ACIT Cir 3[1] Pune, Pune V. Shri Deepak Jagdish Thakkar, Dhule

ITA 695/PUN/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7533 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 695 /P U N/201 2 / ASSESSMENT YEAR : 20 0 2 - 03 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1), DHULE ....... / APPELLANT / V/S. SHRI DEEPAK JAGDISH THAKKAR, PROP. : JAI JAGDISH SUGAR BROKERS, 8, PARAS BAFNA MARKET, OPP. MAHANAGAR PALIKA, DHULE PAN : AAFPT2062E / RESPONDENT ASSESSEE BY : S HRI NIKHIL PATHAK REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 06 - 09 - 2017 / DATE OF PRONOUNCEMENT : 08 - 0 9 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I, NASHIK DATED 31 - 01 - 2012 FOR THE ASSESSMENT YEAR 2002 - 03 DELETING LEVY OF PENALTY RS. 49,49,477/ - U/S. 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO . 695/PUN/2012, A.Y. 2002 - 03 2. THE FACTS AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A WHOLESALE DEALER IN SUGAR AND A COMMISSION AGENT. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS FOLLOWING ADDITIONS/DISALLOWANCES WE RE MADE BY THE ASSESSING OFFICER : I . PAYMENT OF PENAL INTEREST ON DELAYED EXCISE PAYMENTS RS.10,11,266 / - II . UNVERIFIABLE EXPENSES DEBITED TO TRADING, P&L A/C. RS.1,25,000/ - III . INTEREST ON FIXED DEPOSIT RS.10,85,927/ - IV . SUPPRESSED PROFIT ON SALE OF SUGAR RS.3,23,87,523/ - AGAINST THE ADDITIONS MADE IN THE ASSESSMENT ORDER DATED 31 - 03 - 2005, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). IN FIRST ROUND OF LITIGATION THE COMMISSIONER OF INCOME TAX (APPEALS) PARTLY DELETED THE ADDITION IN RESPECT OF SUPPRESSED PROFIT ON SALE OF SUGAR. AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) THE DEPARTMENT AND ASSESSEE FILED CROSS APPEALS BEFORE THE TRIBUNAL IN ITA NO. 1571/PN/2005 AND 1592/PN/2005. THE TRIBUNAL VIDE ORDER DATED 30 - 06 - 2011 REMITTED THE MATTER BACK TO COMMISSIONER OF INCOME TAX (APPEALS) FOR ADJUDICATING THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL. IN THE MEANTIME, THE ASSESSING OFFICER INITIAT ED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND VIDE ORDER DATED 27 - 03 - 2007 LEVIED PENALTY OF RS.49,49,477/ - U/S. 271(1)(C) ON TWO COUNTS : I . NET SUPPRESSED PROFIT AFTER CONSIDERING THE RELIEF GRANTED BY COMMISSIONER OF INCOME TAX (APPEALS) RS.1,50,88, 834/ - . II . FDR INTEREST RS.10,85,927/ - . THE REAFTER IN SECOND ROUND OF LITIGATION IN QUANTUM PROCEEDINGS, THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE ORDER DATED 25 - 01 - 2012 3 ITA NO . 695/PUN/2012, A.Y. 2002 - 03 DELETED THE ENTIRE ADDITION WITH RESPECT TO ALLEGED SUPPRESSION OF PROFIT ON SALE OF SUGAR. THE DEPARTMENT FILED APPEAL BEFORE THE TRIBUNAL IN ITA NO. 694/PUN/2012 ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). THE SAID APPEAL BY THE DEPARTMENT WAS DISMISSED BY THE TRIBUNAL ON 18 - 08 - 2017. AGGRIEVED BY THE ORDER DATED 27 - 03 - 2007 PASSED U/S. 271(1)(C) OF THE ACT, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER DELETED PENALTY IN RESPECT OF RS.1,50,88,834/ - AS T HE ADDITION WAS DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN REMAND PROCEEDINGS. IN SO FAR AS PENALTY ON ADDITION OF RS.10,85,927/ - IS CONCERNED THE SAME WAS DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS) BY OBSERVING THAT THE ADDITION WAS NOT PROVED TO THE HILT. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN VIEW OF THE FACT THAT QUANTUM ADDITION TO THE TUNE OF RS.1,50,88,834/ - HAS BEEN DELETED , T HE PENALTY ON REMAINING AMOUNT OF RS.10,85,927/ - WOULD BE APPROXI MATELY RS.3.32 LAKHS I.E. MUCH BELOW THE MONETARY LIMIT PRESCRIBED BY THE CBDT VIDE CIRCULAR NO. 21/2015, DATED 10 - 12 - 2015 FOR FILING OF APPEALS BY THE DEPARTMENT . THEREFORE, THE APPEAL OF THE DEPARTMENT IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFF ECT. 4 . SHRI AJAY MODI REPRESENTING THE DEPARTMENT FAIRLY ADMITTED THAT IN VIEW OF THE FACT THAT ADDITION OF RS.1,50,88,834/ - HAS BEEN DELETED , THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL WOULD FALL BELOW THE MONETARY LIMIT OF RS.10 LAKHS. 5 . BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. IT IS AN UNDISPUTED FACT THAT OUT OF TOTAL ADDITIONS/DISALLOWANCES OF 4 ITA NO . 695/PUN/2012, A.Y. 2002 - 03 RS.1,61,74,761/ - ON WHICH PENALTY HAS BEEN LEVIED, ADDITION OF RS.1,50,88,834/ - HAS BEEN DELETED. THUS, THE ADDITION UNDER C ONSIDERATION FOR LEVY OF PENALTY IS MERELY RS.10,85,927/ - . THE PENALTY LEVIED ON THE AFORESAID AMOUNT WORKS OUT TO APPROXIMATELY RS.3.32 LAKHS WHICH IS MUCH BELOW THE MONETARY LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21/2015, DATED 10 - 12 - 2015 FOR FILING OF APPEALS BY THE DEPARTMENT. THUS, IN VIEW OF THE FACT THAT THE AMOUNT INVOLVED IN THE PRESENT APPEAL IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE CBDT CIRCULAR , THE PRESENT APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFE CT. 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 08 TH DAY OF SEPTEMBER, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 08 TH SEPTEMBER, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - I, NASHIK 4. / THE CIT - I, NASHIK 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE