SMT ANURADHA BOMB, Jaipur V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, Jaipur

ITA 740/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2032 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 03-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JAIF JCIT DHK
• Assessee Lawyers: D KUMAR
• Section: 143(3); 131

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 740/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SMT. ANURADHA BOMB, PROP. M/S K P EXPORTS 514, HANUMANJI KA RASTA, TRIPOLIA BAZAR, JAIPUR. VS. DY. COMMISSIONER OF INCOME TAX CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADMPB 7633 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI D. KUMAR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI NEENA JAIF (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/02/2018 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 26/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 10/07/2017 OF LD. CIT(A), JAIPUR, ARISING FROM THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR THE ASSES SMENT YEAR 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS A PPEAL:- 1. THE LD. ASSESSING AUTHORITY GROSSLY ERRED IN IM POSING PENALTY OF RS. 48,582/- UNDER SECTION 271(1)(C) OF THE ACT AND THE LD. APPELLATE AUTHORITY HAS ERRED IN CONFIRMING THE SAM E. 2. THAT FURTHER SUBMISSIONS SHALL BE MADE AT THE T IME OF HEARING. 3. THE APPELLATE CRAVES LEAVE TO ADD, AMEND OR ALT ER ALL OR ANY OF GROUNDS OF APPEAL AND RELIEF CLAIMED BEFORE OR AT T HE TIME OF HEARING. 2 ITA NO. 740/JP/2017. SMT. ANURADHA BOMB, JAIPUR. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG IN PRECIOUS AND SEMI PRECIOUS GEMS STONES. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISPUTED THE PURCHASES MADE BY TH E ASSESSEE FROM FOUR PARTIES AMOUNTING TO RS. 7,94,067/-. THE AO WHILE FRAMING THE ASSESSMENT U/S 143(3) MADE ADDITION ON ACCOUNT OF UNVERIFIABLE PURCHASE @ 25% WHICH WAS REDUCED BY THE LD. CIT(A) TO 18%. THUS, THE AD DITIONS SUSTAINED BY THE LD. CIT(A) ON ACCOUNT OF UNVERIFIABLE PURCHASES IS A SUBJECT MATTER FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE AO LEVIED A PENALTY OF RS. 48,582/- WHILE PASSING THE ORDER DATED 26/03/2015. THE ASSE SSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(A), BUT COULD NOT SUCCEED. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOT E THAT AN IDENTICAL ISSUE OF LEVY OF PENALTY AGAINST THE ADDITION MADE ON ACCOUN T OF UNVERIFIABLE PURCHASES BY APPLYING THE GP RATE OF 25% HAS BEEN C ONSIDERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 VIDE ORDER DATED 15.11.2017 IN ITA NO. 55/JP/2016 IN PARA 7 AS UNDER:- 7. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT THE GRIEVANCE OF THE REVENUE IS THAT THE ASSESSEE HAS FAILED TO PRODUCE PARTY. IT MAY BE NOTED THAT WHEN THE ASSESSEE FILED COMPLETE DETAILS OF THE PARTY, T HE REVENUE AUTHORITIES HAVE AMPLE POWER INCLUDING ISSUE OF SUMMONS U/S 131 WHEREAS THE ASSESSEE HAS NO SUCH POWER UNDER THE ACT TO BRING T HE PARTY PERSONALLY 3 ITA NO. 740/JP/2017. SMT. ANURADHA BOMB, JAIPUR. TO PRODUCE BEFORE THE AO. IT APPEARS FROM THE RECOR D THAT THE REVENUE AUTHORITIES DID NOT EXERCISE SUCH POWER U/S 131 OF THE ACT. WHEN TRANSACTIONS WITH A PARTICULAR PARTY ARE OVER THAT PARTY MAY NOT BE READY TO COOPERATE IN GIVING INFORMATION WHICH WERE EXACTLY ASKED BY THE ASSESSING OFFICER TO THE ASSESSEE WHICH WERE TO COLLECT FROM THE PARTY BY THE ASSESSEE. UNDER THESE CIRCUMSTANCE, TH E REVENUE AUTHORITIES HAVE AMPLE POWER, SUCH POWER UNDER THE ACT AND IF THEY ARE NOT EXERCISING SUCH POWERS, THE ASSESSEE CANNOT BE BLAMED IN CONCEALING PARTICULARS OR FURNISHING INACCURATE PAR TICULARS OF INCOME, THEREFORE THE ASPECT OF HUMAN PROBABILITY, TENANCY OF NON COOPERATION BY THE PARTIES AFTER BUSINESS TRANSACTION IS OVER, IS REQUIRED TO BE CONSIDERED WHILE DECIDING BONA FIDE ASPECT OF THE A SSESSEE IN PENALTY MATTER U/S 271(1)(C) OF THE ACT. IN THE ASSESSEE'S CASE UNDER CONSIDERATION THE ASSESSING OFFICER HAS NOT GIVEN F INDING BASED ON SOME CONTRADICTORY EVIDENCE TO DISPROVE THAT EXPLAN ATION OFFERED BY THE ASSESSEE WHICH THE ASSESSEE IS NOT ABLE TO SUBSTANT IATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT A LL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME HAVE BEEN DISCLOSED BY HIM. THE AO APPLIED G.P RATE @ 25 %. CONSIDERING THE FACTUAL POSITION EXPLAINED ABOVE AN D AFTER CONSIDERING THE QUANTUM ORDERS OF REVENUE AUTHORITI ES, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT , THEREFORE, WE QUASH THE PENALTY ORDER U/S 271(1)(C) OF THE ACT. 3.1 HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE WHICH ARE IDENTICAL TO THE FACTS FOR THE ASSESSMENT YEAR 2007 -08 AND FOLLOWING THE ORDER 4 ITA NO. 740/JP/2017. SMT. ANURADHA BOMB, JAIPUR. OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASS ESSMENT YEAR 2007-08, WE DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 26/02/2018. POOJA/- VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. ANURADHA BOMB, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-. DCIT, CIRCLE-1, 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. 740/JP/2017] VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR