P. KISHANCHAND TEXTILES LTD, MUMBAI V. ITO WD 4(3)(3), MUMBAI

ITA 8556/MUM/2011

• Counselvise Citation: 855619914 RSA 2011
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 19-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 8556/MUM/2011 ASSESSMENT YEAR: 2007-08 M/S. P. KISHANCHAND TEXTILES LTD. 51, AGARWAL SADAN, DADI SHETH AGAIRY LANE, KALBADEVI, MUMBAI-02 VS. ITO WD 4(3)(3) MUMBAI (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :AACCP 0073 D ASSESSEE BY : SHRI RAKESH JOSHI REVENUE BY : SHRI SANJEEV JAIN DATE OF HEARING : 10.04.2014 DATE OF PRONOUNCEMENT : 16.04.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-8, MUMBAI DATED 22.11.2011 CONFIRMING THE PENALTY OF RS.25,000/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT FOR T HE ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED, THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF TRADING AND TEXTILES, E- FILED ITS RETURN OF INCOME DECLARI NG A TOTAL INCOME AT RS.5,17,190/-. IN THE ASSESSMENT FRAMED U/S 143(3), THE AO REJECTE D THE BOOKS OF ACCOUNT AND PASSED THE ORDER U/S 144 WHICH RESULTED IN ASSESSIN G THE TOTAL INCOME AT RS.92,46,770/-. CONSEQUENTLY, THE AO INITIATED THE PENALTY PROCEEDING U/S 271A OF THE ACT AND ACCORDINGLY LEVIED A PENALTY OF RS.25,0 00/- FOR NOT MAINTAINING CORRECT AND COMPLETE BOOKS OF ACCOUNTS. ON APPEAL, THE LD.C IT(A) CONFIRMED THE ACTION OF THE AO AS THE ASSESSEE FAILED TO KEEP AND MAINTAIN THE BOOKS OF ACCOUNT AS PROVIDED IN THE ACT. ITA NO. 8556/MUM/2011 M/S. P. KISHANCHAND TEXTILES LTD. ASSESSMENT YEAR: 2007-08 2 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE TRIBUNAL, VIDE ITS O RDER DATED 06.12.2013, IN THE ASSESSES SISTER CONCERN CASE, M/S. UNICORN TEXTILES P. LTD. (ITA NO. 3038/MUM/2012), ON SIMILAR SET OF FACTS HAS DELETED THE PENALTY LEVIED U/S 271 A OF THE ACT. THE RELEVANT FINDINGS THE TRIBUNAL ARE EXT RACTED HEREUNDER:- 5. WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE REL EVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON REC ORD. FROM THE FACTS, AS NARRATED ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS BEEN MAI NTAINING BOOKS OF ACCOUNT AND THE SAME WERE IMPOUNDED AT THE TIME OF SURVEY, A LIST O F SUCH BOOKS OF ACCOUNT IMPOUNDED AS MENTIONED IN THE ASSESSMENT ORDER AS W ELL AS IN THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), WERE AS UNDER:- BOOKS IMPOUNDED:- 1.SHIVAM BANK STATEMENT FILE 2.BANK STATEMENT FILE (POPULA) BOOKS FOUND AND INVENTORISED: 1. BANK BOOK 2. NAKAL VANI BOOK 3. ROKAD VAHI BOOK 4. APPOLLO SALES FILE 5. STATEMENT OF STOCK FILE 6. DELIVERY CHALLAN BOOK THE ASSESSING OFFICERS MAIN ALLEGATION IS THAT THE STOCK REGISTERS HAVE NOT BEEN MAINTAINED BY THE ASSESSEE WHICH DOES NOT RESULT IN TO CORRECT DETERMINATION OF PROFIT. HE HAS REJECTED THE BOOKS OF ACCOUNT AFTER APPLYING THE PROVISIONS OF SECTION 145 AND THEREAFTER COMPLETED THE ASSESSMENT U/S 144A. MAIN LY BECAUSE THE STOCK REGISTER HAS NOT BEEN MAINTAINED, IT CANNOT BE HELD THAT THE ASSESSEE HAS FAILED TO MAINTAIN BOOKS OF ACCOUNT AS PER THE REQUIREMENT OF SECTION 44AA. NOWHERE IN SECTION 44AA, IT HAS BEEN STATED THAT THE BOOKS OF ACCOUNT HAVE TO B E MAINTAINED AS PER THE PRESCRIBED FORMAT FOR A PARTICULAR BUSINESS. THE PR OVISIONS OF RULE 6F HAVE NOT BEEN MADE APPLICABLE TO THE PERSONS CARRYING ON A BUSINE SS OR A PROFESSION OTHER THAN THOSE MENTIONED UNDER SUB-SECTION 1 OF SECTION 44AA , THEREFORE, IT CANNOT BE HELD THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SE CTION 44AA; AND, CONSEQUENTLY LIABLE FOR PENALTY UNDER SECTION 271A. UNLESS SOME SPECIFIC RULES ARE PRESCRIBED FOR MAINTAINING PARTICULAR TYPES OF BOOKS OF ACCOUNT FO R A PARTICULAR TYPE OF BUSINESS, IT CANNOT BE HELD THAT THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO MAINTAIN BOOKS OF ACCOUNT SO AS TO ENTAIL LEVY OF PENALTY UNDER SECTI ON 271A. ON THE FACTS OF THE ASSESSEES CASE, WE ARE OF THE OPINION THAT NO PENA LTY IS WARRANTED UNDER SECTION 271A FOR FAILURE TO MAINTAIN BOOKS OF ACCOUNT AS PE R SECTION 44A. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND CANCEL THE PENALTY IMPOSED BY THE ASSESSING OFFICER . IN VIEW OF THE FACT THAT IDENTICAL FACTS ARE INVOLV ED IN THE CASE OF THE PRESENT ASSESSEE, WE BY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL, DELETE THE IMPUGNED PENALTY LEVIED/CONFIRMED BY THE AO/CIT(A). ITA NO. 8556/MUM/2011 M/S. P. KISHANCHAND TEXTILES LTD. ASSESSMENT YEAR: 2007-08 3 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 6 TH DAY OF APRIL, 2014. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 16.04.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.