Mohmad Yunus Abdullah Chakkaiwala, Surat v. The ACIT.,Circle-9,, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL B AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. N. PAHUJA AM) MD. YUNUS ABDULLAH CHAKKIWALA PROP. ABDULLA TEXTILES 1O/1005 CHOWK BAZAR SOPARIGALI SURAT. PA NO. AAVPC 0577 E VS. ASSTT. CIT CIR-9 SURAT. (APPELLANT) .. (RESPONDENT) AKHTAR ABDULLAH CHAKKIWALA 10/1005 CHOWK BAZAR SOPARIGALI SURAT. PA NO. AAVPC 0584 E VS. ASSTT. CIT CIR-9 SURAT (APPELLANT) .. (RESPONDENT) MD. SALIM ABDULLAH CHAKKIWALA PROP. OF SALIM & CO. 10/1005 CHOWK BAZAR SOPARIGALI SURAT. PA NO. AAVPC 0576 E VS. ASSTT. CIT CIR.9 SURAT. (APPELLANT) .. (RESPONDENT) MD. IMTIYAZ ABDULLAH CHAKKIWALA PROP. IMTIYAZ TRADERS 10/1005 CHOWK BAZAR SOPARI GALI SURAT. PA NO. AAVPC 0585 F VS. ASSTT. CIT CIR.9 SURAT. (APPELLANT) .. (RESPONDENT) ITA NO.2383/AHD/2009 ASST. YEAR :2003-04 ITA NO.2384/AHD/2009 ASST. YEAR :2003-04 ITA NO.2385/AHD/2009 ASST. YEAR :2003-04 ITA NO.2386/AHD/2009 ASST. YEAR :2003-04 ITA NO.2384 -2386/AHD/2009-AY: 2003-04 MOHAMMAD YUNUS ABDULLA CHAKKIWALA AND 3 ORS VS ACIT CIR-9 SURAT 2 2 APPELLANT BY SHRI MANISH J. SHAH AR RESPONDENT BY SHRI R. K. DHANISTA SR. DR O R D E R PER BHAVNESH SAINI : ALL THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LEARNED CIT(A)-V SURAT DATED 25-05-2009 FOR ASSESSMENT YEA R 2003-04 CHALLENGING THE LEVY OF PENALTY U/S 271 (1) (C) OF THE IT ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE AO H AD WORKED OUT ADDITION ON NON-GENUINE PURCHASES AND REJECTION OF CLAIM U/S 80 HHC OF THE IT ACT FOR THE DETAILED REASONS BECAUSE OF THE ABSENCE OF ANY CORROBORATIVE EVIDENCE IN THIS REGARD. PENAL TY PROCEEDINGS WERE ACCORDINGLY INITIATED. THE AO NOTED IN THE PEN ALTY ORDER THAT IN APPEAL THE LEARNED CIT(A) HAS ALLOWED THE DEDUCT ION US 80 HHC OF THE IT ACT CLAIMED BY THE ASSESSEE AND FOR NON-G ENUINE CREDITORS THE LEARNED CIT(A) HAS DIRECTED THE AO T O WORK OUT NON- GENUINE PURCHASES @ 10% OF THE SUNDRY CREDITORS AND THE BALANCE DISALLOWABLE TO BE ALLOWED. CONSEQUENTLY SHOW CAUS E NOTICES WERE ISSUED FOR IMPOSING PENALTY U/S 271 (1) (C) OF THE IT ACT AGAINST ALL THE ASSESSEE AND VIDE SEPARATE ORDERS P ENALTIES WERE IMPOSED. THE LEARNED CIT(A) CONFIRMED THE PENALTY O RDERS AND DISMISSED THE APPEALS OF THE ASSESSEES. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE CROSS APPEALS OF THE ASSESSEES O N QUANTUM HAVE BEEN CONSIDERED BY ITAT AHMEDABAD B BENCH VI DE ORDER DATED 29-10-2010 IN THE CASE TITLED AS SHRI MOHMED AKHTAR ABDULLAH CHAKKIWALA ETC. IN ITA NO. 558/AHD/2008 ET C. WHEREBY ITA NO.2384 -2386/AHD/2009-AY: 2003-04 MOHAMMAD YUNUS ABDULLA CHAKKIWALA AND 3 ORS VS ACIT CIR-9 SURAT 3 3 THE MATER IN ISSUE HAS BEEN RESTORED TO THE FILE OF THE AO FOR FRAMING THE ASSESSMENTS DE NOVO. ACCORDINGLY THE A PPEALS OF THE ASSESSEES AS WELL AS THAT OF THE DEPARTMENT WERE AL LOWED FOR STATISTICAL PURPOSES. COPY OF THE ORDER IS FILED ON RECORD AND GIVEN TO THE LEARNED DR. THE LEARNED DR CONCEDED THAT THE AO IN ALL THE CASES HAS BEEN DIRECTED TO FRAME THE ASSESSMENTS DE NOVO ON THE MATTER IN ISSUE ON WHICH PENALTIES HAVE BEEN IMPOSE D. 4. ON CONSIDERATION OF THE ABOVE FACTS AND SUBMISSI ONS OF THE PARTIES WE DO NOT FIND ANY JUSTIFICATION TO SUSTAI N THE PENALTY ORDERS. THE MATTER IN ISSUE WAS CONSIDERED BY THE T RIBUNAL ON QUANTUM IN APPEALS BY THE ASSESSEES AS WELL AS BY T HE REVENUE AND VIDE ORDER DATED 29-10-2010 ALL THE CROSS APPEA LS OF ALL THE 4 ASSESSEES WERE ALLOWED FOR STATISTICAL PURPOSES BY SETTING ASIDE THE ASSESSMENTS AND THE ASSESSING OFFICERS HAVE BEE N DIRECTED TO DO THE ASSESSMENTS DE NOVO IN ACCORDANCE WITH LAW. THEREFORE THE BASIS FOR LEVY OF THE PENALTY HAS GONE AND AS S UCH NO PENALTY IS LEVIABLE AGAINST THE ASSESSEES. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENA LTIES. HOWEVER THE AO IS AT LIBERTY TO INITIATE PENALTY PROCEEDING S U/S 271 (1) (C) OF THE IT ACT IN ACCORDANCE WITH LAW AND ON PASSING TH E ASSESSMENTS DE NOVO AS PER DIRECTION OF THE TRIBUNAL. WITH THE ABOVE OBSERVATIONS ALL THE APPEALS OF THE ASSESSEES ARE A LLOWED. ITA NO.2384 -2386/AHD/2009-AY: 2003-04 MOHAMMAD YUNUS ABDULLA CHAKKIWALA AND 3 ORS VS ACIT CIR-9 SURAT 4 4 5. IN THE RESULT ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 25-02-2011 SD/- SD/- (A. N. PAHUJA) (BH AVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25-02-2011 LAKSHMIKANT/ COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD