The ITO, Ward-1,, Palanpur v. Shri Dadasaheb K.Jadav, Dist.Bansakantha

ITA 3485/AHD/2007 | 2005-2006
Pronouncement Date: 09-02-2012 | Result: Dismissed

Appeal Details

RSA Number 348520514 RSA 2007
Assessee PAN ABNPJ2440B
Bench Ahmedabad
Appeal Number ITA 3485/AHD/2007
Duration Of Justice 4 year(s) 5 month(s) 25 day(s)
Appellant The ITO, Ward-1,, Palanpur
Respondent Shri Dadasaheb K.Jadav, Dist.Bansakantha
Appeal Type Income Tax Appeal
Pronouncement Date 09-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 09-02-2012
Date Of Final Hearing 07-02-2012
Next Hearing Date 07-02-2012
Assessment Year 2005-2006
Appeal Filed On 14-08-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI JM AND SHRI A. MOHAN A LANKAMONY AM) ITA NO.3485/AHD/2007 A. Y.: 2005-06 THE INCOME TAX OFFICER WARD 1 PALANPUR VS SHRI DADASAHEB K. JADAV PROP. JAGDAMBA TRADERS MOTI BAZAR SIDDHI VINAYAK COMPLEX PALANPUR PAN NO. ABNPJ 2440 B (APPELLANT) (RESPONDENT) ITA NO.2527/AHD/2009 A.Y.: 2005-06 SHRI DADASAHEB K. JADAV PROP. JAGDAMBA TRADERS MOTI BAZAR SIDDHI VINAYAK COMPLEX PALANPUR PAN NO. ABNPJ 2440 B VS THE INCOME TAX OFFICER WARD 1 PALANPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY SHRI B. L. YADAV SR. DR ASSESSEE BY DHIREN SHAH AR DATE OF HEARING: 07 -02-2012 DATE OF PRONOUNCEMENT: 09-02-2012 O R D E R PER BHAVNESH SAINI: THIS ORDER SHALL DISPOSE OF BOTH THE ABOVE APPEALS IN THE CASE OF THE SAME ASSESSEE. ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 2 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. ITA NO.3485/AHD/2007: (AY- 2005-06) (DEPARTMENTAL APPEAL) 3. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE LEARNED CIT(A)-XV AHMEDABAD DATED 30-05-2007 FOR ASSESSMENT YEAR 2005-06. 4. ON GROUND NO.1 REVENUE CHALLENGED THE DELETION OF ADDITION OF RS.2 57 405/- ON ACCOUNT OF ESTIMATION OF GROSS PRO FIT. IN THIS CASE A SURVEY U/S 133A OF THE IT ACT WAS CONDUCTED ON 11-0 3-2005 IN WHICH ADDITIONAL INCOME OF RS.10 00 000/- WAS DISCLOSED. THE SURVEY PARTY INVENTORIZED THE STOCK OF GOLD ON THE DATE OF SURVE Y WHICH WAS FOUND TO BE IN 2143.622 GRAMS IN QUANTITY PHYSICALLY AVAI LABLE WHEREAS THE STOCK AVAILABILITY OF THE GOLD AS PER BOOKS OF ACCO UNTS WAS 543.620 GRAMS. THUS THE EXCESS GOLD TO THE TUNE OF 1600.00 2 GRAMS WAS FOUND WHICH WAS VALUED AT RS.10 00 000/- @ RS.6250/ - PER 10 GRAMS. THE SAME WAS SHOWN BY THE ASSESSEE AS HIS IN COME AT THE TIME OF FILING THE RETURN. THE ASSESSEE HAS CLAIMED LOSS OF RS.1 80 874/- WHICH WAS ALLEGEDLY INCURRED DUE TO F LUCTUATING RATE OF GOLD OVER THE YEAR. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED ON THE REASONS THAT ACCOUNTS OF VARIOUS PARTIES AS APPEARING IN THE BOOKS ARE NOT TALLYING WITH THE CONTRA ACCOUNTS OBT AINED FROM THOSE PARTIES THERE WAS DIFFERENCE IN THE PURCHASES UNA CCOUNTED CASH IS INTRODUCED THERE WAS UNEXPLAINED DEPOSIT IN THE BA NK ACCOUNT OF RS.9 35 000/- FOR WHICH NO PLAUSIBLE EXPLANATION IS GIVEN AND THE ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 3 ASSESSEE HAS RESORTED TO UNDER-PRICING IN THE SALE PRICE OF GOLD SUBSEQUENT TO THE DATE OF SURVEY. ON THE BASIS OF I RREGULARITIES NOTED ABOVE BY THE AO IN THE BOOKS OF ACCOUNTS BOOK RESU LTS WERE REJECTED U/S 145(3) OF THE IT ACT. THE AO ESTIMATED THE PROF IT FOR CURRENT YEAR AT 2.28% TAKING AVERAGE OF GROSS PROFIT DECLARED BY THE ASSESSEE IN PRECEDING 3 YEARS AND ADDITION WAS MADE BY APPLYING THE SAME AGAINST TOTAL TURNOVER BY REJECTING THE THEORY OF G ROSS LOSS. ADDITION OF RS.2 57 405/- WAS ACCORDINGLY MADE. IT WAS SUBMITTE D BEFORE THE LEARNED CIT(A) THAT LOSS WAS RESULTED IN NORMAL COU RSE OF BUSINESS WHICH WERE DUE TO CONTINUOUS FLUCTUATION IN PURCHAS E AND SALE RATES. COMPLETE DETAILS HAD BEEN FILED AND THERE WERE CERT AIN WRONG POSTINGS OF CERTAIN ENTRIES MADE BY THE ACCOUNTANT WHICH WERE TRIED TO BE RECONCILED AT THE ASSESSMENT STAGE. IT WAS FU RTHER EXPLAINED THAT THE CONTRA ACCOUNTS WHICH WERE NOT TALLIED AS PER THE AO THE ACCOUNTANT HAS GIVEN WRONG CREDIT TO ABHUSHAN JEWEL LERS. IT W AS FURTHER SUBMITTED THAT THERE WAS A TYPING MISTAKE I N THE CASE OF DHARA JEWELLERS AND WRONG POSTINGS HAVE BEEN MADE TO THE ACCOUNTS OF CHOKSHI PARITOSH RAMANLAL. IN THE CASE OF BHUMI JEW ELLERS DIFFERENCE WAS DUE TO WRONG POSTINGS WHICH HAVE BEE N RECONCILED BY MAKING CORRECT POSTINGS. IT WAS FURTHER SUBMITTED T HAT OTHER DISCREPANCIES WERE ALSO RECONCILED WHICH WERE MAINL Y ON ACCOUNT OF WRONG POSTINGS IN THE CASE OF OTHER PARTIES WHICH S TAND RECONCILED BEFORE THE AO. IT WAS THEREFORE SUBMITTED THAT SI NCE ALL THE POINTS RAISED BY THE AO WERE RECONCILED THEREFORE THE SA ID AMOUNT SHOULD BE EXCLUDED WHICH HAVE BEEN RECONCILED. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE AND MAT ERIAL ON RECORD PARTLY ACCEPTED THE CONTENTION OF THE ASSESSEE. THE LEARNED CIT(A) ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 4 HOWEVER FOUND THAT THE ASSESSEE TRIED TO EXPLAIN SALE PRICE OF GOLD BUT THE EXPLANATION IS NOT CORRECT. IT WAS FOUND TH AT THE ASSESSEE UNDERSTATED PRICE OF GOLD WHICH WAS NOT BASED ON MA RKET PRICE. ADDITION WAS THEREFORE MADE IN A SUM OF RS.1 63 0 86/- AS AGAINST MADE BY THE AO AT RS.2 57 405/-. THE FINDINGS OF TH E LEARNED CIT(A) IN THE APPELLATE ORDER IN PARA 3.1 TO PARA 3.3 ARE REPRODUCED AS UNDER: 3.1 ALL THESE SUBMISSIONS HAVE BEEN VERIFIED BY M E AND ARE FOUND TO BE CORRECT. THE RECONCILED ACCOUNTS HA VE BEEN PLACED AT PAGE 55 26 56 57 58 51 AND 59 OF THE PAPER BOOK. ON THE BASIS OF CORRECT POSTING AS IS RECTIFIED BY THE APPELLANT ALL THESE ACCOUNTS CAN BE SAID TO BE FULLY RECONCIL ED AND NO ADVERSE INFERENCE COULD BE DRAWN. 3.2 THE DIFFERENCE OF RS.2 LACS AS POINTED OUT BY THE LD. ASSESSING OFFICER BETWEEN THE PURCHASES DECLARED BY THE APPELLANT TO THE INCOME-TAX DEPARTMENT WITH THAT OF THE SALES TAX DEPARTMENT WAS ALSO RECONCILED BY THE AUTHORISE D REPRESENTATIVE BY FILING A COPY OF THE SALES-TAX OR DER WHICH IS AVAILABLE AT PAGE 69 AND 70 OF THE PAPER BOOK. SIN CE THE PURCHASES OF RS.35 37 500 SHOWN TO THE IT DEPARTMEN T TALLIED WITH THE SAME AMOUNT TAKEN IN THE ASSESSMENT ORDER OF THE SALES TAX DEPARTMENT NO ADVERSE INFERENCE COULD TH EREFORE BE DRAWN. 3.3 THE REASONS MENTIONED AT SR. NO. (III AND IV) OF PARA 1.2 ABOVE WILL BE SEPARATELY DISCUSSED WHILE DISPOS ING OFF THE GROUND OF APPEAL NO.4 AND 2. THE LD. ASSESSING OFFI CER AT PAGE 6 OF THE ASSESSMENT HAS OBSERVED THAT THE AVERAGE S ALE RATE OF GOLD DURING THE PERIOD 21/3/2005 TO 30/3/2005 WAS R ANGING BETWEEN RS.6 200/- TO RS.6 300/- PER 10 GRAMS WHERE AS THE APPELLANT HAS SHOWN THE SALES AT RS.5 950/- PER 10 GRAMS DURING THIS PERIOD. ACCORDING TO THE LD. ASSESSING OFFICER THE APPELLANT HAS RESORTED TO THE UNDERSTATEMENT OF SAL E PRICE OF ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 5 GOLD JUST TO REDUCE ITS TAXABLE PROFITS AS HE HAD D ISCLOSED ADDITIONAL INCOME OF RS. 10 LACS DURING THE COURSE OF SURVEY. THE LD. AUTHORISED REPRESENTATIVES HAVE TRIED TO EXPLAIN THAT THEIR SALE PRICE IS GENUINE BECAUSE TH E GOLD HAS BEEN SOLD AT THE MARKET RATE AS WAS PREVAILING ON D IFFERENT DATES TO VARIOUS OF ITS CUSTOMERS. THE EXPLANATION SO GIVEN BY THE AUTHORISED REPRESENTATIVES DOES NOT APPEAR TO B E LOGICAL BECAUSE THE OTHER PARTIES HAVE SOLD THE GOLD AT AN AVERAGE RATE OF RS.6200 TO RS.6300 PER 10 GRAM AND THEREFORE TH E SALE RATE DISCLOSED BY THE APPELLANT AT RS.5 950/- PER 10 GRA MS IS DEFINITELY NOT ON THE BASIS OF THE MARKET PRICE OF THE GOLD DURING THIS PERIOD. THERE IS AN APPARENT DIFFERENCE OF RS. 300 PER 10 GRAMS. THE APPELLANT HAS SOLD 543.620 GRAMS DURING 22 ND MARCH TO 30 TH MARCH 2005 WHICH IS TO BE MULTIPLIED BY RS.300/- PER 10 GRAMS SO AS TO WORK OUT THE UNDERSTATEMENT O F SALES. IN THIS MANNER THE ADDITION CAN BE ESTIMATED AT RS.1 63 086/- AS AGAINST RS.2 57 405/- ESTIMATED BY THE ASSESSING OF FICER TAKING THE AVERAGE G.P. RATE FOR THE LAST THREE PRECEDING YEARS. IT WOULD THUS BE FAIR AND REASONABLE TO RESTRICT THE A DDITION TO RS.1 63 086/- WHICH WILL HAVE EFFECT OF REDUCING TH E GROSS LOSS TO RS.17 788/-. THE ADDITION OF RS.2 57 405/- IS TH EREFORE DELETED. 5. THE LEARNED DR RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT EXCESS STOCK WAS FOUND AND ASSESSEE HAS NOT EX PLAINED THE DISCREPANCIES THEREFORE ADDITION WAS RIGHTLY MADE BY THE AO. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSESSEE RE ITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LEARNED COUNSEL FOR THE ASSESSEE ADMITTED THAT THE ASSESSEE HAS NOT PRE FERRED ANY APPEAL AGAINST THE ADDITION MAINTAINED BY THE LEARN ED CIT(A). THE ORDER OF THE LEARNED CIT(A) REVEAL THAT FOR EXCESS STOCK FOUND DURING ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 6 THE COURSE OF SURVEY THE ASSESSEE HAS DECLARED THE SAME UNACCOUNTED INCOME AND THE FURTHER DISCREPANCIES FO UND ON VERIFICATION OF ACCOUNTS THE ASSESSEE EXPLAINED TH E SAME BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) ACCEPTED ALL THE ACCOUNTS WHICH HAVE BEEN FULLY RECONCILED. SINCE IT IS A DEPARTMEN TAL APPEAL AND NOTHING IS PRODUCED BEFORE US TO CONTRADICT THE FIN DINGS OF THE LEARNED CIT(A) THEREFORE WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) IN DELETING PART OF THE ADDITION. FURTHER FOR UNDERSTATEMENT OF SALE PRICE OF THE GOLD THE LEARN ED CIT(A) ON PROPER APPRECIATION OF THE FACTS COMPARABLE WITH MA RKET RAGE CONFIRMED THE ADDITION AGAINST THE ASSESSEE IN A SU M OF RS.1 63 086/-. SINCE THE ASSESSEE ACCEPTED THIS AD DITION AND NO APPEAL IS PREFERRED THEREFORE NO FURTHER INTERFER ENCE IS CALLED FOR IN THE MATTER. IT APPEARS THAT REVENUE HAS TAKEN WRONG GROUND OF APPEAL BECAUSE THE LEARNED CIT(A) HAS MAINTAINED PART OF T HE ADDITION ON THIS ISSUE. THIS GROUND OF APPEAL OF THE REVENUE HA S NO MERIT AND IS ACCORDINGLY DISMISSED. 7. ON GROUND NO.2 REVENUE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN DELETING THE ADDITION OF RS.9 35 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT. THE ASSESSEE HAS DEPOSITED RS.2 95 000/- AND RS.6 40 000/- AS CASH IN THE BANK ACCOUNT ON 2 4-03-2005. THE AO TREATED THE ENTIRE CASH DEPOSIT TO BE UNEXPLAINE D MONEY OF THE ASSESSEE AS ACCORDING TO HIM THE ASSESSEE WAS NOT HAVING SUFFICIENT CASH BALANCE IN HIS BOOKS OF ACCOUNTS ON THIS DATE. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) AS REGARDS DEPOSIT OF RS. 2 95 000/- THAT THE ASSESSEE HAS WITHDRAWN THE SAME AMOUNT FROM CASH IN HAND ON ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 7 24-03-2005. THE ASSESSEE WAS HAVING CASH BALANCE OF RS.4 82 744/- AS ON 24-03-2005 AND COPY OF THE CASH BOOK WAS FILE D IN SUPPORT OF THE SAME. THE ACCOUNTANT INSTEAD OF MAKING ENTRY OF CASH WITHDRAWAL ON 24-03-2005 HAS WRONGLY MADE ENTRY ON 27-03-2005. IT WAS THEREFORE EXPLAINED THAT THE ASSESSEE WAS HAVING S UFFICIENT CASH BALANCE FOR MAKING DEPOSIT IN THE BANK. IN ORDER TO EXPLAIN CASH DEPOSIT OF RS.6 40 000/- IN THE BANK ON THE SAME DA Y IT WAS SUBMITTED THAT THIS MONEY BELONGED TO WIFE OF THE A SSESSEE WHICH WAS HANDED OVER TO HER ACCOUNTANT TO BE DEPOSITED I N HER OWN BANK ACCOUNT BECAUSE SHE WAS TO ISSUE CHEQUES OF THE EQ UAL AMOUNT IN FAVOUR OF HER HUSBAND. HOWEVER THE ACCOUNTANT COMM ITTED A MISTAKE AND INSTEAD OF DEPOSITING THE SAID CASH AMO UNT IN HER BANK ACCOUNT HE DIRECTLY MADE THE DEPOSIT IN THE BANK A CCOUNT OF THE ASSESSEE. LATER ON WHEN THIS MISTAKE WAS REALIZED THE AMOUNT WAS WITHDRAWN FROM THE BANK AND IT WAS RETURNED TO THE WIFE OF THE ASSESSEE ON 31-03-2005. HER PERSONAL CASH BOOK WAS PRODUCED IN SUPPORT OF THE SAME CONTENTION. SHE WAS ASSESSED TO TAX ALSO HAVING PERMANENT ACCOUNT NUMBER AND SHE FILED WRITT EN CONFIRMATION TO THAT EFFECT. IT WAS THEREFORE SUBMITTED THAT A DDITION IS CLEARLY UNJUSTIFIED. THE LEARNED CIT(A) CONSIDERING THE EXP LANATION OF THE ASSESSEE AND MATERIAL ON RECORD DELETED THE ENTIRE ADDITION. HIS FINDINGS IN PARA 4.3 OF THE APPELLATE ORDER ARE REP RODUCED AS UNDER: 4.3 THE CONTENTION OF THE AUTHORISED REPRESENTATIV ES REGARDING THE CASH DEPOSIT OF RS.2 95 000/- IN THE BANK ACCOUNT AS ON 24/3/2005 NEEDS TO BE ACCEPTED BECAUSE THE AP PELLANT WAS HAVING SUFFICIENT C ASH IN HAND OF RS.4 82 744/ - IN HIS BOOKS OF ACCOUNTS AS ON THAT DATE. THE AMOUNT OF RS .2 95 000/- COULD THUS EASILY BE DESPOILED OUT THE CASH IN HAND . WHILE ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 8 MAKING THE ENTRIES IN THE BOOKS THE ACCOUNTANT HAS WRONGLY SHOWN THE WITHDRAWAL OF CASH FROM THE CASH BOOK ON 27/3/2005 WHEREAS IT SHOULD HAVE BEEN POSTED ON 24 TH MARCH 2005. I ALSO FIND THAT EVEN ON 27 TH MARCH 2005 THE APPELLANT WAS HAVING CASH IN HAND OF RS.5 38 644/-. IT WILL BE LITTLE HA RSH TO PENALIZE THE APPELLANT JUST BECAUSE THE ACCOUNTANT HAS MADE A WRONG POSTING OF THE WITHDRAWAL OF CASH ON 27/3/2005. IN THE BACKGROUND OF THESE FACTS THE CASH DEPOSIT OF RS.2 95 000/- IN THE BANK ON 24-3-2005 CANNOT BE HELD TO BE UNEXPLAI NED AS THE APPELLANT WAS HAVING SUFFICIENT CASH IN HAND. IN SO FAR AS THE OTHER CASH DEPOSIT IS CONCERN THE EXPLANATION GIVEN BY THE APPELLANT IN THIS REGARD APPEARS TO BE CORRECT ON THE FACT OF IT. SMT. SUMANBEN D. JADAV WAS HAVING C ASH OF RS.6 40 000/- WHICH SHE WANTED TO GIVE IT HER HUSBA ND THROUGH NORMAL BANKING CHANNEL. SHE HANDED OVER THE MONEY T O HER ACCOUNTANT WHO INCIDENTALLY HAPPENS TO BE THE ACCOU NTANT OF HER HUSBAND ALSO. THE MONEY WAS MEANT TO BE DEPOSIT ED IN HER BANK ACCOUNT BUT THE ACCOUNTANT DEPOSITED THE SAME MONEY IN THE BANK ACCOUNT OF HER HUSBAND. THE PLEA OF SMT. S UMANBEN D. JADAV APPEARS TO BE BELIEVABLE BECAUSE THE ACCOU NTANT SEEMS TO BE A CARELESS PERSON WHO HAS MESSED UP TH4 E ACCOUNTS OF THE APPELLANT IN SO MANY WAYS. IN SO FA R AS THE COURSE OF RS.6 40 000/- IS CONCERNED SHE HAS OWNED UP THE CASH IN HER HAND AND HAS ACCEPTED IT TO BE BELONGIN G TO HER. HER IDENTITY IS NOT IN DOUBT BECAUSE SHE IS REGULAR LY ASSESSED TO TAX WITH T4HE SAME ASSESSING OFFICER HAVING PA NO. ABNPJ 2441 A. SHE HAS CONFIRMED IN WRITING HAVING GIVEN T HE MONEY AND SHE HAS ALSO CONFIRMED TO HAVE RECEIVED THE MON EY BACK FROM HER HUSBAND ON 31/3/2005. IN THIS BACKGROUND O F THE MATTER THE SOURCE OF THE CASH HAVING BEEN GIVEN BY THE WIFE OF THE APPELLANT CAN BE SAID TO BE EXPLAINED IN THE H ANDS OF THE APPELLANT. THE ADDITION OF RS.9 35 000/- IS THEREFO RE DELETED. 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESSEE PRODUCED SUFFICIENT MATERIAL AND EVIDENCES AND CONFIRMATION BEFORE THE LEARNED CIT(A) TO EXPLAIN THE AVAILABILITY OF SUFFICIENT CA SH FOR THE PURPOSE OF ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 9 DEPOSIT IN THE BANK ACCOUNT. THE AMOUNT GIVEN BY WI FE OF THE ASSESSEE WHICH WAS WRONGLY DEPOSITED IN THE BANK AC COUNT OF THE ASSESSEE WAS ALSO EXPLAINED THROUGH EVIDENCES AND C ONFIRMATION ON RECORD. CONSIDERING THE FINDINGS OF THE LEARNED CIT (A) ON THE BASIS OF EVIDENCES AND MATERIAL ON RECORD WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. THE ASSESSEE EXPLAINED THE SOURCE OF DEPOSITS OF THE CASH IN HIS BANK ACCOUNT; THEREFORE THIS GROUND OF APPEAL OF THE REVENUE HAS NO MERIT AND IS DISMISSED. 9. ON GROUND NO.3 REVENUE CHALLENGED THE DELETION OF ADDITION OF RS.2 24 746/- ON ACCOUNT OF LABOUR FOR GOLD AND SIL VER REFINING. THE AO MADE THE ABOVE ADDITION BECAUSE DURING THE ASSES SMENT YEAR THE ASSESSEE HAS NOT SHOWN ANY LABOUR INCOME. THE A O NOTED THAT SUCH INCOME WAS SHOWN IN THE EARLIER ASSESSMENT YEA R; THEREFORE THE AO ON AVERAGE BASIS OF LAST 3 YEARS ESTIMATED L ABOUR INCOME AND MADE THE ADDITION. IT WAS SUBMITTED BEFORE THE LEAR NED CIT(A) THAT SINCE NO INCOME IS EARNED IN THIS ASSESSMENT YEAR THEREFORE IT WAS NOT A REAL INCOME BUT THE AO MADE THE ADDITION ON A CCOUNT OF IMAGINARY INCOME. NOTHING WAS DETECTED DURING THE C OURSE OF SURVEY IF THE ASSESSEE EARNED ANY LABOUR INCOME THEREFORE NO ADDITION COULD BE MADE. THE LEARNED CIT(A) ACCEPTED THE CONT ENTION OF THE ASSESSEE BECAUSE NO EVIDENCE WAS BROUGHT ON RECORD BY THE AO TO PROVE THAT THE ASSESSEE HAD IN FACT EARNED ANY LABO UR INCOME ON THIS ISSUE. NO EVIDENCE WAS ALSO FOUND DURING THE COURSE OF SURVEY TO PROVE CONTENTION OF THE AO. ADDITION WAS ACCORDINGL Y DELETED. ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 10 10. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE AO MERELY ON THE BASIS OF THE INCOME DECLARED ON ACCOUNT OF LABOUR I N EARLIER YEARS PRESUMED THAT THE ASSESSEE HAS EARNED LABOUR INCOME IN THIS ASSESSMENT YEAR ALSO. NO EVIDENCE HOWEVER WAS BROU GHT ON RECORD TO SUPPORT SUCH CONTENTION OF THE AO. NO MATERIAL W AS ALSO FOUND DURING THE COURSE OF SURVEY AGAINST THE ASSESSEE ON THIS ISSUE. THEREFORE THE LEARNED CIT(A) ON PROPER APPRECIATIO N OF FACTS AND MATERIAL ON RECORD RIGHTLY DELETED THE ADDITION. TH IS GROUND OF APPEAL OF THE REVENUE HAS NO MERIT AND IS DISMISSED. 11. IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMI SSED. ITA NO.2527/AHD/2009: (AY -2005-06) (ASSESSEES APPEAL) 12. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XV AHMEDABAD DATED 18-06-2009 FOR A SSESSMENT YEAR 2005-06 CHALLENGING LEVY OF PENALTY U/S 271 ( 1) ( C ) OF THE IT ACT IN A SUM OF RS.49 910/-. 13. THE FACTS OF THE CASE ARE ALREADY NOTED ABOVE I N WHICH THE LEARNED CIT(A) ON QUANTUM RESTRICTED THE ADDITION T O RS.1 63 086/- ON WHICH WE HAVE CONSIDERED GROUND NO.1 OF DEPARTMEN TAL APPEAL. THE AO ON THE BASIS OF THE ADDITION CONFIRMED BY THE LE ARNED CIT(A) FOUND THAT THE ASSESSEE HAS SOLD THE GOLD AT LESSER VALUE AND IT IS NOTHING BUT UNDERSTATEMENT OF SALES. THE AO COLLECT ED INFORMATION FROM OTHER PARTIES IN SUPPORT OF THE SAME CONTENTIO N AND THEREFORE HELD THAT THE ASSESSEE HAS DELIBERATELY UNDERSTATED THE SALES AS ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 11 WORKED TO REDUCE THE TAX LIABILITY. THE ASSESSEE HA S NOT PUT FORTH ANY FURTHER EXPLANATION REGARDING MANIPULATION IN THE P ROFITS. PENALTY WAS ACCORDINGLY LEVIED FOR FURNISHING INACCURATE PARTIC ULARS OF INCOME TO THE EXTENT OF RS.1 63 086/-. WE HAVE NOTED THAT THE LEARNED CIT(A) CONFIRMED THE ADDITION TO THAT EXTENT IN THE APPELL ATE ORDER AND THE ASSESSEE HAS NOT PREFERRED ANY APPEAL ON QUANTUM BE FORE THE TRIBUNAL AS IS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE. IT THEREFORE STANDS PROVED THAT ADDITION OF RS.1 63 0 86/- HAS BECOME FINAL AGAINST THE ASSESSEE ON WHICH THE AO IMPOSED PENALTY AND THE LEARNED CIT(A) CONFIRMED THE PENALTY BECAUSE THE SU PPRESSION OF SALES WAS FOUND AGAINST THE ASSESSEE. 14. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS TH AT IT IS AN ESTIMATED ADDITION THEREFORE NO PENALTY IS LEVIAB LE AND REPLIED UPON THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 IN WHICH IT WAS HELD THAT WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTI ON OF INVITING PENALTY. 15. ON THE OTHER HAND THE LEARNED DR RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT IF THERE WOULD NOT HAVE BEEN ANY SURVEY CONDUCTED IN THE PREMISES OF THE ASSESSEE T HE UNDERSTATEMENT OF SALE PRICE OF THE GOLD WOULD NOT HAVE BEEN DETECTED AND THE ASSESSEE WOULD NOT HAVE COME OUT T O SURRENDER THE ADDITIONAL AMOUNT FOR TAXATION THEREFORE PENALTY WAS RIGHTLY IMPOSED IN THE MATTER. ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 12 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS HARPARSHAD AND COMPANY LTD. 328 ITR 53 HELD AS UN DER: HELD THAT THE REASONS GIVEN BY THE TRIBUNAL FOR QUASHING THE PENALTY PROCEEDINGS WERE IRRELEVANT N OT GERMANE TO THE ISSUE AND THE TRIBUNAL HAD LOST SIGH T OF ASPECTS WHICH HAD BEEN CONCLUSIVELY ESTABLISHED IN THE QUANTUM PROCEEDINGS. THE TRIBUNAL HAD FAILED TO TAKE NOTE OF THE FACT THAT PART OF THE CLAIM AS COMMISSION WAS ALLOWED TO THE ASSESSEE NOT BECAUSE R HAD RENDERED ANY SERVICES BUT BECAUSE J HAD RENDERED SERVICES FOR WHICH IT WAS PAID 1 PER CENT OF THE COMMISSION BY R OUT OF THE 3 PER CENT RECEIVED BY HER. AS FAR AS COMMISSION TO R WAS CONCERNED IT WAS ACCEPTED BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS THAT SHE DID NOT RENDER ANY SERVICES AT ALL. THE ASSESSEE HAD FAILED TO OFFER A NY EXPLANATION IN RESPECT OF THE ADDITION OF RS.1 83 0 78 AND IT COULD BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF BY VIRTUE OF THIS EXPLANATION. THE TRIBUNAL WAS NOT JUSTIFIED IN DELETING THE PENALTY IMPOSED BY THE INCOME-TAX OFFICER UNDER SECTION 271 (1) (C) OF THE ACT. THE FINDINGS GIVEN IN ASSESSMENT PROCEEDINGS ARE RELEVANT AND HAVE PROBATIVE VALUE. WHERE THE ASSESSEE PRODUCES NO FRESH EVIDENCE OR PRESENTS ANY ADDITIONAL OR FRESH CIRCUMSTANCES IN PENALTY PROCEEDINGS HE WOULD BE DEEMED TO HAVE FAILED TO DISCHARGE THE ONUS PLACED ON HIM AND THE LEVY OF PENALTY COULD BE JUSTIFIED. EVEN IF THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS BUT ON THE BA SIS THEREOF THE CLAIM WHICH IS MADE IS EX FACIE BOGUS IT MAY STILL ATTRACT PENALTY PROVISION. ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 13 THE EXPLANATION APPENDED TO SECTION 271 (1) (C) OF THE ACT ENTIRELY INDICATE THE ELEMENT OF STR ICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GI VING INACCURATE PARTICULARS WHILE FILING RETURN. THE OBJ ECT BEHIND ENACTMENT OF SECTION 271 (1) (C) READ WITH T HE EXPLANATIONS INDICATE THAT THE SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE . THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILI TY. WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MA TER OF PROSECUTION UNDER SECTION 276C OF THE ACT. 16.1 THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JYOTI LAXMAN KONKAR VS CIT 292 ITR 163 HELD AS UNDER: THE ASSESSEE HAD FILED A RETURN FOR THE ASSESSMENT YEAR 1999-2000 DECLARING AN INCOME OF RS.7 40 510. NOT SATISFIED THEREWITH THE ASSESSING OFFICER CARRIED OUT A SURVEY UNDER SECTION 133A OF THE INCOME-TAX ACT 1961 AND DURING THE SURVEY FOUND THAT THERE WAS A DISCREPANCY IN STOCK TO THE TUNE O F RS.18 28 706 WHICH WAS BROUGHT TO THE NOTICE OF THE ASSESSEE AND THE ASSESSEE FILED A REVISED RETURN DISCLOSING ADDITIONAL INCOME OF RS.18 28 706. THE ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271 (1) ( C ) AND THIS WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD DISMISSING THE APPEAL THAT THE QUESTION WHETHER THERE IS CONCEALMENT OF INCOME OR NOT HAS T O BE DECIDED WITH REFERENCE TO THE FACTS OF A GIVEN C ASE AND THE FACT FINDING AUTHORITIES UNDER THE ACT HAVI NG COME TO THE CONCLUSION THAT IN THE FACTS OF THE CAS E THE ASSESSEE HAD CONCEALED THE INCOME INITIALLY WIT H A VIEW TO AVOID PAYMENT OF TAX THE IMPOSITION OF PENALTY WAS VALID. ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 14 16.2 THE HONBLE GUJARAT HIGH COURT IN THE CASE OF LMP PRECISION ENGG. CO. LTD. VS DCIT (ASSESSMENT) 330 ITR 93 HE LD AS UNDER: HELD THAT IT WAS ONLY AFTER THE STATEMENT OF THE CHAIRMAN AND MANAGING DIRECTOR WAS RECORDED BY THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION) MUMBAI THAT THE FIRST DISCLOSURE DATED OCTOBER 20 1988 RS.54 71 463 WAS MADE ACCOMPANIED BY ANOTHER DISCLOSURE OF RS.54 LAKHS IN A ROUND FIGURE BEING DIVIDED INTO THREE SEGMENTS OF RS.18 LAKHS EACH FOR ASSESSMENT YEARS 1986-87 1987-88 AND 1988-89. THE REVISED RETURN DECLARING A SUM OF RS.78 56 613 CAME ABOUT AS A CONSEQUENCE OF FOLLOW- UP PROCEEDINGS UNDERTAKEN BY THE DEPUTY DIRECTOR OF INCOME-TAX IN RELATION TO THE OTHER THREE SUPPLIERS VIZ. SC NB AND NPST. THEREFORE THE ASSESSEE COUL D NOT BE STATED TO HAVE VOLUNTARILY COME FORWARD TO DISCLOSE INCOME WHICH HAD UNINTENTIONALLY BEEN OMITTED FROM THE ORIGINAL RETURN OF INCOME. THE IMPOSITION OF PENALTY WAS VALID. 17. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS WE ARE OF THE VIEW PENALTY IS RIGHTLY IM POSED BY THE AO WHICH HAS BEEN RIGHTLY CONFIRMED BY THE LEARNED CIT (A). IN THIS CASE IT IS UNDISPUTED FACT THAT EXCESS GOLD WAS FOUND DU RING THE COURSE OF SURVEY; THEREFORE THE ASSESSEE SURRENDERED ADDITIO NAL INCOME. SEVERAL DISCREPANCIES WERE FOUND IN THE ACCOUNTS OF THE ASSESSEE WHICH WERE BASED UPON THE MATERIAL FOUND DURING THE COURSE OF SURVEY. SOME OF THE DISCREPANCIES WERE RECONCILED B Y THE ASSESSEE BUT IT WAS SPECIFICALLY FOUND THAT THE ASSESSEE HAS RESORTED TO UNDER- PRICING THE SALE PRICE OF GOLD SUBSEQUENT TO SURVEY . THE ASSESSEE COULD NOT FILE ANY SATISFACTORY EXPLANATION BEFORE THE AUTHORITIES BELOW THEREFORE ON THE BASIS OF THE MATERIAL ON R ECORD AND MARKET ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 15 PRICE OF THE GOLD AND THE MARKET PRICE ASCERTAINED BY THE AO FOR GOLD IT WAS FOUND THAT THE ASSESSEE UNDERSTATED SALE PRI CE OF THE GOLD. THE FINDING OF FACTS RECORDED BY THE AUTHORITIES BELOW HAVE NOT BEEN DISPUTED BY THE ASSESSEE IN WHICH THE LEARNED CIT(A ) CONFIRMED THE ADDITION OF RS.1 63 086/-. THE ASSESSEE DID NOT CHA LLENGE THE SAID ADDITION BEFORE THE TRIBUNAL. THUS IT HAS BEEN FIN ALLY CONCLUDED THAT THE ASSESSEE UNDERSTATED THE GOLD PRICE WHICH WAS N OT AS PER THE MARKET RATE. HAD THERE BEEN NO SURVEY CONDUCTED IN THE BUSINESS PREMISES THE UNDERSTATEMENT OF GOLD PRICE COULD NO T HAVE BEEN UNEARTHED. THE ASSESSEE WOULD NOT HAVE DISCLOSED TH E ADDITIONAL AMOUNT FOR THE PURPOSE OF TAXATION. THE ASSESSEE UL TIMATELY ACCEPTED THE ADDITION BECAUSE THE ASSESSEE HAS NO EXPLANATIO N WHATSOEVER TO EXPLAIN UNDERSTATEMENT OF THE GOLD PRICE. DESPITE I N SURVEY MATERIAL FOUND AGAINST THE ASSESSEE THE ASSESSEE AGAIN DELI BERATELY FURNISHED INACCURATE PARTICULARS OF INCOME TO THE E XTENT OF RS.1 63 086/- BECAUSE AFTER SURVEY ASSESSEE MANIPU LATED TRADING LOSS TO REDUCE TAX LIABILITY OF TAX PAYMENTS. IT WA S DONE SO BY REDUCING THE SALE PRICE OF GOLD. IT IS NOT AN ESTI MATED ADDITION AS MADE BY THE LEARNED CIT(A). THE FINDINGS RECORDED B Y THE LEARNED CIT(A) ARE REPRODUCED ABOVE IN THIS ORDER ON GROUND NO.1 OF THE DEPARTMENTAL APPEAL CLEARLY PROVE THAT IT IS SPECIF IC ADDITION MADE AGAINST THE ASSESSEE IN RESPECT OF UNDERSTATED OF T HE GOLD PRICE AS COMPARED WITH THE MARKET PRICE. THEREFORE THE DECI SIONS CITED ABOVE SQUARELY APPLY TO THE CASE OF THE ASSESSEE. THE FIN DINGS GIVEN IN THE QUANTUM PROCEEDINGS HAVE A PROBATIVE VALUE AGAINST THE ASSESSEE AND THE ASSESSEE HAS NOT PRODUCED ANY FRESH EVIDENC E MATERIAL BEFORE THE AUTHORITIES BELOW TO EXPLAIN THE ABOVE I SSUE. THEREFORE ITA NO.3485/AHD/2007 AND 2527/AHD/2009 SHRI DADASEB K. JADAV PALANPUR 16 PENALTY IS RIGHTLY ATTRACTED IN THE CASE OF THE ASS ESSEE. THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SU PRA) WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. WE ACCORDINGLY C ONFIRM THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING LEVY OF PENALTY AGAINST THE ASSESSEE. THE APPEAL OF THE ASSESSEE HAS NO MERIT. 18. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. 19. IN THE RESULT THE DEPARTMENTAL APPEAL AND THE APPE AL OF THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ABOVE. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - 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 DY. REGISTRAR ITAT AHMEDABAD