DCIT, Nashik v. M/s P.T.Choksi & Sons, Nashik

ITA 218/PUN/2011 | 2000-2001
Pronouncement Date: 27-07-2011 | Result: Dismissed

Appeal Details

RSA Number 21824514 RSA 2011
Assessee PAN AADFP7201M
Bench Pune
Appeal Number ITA 218/PUN/2011
Duration Of Justice 5 month(s) 4 day(s)
Appellant DCIT, Nashik
Respondent M/s P.T.Choksi & Sons, Nashik
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 27-07-2011
Assessment Year 2000-2001
Appeal Filed On 22-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 218/PN/2011 : A.Y. 2000-01 DY. CIT CENT. CIR. 1 NASIK APPELLANT VS. P.T. CHOKSI & SONS 1462 SARAF BAZAR NASIK 422 001 PAN AADFP 7201 M RESPONDENT APPELLANT BY: SMT. J.R. CHANDEKAR RESPONDENT BY: SHRI SANJAY SINGH ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-I NASIK DATED 3-12-2010 ON THE POINT OF DELETION OF PENALTY LEVIED BY THE ASSESSING OFFICER AT RS. 10 28 066/- U/S 271(1)(C) OF THE ACT FOR A.Y. 2000- 01. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF GOLD AND SILVER. THERE WAS A SEARCH ACTION U/S 132(1) ON 21-1-2004 IN THE BUSINE SS PREMISES OF THE ASSESSEE AND ITS PARTNERS. THE ASS ESSING OFFICER ISSUED A NOTICE U/S 153A ON 25-3-2004 IN RE SPONSE 2 218/PN/2011 PT CHOKSI & SONS A.Y. 2000-01 TO WHICH THE ASSESSEE FILED A RETURN OF INCOME DECL ARING TOTAL INCOME OF RS. 1 30 558/- ON 13-8-2004. THERE AFTER ASSESSMENT U/S 143(3) R.W.S. 153A WAS COMPLETED ON THE TOTAL INCOME OF RS. 27 10 860/- AS AGAINST THE RETU RNED INCOME OF RS. 1 30 558/-. THE MAIN ISSUE WITH REGA RD TO VARIATION IN THE RETURNED AND ASSESSED TOTAL INCOME WAS THE ADDITION OF RS. 2 49 000;/- ON ACCOUNT OF UNREC ORDED CREDIT SALES AND RS. 23 30 802/- ON ACCOUNT OF ESTI MATED VALUATION OF EXCESS STOCK. THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHIC H WAS DISMISSED VIDE ORDER DATED 6-8-2007 CONFIRMING THE ADDITION MADE IN THE ASSESSMENT ORDER. THEREAFTER THE ASSESSING OFFICER LEVIED PENALTY OF RS. 10 28 066/- . 3. MATTER WAS CARRIED IN APPEAL BEFORE FIRST APPELL ATE AUTHORITY. THE STAND OF THE ASSESSEE WAS THE ADDITI ON IN THE ASSESSMENT ORDER WAS ON ACCOUNT OF ESTIMATION C REDIT SALES AND VALUATION AND QUANTIFICATION OF THE EXCE SS STOCK AND THE DIFFERENCE THAT WHAT ARRIVED AT WAS PRIMARI LY BASED ON THE ESTIMATION DIFFERENCE OF OPINION AND DID NOT CONSTITUTE POSITIVE INCOME OF THE ASSESSEE. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE THE 3 218/PN/2011 PT CHOKSI & SONS A.Y. 2000-01 CIT(A) CANCELLED THE IMPUGNED PENALTY. THE SAME HA S BEEN OPPOSED BY THE REVENUE BEFORE US. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDING OF THE CIT(A). THE VARIATION IN THE RETURNED AND AS SESSED TOTAL INCOME WAS THE BASIS OF ADDITION. FIRST ADDIT ION OF RS. 2 49 000/- WAS ON ACCOUNT OF UNRECORDED CREDIT SALE S AND RS. 23 30 802/- ON ACCOUNT OF ESTIMATED VALUATION O F EXCESS STOCK. THUS THE ASSESSING OFFICER MADE AN A DDITION OF RS. 2 49 000/- + RS. 23 30 802/- = RS. 25 79 802 /-. THE ADDITION OF RS. 2 49 000/- WAS MADE ESTIMATING THE CREDIT SALES WHICH INCLUDED ESTIMATED PROFIT ON UNDISCLOSE D SALES WORKED OUT BY THE ASSESSING OFFICER AT 7.92% INSTEA D OF THE GROSS PROFIT @ 5% CLAIMED TO BE OFFERED BY THE ASSE SSEE TO BUY PEACE OF MIND. WITH REGARDS TO OTHER ADDITION O F RS. 213 30 802/- IT IS FOUND THAT THE ASSESSING OFFICER HAD ISSUED THE FIRST SHOW CAUSE NOTICE PROPOSING AN ADD ITION OF RS. 52 58 971/- AND AFTER CONSIDERING THE EXPLANATI ON OFFERED BY THE ASSESSEE REVISED IT TO RS. 27 92 580 /- BY ISSUING SECOND SHOW CAUSE NOTICE. HOWEVER FINALLY HE MADE AN ADDITION TO THE EXTENT OF RS. 23 30 802/-. FROM 4 218/PN/2011 PT CHOKSI & SONS A.Y. 2000-01 THIS APPROACH THE ASSESSING OFFICER IN DEALING WIT H THE QUANTUM ADDITIONS FOR THE PURPOSE OF LEVYING TAX I T WAS FOUND EVIDENT THAT THE ASSESSEES EXPLANATION WAS P ARTLY ACCEPTED FOR MAKING THE ADDITION BUT NO MALAFIDE WA S ATTRIBUTED ON THE PART OF THE ASSESSEE. THE CIT(A) WHILE DEALING WITH THE ABOVE TWO QUANTUM ADDITIONS OBSERV ED AS UNDER: THUS IT MAY BE APPRECIATED THAT THE APPELLANT ACTUALLY HAS NO CASE TO PLEAD OR AGITATE BEFORE THE APPELLATE AUTHORITY. THE AOS ORDER IS BASED ON SE IZED MATERIAL AND AGREEMENT OF THE ASSESSEE AFTER DUE DELIBERATIONS IN THIS EGAD. AS THE FACTS EMERGE FR OM THE SAME I FIND THAT NO INTERFERENCE IS CALLED FOR HERE. ACCORDINGLY ADDITION OF RS.2 49 500/- IS CONFIRMED . .. IN THE LIGHT OF THE ABOVE I REJECT ALL THE CONTENTIONS OF APPELLANT AND ADDITION ON ACCOUNT OF UNEXPLAINED STOCK AT RS. 23 30 802/- IS CONFIRMED. 5. THE STAND OF THE ASSESSEE BEFORE THE ASSESSING O FFICER WAS THAT NO POSITIVE INCOME BASED ON EVIDENCE REQUI RED FOR LEVY OF A PENALTY U/S 271(1)(C) WAS MADE. THE BASI S OF THE ADDITION IN THE ASSESSMENT ORDER FOR LEVY OF TAX CA NNOT BE THE BASIS FOR LEVY OF PENALTY. THE ADDITIONS IN TH E ASSESSMENT ORDER WAS MADE BASED ON OPINION OF THE ASSESSING OFFICER WHICH MAY HOLD GOOD FOR THE TAX P URPOSE BUT SUCH FINDING DID NOT AMOUNT TO CONCEALMENT OF I NCOME 5 218/PN/2011 PT CHOKSI & SONS A.Y. 2000-01 LEADING TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT . THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING TH E ABOVE CONTENTION ESPECIALLY WHEN ESTIMATED ADDITIONS HAVE BEEN MADE WHICH HAVE BEEN ACCEPTED BY THE ASSESSEE OR CONTESTED IN THE APPEAL AND CONFIRMED THEREIN EVEN THEN PENALTY U/S 271(1(C) OF THE ACT IS NOT ATTRACTED. THE ESTIMATED ADDITION IS NOT SOUND BASIS FOR INVOKING THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. FOR LEV YING PENALTY U/S 271(1)(C) OF THE ACT (I) THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSION THAT THE AMOUN T DOES REPRESENT THE ASSESSEES INCOME. IT IS NOT ENO UGH FOR THE PURPOSE OF PENALTY THAT THE AMOUNT HAS BEEN ASSESSED AS INCOME; AND (II) THE CIRCUMSTANCES MUST SHOW THAT THERE WAS ANIMUS I.E. CONSCIOUS CONCEALMENT OR ACT OF FURNISH ING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESS EE. 5.1 EXPLANATION (1) OF SECTION U/S 271(1)(C) OF THE ACT DOES NOT MAKE THE ASSESSMENT ORDER CONCLUSIVE EVIDENCE T HAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE A SSESSEE IN THAT YEAR. NO PENALTY CAN BE IMPOSED IF THE FAC TS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOT HESIS 6 218/PN/2011 PT CHOKSI & SONS A.Y. 2000-01 THAT THE AMOUNT DOES NOT REPRESENT THE CONCEALED IN COME WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E . IT IS NOT ACCEPTED THAT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEE S CASE IS FALSE. ABSENCE OF PROOF ACCEPTABLE TO THE DEPART MENT CANNOT BE EQUATED WITH FRAUD OR WILLFUL DEFAULT TO WARRANT PENALTY U/S 271(1)(C) OF THE ACT. 6. IN THE PRESENT CASE IT IS EVIDENT THAT THE ASSE SSEE HAS DISCLOSED FULL FACTS REGARDING THE CREDIT SALES AND SOURCES OF THE QUANTITY AND VALUATION OF THE CLOSING STOCK BY GIVING EXPLANATION THAT WAS NOT FOUND TO BE FALSE OR MALAF IDE. UNDER THE FACTS AND CIRCUMSTANCES PENALTY IN QUEST ION IS NOT JUSTIFIED FOR THE REASONS DISCUSSED ABOVE. SAM E HAS RIGHTLY BEEN DELETED BY THE CIT(A). WE UPHOLD THE S AME. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 27 TH JULY 2011 S D/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER S D/ - (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 27 TH JULY 2011 ANKAM 7 218/PN/2011 PT CHOKSI & SONS A.Y. 2000-01 COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) I NASIK 4. THE CIT CENTRAL 4. THE D.R A BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE