SWEETY NX, MUMBAI V. DCIT CEN CIR 33, MUMBAI

ITA 7653/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2985 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SARAVANAN
• Assessee Lawyers: HARSH BHUTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 7653/MUM/2013 (ASSESSMENT YEAR:2006-07) M/S. SWEETY NX, 701, REHANA HEIGHTS, CHAPPEL LANE, SANTACRUZ (WEST), MUMBAI 400 054 APPELLANT VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 33, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI 400 020 RESPONDENT PAN: AASFS8054L /BY APPELLANT : SHRI HARSH BHUTA, A.R. /BY RESPONDENT : SHRI J. SARAVANAN, D.R. /DATE OF HEARING : 28.06.2016 /DATE OF PRONOUNCEMENT : 29.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-41, MUMBAI, DATED 29.10.2013 FOR A.Y. 2006-07 ON FOLLOWING GROUNDS: ITA NO.7653/MUM/13 A.Y. 06-07 [M/S. SWEETY NX VS. D CIT] PAGE 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN FACTS AND IN LAW IN DIRECTING THE ASSESSING OFFICER (AO) TO RECOMPUTE MINIMUM PENALTY U/S 271 (1) (C) OF I. T. ACT ON CONCEALED INCOME OF RS. 30,86,813/- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN FACTS AND IN LAW IN REJECTING THE ASSESSEE'S CONTENTION THAT PENALTY U/ S 271 (1) (C) IS NOT LEVIABLE AS THE BASIS OF ADDITIO N MADE BY AO WAS NOT UPHELD BY CIT(A) IN QUANTUM APPEAL. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN FACTS AND IN LAW IN REJECTING THE ASSESSEE'S CONTENTION THAT PENALTY U/ S 271 (1) (C) IS NOT LEVIABLE ON THE ENHANCED CONCEAL ED INCOME AS DETERMINED BY THE LEARNED CIT(A) IN THE QUANTUM APPEAL ON A DIFFERENT BASIS AND FOR WHICH PENALTY PROCEEDING U/S 271 (1) (C) WAS NOT INITIATE D BY CIT(A). 2. AT THE OUTSET OF HEARING, LD. AUTHORIZED REPRESE NTATIVE HAS BROUGHT TO OUR KNOWLEDGE THAT QUANTUM ADDITION HAS BEEN DELETED BY ITAT MUMBAI E BENCH IN ITA NOS.25 86 & 2587/MUM/2011 BY OBSERVING AS UNDER: 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD AND REFERRED BEFORE US. IT IS AN UNDISPUTED FACT THAT THE ENTIRE ADDITION IS BASED UPON THE BALANCE SHEET FOUND FROM THE COMPUTER WHICH IS PLACED AT PAGE-8 O F THE PAPER BOOK. WE FIND THAT THE CLOSING STOCK IS SHOWN AT RS. 88,18,414/-, AT PAGE-9 IS THE PROFIT & LOSS ACCOUNT WHERE THE CLOSING STOCK IS SHOWN AT RS. 45,16,50/-. IT IS ALSO AN UNDISPUTED FACT THAT THE TRADING PROFIT AND LOSS AC COUNT AT PAGE-9 OF THE PAPER BOOK IS AS PER AUDIT REPORT AND IS AN AUDITED STATEMENT OF ACCOUNTS WHEREAS BALANCE SHEET AT PAGE-8 IS AN UNSIGNED, UNVERIFIED AND UNAUDITED. ITA NO.7653/MUM/13 A.Y. 06-07 [M/S. SWEETY NX VS. D CIT] PAGE 3 MOREOVER, IN THE SAID BALANCE SHEET, WE FIND THE CA SH IN HAND SHOWN AS A NEGATIVE BALANCE OF RS. 27.01 LAKHS . IN OUR UNDERSTANDING OF ACCOUNTANCY, NO BALANCE SHEET CAN HAVE A NEGATIVE FIGURE FOR CASH IN HAND. MOREOVER, NO ADVERSE INFERENCE HAS BEEN DRAWN BY THE AU IN SO FA R AS THE AUDITED STATEMENTS OF ACCOUNTS ARE CONCERNED. N O DISCREPANCY /ERROR/FALLACY HAS BEEN SHOWN IN THE AU DITED STATEMENT OF ACCOUNTS. 10.1. AS MENTIONED ELSEWHERE, THE ENTIRE ADDITION I S BASED UPON THE BALANCE SHEET WHICH IN ITSELF IS AN UNRELI ABLE DOCUMENT AND CANNOT JUSTIFY THE ADDITIONS. 11. APART FROM THE ALLEGED BALANCE SHEET, THERE IS NO OTHER MATERIAL ON RECORD BEFORE THE AU TO INDICATE THAT THE ASSESSEE HAD UNEXPLAINED STOCK. THE AU HAD NEITHER CONDUCTED ANY ENQUIRY NOR MADE ANY EFFORT TO ESTABL ISH THE FACT BY BRINGING COGENT MATERIAL EVIDENCE ON RE CORD TO SHOW THAT THE AMOUNTS SHOWN IN THE BALANCE SHEET AR E TRUE AND CORRECT. WHEN THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT AND HAS SUBMITTED THE AUDI TED STATEMENT OF ACCOUNTS, THE SAME CANNOT BE DISBELIEV ED WITHOUT BRINGING COGENT MATERIAL ON RECORD TO PROVE THEM WRONG. NO ADDITIONS CAN BE MADE MERELY ON THE BASIS OF THE IMPUGNED BALANCE SHEET WHICH BY ITS VERY NATURE IS NOT FINAL. THAT BESIDES THE BALANCE SHEET FOUND DUR ING THE SEARCH PROCEEDING BEING UNSIGNED ONE NO IMPORTANCE CAN BE ATTACHED TO SUCH A DOCUMENT WHEN THE ASSESSEE HA S SUBMITTED AUDITED P&L ACCOUNT AND BALANCE SHEET, WH ICH CANNOT BE DISCARDED UNLESS THERE IS STRONG EVIDENCE TO PROVE THEM WRONG. 11.1. CONSIDERING THE FACTS IN TOTALITY AS MENTIONE D HEREINABOVE, IN OUR CONSIDERED OPINION, NO ADDITION S NEED TO BE MADE ON THE GIVEN SET OF FACTS, WE ACCORDINGL Y SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE IMPUGNED ADDITIONS. GROUND NO. 3 & 4 ARE ACCORDINGLY ALLOWED. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BE HALF OF REVENUE. SO, WE FIND THAT QUANTUM ADDITION WHICH I S BASIS ITA NO.7653/MUM/13 A.Y. 06-07 [M/S. SWEETY NX VS. D CIT] PAGE 4 OF PENALTY DOES NOT SURVIVE. IN VIEW OF THE TRIBUN ALS DECISION IN QUANTUM, PENALTY U/S.271(1)(C) OF THE A CT DOES NOT SURVIVE. SAME IS DIRECTED TO BE DELETED. 3. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 29/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&