M/S JAIPUR JEWELLERY HOUSE, Jaipur V. ITO, Jaipur

ITA 816/JPR/2012

• Counselvise Citation: 81623114 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 22-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Rejection of books of accounts; Sale consideration of property below Jantri Value; Loose papers; Fair market value
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA , ACCOUNTANT MEMBER . ITA.NO. 81 6 /JP /20 1 2 (ASSESSMENT YEAR: 200 6 - 0 7 ) M/S JAIPUR JEWELLERY HOUSE 81, JOHARI BAZAR, JAIP UR APPELLANT VS. INCOME TAX OFFICER, WARD 1(1), JAIPUR RESPONDENT PAN: AACFJ3348L / BY APPELLANT : SHRI MANISH AGARWAL , A.R. / BY RESPONDENT : SHRI KAILASH MANGAL , D.R. / DATE OF HEARING : 0 2 .1 2 .2014 / DATE OF PRONOUNCEMENT : 0 4 .1 2 .2014 ORDER PER SHAILENDRA KUMAR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - I, JAIPUR , DATED 1 7 . 0 8 .201 2 FOR A.Y. 200 6 - 0 7 ON THE FOLLOWING GROUND S : I.T .A. NO. 81 6 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( M/S JAIPUR JEWELLERY HOUSE VS. ITO ) PAGE 2 1 . ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFORMING THE PENALTY IMPOSED ON ACCOUNT OF BOGUS PURCHASES BY SIMPLY RELYING UPON THE CONCLUSION DRAWN IN THE ASSESSMENT PROCEEDINGS WHEN IN FACT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT FROM EACH OTHER AND CONCLUSION DRAWN IN ASSESSMENT PROCEEDINGS CANNOT BE MADE BASIS FOR LEVYING THE PENALTY, THUS THE CONSEQUENT ORDER OF LEVY OF PENALTY IS ILLEGAL AND BAD IN LAW. 1.2 THE LD. CIT(A) HAS FURTHER ERRED IN CONFIRMING THE PENALTY ON ACCOUNT OF BOGUS PURCHASES BY IGNORING THE FACT THAT ASSESSEE HAS FURNISHED ALL THE REQUIRED DETAILS WITH REGARD TO PURCHASES MADE, DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS AND ADDITIONS WERE SUSTAINED ON ESTIMATE BASIS HENCE THE PENALTY SO LEVIED DESERVES TO BE DELETE. 1.3 THAT THE LD. CIT(A) HAS FURTHER ERRED IN IGNORING THE FACT THAT ASSESSEE HAS ALREADY OFFERED A SUM OF RS.1,17,379/ - FOR TAX THUS TO SUCH EXTENT THERE WAS NO CONCEALED INCOME. 1 . 1 THE L D. C OMMISSIONER OF I NCOME T AX (A PPEALS ) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF AO IN ADOPTING THE SALE CONSIDERATION OF FLAT U/S 50C(1) AT RS. 1,20,90,915/ - AS AGAINST ACTUAL CONSIDERATION OF RS.80,00,000/ - . 1 . 2 SHE HAS FURTHER ERRED IN NOT REFERRING THE MATTER TO DVO U/S 50C(2) EVEN WHEN ASSESSEE HAS CLAIMED BEFORE THE AO THAT VALUE ADOPTED BY STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY. 2. ASSESSING OFFICER IN PENALTY PROCEEDING OBSERVED THAT ASSESSEE FILED APPEAL AGAINST ASSESSMENT ORDER AND CIT(A) VIDE HIS ORDER DATED 18.03.2009 CONFIRMED THE TRADING ADDITION OF RS.2,52,381/ - AND DISALLOWANCE U/S. 40(A)( IA ) OF RS.1,73,338/ - . THEREAFTER, A SHOW CAUSE NOTICE WAS ISSUED TO ASSESSEE TO I.T .A. NO. 81 6 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( M/S JAIPUR JEWELLERY HOUSE VS. ITO ) PAGE 3 EXPLAIN AS TO WHY PENALTY U/S. 271(1)(C) BE NOT IMPOSED ON IT. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, ASSESSING OFFICER OBSERVED THAT SURVEY U/S. 133A OF ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF AS SESSEE AND CERTAIN INCRIMINATING DOCUMENTS WERE FOUND APART FROM THE EXCESS STOCK AND CASH. DURING COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSEE HAD MADE HUGE PURCHASES IN CASH AND CERTAIN PURCHASES AS WELL AS SALES WERE NOT SU BJECT TO VERIFICATION. ASSESSEE FAILED TO VERIFY THE LOOSE PAPERS FOUND DURING COURSE OF SURVEY FROM ITS BOOKS OF ACCOUNTS. THEREFORE, ASSESSING OFFICER IN QUANTUM PROCEEDING, REJECTED BOOKS OF ACCOUNT BY INVOKING PROVISIONS OF SECTION 145(3) AND MADE TR ADING ADDITION OF RS.13,63,636/ - . CIT(A) CONFIRMED THE TRADING ADDITION TO THE EXTENT OF RS.2,52,381/ - . IN PENALTY PROCEEDING, ASSESSING OFFICER OBSERVED THAT THOUGH ADDITION WAS MADE BY ESTIMATING THE INCOME, SUCH ESTIMATION WAS NECESSITATED BECAUSE BOO KS OF ACCOUNTS OF ASSESSEE WERE INCOMPLETE. DEPARTMENT HAD BROUGHT POSITIVE MATERIAL ON RECORD COLLECTED DURING COURSE OF SURVEY NECESSITATING THE REJECTION OF BOOKS OF ACCOUNTS OF ASSESSEE, WHICH WAS FURTHER CONFIRMED BY CIT(A). SIMILARLY, ASSESSEE HAD NOT MADE ANY DISALLOWANCE U/S. 40(A)( IA ) AND TO THAT EXTENT ASSESSEE FILED INACCURATE PARTICULARS OF INCOME. IT WAS FINALLY HELD THAT ASSESSEE TRIED TO EVADE ITS TAX BY DELIBERATELY AND WILLFULLY HAVING CONCEALED ITS INCOME OF RS.4,25,729/ - . ACCORDINGLY, PENALTY WAS LEVIED. I.T .A. NO. 81 6 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( M/S JAIPUR JEWELLERY HOUSE VS. ITO ) PAGE 4 3. IN APPEAL, PENALTY U/S. 271(1)(C) FOR CONCEALMENT OF INCOME WITH RESPECT TO TRADING ADDITION CONFIRMED BY ITAT, JAIPUR, WAS CONFIRMED AND ASSESSING OFFICER WAS DIRECTED TO RE - CALCULATE THE PENALTY ACCORDINGLY. BUT PENALTY FOR DISAL LOWANCE OF RS.1,73,338/ - U/S. 40(A)(IA) WAS DELETED. 4. BEFORE US, LD. AUTHORIZED RE PRESENTATIVE SUBMITTED THAT CIT( A) WAS NOT JUSTIFIED IN MAKING PENALTY U/S. 271(1)(C). LD. AUTHORIZED REPRESENTATIVE POINTED OUT THAT CIT(A) IN PENALTY PROCEEDING DID N OT CONSIDER THE ORDER OF ITAT, WHICH IS NOT FOUND CORRECT BY US AS PER ORDER OF CIT(A) WHO HAS HELD AS U ND ER: THEREFORE, THE PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME WITH RESPECT TO THE TRADING ADDITION CONFIRMED BY THE HON BLE ITAT, JAIPUR BENCH I S CONFIRMED AND THE AO IS DIRECTED TO RECALCULATE THE PENALTY, ACCORDINGLY. LD. AUTHORIZED REPRESENTATIVE HAS NOT ADDRESSED US FOR PENALTY LEVIED FOR CONCEALMENT OF INCOME WITH RESPECT TO TRADING ADDITION CONFIRMED BY ITAT. HOWEVER, LD. AUTHORIZED REPRE SENTATIVE REQUESTED THAT ASSESSEE WAS NOT PROVIDED DUE OPPORTUNITY OF HEARING FOR ADDRESSING PENALTY VIS - - VIS TRADING ADDITION CONFIRMED BY ITAT. SO, MATTER SHOULD BE RESTORED TO CIT(A) ON THIS POINT. TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATIO N, WE SET ASIDE THE ORDER OF CIT(A) ON THE ISSUE AND RESTORE THE ISSUE WITH DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW. ISSUE OF PENALTY WITH REGARDS TO CONFIRMED TRADING ADDITION HAS DONE BY ITAT BENCH IN ASSESSEE S QUANTUM PRECEDENCE. SINCE, WE A RE RESTORING THE ISSUE ON THIS POINT TO I.T .A. NO. 81 6 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( M/S JAIPUR JEWELLERY HOUSE VS. ITO ) PAGE 5 CIT(A), SO, WE ARE REFRAINING TO COMMENT ON THE MERIT OF ISSUE AT HAND. 5 . AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . PRONOUNCED IN THE OPEN COURT ON THIS THE 4 TH DAY OF DECEM BE R, 2014. SD/ - SD/ - ( B. C. MEENA ) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT - M/S JAIPUR JEWELLERY HOUSE 2. THE RESPONDENT - ITO, WARD 1(1), JAIPUR 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NO. 81 6 /JP/ 2012 ) BY ORDER A.R., JAIPUR.