Shri Dinesh S. Patel, Ahmedabad V. The ACIT, Cent. Circle -2(1), Ahmedabad

ITSSA 282/AHD/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2955 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 19-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) IT(SS)A. NOS: 281 & 282/AHD/2013 (ASSESSMENT YEARS: 2009-10 & 2010-11) DINESH S. PATEL 7, GANESH ESTATE, NARODA ROAD, AHMEDABAD-380025 V/S ACIT, CENTRAL CIRCLE-2(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AGVPP0448A APPELLANT BY : SHRI TEJ SHAH, AR RESPONDENT BY : SHRI ASHISH POPHARE, SR. D.R . ( )/ ORDER DATE OF HEARING : 28 -02-201 7 DATE OF PRONOUNCEMENT : 02-03-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. IT(SS)A NOS. 281 & 282/AHD/2013 ARE APPEALS BY THE ASSESSEE PREFERRED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-IIII, AHMEDABAD DATED 17.05.2013 PERTAINING TO A.Y. 2009-10 & 2010-11. IT(SS)A NOS. 281 & 282/AHD/2013 . A.YS. 2009-1 0 & 2010-11 2 2. SINCE THE FIRST APPELLATE AUTHORITY HAS DISPOSED TH ESE APPEALS BY A COMMON ORDER, THEREFORE, THEY WERE HEARD TOGETHER A ND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE COMMON GRIEVANCE IN THE IMPUGNED APPEALS RELATE TO THE LEVY OF PENALTY U/S. 271A OF THE ACT. 4. A SEARCH ACTION WAS CONDUCTED AT THE PREMISES U/S. 132 OF THE ACT IN WHICH A NOTE BOOK WAS SEIZED AND THE ENTRIES IN THE NOTE BOOK FOUND TO BE UNACCOUNTED SALES TRANSACTIONS OF RS. 3.93 CRORES A ND 3.56 CRORES FOR PERTAINING TO THE FINANCIAL YEARS 2008-09 & 2009-10 . THE A.O. WAS OF THE FIRM BELIEF THAT SINCE THE ASSESSEE IS NOT MAINTAIN ING ANY BOOKS OF ACCOUNTS, THEREFORE, THE INCOME COULD BE DETERMINED ONLY BY T AKING AN ESTIMATE. ACCORDINGLY, NET PROFIT @ 6% WAS TAKEN AFTER CONSID ERING ALL THE MATERIAL AVAILABLE ON RECORD. 5. PENALTY PROCEEDINGS U/S. 271A WERE INITIATED AS THE A.O. WAS SATISFIED THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIO N OF SECTION 44AA OF THE ACT BY NOT MAINTAINING PROPER BOOKS OF ACCOUNTS SO AS TO ENABLE THE ASSESSING OFFICER TO COMPUTE HIS TOTAL INCOME IN AC CORDANCE WITH THE PROVISIONS OF THE ACT. THE A.O. LEVIED PENALTY OF R S. 25,000/- EACH FOR THE IMPUGNED ASSESSMENT YEARS. 6. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) BUT WITHOUT ANY SUCCESS. IT(SS)A NOS. 281 & 282/AHD/2013 . A.YS. 2009-1 0 & 2010-11 3 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF BHIKHABHAI K. PATEL IT(SS)A NOS. 279 & 280/AHD/2013 FOR A.YS. 2009-10 & 2010-11. IT IS T HE SAY OF THE LD. COUNSEL THAT ON IDENTICAL SET OF FACTS, THE TRIBUNAL HAS DE LETED THE PENALTY LEVIED U/S. 271A OF THE ACT. 8. THE LD. D.R. COULD NOT BRING ANY DISTINGUISHING DEC ISION IN FAVOUR OF THE REVENUE. 9. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. IT IS TRUE THAT A NOTE BOOK WAS FOUND AT THE TIME OF SEARCH. I T IS EQUALLY TRUE THAT THE ENTRIES RELATING TO THE UNACCOUNTED SALES TRIGGERED THE ESTIMATION OF PROFIT @ 6%. THIS BY ITSELF SHOWS THAT THE A.O. USED THE E NTRIES IN THE IMPOUNDED NOTE BOOK FOR COMPLETING THE ASSESSMENT. THEREFORE, THE OFFICER WAS NOT DEPRIVED IN ANY WAY IN COMPUTING THE INCOME OF THE ASSESSEE. 10. THE TRIBUNAL IN THE CASE OF BHIKHABHAI K. PATEL (SU PRA) HAD THE OCCASION TO CONSIDER IDENTICAL FACTS AND THE RELEVANT FINDINGS OF THE TRIBUNAL READ AS UNDER:- 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT THERE IS NO DISPUTE WITH REGARD TO THE PROPOSITION THAT IF AN ASSESSEE FAILED TO MAINTAIN BOOKS OF ACCOUNTS, AND OTHER DOCUMENTS AS REQUIRED UNDER SEC TION 44AA, THEN PENALTY UNDER SECTION 271A CAN BE IMPOSED UPON THE ASSESSEE . HE FURTHER CONTENDED THAT NO SPECIFIC TYPE OF BOOKS OF ACCOUNTS IS BEING PROV IDED EITHER UNDER SECTION 44AA OR UNDER THE RELEVANT RULES, WHICH WAS REQUIRED TO BE MAINTAINED BY AN ASSESSEE. IT IS NOT THE CASE THAT THE ASSESSEE WAS NOT MAINTA INING ANY BOOKS. HE WAS IT(SS)A NOS. 281 & 282/AHD/2013 . A.YS. 2009-1 0 & 2010-11 4 MAINTAINING A DIARY WHICH DISCLOSED THE TURNOVER, A ND THE BASIS OF TURNOVER MENTIONED IN THE DIARY. THE ID.AO HAS MADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE IN BOTH THE YEARS. THEREFORE, THE ASSESSEE CANNOT BE VISITED WITH PENALTY. IN SUPPORT OF HIS CONTENTIONS, HE RELIED U PON THE ORDER OF THE ITAT IN THE CASE OF ITO VS. DINESH PAPER MART, 70 ITD 274 (NAG. ) AND IN THE CASE OF SANT CONSTRUCTION CO. VS. ITO, 86 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 COULD NOT BE PRODUCED BEFORE THE AO IN SPITE OF SEVERAL OPPORTUNITIES. THE AO HARBOURED A BELIEF THAT THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNTS, AND THEREFORE, V ISITED THE ASSESSEE WITH PENALTY. IN THIS BACKGROUND, THE TRIBUNAL GOT OCCAS ION TO EXAMINE THE NATURE OF BOOKS OF ACCOUNTS REQUIRED TO BE MAINTAINED UNDER S ECTION 44AA OF THE INCOME TAX ACT. IT HAS BEEN HELD THAT SECTION DOES NOT PRO VIDE ANY SPECIFIC TYPE OF BOOKS OF ACCOUNTS. IT ONLY TALKS ABOUT THE ACCOUNTS AND D OCUMENTS, WHICH CAN ENABLE THE AO TO ADDUCE THE TRUE INCOME OF THE ASSESSEE. I N THE PRESENT CASE ALSO, THE ASSESSEE WAS MAINTAINING A DIARY, WHICH HAD HELPED THE AO TO WORK OUT THE ALLEGED UNACCOUNTED SALES. THEREFORE, IN OUR OPINIO N, THE ID.AO WAS NOT JUSTIFIED TO IMPOSE THE PENALTY UNDER SECTION 271A OF THE ACT . WE ALLOW BOTH THE APPEALS AND DELETE THE IMPUGNED PENALTY. 11. FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE F INDINGS OF THE TRIBUNAL (SUPRA), WE DIRECT THE A.O. TO DELETE THE PENALTY F ROM EACH ASSESSMENT YEARS UNDER CONSIDERATION. IT(SS)A NOS. 281 & 282/AHD/2013 . A.YS. 2009-1 0 & 2010-11 5 12. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 02 - 03- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 02 /03/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD