The DCIT, Circle-5, Baroda V. Rakesh Shankerlal Shah, Baroda

ITA 763/AHD/2013

• Counselvise Citation: 76320514 RSA 2013
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-07-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Section: 69

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ %& %& %& %& , , , , &' &' &' &' ( & ' ( & ' ( & ' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.763/AHD/2013 [ASSTT.YEAR : 1999-2000] DCIT, CIR.5 BARODA 390 007. /VS. SHRI RAKESH SHANKERLAL SHAH 3, TAKSHSHILA SOCIETY WAGHODIA ROAD, NR.CHITRAKUT BARODA. PAN : AJFPS 4625 P ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI J.P. JHANGID, SR.DR 1% . / &/ ASSESSEE BY : NONE 2 . %3'/ DATE OF HEARING : 1 ST JULY, 2013. 456 . %3'/ DATE OF PRONOUNCEMENT : 02-08-2013 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 1999-2000 IS DIRECT ED AGAINST THE ORDER OF THE CIT(A)-V1, BARODA DATED 7.12.2012. ITA NO.763/AHD/2013 -2 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS WITH THE REQUEST TO CONSIDER THE SAME AND DISPOSE OF THE APPEAL OF THE REVENUE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS BEING DISPOSED OF AFTER HEARING THE LEARNED DR AND AFTER CONSIDERI NG THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE-RESPONDENT. 3. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN - (I) DELETING PENALTY OF RS.8,66,400/- LEVIED U/S.27 1(1)(C) OF THE I.T.ACT. (II) DELETING PENALTY U/S.271(1)(C) OF THE ACT MERE LY DUE TO CHANGE OF BASIS OF ADDITION SUSTAINED AT CIT(A) LEV EL AND BY RELYING UPON DECISION IN THE CASE OF A.N. SHAH V S. CIT, 238 ITR 415 (GUJ), EVEN THOUGH THE NATURE OF DEFAULT REMAINED TO BE SAME, I.E. CONCEALMENT OF PARTICULARS OF INCOME. 4. THE LEARNED DR SUBMITTED THAT MERELY BECAUSE THE BASIS OF ADDITION WAS CHANGED AT THE APPELLATE LEVEL, IT COU LD NOT BE SAID THAT THE ASSESSEE IS NOT GUILTY OF CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME. HE SUBMITTED THA T THE ADDITION HAS BEEN PARTLY SUSTAINED BY THE CIT(A) AND THE TRIBUNA L, AND THEREFORE, TO THAT EXTENT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT ARE LEVIABLE ON THE ASSESSEE. HE RELIED ON THE ORDER O F THE AO. 5. THE ASSESSEE IN ITS WRITTEN SUBMISSION HAS SUBMI TTED THAT THE ADDITION WAS MADE AS UNDISCLOSED INVESTMENT IN PROC UREMENT OF ITA NO.763/AHD/2013 -3 DEMAND DRAFTS/PAY ORDERS. THE CIT(A) HELD THAT THE ASSESSEE WAS ONLY A FACILITATOR FOR PROCUREMENT OF DEMAND DRAFTS /PAY ORDERS AND WAS MERELY ACTING AS A COMMISSION AGENT, AND HAS EA RNED ONLY COMMISSION INCOME FROM THIS ACTIVITY. THE COMMISSIO N INCOME WAS ESTIMATED BY THE CIT(A) AT 5% WHICH WAS FURTHER RED UCED BY THE TRIBUNAL TO ONLY 1% OF THE AMOUNT OF DDS/POS., AND EVEN THE NATURE OF ADDITION WAS CHANGED IN APPEAL AS COMPARED TO TH E ADDITION MADE BY THE AO. THE ASSESSEE SUBMITTED THAT THE PROVISI ON OF SECTION 271(1)(C) OF THE ACT WAS NOT ATTRACTED TO THE CASE WHERE THE INCOME IS ASSESSED ON ESTIMATE BASIS ONLY. 6. WE HAVE CONSIDERED SUBMISSION OF THE LEARNED DR AND PERUSED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND THE O RDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ADDITION WAS MADE IN THIS CASE UNDER SECTION 69 OF THE ACT TOWARDS UNDISCLOSED INVESTMEN T IN PROCURING DDS./POS. IN APPEAL, THE CIT(A) HAS HELD THAT THE ASSESSEE WAS ACTING AS A COMMISSION AGENT AND HAS EARNED ONLY CO MMISSION INCOME FROM THIS ACTIVITY, AND THE AMOUNT ITSELF OF DDS./P OS., DID NOT BELONG TO THE ASSESSEE. THE INCOME ESTIMATED AT THE RATE OF 5% AS COMMISSION INCOME OF THE ASSESSEE ON THE AMOUNT OF DDS/POS BY THE CIT(A) WAS SUBSTANTIALLY REDUCED TO 1% BY THE TRIBU NAL. WE FIND THAT THE INCOME DETERMINED AT 1% OF THE AMOUNT IN Q UESTION AS COMMISSION INCOME OF THE ASSESSEE, IS ALSO BY WAY O F ESTIMATE ONLY. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE EST IMATE OF COMMISSION INCOME AT 1% MAY BE JUSTIFIED, BUT DID NOT JUSTIFY THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN THI S VIEW OF THE MATTER, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF TH E CIT(A) IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE A CT, WHICH IS ITA NO.763/AHD/2013 -4 ACCORDINGLY CONFIRMED AND THE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& / TEJ RAM MEENA) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD