M/s. Vega Jewellery, Mumbai V. The Income Tax Officer, Ward-4, Navsari

ITA 763/AHD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9527 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA.NO.763/AHD/2016 / ASSTT. YEAR: 2009-2010 M/S.VEGA JEWELLERY 208-222, KOHINOOR INDL. PREMISES SOC. LTD. NR. VIRWAI ESTATE W.E. HIGHWAY GOREGOAN (EAST) MUMBAI 400 063. VS. ITO, WARD - 4 NAVSARI. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : MS.URVASHI SHODHAN REVENUE BY : SHRI PRASOON KABRA, SR.DR / DATE OF HEARING : 10/01/2017 / DATE OF PRONOUNCEMENT: 11 /01/2017 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A), VALSAD DATED 1.2.2016 PASSED FOR THE ASS TT.YEAR 2009-10. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.16,86,980/- IMPOSED BY THE AO UNDER S ECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS E-RETURN OF INCOME ON 24.9.2009 DECLARING TOTAL INCOME AT RS.15 ,43,225/-. THE CASE OF ITA NO.763/AHD/2016 2 THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND IN THE SCRUTINY ASSESSMENT THE AO NOTICED THAT THE ASSESSEE HAS CLA IMED EXCESSIVE MANUFACTURING LOSS OF RS.54,59,500/-, WHICH THE AO HAS NOT ACCEPTED AND MADE ADDITION OF THE SAME TO THE TOTAL INCOME OF TH E ASSESSEE. THIS ADDITION WAS CONFIRMED BY THE LD.CIT(A). THE AO INITIATED P ENALTY PROCEEDINGS AND IMPOSED PENALTY OF RS.16,86,980/- VIDE ORDER DATED 27.3.2014 UNDER SECTION 271(1)(C). ON APPEAL, LD.CIT(A) HAS CONFIRMED THE PENALTY. 4. AT THE VERY OUTSET, THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT ADDITION MADE BY THE AO QUA PENALTY HAS BEEN IMPOSED, WAS DELETED BY THE TRIBUNAL VIDE ORDER DATED 22.11.2013 PASSED IN ITA NO.1604/AHD/2011, THEREFORE, IMPUGNED PENALTY WILL NOT SURVIVE. SHE P LACED ON RECORD COPY OF THE TRIBUNALS ORDER. THE LD.DR WAS UNABLE TO CONT ROVERT TO THIS CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE FIND THAT S UB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHI CH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGU ISHED BY DELETING THE ADDITION VIDE ABOVE ORDER OF THE TRIBUNAL DATED 18. 3.2016, THEREFORE, THERE CANNOT BE ANY PENALTY UPON THE ASSESSEE UNDER SECTI ON 271(1)(C) OF THE ACT, ITA NO.763/AHD/2016 3 AND ACCORDINGLY, WE DELETE IMPUGNED PENALTY AND CAN CEL ORDERS OF THE BOTH THE AUTHORITIES BELOW. APPEAL OF THE ASSESSEE IS A LLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 11 TH JANUARY, 2017 AT AHMEDABAD. SD/- SD/- ( PRADIP KUMAR KEDIA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER