M/s. Hanee Traders, Valsad V. The Income tax Officer,Ward-2, Valsad

ITA 903/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5740 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 10-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: PRAKRUTI R UPADHYAY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER DATE OF HEARING :13-7-2010 DRAFTED ON: 13-7- 2010 ITA NO. 903/AHD/2008 ASSESSMENT YEAR : 2005-06 M/S.HANEE TRADERS, OPP. LAL SCHOOL, HALAR ROAD, VALSAD. VS. INCOME TAX OFFICER, WARD-2, INCOME TAX OFFICE, DHARAMPUR ROAD, VALSAD. PAN/GIR NO. : AABFH 4850 L (APPELLANT) .. (RESPONDENT) APPELLANT BY : PRAKRUTI R. UPADHYAY. RESPONDENT BY: SHRI R.K. DHANESTA, D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD, DATED 30- 11-2007. 2. THE SOLE GROUND TAKEN BY THE ASSESSEE READS AS UNDER :- 1. THE ASSESSING OFFICER HAS ERRED IN LAW AND ON F ACTS TO INITIATE AND LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT IGNORING THE LEGAL POSITION THAT NON ACCEPTANCE OF EXPLANATION OFFERED BY THE APPELLANT NEITHER AMOUNT TO CONCEALM ENT OF INCOME NOR FURNISHING INACCURATE PARTICULARS OF INC OME. LEARNED COMMISSIONER OF INCOME TAX (APPEALS),VALSAD HAS ALSO ERRED IN CONFIRMING THE ACTION OF THE ASSESSIN G OFFICER. - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF GLASS SHEETS. THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2005-06 DECLAR ING INCOME OF RS.2,09,410/-. THE LEARNED ASSESSING OFFICER AFTER POINTING OUT SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNTS MAINTAINE D BY THE ASSESSEE, REJECTED THE BOOK RESULT BY INVOKING THE PROVISIONS OF SECTION 145(2) AND SECTION 145(3) OF THE ACT. THEREAFTER, THE LEAR NED ASSESSING OFFICER WORKED OUT THE QUANTITY OF PURCHASES AND SA LES MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ON THE BASIS OF PURCHASE BILLS AND SALES BILLS AND FOUND THAT THERE WERE UNA CCOUNTED SALES OF RS.6,14,457/- AND MADE ADDITION OF THE SAME TO THE INCOME OF THE ASSESSEE. IN APPEAL, THE LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) CONFIRMED THE ADDITION MADE BY THE LEA RNED ASSESSING OFFICER . 4. THEREAFTER THE LEARNED ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS. 2,15,058/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE WHICH WAS CONFIRMED IN APPEAL BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 5. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME TAX(APPEALS) ASSESSEE IS IN APPEAL BEFORE US . 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE FILED BEFORE US COPY OF ORDER OF THE TRIBUNAL FOR A.Y. 20 05-06 PASSED IN THE CASE OF THE ASSESSEE IN ITA NO.1974/AHD/2007 DA TED 9-4-2010 - 3 - AND SUBMITTED THAT THE TRIBUNAL HAS DELETED THE ADD ITION MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE CIT( A) THEREFORE, THE PENALTY LEVIED CANNOT BE SUSTAINED AND SHOULD B E DELETED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE LEARNED ASSES SING OFFICER LEVIED PENALTY OF RS. 2,15,058/- ON THE ASSESSEE FO R FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS SUPPRESSED THE SALES OF RS.6,14,45 1/- WHILE FILING THE RETURN OF INCOME. WE FIND THAT THIS ADDITION WAS CO NFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THE AS SESSEE FILED SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE TRIBUNAL VIDE ITS ORDER DATED 9-4-2010 PASSED IN THE CASE OF THE ASSESSEE I TSELF IN ITA NO.1974/AHD/2007 HELD THAT THE ASSESSEE WAS CLAIMIN G BREAKAGE OF 6% TO 18% WHEREAS THE LEARNED ASSESSING OFFICER HAS ALLOWED THE BREAKAGE OF 0.2% ONLY THE TRIBUNAL HELD THAT 7.5% BREAKAGE SHOULD BE ALLOWED ON SALES. THE TRIBUNAL FURTHER HELD THAT THIS WILL CREATE A DIFFERENCE OF RS.8,70,391/- WHICH WILL OFF-SET THE ADDITION OF RS.6,14,451/- MADE BY THE LEARNED ASSESSING OFFICER . THEREFORE, THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER CANNOT BE SUSTAINED. HOWEVER, CONSIDERING THE FACTS AND CIRC UMSTANCES OF THE CASE THE TRIBUNAL SUSTAINED ADDITION OF RS. 25,000/ - ONLY. 8. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE , AS THE ADDITION MADE IN THE ASSESSMENT WAS DELETED BY THE TRIBUNAL, THE VERY BASIS FOR LEVY OF PENALTY DOES NOT SURVIVE AND THER EFORE, THE PENALTY ALSO DOES NOT SURVIVE. WE THEREFORE, SET ASIDE THE ORDERS OF THE LOWER - 4 - AUTHORITIES AND DELETE THE LEVY OF PENALTY OF RS.2 ,15,058/- LEVIED U/S. 271(1)(C) OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 16 TH DAY OF JULY, 2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 16 TH DAY OF JULY, 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 13-7-10 2. DRAFT PLACED BEFORE AUTHORITY 13-7-10 3. DRAFT PROPOSED & PLACED JM BEFORE THE SECOND MEMBER 13-7-10 4. DRAFT DISCUSSED/APPROVED JM/AM BY SECOND MEMBER 13-7-10 5. APPROVED DRAFT COMES TO P.S 16-7-10 6. KEPT FOR PRONOUNCEMENT ON 16-7-10 7. FILE SENT TO THE BENCH CLERK 16-7-10 8. DATE ON WHICH FILE GOES TO THE 9. DATE OF DISPATCH OF ORDER