEALED THE PARTICULAR S OF INCOME. CONSIDERING ALL THESE ASPECTS THE PENALTY LEVIED BY THE ASSESSING OFFICER IS DIRECTED TO BE CANCELLED. 8. NOW, THE REVENUE IS BEFORE US. THE LD. D.R. VEH EMENTLY RELIED ON THE ORDER OF THE A.O. FROM THE SIDE OF THE APPELLANT, LD. SR. COUNSEL SHRI S.N. ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 10 SOPARKAR CONTENDED THAT THE LD. CIT(A) MADE ADDITIO N ON ESTIMATE BASIS. NO PARTICULARS OF INCOME HAVE BEEN FOUND FALSE. THE E XPLANATION IS BONAFIDE. THUS, THE CIT(A) ORDER SHOULD BE CONFIRMED. 9. WE HAVE PERUSED THE ORIGINAL ASSESSMENT AS WELL AS RE-ASSESSMENT ON THE DIRECTION OF ITAT AND APPEAL ORDER AGAINST QUAN TUM ADDITION AND ALSO PENALTY ORDER OF THE AUTHORITIES BELOW. LD. CIT(A) HAD ESTIMATED THE INCOME ON THE BASIS OF NET PROFIT RATE. THERE IS NO CASE MADE OUT BY LD. A.O. THAT PARTICULARS OF INCOME HAD BEEN FURNISHED INACCURATE AND CONCEALED THE INCOME. THUS, WE DO NOT INTERFERE WITH THE ORDER O F CIT(A). THE REVENUES APPEAL IS DISMISSED. 10. IN THE COMBINED RESULT, THE REVENUES APPEALS A RE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 7.9.2012 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; ITA NOS. 105 & 694/AHD/2009 A.Y. 95-96 PAGE 11 STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 28 .08.2012 & 03.09.201 2 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 03.09.2012 4) DATE OF CORRECTION 04.09.2012 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 7 . 9 . 2012 7) ORDER UPLOADED ON 7.9.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 7.9.2012