The ACIT, Circle-4, Surat V. M/s. Supreme India Implex Ltd., Surat

ITA 839/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6914 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-10-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: RAMESH K MAL
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA.NO.839/AHD/2011 (ASSESSMENT YEAR:2006-07) ACIT, CIRCLE-4, ROOM NO.223, AAYAKAR BHAVAN, SURAT. APPELLANT VS. M/S. SUPREME INDIA IMPEX. LTD., SUPREME HOUSE, PLOT NO. 823/2, ROAD NO. 8, GIDC, SACHIN, SURAT. RESPONDENT PAN: AADCS9506P /BY APPELLANT : SHRI B. L. YADAV, SR.D.R. /BY RESPONDENT : SHRI RAMESH K. MALPANI, A.R. !'# /DATE OF HEARING : 16.10.2014 $%& !'# /DATE OF PRONOUNCEMENT : 29.10.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-IV, S URAT, DATED 29.11.2010 FOR A.Y. 2006-07 ON THE FOLLOWING ISSUE. I.T.A. NO. 839/AHD/2011 A.Y. 06-07 (ACIT VS. M/S. SUPREME INDIA IMPEX LTD.) PAGE 2 [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E HONBLE C.I.T. (A) HAS ERRED IN DELETING THE PENALT Y U/S 271(1)(C) OF RS. 6,55,477/- MADE BY A.O. ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. [2] ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD CIT(A), SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A)-IV/SRT MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOT ICE U/S. 133(6) OF THE ACT WAS ISSUED TO VARIOUS PARTIE S FOR VERIFICATION OF PURCHASES BY ASSESSING OFFICER. OU T OF THESE, TWO PARTIES VIZ. RAJSHREE FABRICS (RS.36,71,415/-) AND SANJAY TEXTILE (RS.50,68,262/-) COULD NOT BE LOCATE D AT THE GIVEN ADDRESS. THE ASSESSEE ALSO COULD NOT PRODUCE THESE PARTIES FOR VERIFICATION. ASSESSING OFFICER DISALL OWED 25% OF PURCHASES MADE FROM THESE PERSONS. CONSEQUENTLY PE NALTY WAS LEVIED. STAND OF ASSESSEE HAS BEEN THAT ADDITI ON HAD BEEN MADE ON ESTIMATE BASIS AND NO CATEGORICAL FIND ING HAD BEEN MADE BY ASSESSING OFFICER. SO, PENALTY IS NOT JUSTIFIED, HOWEVER, ASSESSING OFFICER LEVIED PENALTY OF RS.6,5 5,477/- BEING 100% OF TAX SOUGHT TO BE EVADED. I.T.A. NO. 839/AHD/2011 A.Y. 06-07 (ACIT VS. M/S. SUPREME INDIA IMPEX LTD.) PAGE 3 2.1. MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTH ORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) DEL ETED THE PENALTY IN QUESTION BY OBSERVING AS UNDER: 4. I HAVE GONE THROUGH THE FACTS OF THE CASE, THE ASSESSMENT ORDER, PENALTY ORDER, SUBMISSIONS OF THE APPELLANT AND EVIDENCES PLACED BEFORE ME DURING THE COURSE OF APPEAL PROCEEDINGS. I FIND THAT THE CASE OF THE APPELLANT IS NOT ON THE SAME FOOTING AS M/S. VIJAY PROTEINS LTD. IN THE CASE OF M/S. VIJAY PROTEINS LT D. THERE WERE POSITIVE EVIDENCES TO SHOW THAT THEY HAD INDULGED IN WRONG DOING. IN THE CASE OF THE APPELLA NT BEFORE ME, THERE IS NO SUCH FINDINGS. IT HAS FURNIS HED FULL DETAILS OF PURCHASES AND PAYMENTS. THE PARTIES TO THE TRANSACTIONS WERE REGISTERED WITH SALES-TAX AND EXCISE AUTHORITIES AND HAVE CHARGED THE APPELLANT T HE REQUIRED DUTIES. THIS IS EVIDENT FROM THE PURCHASE BILLS SUBMITTED. THE ONLY REASON FOR THE ADDITIONS ITSELF WAS THAT THESE PARTIES COULD NOT BE FOUND AT THE ADDRES SES PROVIDED BY THE APPELLANT. FURTHER FULL QUANTITATIV E TALLY OF GOODS PURCHASED AND SOLD WERE PROVIDED BY THE APPELLANT AND THE A.O. HAS NOT FOUND ANY DISCREPANC IES IN THE SAME. THE IDENTITIES OF THE PERSONS WERE ESTABLISHED BY WAY OF THEIR EXCISE AND VAT REGISTRA TION. ALL EVIDENCES RELATED TO THE TRANSACTIONS WERE PROD UCED BEFORE THE A.O. DISALLOWANCE WAS MADE NOT BECAUSE T HE TRANSACTIONS WERE PROVED TO BE BOGUS BUT BECAUSE TH EY WERE UNVERIFIABLE. IT THEREFORE CANNOT BE HELD THAT THE APPELLANT FURNISHED INACCURATE PARTICULARS OF INCOM E OR CONCEALED HIS INCOME. MERELY BECAUSE THE APPELLANT ACCEPTED THE ADDITION TO AVOID LITIGATION, IT CANNO T BE HELD AGAINST HIM IN PENALTY PROCEEDINGS. IN THE CAS E OF M/S. GOYAL SYNTHETICS P. LTD., THE HON'BLE ITAT HEL D THAT DISALLOWANCE OF AN EXPENDITURE PER SE CANNOT M EAN THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IT FURTHER HELD THAT PENALTY CANNOT BE LEVI ED MERELY BECAUSE THE EXPLANATION FURNISHED BY THE I.T.A. NO. 839/AHD/2011 A.Y. 06-07 (ACIT VS. M/S. SUPREME INDIA IMPEX LTD.) PAGE 4 APPELLANT WAS NOT ACCEPTED BY THE A.O. THE A.O. IS REQUIRED TO SHOW THAT THE EXPLANATION FURNISHED BY THE APPELLANT WAS FALSE. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE CONDITIONS FOR LEVY OF PENALTY DO NO T EXIST IN THE CASE OF THE APPELLANT. IT IS THEREFORE HELD THAT THE APPELLANT HAD NEITHER CONCEALED HIS INCOME NOR FILE D INACCURATE PARTICULARS OF INCOME. THE PENALTY LEVIE D U/S. 271(L)(C) OF THE I.T. ACT IS THEREFORE CANCELL ED. 2.2. SAME HAS BEEN APPROACHED BEFORE US. ON BEHALF OF REVENUE, LD. D.R. SUBMITTED THAT CIT(A) WAS NOT JUS TIFIED IN DELETING PENALTY LEVIED U/S. 271(L)(C) OF RS. 6,55, 477/- MADE BY THE A.O. ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. ON TH E OTHER HAND, LD. A.R. SUPPORTED THE ORDER OF CIT(A). 2.3. AFTER PERUSING THE SUBMISSION AND MATERIAL ON RECORD, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS DELETED THE PENALTY IN QUESTION. AS DISCUSSED ABOVE ASSESSEE HAS FURNISHED FULL DETAILS OF PURCHASES AN D PAYMENTS. THE PARTIES TO THE TRANSACTIONS WERE REGI STERED WITH SALES-TAX AND EXCISE AUTHORITIES AND HAVE CHAR GED THE APPELLANT THE REQUIRED DUTIES. IT WAS FOUND EVIDENT FROM THE PURCHASE BILLS SUBMITTED ON BEHALF OF ASSESSEE. THE ONLY REASON FOR THE ADDITIONS WAS THAT THESE ABOVE MENTI ONED PARTIES COULD NOT BE FOUND AT THE ADDRESSES PROVIDE D BY THE ASSESSEE. THE FULL QUANTITATIVE TALLY OF GOODS PURC HASED AND SOLD WERE PROVIDED BY ASSESSEE. ASSESSING OFFICER HAS NOT FOUND ANY DISCREPANCIES IN THE SAME. THE IDENTITIES OF PERSONS WERE ESTABLISHED BY WAY OF THEIR EXCISE AND VAT I.T.A. NO. 839/AHD/2011 A.Y. 06-07 (ACIT VS. M/S. SUPREME INDIA IMPEX LTD.) PAGE 5 REGISTRATION. ALL EVIDENCES RELATED TO THE TRANSACT IONS WERE PRODUCED BEFORE ASSESSING OFFICER AT RELEVANT PART OF TIME. HOWEVER, DISALLOWANCE WAS MADE NOT BECAUSE TRANSACT IONS WERE PROVED TO BE BOGUS BUT BECAUSE THEY WERE UNVER IFIABLE. IN SUCH SITUATION, IT CANNOT BE INFERRED THAT THE A SSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCE ALED HIS INCOME. AS DISCUSSED ABOVE, ASSESSEE COULD NOT PRO DUCE THE PARTIES. SO TO AVOID LITIGATION, HE ACCEPTED THESE ADDITIONS. WITHOUT PREJUDICE TO QUANTITATIVE ADDITION, IT CANN OT BE INFERRED THAT ASSESSEE HAS CONCEALED INCOME FORM TH E DEPARTMENT. MOREOVER, DISALLOWANCES HAVE BEEN MADE BY WAY OF ON ESTIMATE BASIS FOR REASONS DISCUSSED ABOV E. IN SUCH SITUATION, CIT(A) WAS JUSTIFIED IN DELETING TH E PENALTY. SAME NEEDS NOT INTERFERENCE FROM OUR SIDE. 3. AS A RESULT, APPEAL FILED BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF OCTOBER, 2014. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YA DAV) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA ' ' ' ' !( !( !( !( )(&! )(&! )(&! )(&! / COPY OF ORDER FORWARDED TO:- 1. ,- / REVENUE 2. / ASSESSEE 3. 00! 1 / CONCERNED CIT I.T.A. NO. 839/AHD/2011 A.Y. 06-07 (ACIT VS. M/S. SUPREME INDIA IMPEX LTD.) PAGE 6 4. 1- / CIT (A) 5. (56 !, , / DR, ITAT, AHMEDABAD 6. 69: ;< / GUARD FILE . BY ORDER / ' , =/ 0, , ?