The ITO, Ward-1,, GANDHIDHAM v. M/s Agarwal Cargo Carriers,, GANDHIDHAM

ITA 1039/RJT/2009 | 2003-2004
Pronouncement Date: 03-12-2010 | Result: Dismissed

Appeal Details

RSA Number 103924914 RSA 2009
Assessee PAN AAEFA6749B
Bench Rajkot
Appeal Number ITA 1039/RJT/2009
Duration Of Justice 1 year(s) 9 day(s)
Appellant The ITO, Ward-1,, GANDHIDHAM
Respondent M/s Agarwal Cargo Carriers,, GANDHIDHAM
Appeal Type Income Tax Appeal
Pronouncement Date 03-12-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 03-12-2010
Assessment Year 2003-2004
Appeal Filed On 24-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI D.T. GARASIA (JM) I.T.A. NO.1039/RJT/2009 (ASSESSMENT YEAR 2003-04) ITO WD.1 VS M/S AGRAWAL CARGO CARRIERS GANDHIDHAM SHOP D-70/71 GANDHIDHAM KUTCH PAN : AAEFA6749B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JAI RAJ KUMAR RESPONDENT BY : SHRI MP SARDA O R D E R GARASIA : THIS APPEAL BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF CIT(A)-II RAJKOT FOR THE ASSESSMENT YEAR 2003-04 VIDE WHICH T HE LD.CIT(A) HAS CANCELLED THE PENALTY OF RS.2 08 870 IMPOSED U/S 271(1)(C) OF THE ACT. 2. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E TRANSPORTATION BUSINESS. THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER PASSED U/S 143(3) FOR THE ASSESSMENT YEAR UNDER CONSIDERATION HAS REJECT ED THE BOOKS OF ACCOUNT OF THE ASSESSEE ON THE GROUND THAT EXPENSES AMOUNTING TO RS.1 48 199 WERE NOT SUPPORTED BY PROPER BILLS. THE ASSESSING OFFICER C ONSEQUENTLY RESTRICTED THE EXPENSES IN RESPECT OF ALL TRUCKS TO AVERAGE OF 60% THEREBY MAKING ADDITION OF RS.28 41 797. IN THE FIRST APPEAL HE LD.CIT(A) HE LD THE REJECTION OF BOOKS AS NOT JUSTIFIED BUT CONFIRMED THE ADDITION TO THE EXTENT OF RS.5 68 360 TO COVER UP MINOR IRREGULARITIES IN THE CLAIM OF EXPENSES. ON THE BA SIS OF THE ORDER OF CIT(A) THE ASSESSING OFFICER IMPOSED THE IMPUGNED PENALTY. WH EN APPEALED AGAINST THE LEARNED CIT(A) CANCELLED THE PENALTY. AGGRIEVED T HE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.1039/RJT/2009 2 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE BEFORE U S SUBMITTED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CANCELING THE P ENALTY. THOUGH THE REJECTION OF BOOKS OF ACCOUNT WAS HELD TO BE INVALID STILL THE ADDITION WAS UPHELD TO THE EXTENT OF RS. 5 68 360 AS THE TRIBUNAL TOO FOUND THAT THER E WERE IRREGULARITIES IN THE CLAIM OF EXPENDITURE. THIS ADDITION WAS UPHELD ONL Y AT THE BEHEST OF THE ASSESSING OFFICER AS HE FOUND DURING THE COURSE OF SCRUTINY THE DETAILS FURNISHED BY THE ASSESSEE IN SUPPORT OF THE EXPENDITURE CLAIM ED WAS INACCURATE. THE LEARNED DEPARTMENTAL REPRESENTATIVE THUS PLEADED TH AT THE ORDER OF THE LEARNED CIT(A) MAY BE REVERSED AND THAT OF THE ASSESSING OF FICER MAY BE UPHELD. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE CIT(A) AS WELL AS THE ITAT HAS HELD THAT THE BOOKS OF ACCOUNT WERE NOT LIABLE FOR REJECTION AND THEREFORE THE VERY BASIS FOR INITIATION OF PENALTY WITH THE NOTION THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHI NG ANY INACCURATE PARTICULARS IS ON A WRONG FOOTING. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSING OFFICER INVOKED EXPLANATION 1 TO SECTION 271(1)(C) AS ACCORDING TO HIM THE ASSESSEE FAILED TO DISCHARGE THE ONUS TO COMPLY IN SUBMITTING THE DETAILS CALLED FOR AND ALSO BOOKS OF ACCOUNTS DOCUMENTS VOUCHERS BILLS ETC. THIS ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE IS NOT BORNE O UT OF RECORDS; A PORTION OF THE ADDITION WAS ESTIMATED BY THE TRIBUNAL NOT BECAUSE OF THE DEFECTS AS OPINED BY THE ASSESSING OFFICER BUT ONLY TO COVER UP MINOR I RREGULARITIES IN THE CLAIM OF EXPENSES. THE LEARNED COUNSEL FOR THE ASSESSEE REL IED UPON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS SUBHASH TRADING CO 221 ITR 110 (GUJ) FOR THE PROPOSITION THAT EVEN AFTER R EJECTION OF BOOKS PENALTY COULD NOT BE LEVIED ON ADDITION CONFIRMATION ON ESTIMATIO N. HE POINTED OUT THAT THOUGH IN THE CASE OF THE ASSESSEE THERE WAS NO REJECTION OF BOOKS OF ACCOUNT AS PER THE DECISION OF THE APPELLATE AUTHORITIES THE DISALLOW ANCE OF EXPENSES WAS BASED ON ESTIMATE AND THEREFORE THE JUDGMENT OF THE JURISDI CTIONAL HIGH COURT EQUALLY APPLIES TO THE CASE OF THE ASSESSEE. FURTHER RELIA NCE WAS PLACED ON THE FOLLOWING JUDGMENTS: ITA NO.1039/RJT/2009 3 BANGLA SWEET HOUSE VS ITO 109 TAXATION 55 (DEL TRI B) CIT VS STAR PAPER MILLS LTD 108 CTR 224 (CAL) NAVJIVAN OIL MILLS VS CIT (2001) 252 ITR 417 (GUJ) CIT VS M.M. RICE MILLS (2002) 253 ITR 17 (P&H) DCIT VS MADAD ALI ANSARI & CO 69 TTJ 279 (JODH) HARIGOPALSINGH VS CIT 258 ITR 85 (P&H) SHYAM NATHANI VS ITO 109 TTJ 421 (JP) CIT VS KL MANGAL SAIN 17 ITR 598 (ALL) 5. THE LEARNED COUNSEL FOR THE ASSESSEE THUS SUBMIT TED THAT THE LEARNED CIT(A) HAS JUSTIFIED IN CANCELLING THE IMPUGNED PEN ALTY. HE FURTHER SUBMITTED THAT CONCEALMENT PENALTY CANNOT BE SADDLED ON AN ASSESSE E IN WHOSE CASE THE ADDITION HAS BEEN MADE ON ESTIMATE. IN THE CAS E OF THE ASSESSEE ADDITION HAS BEEN ESTIMATED BY THE TRIBUNAL NOT BEC AUSE THE ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED THE INCOME; BUT FOR ANY POSSIBLE OMISSION HERE AND THERE WHICH ACT IS A PLAUSIBLE ACTION FROM THE TRIBUNAL AND MORE INFLU ENCED BY A POSSIBILITY. THERE ARE AS MANY CONTRIBUTING REASONS FOR ACCEPTANCE OF A DECISION AND KEEPING AWAY FROM DRAGGING THE ISSUE I N LITIGATION FURTHER ALONE CANNOT BE CONSIDERED AS ACCEPTANCE OF A DECIS ION. THE LEARNED COUNSEL THUS PLEADED THAT THE DECISION OF THE LEARN ED CIT(A) MAY BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL PLACED BEFORE US. WE HAVE ALSO CAREFULLY GONE THRO UGH THE PLETHORA OF DECISIONS CITED BEFORE US. IN OUR CONSIDERED OPINION THE OR DER OF THE LEARNED CIT(A) IS A SPEAKING ORDER AND DOES NOT REQUIRE OUR INTERFERENC E. THERE IS NO DISPUTE THAT THE PART OF THE ADDITION IN THE CASE OF THE ASSESSE E WAS CONFIRMED BY THE TRIBUNAL TO THE EXTENT OF RS. 5 68 360 ON ESTIMATE BASIS. T HERE IS ALSO NO DISPUTE THAT THE ADDITION WAS ESTIMATED NOT BECAUSE THE ASSESSEE HAS CONCEALED THE INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE ITA NO.1039/RJT/2009 4 REVENUE THAT THE ASSESSEE HAS COME OUT WITH NO EXPL ANATION. UNLESS THE ASSESSING OFFICER CONSIDER THE EXPLANATION FURNISHE D BY THE ASSESSEE OBJECTIVELY AND UNLESS HE FINDS THE EXPLANATION AGAINST THE HUM AN PROBABILITIES OR ANY REAL INCONSISTENCY OR ANY FACTUAL ERROR POINTED OUT IN T HE EXPLANATION OFFERED BY THE ASSESSEE THE SCOPE FOR INVOKING EXPLANATION 1 TO S ECTION 271(1)(C) OF THE ACT IN OUR CONSIDERED OPINION IS LIMITED TO THE BARE MINI MUM. IT HAS BEEN THE SETTLED POSITION THAT CONCEALMENT PENALTY IS NOT EXIGIBLE I N A CASE WHERE THE ADDITION IS MADE ON ESTIMATE BASIS. THE HONBLE PUNJAB & HARYA NA HIGH COURT IN THE CASE OF RAVAIL SINGH 254 ITR 110 (P&H) HELD THAT PENALTY U/S 271(1)(C) WAS NOT LEVIABLE WHERE THE ADDITION TO ASSESSEES INCOME WA S MADE ON THE BASIS OF ESTIMATE AND NOT ON CONCRETE EVIDENCE OF CONCEALMEN T OF ANY TRANSACTION OR FURNISHING OF INACCURATE PARTICULARS. THE OTHER JUDGMENTS RELIED UPON BY THE LEARNED COUNSEL SQUARELY APPLY TO THE CASE ON HAND. IN THIS VIEW OF THIS WE DECLINE TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) CANCELING THE PENALTY OF RS. 2 08 870 IMPOSED U/S 271(1)(C) OF TH E ACT. THE ORDER OF CIT(A) IS UPHELD. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03-12-2010. SD/- SD/- (A.L. GEHLOT) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DT : 03 RD DECEMBER 2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-II RAJKOT 4. THE CIT-I RAJKOT 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT