M/S EURO JEWELS, Jaipur V. Income tax officer, ward-2-1, Jaipur

ITA 712/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2211 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 22-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA CIT DHK
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 712/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 M/S EURO JEWELS, 2238, HALDION KA RASTA, JOHARI BAZAR, JAIPUR- 302003 CUKE VS. INCOME TAX OFFICER, WARD-2(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAFE 3220 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SAURABH HARSH (ADV). JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/01/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 31/07/2017 F OR THE A.Y. 2009- 10, WHEREIN THE ASSESSEE HAS RAISED ONLY ONE GROUND OF APPEAL, WHICH IS AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING PENALTY U/S 271( 1)(C) OF THE IT ACT TO THE EXTENT OF RS. 15,450/- AS AGAINST THE AMOUNT OF RS. 46,350/- IMPOSED BY THE LD. ASSESSING OFFICER. ITA 712/JP/2017_ M/S EURO JEWELS VS ITO 2 2. THE ONLY ISSUE INVOLVED IN THE APPEAL, IS AGAINST SUSTAINING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT) OF RS. 15,450/- BEING 100% OF THE TAX SOUGHT TO BE EVADED. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS SUBMITTED THAT THE ASSESSMENT U/S 143(3) OF THE ACT WAS FINALIZED ON 21/11/2011 AND A TRADING ADDITION OF RS. 1,36,400/- WAS MADE. THE LD. CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT AND RESTRICTED THE ADDITION TO RS. 50,000/- ONLY. THUS, THE ESTIMATED T RADING ADDITION MADE BY THE ASSESSING OFFICER ITSELF WAS NOT BASED O N ANY CONCRETE FACTS AND THE LD. CIT(A) HAS JUST SUSTAINED AN AD HO C ADDITION OF RS. 50,000/-. THEREFORE, THE ASSESSEE SHOULD NOT HAVE BE EN VISITED BY PENALTY U/S 271(1)(C) OF THE ACT. THIS FACT SHOWS TH AT THE ASSESSEE HAS NEITHER FURNISHED INACCURATE PARTICULARS OF INC OME NOR IT HAS CONCEALED THE INCOME. THE BOOKS OF ACCOUNTS WERE AUDI TED AS PER PROVISIONS OF SECTION 44AB OF THE ACT. HE ALSO SUBM ITTED THAT THE LD. CIT(A) IN ASSESSEES OWN CASE WHILE DECIDING ITA NO 63 /2012-2013 DATED 30/10/2014 FOR THE A.Y. 2006-07 HAS DELETED T HE PENALTY IN SIMILAR CIRCUMSTANCES. THE LD AR ALSO SUBMITTED THAT IN THE CASE OF SHRI RAVI KUMAR RAWAT, SIMILAR PENALTY LEVIED WAS DEL ETED BY THE LD. CIT(A) WHILE DECIDING ITA NO. 32/2010-11 VIDE ITS ORD ER DATED ITA 712/JP/2017_ M/S EURO JEWELS VS ITO 3 01/8/2013 THE LD. AR ALSO PLACED RELIANCE ON VARIOUS OTHER ITATS DECISIONS INCLUDING THE DECISION IN THE CASE OF SHR I SHYAM MOHAN RAWAT IN ITA NO. 04/2012-13 DATED 11/11/2014. HE ALS O PLACED RELIANCE ON THE VARIOUS DECISIONS OF HONBLE ITAT AN D HON'BLE HIGH COURT, WHICH ARE AS UNDER:- A. HONBLE JURISDICTIONAL RAJASTHAN HIGH COURT IN CIT V. KRISHI TYRE RETREADING & RUBBER INDUSTRIES IN DBITA 542/2008 VIDE ORDER DATED 19.09.2013 HAS HELD: MERELY BECAUS E BOOKS OF ACCOUNTS OF THE ASSESSEE WERE REJECTED OR ESTIMATED ADDITION WAS MADE, IN OUR VIEW, NO PENALT Y IS LEVIABLE. B. CIT VS. KAILASH CROCKERY HOUSE (1999) 235 ITR 54 4 (PAT) C. CIT V. METAL PRODUCTS OF INDIA [1984] 150 ITR 71 4 (P&H) D. CIT V. WHITELINE CHEMICALS (GUJ) (TAX APPEAL NO. 496/2102) DATED 15.01.2013 E. CIT VS. SUBHASH TRADING COMPANY (1996) 221 ITR 1 10 (GUJ) F. CIT VS. RAJ BANS SINGH (2005) 276 ITR 351 (ALL) G. CIT V. AERO TRADERS (2010) 231 CTR 524 (DELHI) H. CIT V. MODI INDUSTRIAL CORPORATION (2010) 195 TA XMAN 68 (P&H) I. CIT V. VIJAY KUMAR JAIN (2010) 325 ITR 378 (CHAT TISGARH) J. SHIV NARAIN JAMNALAL (MP HIGH COURT): 7 ITD 795: HELD THAT WHERE TRADING ADDITION HAS BEEN MADE BY REJECT ING THE BOOKS OF ACCOUNTS, NO PENALTY WAS IMPOSABLE FOR SUCH ESTIMATED ADDITION. ITA 712/JP/2017_ M/S EURO JEWELS VS ITO 4 LD. AR PLEADED THAT THE PENALTY SHOULD NOT BE IMPO SED AUTOMATICALLY MERELY BECAUSE SOME ADDITION HAS BEEN SUSTAINED. HE ALSO RELIED ON THE FOLLOWING CASE LAWS: A. IN THE CASE OF ACIT V VIP INDUSTRIES 122 TTJ 289 (MUM) IT WAS HELD THAT, WHERE ADDITION IS MADE THE PENALTY S HALL NOT AUTOMATICALLY FOLLOW. IN A CASE OF GENUINE DIFFEREN CE BETWEEN AO AND A, PENALTY CANNOT BE LEVIED. SAME V IEW HAS BEEN TAKEN BY PUNE BENCH IN THE CASE OF KANBAY SOFTWARE INDIA 122 TTJ 721. B. IN THE CASE OF CIT V SIDHARTHA ENTERPRISES 184 TA XMAN 460 P&H IT WAS HELD THAT IT IS NOT NECESSARY THAT IN EVERY CASE WHERE PARTICULARS ARE INACCURATE, PENALTY MUST FOLLOW. PENALTY IS IMPOSED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERATE DEFAULT AND NOT WHEN THERE IS MERELY A M ISTAKE OR BONA FIDE CLAIM. 4. THE HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN (2010) 322 ITR 158 (SC) HAS OBSERVED AS UNDER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD - PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORD ER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIONS, THE PENALTY PROVISION CA NNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAU SE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FU RNISH ITA 712/JP/2017_ M/S EURO JEWELS VS ITO 5 THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULAR S ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NO T BE ACCURATE, NOT EXACT OR CORRECT, NO ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RE TURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 4. ON THE OTHER HAND, THE LD SR.DR HAS RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW. 5. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE VARIOUS CASE LAWS RELIED UPON AND FACTUAL ASPECT OF THE CASE, THE BENCH IS OF THE VIEW THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) IT SELF WAS AN ESTIMATED ADDITION AND THE SAME HAS BEEN SUSTAINED TO THE EXTENT OF RS. 50,000/- ONLY ON AD HOC. THE PENALTY IS NOT AN A UTOMATICALLY LEVIABLE WHEREVER ADDITION IS SUSTAINED. FURTHER WHE RE THE TRADING ADDITIONS ARE MADE, WHICH HAS BEEN REDUCED AND SUSTA INED ON AD HOC BASIS, NO PENALTY IMPOSABLE ON SUCH ESTIMATED A DDITION. KEEPING IN VIEW THESE FACTS AND CIRCUMSTANCES OF THE CASE AN D THE CASE LAWS RELIED UPON, THE BENCH HEREBY DIRECT TO DELETE THE PENALTY OF RS. 15,450/- SUSTAINED U/S 271(1)(C) OF THE ACT. ITA 712/JP/2017_ M/S EURO JEWELS VS ITO 6 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/01/2018. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 TH JANUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S EURO JEWELS, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-2(1), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 712/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR