M/s. Sun Automobiles, Ahmedabad V. The ACIT.,Cent.Circle-1(2), Ahmedabad

ITSSA 11/AHD/2013

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9097 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 01-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: PRASHANT MAHARISHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMADABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO. 11/AHD/2013 ASSESSMENT YEAR :2007-08 M/S. SUN AUTOMOBILES NEAR SHAH WADI BUST STOP, NATIONAL HIGHWAY NO.8, NAROL, AHMADABAD-382405 V/S . ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 1(2), AHMEDABAD PAN NO. A A GFS9455F (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI PRASHANT MAHARISHI, A.R. /BY RESPONDENT SHRI RAHUL KUMAR, SR. D.R. /DATE OF HEARING 22.02.2013 /DATE OF PRONOUNCEMENT 19.04.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHI CH HAS EMANATED FROM THE ORDER OF CIT(A)-I, AHMEDABAD, ORDER DATED 25.01.2010 FOR A.Y. 2007- 08, WHEREIN PENALTY U/S.271(1)(C) WAS CONFIRMED. TH E APPELLANT IS AGAINST CONFIRMING THE PENALTY OF RS.65,971/- U/S.271(1)(C) OF THE IT ACT BY CIT(A). 2. THE ASSESSEE DERIVED INCOME FROM SALE OF SCRAP.T HERE WAS A SEARCH ACTION U/S.132 ON FIRM AS WELL AS PARTNERS OF THE F IRM AND A SURVEY U/S.133(A) IT(SS)A NO. 11/AHD/13 A.Y. 07-08 PAGE 2 WAS CARRIED OUT AT THE GODOWN SITUATED IN SHAHVADI, NAROL AND AT SANAND HIGHWAY, AHMADABAD. THERE WAS A DISCREPANCY IN STO CK OF RS.27,98,540/-. THUS, A.O. MADE ADDITION ON THE SAME AMOUNT AND PEN ALTY PROCEEDING U/S.271(1)(C) HAS BEEN INITIATED WITHOUT GIVING THE REASONS WHETHER IT WAS FOR CONCEALMENT OF INCOME OR INACCURATE PARTICULARS OF INCOME IN THE ASSESSMENT ORDER. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE CIT(A) WHO HAD REDUCED THE GROSS PROFIT RATE FROM 15% TO 12.5% AND FINALLY, ON THAT BASIS, THE DISCREPANCY WAS WORKED OUT AT RS.8,77,558/-. NOTIC E FOR IMPOSITION OF PENALTY WAS ISSUED ON 01.03.2011. THE APPELLANT REQUESTED TO KEEP THE PENALTY PROCEEDING IN ABEYANCE AS APPEAL WAS PENDING BEFORE THE ITAT. BESIDES THIS, THE ASSESSEE DID NOT FILE ANY EXPLANATION ON DISCREPANCY FOR IMPOSITION OF PENALTY. IN ABSENCE OF ANY REPLY, THE LD. A.O. IMP OSED PENALTY AT RS.2,63,267/-, WHICH IS 100% OF TAX SOUGHT TO BE EV ADED BY THE APPELLANT. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAD OBSERVED THAT DISCREPANCY IN THE STOCK TO THE EXTENT OF RS.2 ,14,156/- HAD BEEN ADMITTED BY THE ASSESSEE BEFORE THE CIT(A) DURING THE COURSE OF APPEAL PROCEEDING. THE OTHER REMAINING ADDITION IN DISCREPANCY IN STOC K WAS BASED ON RATE OF GP. THEREFORE, LD. CIT(A) HAD ALLOWED THE APPEAL PARTLY . 4. NOW, THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THE ADDITION IS DEBATABLE AND DISCRE PANCY IN STOCK WAS DUE TO GP RATE. THE APPELLANT HAD GIVEN EXPLANATION BEFOR E THE A.O., WHICH WAS NOT FOUND FALSE. AS PER EXPLANATION, THE GP ADDITION I S DEBATABLE. HE ALSO HAS IT(SS)A NO. 11/AHD/13 A.Y. 07-08 PAGE 3 DRAWN OUR ATTENTION ON PAGE NOS. 44 TO 47 OF THE PA PER BOOK WHEREIN C.O. NO. 101/AHD/2010 FILED FOR A.Y. 07-08 AGAINST THE CONFI RMATION OF ADDITION BY THE CIT(A) AT RS.8,77,558/- AND SUBMITTED THAT THIS C.O . HAS NOT BEEN PRESSED BEFORE THE A BENCH, AHMADABAD. THE ASSESSEE WAS MAINTAINING REGULAR BOOKS OF ACCOUNT INCLUDING SALE AND PURCHASE REGIST ER. THE ASSESSEE PURCHASED SCRAP OF VEHICLES AND WEIGHT AND PRICE HA D BEEN TAKEN ON ESTIMATE BASIS. DURING THE COURSE OF SEARCH, NO UNACCOUNTED PURCHASE AND SALE OF SCRAP WAS FOUND. THUS, HE REQUESTED TO DELETE THE PENALTY U/S.271(1)(C). AT THE OUTSET, LD. SR. D.R. VEHEMENTLY RELIED UPON THE ORDER OF THE CIT(A) AND REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS IN THE BUSINESS OF PURCHAS E AND SALE OF SCRAP OF VEHICLES AND ALSO SCRAP AUCTION SALE OF GOVERNMENT DEPARTMENTS. THE DISCREPANCY WAS CALCULATED ON THE BASIS OF GP WHICH VARIES YEAR-TO-YEAR WHICH HAS BEEN ACCEPTED BY THE CIT(A). FURTHER, TH E EXPLANATION FILED, DURING THE COURSE OF ASSESSMENT PROCEEDING, NOT FOUND FALS E. THE ADDITION IS DEBATABLE. THE SURVEY WAS MADE ON 04.08.2006 WHICH WAS RELEVANT TO A.Y. 07-08. THE RETURN FOR A.Y. 07-08 WAS ALSO DUE ON O R BEFORE 31.10.2007. THE ASSESSEE HAS ACCEPTED THE ADDITION BEFORE THE ITAT IN TOTO. EVEN THEN, PENALTY IMPOSED ON ADDITION OF RS.2,14,156/- IN PLA CE OF RS.8,77,588/-. THUS, WE HAVE CONSIDERED VIEW THAT IT IS NOT A FIT CASE F OR LEVY OF PENALTY U/S. U/S.271(1)(C). ACCORDINGLY, WE REVERSE THE ORDER O F THE CIT(A). IT(SS)A NO. 11/AHD/13 A.Y. 07-08 PAGE 4 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 19.04.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;