M/s Taksus Steels Pvt. Ltd., Mandi Gobindgarh V. ACIT, Patiala

ITA 967/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6532 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 05-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SSH ASHWANI KUMAR ADITYA KUMAR
• Keywords: Gross profit estimation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 967/CHD/2016 ASSESSMENT YEAR: 2008-09 M/S TAKSUS STEELS PVT. LTD., VS. THE ACIT, CENTRAL CIRCLE, GRAIN MARKET, PATIALA MANDI GOBINDGRH PAN NO. AAACT6876G (APPELLANT) (RESPONDENT) APPELLANT BY : S/SH. ASHWANI KUMAR, ADITYA KUMAR RESPONDENT BY : SMT. MEENAKSHI VOHRA DATE OF HEARING : 06.09.2017 DATE OF PRONOUNCEMENT : 04.12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), [HEREINAFTER REFERRED TO AS CIT(A)]-5, LUDHIANA DATED 20.06.2016, AGITAT ING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT IN THE QUANTUM PROCEEDINGS, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 13,22,011 /- INTO THE RETURNED INCOME OF THE ASSESSEE ON ACCOUNT OF CENVAT CREDIT DISALLOWANCE AND 2 FURTHER ADDITION OF RS. 31,56,401/- WAS MADE ON AC COUNT OF ENHANCEMENT OF GP RATE ON ESTIMATION BASIS. THE BASIS FOR THE E NHANCEMENT OF THE GP RATE BY THE ASSESSING OFFICER WAS BECAUSE THE ASSES SING OFFICER DOUBTED CERTAIN PURCHASES MADE BY THE ASSESSEE FROM ONE M/S ROHIT ISPAT (INDIA), MANDI GOBINDGARH. IN FIRST APPEAL, THE CIT(A) DELETED THE ADDITION ON ACCOUNT OF THE CENVAT BUT RETAINED THE ADDITION ON ACCOUNT OF LOW GP RATE. THE ASSESSING OFFICER, THEREFORE, LEVIED PEN ALTY OF RS. 9,75,216/- @ 100% OF TAX SOUGHT TO BE EVADED IN RELATION TO THE AFORESAID CONFIRMATION OF ADDITION OF RS. 31,56,401/-. 3. THE ASSESSEE IN THE QUANTUM PROCEEDINGS CARRIED OVER THE MATTER TO THE TRIBUNAL. THE TRIBUNAL FURTHER RESTRICTED THE D ISALLOWANCE MADE ON ACCOUNT OF ENHANCED RATE TO RS. 4 LAKHS AS AGAINST THE ADDITION OF RS. 31,56,401/- MADE BY THE ASSESSING OFFICER. THE LD. CIT(A), THEREFORE, RESTRICTED THE PENALTY @ 100% ON THE AFORESAID ADDI TION OF RS. 4 LACS CONFIRMED BY THE TRIBUNAL. BEING AGGRIEVED BY THE A BOVE CONFORMATION OF THE PENALTY, THE ASSESSEE HAS COME IN APPEAL BEFOR E US. 4. ADMITTEDLY, IN THE ASSESSMENT PROCEEDINGS, THE A DDITION HAS BEEN MADE BY THE ASSESSING OFFICER ONLY ON ESTIMATION BA SIS. THE ASSESSING OFFICER DOUBTED THE PURCHASES MADE BY THE ASSESSEE FROM ONE PARTY AND PRESUMED THAT THE ASSESSEE MIGHT HAVE PURCHASED THE MATERIAL AT SOME LOWER PRICE FROM THE GREY MARKET. THE ADDITION IN T HIS CASE HAS BEEN MADE ON PREPONDERANCE OF PROBABILITIES AND NOT ON THE BA SIS OF AN ADVERSE EVIDENCE FOUND AGAINST THE ASSESSEE. IT IS A SETTLE D LAW THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM ASSESSMENT PROCEEDIN GS. FOR THE LEVY OF PENALTY, IT HAS TO BE ESTABLISHED ON THE FILE THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED H IS INCOME. IN EVERY 3 CASE, PENALTY CANNOT BE LEVIED MERELY BECAUSE SOME ADDITIONS HAVE BEEN MADE INTO THE INCOME OF THE ASSESSEE. IN VIEW OF T HE ABOVE DISCUSSION, WE DO NOT FIND IT A FIT CASE FOR LEVY OF PENALTY U/S 2 71(1)(C) OF THE ACT AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.12.2017 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 04.12.2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR