The ITO, Ward-1(4),, Surat v. Priya Dyeing & Printing Pvt.Ltd.,, Surat

ITA 2069/AHD/2009 | 2005-2006
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 206920514 RSA 2009
Assessee PAN AABCP3964G
Bench Ahmedabad
Appeal Number ITA 2069/AHD/2009
Duration Of Justice 2 year(s) 2 month(s) 24 day(s)
Appellant The ITO, Ward-1(4),, Surat
Respondent Priya Dyeing & Printing Pvt.Ltd.,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 23-09-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2005-2006
Appeal Filed On 29-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. MOHAN ALAN KAMONY AM) ITA NO.2069/AHD/2009 AY: 2005-06 THE INCOME TAX OFFICER WARD 1 (4) ROOM NO.206 2 ND FLOOR AAYAKAR BHAVAN MAJURA GAGE SURAT VS M/S. PRIYA DYEING & PRINTING MILLS PVT. LTD. BLOCK NO.206/P KADODARA SURAT PA NO. AABCP 3964 G (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. C. SURTI DR RESPONDENT BY NONE DATE OF HEARING: 15-09-2011 DATE OF PRONOUNCEMENT: 23-09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II AHMEDABAD DATED 03-03-2009 FOR ASSESSMENT YEAR 2005-06 CHALLENGIN G THE DELETION OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF DYEING AND PRINTING OF C LOTH ON JOB WORK BASIS. ADDITION WAS MADE ON ACCOUNT OF FALL IN GROS S PROFIT BECAUSE IN THE CURRENT YEAR IT WAS 11.35% AS AGAINST AVERAGE G ROSS PROFIT OF 11.96% IN THE EARLIER YEAR. PENALTY WAS IMPOSED ON ACCOUNT OF THE SAME ADDITION. THE AO NOTED IN THE PENALTY ORDER TH AT THE ASSESSEE ITA NO.2069/AHD/2009 ITO WARD 1 (4) SURAT VS M/S. PRIYA DYEING & PRINT ING MILLS LTD. LTD. 2 DID NOT MAINTAIN PROPER RECORDS LIKE PURCHASE BILLS ETC. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) WHILE CHALLENGI NG THE PENALTY ORDER THAT THERE IS MINOR FALL IN GROSS PROFIT AS C OMPARED TO THE EARLIER YEARS AND THAT NO SPECIFIC DEFECTS HAVE BEEN POINTE D IN THE BOOKS OF ACCOUNTS. ADDITION IS MADE MERELY ON ESTIMATE BASIS . THEREFORE NO CASE OF CONCEALMENT OF INCOME OR FILING OF INACCURA TE PARTICULARS OF INCOME IS MADE OUT. THE ASSESSEE RELIED UPON SEVER AL DECISIONS IN SUPPORT OF THE CONTENTION. THE LEARNED CIT(A) ACCEP TED THE CONTENTION OF THE ASSESSEE AND RELIED UPON THE DECI SION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SUBHASH T RADING CO. 221 ITR 110 IN WHICH IT WAS HELD THAT PENALTY IS NOT LE VIABLE ON THE ADDITION ON ACCOUNT OF GROSS PROFIT. THE LEARNED CI T(A) NOTED THAT THE ASSESSEE MAINTAINED BOOKS OF ACCOUNTS AND VOUCHERS. THE ASSESSEE OFFERED EXPLANATION AND ADDITION WAS MADE ONLY ON L OW GROSS PROFIT. THEREFORE PENALTY IS NOT LEVIABLE IN THE MATTER. A PPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLOWED. 3. THE LEARNED DR RELIED UPON THE ORDER OF THE AO. HOWEVER NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SER VICE OF NOTICE. A/D CARD IS AVAILABLE ON RECORD. THE ASSESSEE IS T HEREFORE PROCEEDED EX-PARTE. 4. ON CONSIDERATION OF THE ABOVE FACTS WE ARE OF T HE VIEW THE LEARNED CIT(A) RIGHTLY CANCELLED THE PENALTY IN THE MATTER. THE AO IN THE ASSESSMENT ORDER MERELY NOTED FALL IN THE GROSS PROFIT AS COMPARED TO AVERAGE GROSS PROFIT OF EARLIER YEARS. THE ASSESSEE WAS DOING THE WORK ON JOB WORK BASIS. THEREFORE THERE WAS NO NEED TO ITA NO.2069/AHD/2009 ITO WARD 1 (4) SURAT VS M/S. PRIYA DYEING & PRINT ING MILLS LTD. LTD. 3 MAINTAIN DAY TO DAY STOCK REGISTER. NO SPECIFIC DEF ECTS HAVE BEEN POINTED OUT IN THE MAINTENANCE OF THE BOOKS OF ACCO UNTS. THEREFORE EVEN IF ADDITION IS MADE ON ACCOUNT OF LOW GROSS P ROFIT BY ITSELF NO GROUND TO PROVE THAT ASSESSEE HAS CONCEALED PARTICU LARS OF INCOME OR FILED INACCURATE PARTICULARS OF INCOME. MERELY ENHA NCING THE INCOME ON ACCOUNT OF GROSS PROFIT WOULD NOT ATTRACT THE PR OVISION OF SECTION 271 (1) (C) OF THE IT ACT. THERE IS NOTHING ON RECO RD TO JUSTIFY LEVY OF PENALTY IN THE MATTER. WE THEREFORE DO NOT FIND A NY JUSTIFICATION TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) IN CAN CELING THE PENALTY. IN THE RESULT DEPARTMENTAL APPEAL HAS NO MERIT AND IS DISMISSED. 5. IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD