M/s. Gujarat Tool Room Ltd., Ahmedabad V. The Income tax Officer,Ward-4(1), Ahmedabad

ITA 842/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6892 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAIN I , ACCOUNTANT MEMBER ITA NO . 84 2 / AHD/20 1 1 A. Y. 200 6 - 0 7 M/S. GUJARAT TOOL ROOM LIMITED, 153, MUKTI MEDAN, MANINAGAR, AHMEDABAD. PAN : AAACG 5585F VS ITO, WARD - 4(1), AHMEDABAD. (APPELLANT) (RESPONDENT) ITA NO.87 2 /AHD/2011 A.Y. 2006 - 07 ITO, WARD - 4(1), AHMEDABAD. VS M/S. GUJARAT TOOL ROOM LIMITED, 153, MUKTI MEDAN, MANINAGAR, AHMEDABAD. PAN: AAACG 5585F (APPELLANT) (RESPO NDENT) REVENUE BY : SHRI DINESH SINGH , SR.D.R. , ASSESSEE(S) BY : MS. URVASHI SHODHAN, A.R. / DATE OF HEARING : 28 / 1 1 /201 4 / DATE OF PRONOUNCEMENT: 23 / 1 2 /201 4 / O R D E R PER BENCH THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF CIT(A) - XX, AHMEDABAD DATED 10.12.2010. 2. IN ASSESSEES APPEAL, GROUND NO.1 READ S AS UNDER: ITA NO. 84 2 & 87 2 /AHD/201 1 M/S. GUJARAT TOOL ROOM LTD. VS. ITO WARD - 4(1), AHMEDAAD FOR A.Y S . 200 6 - 0 7 - 2 - 1. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONF IRMING THE PENALTY TO THE EXTENT OF 100% OF TAX LEVIABLE ON RS.4,14,403/ - . THE LD. CIT(A) OUGHT TO HAVE DELETED THE PENALTY IN TOTO. IT BE DELETED NOW . 2.1 IN THE REVENUES APPEAL, GROUND NO.1 READS AS UNDER: 1. THE LD. CIT(A) - XX, AHMEDABAD, HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.6,65,019/ - LEVIED BY THE AO U/S.271(1)(C) OF THE ACT, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER 3. THE BRIEF FACTS OF THE CASE ARE T HAT IN THE ASSESSMENT MADE U/S.143(3) ON 5.11.2008. THE ASSESSING OFFICER MADE FOLLOWING ADDITION TO THE INCOME OF THE ASSESSEE. TOT AL INCOME AS PER RETURN (LOSS) RS.22,83,253/ - ADD: EXCESS PURCHASES (PARA 4.2) RS.1,49,182/ - UNACCOUNTED SALES (PARA 4.3) RS. 20,94,008 LOSS ON SALE OF ASSETS (PARA - 5) RS.1,75,227 OLD BAL. WRITTEN OFF RS.19,483/ - RS.24,37,900/ - TOTAL REVISED INCOME RS.1,54,647/ - LESS: C/F LOSS A.Y. 00 - 01 (TOTAL 979490) RS.1,54,647/ - REVISED TOTAL INC OME NIL 4. ON APPEAL FILED BY THE ASSESSEE, THE CIT(A) RESTRICTED THE ADDITION TO RS.4,14,403/ - . 5. THE ASSESSING OFFICER AFTER THE COMPLETION OF THE ASSESSMENT LEVIED PENALTY U/S.271(1)(C) OF THE ACT FOR RS.8,04,507/ - BEING 100% OF THE TAX SOUGHT TO BE EVADED ON ACCOUNT OF CONCEALMENT OF INCOME. 6. ON APPEAL THE CIT(A) RESTRICTED THE PENALTY ON THE ADDITION OF RS.4,14,403/ - SUSTAINED BY HIM IN THE ORDER PASSED BY HIM ON ITA NO. 84 2 & 87 2 /AHD/201 1 M/S. GUJARAT TOOL ROOM LTD. VS. ITO WARD - 4(1), AHMEDAAD FOR A.Y S . 200 6 - 0 7 - 3 - 10.12.2010 IN THE QUANTUM APPEAL OF THE ASSESSEE AND DELETED THE BALANCE AMOUNT O F PENALTY LEVIED ON RS.20,23,497/ - . 7. BEING AGGRIEVED BY THIS ORDER OF THE CIT(A) BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDER OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT MADE ADDITION OF RS. 20,97,008/ - AS UNDISCLOSED SALES ON THE BASIS OF ISSUE REGISTER OF MOULDS WHEREIN THE VALUE OF ISSUED MOULDS WAS SHOWN AS AT RS.45,06,566/ - ; WHEREAS THE SALE VAL UE OF MOULDS IN THE BOOKS OF ACCOUNT WAS SHOWN AT RS.24,09,558/ - . 9. THE ASSESSING OFFICER THEREAFTER LEVIED PENALTY OF RS.8,04,507/ - U/S 271(1)(C) IN RESPECT OF ABOVE ADDITION OF RS.20,97,008/ - . 10. ON APPEAL, THE CIT(A) FOUND THAT THE ISSUE OF MOULDS OF RS.45,06,566/ - WAS NOT THE SALE VALUE OF MOULDS WHICH WAS THE COST OF MOULDS WHICH WERE FINISHED DURING THE YEAR. THE CLOSING STOCK OF MOULDS INCREASED BY RS.30 LACS, THE ASSESSEE CLAIMED MOULDS OF RS.4,14,403/ - WAS DEFECTIVE HAVING NO REALIZABLE VALUE AND BALANCE MOULDS OF RS.10,92,163/ - WAS SOLD DURING THE YEAR FOR RS.24,09,558/ - . THE CIT(A), THEREFORE, HELD THAT THE ISSUE OF RS.45,06,566/ - WAS NOT THE ACTUAL SALE VALE. THE CIT(A) ALSO OPINED THAT THE CLAIM OF THE ASSESSEE THAT MOULDS COSTS RS.4,14,40 3/ - WAS DEFECTIVE AND HAD NO REALIZABLE VALUE IS ALSO NOT ACCEPTABLE. THEREFORE, IN THE QUANTUM APPEAL, THE CIT(A) RESTRICTED THE ADDITION TO RS.4,14,403/ - AND DELETED THE BALANCE ITA NO. 84 2 & 87 2 /AHD/201 1 M/S. GUJARAT TOOL ROOM LTD. VS. ITO WARD - 4(1), AHMEDAAD FOR A.Y S . 200 6 - 0 7 - 4 - ADDITION OF RS.16,82,605/ - AND CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) IN RESPECT OF ADDITION OF RS.4,14,403/ - . 11. BEFORE US, THE DEPARTMENT IS IN APPEAL IN RESPECT OF DELETION OF PENALTY WITH REFERENCE TO DELETED INCOME OF RS.16,82,605/ - AND THE ASSESSEE IS IN APPEAL IN RESPECT OF CONFIRMATION OF PENALTY WITH REFERENCE TO THE ADDITION IN RESPECT OF RS.4,14,403/ - . 12. WE FIND THAT THE ADDITION OF RS.16,82,605/ - HAS BEEN DELETED BY THE CIT(A) AND IN ABSENCE OF ANY ADDITION, THE PENALTY CANNOT SURVIVE. THEREFORE, THE CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/ S 271(1)(C) IN RESPECT OF RS.16,82,605/ - . THEREFORE, THERE IS NO FORCE IN THE APPEAL OF THE REVENUE AND ACCORDINGLY, THE SAME IS DISMISSED. 13. IN RESPECT OF LEVY OF PENALTY WITH REFERENCE TO THE ADDITION OF RS.4,14,403/ - , WE FIND THAT IN THE QUANTUM APP EAL THE ADDITION OF RS.4,14,403/ - WAS SUSTAINED ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM THAT MOULDS OF RS.4,14,403/ - WAS DEFECTIVE AND HAD NO REALIZABLE VALUE. THUS, IT IS OBSERVED THAT THE DEPARTMENT COULD NOT BRING ANY MATERIAL O N RECORD TO SHOW THAT THE MOULDS COSTING RS.4,14,403/ - WAS IN FACT SOLD BY THE ASSESSEE AND THE ASSESSEE ACTUALLY REALIZED RS.4,14,403/ - BY SELLING THE SAME. 14. IT IS ESTABLISHED POSITION OF LAW THAT CONSIDERATION WHICH APPLIES IN A PENALTY PROCEEDINGS IS QUITE DIFFERENT AND DISTINCT FROM THE CONSIDERATION WHICH APPLIES IN AN ASSESSMENT PROCEEDINGS. IN AN ASSESSMENT PROCEEDINGS, A CLAIM MADE BY THE ASSESSEE MAY NOT BE ALLOWED WHEN THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE SAME BY BRINGING ON RECORD P ROPER SATISFACTORY MATERIAL BUT SUCH ITA NO. 84 2 & 87 2 /AHD/201 1 M/S. GUJARAT TOOL ROOM LTD. VS. ITO WARD - 4(1), AHMEDAAD FOR A.Y S . 200 6 - 0 7 - 5 - DISALLOWANCE BY ITSELF DOES NOT INVITE LEVY OF PENALTY U/S 271(1)(C) UNLESS THE ASSESSEE IS FOUND GUILTY OF EITHER CONCEALING THE PARTICULARS OF INCOME OR GUILTY OF FURNISHING ANY INACCURATE PARTICULARS OF INCOME. THERE FORE, IN OUR CONSIDERED VIEW, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) IN RESPECT OF ADDITION OF RS.4,14,403/ - . WE, THEREFORE, DELETE THE LEVY OF PENALTY U/S 271(1)(C) IN RESPECT OF THE ADDITION OF RS.4,14,403/ - AND ALL OW THE APPEAL OF THE ASSESSEE. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED, WHEREAS THE APPEAL FILED BY THE REVENUE IS DISMISSED. SD/ - SD/ - ( MUKUL KR. SHRAWAT ) ( N.S. SAINI ) J UDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 23 / 1 2 /20 1 4 PKK/BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, //TR UE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD