Shri Bhikhabhai K. Patel, Ahmedabad V. The ACIT, Cent. Circle -2(1), Ahmedabad

ITSSA 279/AHD/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2287 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ IT(SS)A.NO.279 AND 280/AHD/2013 / ASSTT. YEAR: 2009-10 AND 2010-11 BHIKHABHAI K. PATEL 16, KHODALDAM SOCIETY BHADRESHWAR AHMEDABAD 382475. PAN : AGWPP 3929 M VS ACIT, CENT.CIR.2(1) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI TEJ SHAH, AR REVENUE BY : SHRI SANJAY KUMAR, SR.DR / DATE OF HEARING : 10/08/2016 / DATE OF PRONOUNCEMENT: 22/09/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER PRESENT TWO APPEALS ARE DIRECTED AGAINST COMMON ORD ER OF THE LD.CIT(A)-III, AHMEDABAD DATED 17.5.2013 PASSED FOR THE ASSTT.YEAR 2009-10 AND 2010-11. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.25,000/- IMPOSED UNDER SECTION 271A OF THE INCOME TAX ACT, 1961 BY THE AO IN EACH ASSESSMENT Y EAR. 3. FACTS ON ALL VITAL POINTS ARE COMMON IN BOTH THE YEARS. THEREFORE, FOR THE FACILITY OF REFERENCE, WE TAKE UP THE FACT FROM THE ASSTT.YEAR 2009-10. IT IT(SS)A NO.279 AND 280/AHD/2013 2 EMERGES OUT FROM THE RECORD THAT A SEARCH UNDER SEC TION 132 OF THE ACT WAS CARRIED OUT ON 14.1.2010. DURING THE COURSE OF SEA RCH, A NOTE BOOK WAS SEIZED WHICH WAS INVENTORISED AS ANNEXURE-A/1. THE ASSESS EE HAS FILED HIS RETURN OF INCOME FOR THE ASSTT.YEAR 2009-10 ON 30.1.2011 AND DISCLOSED AN INCOME OF RS.24,01,550/-. SIMILARLY, IN THE ASSTT.YEAR 2010- 11, RETURN WAS FILED ON 30.7.2011 AND INCOME OF RS.41,20,700/- WAS DISCLOSE D. THE LD.AO HAS PASSED ASSESSMENT ORDER IN BOTH YEARS. HE DETERMIN ED THE TAXABLE INCOME OF THE ASSESSEE AT RS.35,03,254/- AND RS.42,52,210/- I N THE ASSTT.YEARS 2009-10 AND 2010-11 RESPECTIVELY. THE AO WAS OF THE OPINIO N THAT TURNOVER OF THE ASSESSEE EXCEEDED RS.10 LAKHS, AND THEREFORE, HE WA S REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS WHICH IN HIS OPINION, WERE NOT BE ING MAINTAINED BY THE ASSESSEE, THEREFORE, HE INITIATED PENALTY PROCEEDIN GS UNDER SECTION 271A OF THE ACT. THE AO HAS ULTIMATELY IMPOSED A PENALTY OF RS .25,000/- IN EACH ASSESSMENT YEAR. THE APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT THERE IS NO DISPUTE WITH REGARD TO THE PROPOSITION THAT IF AN A SSESSEE FAILED TO MAINTAIN BOOKS OF ACCOUNTS, AND OTHER DOCUMENTS AS REQUIRED UNDER SECTION 44AA, THEN PENALTY UNDER SECTION 271A CAN BE IMPOSED UPON THE ASSESSEE. HE FURTHER CONTENDED THAT NO SPECIFIC TYPE OF BOOKS OF ACCOUNT S IS BEING PROVIDED EITHER UNDER SECTION 44AA OR UNDER THE RELEVANT RULES, WHI CH WAS REQUIRED TO BE MAINTAINED BY AN ASSESSEE. IT IS NOT THE CASE THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS. HE WAS MAINTAINING A DIARY WHICH DISCLOSED THE TURNOVER, AND THE BASIS OF TURNOVER MENTIONED IN TH E DIARY. THE LD.AO HAS MADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE I N BOTH THE YEARS. THEREFORE, THE ASSESSEE CANNOT BE VISITED WITH PENALTY. IN SU PPORT OF HIS CONTENTIONS, HE RELIED UPON THE ORDER OF THE ITAT IN THE CASE OF IT O VS. DINESH PAPER MART, 70 ITD 274 (NAG.) AND IN THE CASE OF SANT CONSTRUCT ION CO. VS. ITO, 86 IT(SS)A NO.279 AND 280/AHD/2013 3 TAXMAN 268 (DELHI)(MAG.). HE PLACED ON RECORD COPY OF BOTH THESE DECISION. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDER OF THE AO. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. IN THE CASE OF DINESH PAPER MART (SUPRA ), THE ASSESSEE WAS A PARTNERSHIP FIRM AND WAS MAINTAINING BOOKS OF ACCOU NTS, WHICH WAS AUDITED AS PER SECTION 44AB OF THE ACT, BUT THOSE BOOKS COU LD NOT BE PRODUCED BEFORE THE AO IN SPITE OF SEVERAL OPPORTUNITIES. THE AO H ARBOURED A BELIEF THAT THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNTS, AND THEREFORE, VISITED THE ASSESSEE WITH PENALTY. IN THIS BACKGROUND, THE TRI BUNAL GOT OCCASION TO EXAMINE THE NATURE OF BOOKS OF ACCOUNTS REQUIRED TO BE MAINTAINED UNDER SECTION 44AA OF THE INCOME TAX ACT. IT HAS BEEN HE LD THAT SECTION DOES NOT PROVIDE ANY SPECIFIC TYPE OF BOOKS OF ACCOUNTS. IT ONLY TALKS ABOUT THE ACCOUNTS AND DOCUMENTS, WHICH CAN ENABLE THE AO TO ADDUCE THE TRUE INCOME OF THE ASSESSEE. IN THE PRESENT CASE ALSO, THE ASS ESSEE WAS MAINTAINING A DIARY, WHICH HAD HELPED THE AO TO WORK OUT THE ALLEGED UNA CCOUNTED SALES. THEREFORE, IN OUR OPINION, THE LD.AO WAS NOT JUSTIF IED TO IMPOSE THE PENALTY UNDER SECTION 271A OF THE ACT. WE ALLOW BOTH THE A PPEALS AND DELETE THE IMPUGNED PENALTY. 6. IN THE RESULT, APPEALS OF THE ASSESSEE, BOTH ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANTN MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 22/09/2016