Deluxe Machinery Stores, Vapi V. The Income tax Officer,Vapi Ward-1, Vapi

ITA 949/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5589 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B D BAROT
• Assessee Lawyers: S N L AGARWALA
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH SMC SMC SMC SMC BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI, , , , ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE OF HEARING :16-7-10 DRAFTED ON : 16-7-10 ITA NO. 949 /AHD/ 2010 ASSESSMENT YEAR :2003-04 M/S DELUXE MACHINERY STORES, OPP.NEW VEGETABLE MARKET, MAIN VS. INCOME TAX OFFICER, WARD-1, INCOME TAX OFFICE, VAPI. PAN/GIR NO. : AABFD 7813K (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.N.L. AGARWALA. RESPONDENT BY: SHRI B.D. BAROT, D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-VAL SAD, DATED 13-12-2009. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS AS UND ER :- 1. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) VA LSAD ERRED IN LAW AND ON FACTS IN DIRECTING LEARNED ASSE SSING OFFICER TO LEVY PENALTY ON RS.90,000/- THE ADDITION CONFIRMED BY HON'BLE ITAT ON ESTIMATE BASIS. 2. PENALTY UNDER SECTION 271(1) CANNOT BE LEVIED WH ERE INCOME IS PURELY ESTIMATED BY VARIOUS AUTHORITIES A ND EACH TIME IT HAS UNDERGONE A CHANGE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNED ASSESSING OFFICER MADE ADDITION OF `.5,00,000/- ON ESTIMATE B ASIS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DISMIS SED THE APPEAL OF THE APPELLANT. AGGRIEVED WITH THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE PREFERRED APP EAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ITS ORDER DATED 8-5-09 IN ITA NO.706/AHD/2009 REDUCED THE ADDITION TO ` 90,000/-. IN THE - 2 - MEANTIME THE LEARNED ASSESSING OFFICER LEVIED THE P ENALTY OF `. 2,00,000/- ON BEING SATISFIED THAT THE LEARNED COMM ISSIONER OF INCOME TAX(APPEALS) HAD CONFIRMED THE QUANTUM ADDIT ION MADE IN THE ASSESSMENT ORDER. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DIRECTE D THE LEARNED ASSESSING OFFICER TO LEVY PENALTY ON `.90,000/- BEI NG THE ADDITION SUSTAINED BY THE TRIBUNAL IN APPEAL IN PLACE OF `.5 LAKHS. 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE FILED BEFORE US COPY OF ORDER OF THE TRIBUNAL PASSED IN T HE QUANTUM APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2002 -03 IN ITA NOIS.205 AND 110/AHD/2006 DATED 16-11-2006 AND ARGU ED THAT IN THAT YEAR ALSO THE TRIBUNAL HAD ESTIMATED THE TURNO VER OF THE ASSESSEE AT `. 18 LAKHS AND BY ESTIMATING THE PROFI T AT 5% ON THE ESTIMATED TURNOVER ASSESSED THE INCOME AT `.90,000/ - IN PLACE OF `.5 LAKHS ASSESSED BY THE LEARNED ASSESSING OFFICER . HE SUBMITTED THAT IN THE ASSESSMENT YEAR 2002-03 THE AO DID NOT LEVY ANY PENALTY. HE SUBMITTED THAT IN THE PRESENT YEAR OF APPEAL THE TRIBUNAL VIDE ORDER DATED 8-5-2009 HAS COMPUTED THE INCOME OF THE ASSESSEE EXACTLY IN THE SAME MANNER AS WAS DONE IN THE ASSESSMENT YEAR 2002-03 BY ESTIMATING THE TURNOVER OF THE ASSESSEE AT `. 18 LAKHS AND ESTIMATING THE PROFIT A T 5% ON THE ESTIMATED TURNOVER ASSESSED THE INCOME AT `. 90,000 /-. THEREFORE, FACTS BEING IDENTICAL TO THE FACTS FOR THE ASSESSME NT YEAR 2002-03 MAINTAINING THE CONSISTENCY NO PENALTY SHOULD BE LE VIED ON THE ASSESSEE. HE FURTHER RELIED UPON THE DECISION OF HO N'BLE DELHI HIGH COURT IN THE CASE OF C.I.T. VS. AERO TRADERS P. LTD ., (2010) 322 ITR 316(DEL) AND SUBMITTED THAT THE HON'BLE HIGH COURT IN THIS CASE HAS HELD THAT AS ADDITION WAS MADE BY THE LEARNED ASSES SING OFFICER ON THE BASIS OF ESTIMATED PROFIT IT COULD NOT BE A SUBJECT MATTER OF PENALTY FOR CONCEALMENT OF INCOME. HENCE HE SUBMIT TED THAT THE PENALTY SUSTAINED BY THE LEARNED COMMISSIONER OF IN COME - 3 - TAX(APPEALS) ON THE ADDITION OF `.90,000/- SUSTAINE D BY THE TRIBUNAL SHOULD BE DELETED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED O N THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS). 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS ON RECORD. IN THE PRESENT YEAR THE LEARNED ASSESSING O FFICER ESTIMATED INCOME OF THE ASSESSEE AT `.5,00,000 WHICH WAS CONF IRMED IN APPEAL BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS). THE LEARNED ASSESSING OFFICER THEREAFTER, LEVIED PENALT Y UNDER SECTION 271(1)(C) OF THE ACT OF `.2,00,000/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. ON APPEAL FI LED BY THE ASSESSEE TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DIR ECTED THE LEARNED ASSESSING OFFICER TO LEVY PENALTY ON `.90,0 00/- WHICH WAS THE INCOME ESTIMATED BY THE TRIBUNAL IN PLACE OF `. 5,00,000/- ESTIMATED BY THE LEARNED ASSESSING OFFICER. THE CON TENTION OF THE ASSESSEE IS THAT IN ASSESSMENT YEAR 2002-03 ALSO TH E INCOME OF THE ASSESSEE WAS ESTIMATED BY THE TRIBUNAL AT `.90, 000 IN PLACE OF `.5 LAKHS ESTIMATED BY THE LEARNED ASSESSING OFFICE R AND NO PENALTY WAS LEVIED BY THE LEARNED ASSESSING OFFICER ON THE ADDITION SUSTAINED BY THE TRIBUNAL. THEREFORE, THERE BEING N O DIFFERENCE IN FACTS IN THE YEAR UNDER CONSIDERATION THE PENALTY L EVIED SHOULD BE DELETED. IN THE ABOVE FACTS AND CIRCUMSTANCES OF TH E CASE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS SUBMIT TED THAT IN ASSESSMENT YEAR 2002-03 ALSO SIMILARLY THE INCOME O F THE ASSESSEE WAS ESTIMATED BY THE TRIBUNAL AT `.90,000 IN PLACE OF `.5,00,000/- ESTIMATED BY THE LEARNED ASSESSING OFFICER AND NO P ENALTY WAS LEVIED ON THE ASSESSEE IN THAT YEAR. THE ESTIMATE O F INCOME IN THE PRESENT YEAR OF APPEAL HAS BEEN MADE BY THE TRIBUNA L IN A SIMILAR FASHION AT `.90,000/- IN PLACE OF `.5,00,000/- ESTI MATED BY THE LEARNED ASSESSING OFFICER. AS THE FACTS OF THE PRE SENT YEAR OF APPEAL ARE IDENTICAL TO THE FACTS THAT WERE IN THE ASSESSMENT YEAR - 4 - 2002-03 AND AS THE LEARNED DEPARTMENTAL REPRESENTAT IVE COULD NOT CONTROVERT THE SUBMISSION MADE BY THE LEARNED A UTHORISED REPRESENTATIVE OF THE ASSESSEE THAT NO PENALTY UNDE R SECTION 271(1)(C) OF THE ACT WAS LEVIED ON THE ASSESSEE IN THE ASSESSMENT YEAR 2002-03 THEREFORE, MAINTAINING THE CONSISTENCY IN MY OPINION THE ASSESSEE IS NOT LIABLE TO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE PRESENT YEAR ALSO ON THE GROUND OF FURNI SHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. F URTHER, THE HON'BLE DELHI HIGH COURT IN THE CASE OF AERO TRADER S P. LTD. (SUPRA) HAS HELD THAT NO PENALTY FOR CONCEALMENT OF INCOME CAN BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT IN A CASE WHERE ADDITION IS MADE BY THE LEARNED ASSESSING OFFICER ON ESTIMATE BASIS. THEREFORE, I SET ASIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) AND DELETE THE LEVY OF PENALTY UNDER S ECTION 271(1)(C) OF THE ACT SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON `.90,000/-. THEREFORE, THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 23RD JULY, 2010 SD/- ( N. S. SAINI ) ACCOUNTANT MEMBER AHMEDABAD; ON THIS 23RD DAY OF JULY, 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE R ESPONDENT 3. THE CIT CONCERNED 4. THE LD. C IT(APPEALS)-VIII,ABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// - 5 - (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 22-7-10 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 22-7-10 ----- -------------- 3. DRAFT PROPOSED & PLACED 22-7-10 ------------ ------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 22-7-10 ------------------- JM 5. APPROVED DRAFT COMES TO P.S ---------------- -- ------------------ 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------