Shri Pokhraj P.Doshi, Baroda v. The Income tax Officer,Ward-5(1),, Baroda

ITA 426/AHD/2013 | 2005-2006
Pronouncement Date: 26-07-2013 | Result: Allowed

Appeal Details

RSA Number 42620514 RSA 2013
Assessee PAN ABOPD2129A
Bench Ahmedabad
Appeal Number ITA 426/AHD/2013
Duration Of Justice 5 month(s) 13 day(s)
Appellant Shri Pokhraj P.Doshi, Baroda
Respondent The Income tax Officer,Ward-5(1),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 26-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 26-07-2013
Date Of Final Hearing 24-07-2013
Next Hearing Date 24-07-2013
Assessment Year 2005-2006
Appeal Filed On 12-02-2013
Judgment Text
A IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH . .. . . .. . !' !' !' !' #$ #$ #$ #$ # ## #. .. .% %% % . .. .&'( &'( &'( &'( %) * %) * %) * %) * % ' % ' % ' % ' BEFORE S/SHRI G.C. GUPTA VICE-PRESIDENT AND A. K. GARODIA ACCOUNTANT MEMBER) ITA NO.426/AHD/2013 [ASSTT.YEAR : 2005-2006] SHRI POKHRAJ DOSHI NARSINH ESTATE YAMUNA MILL ROAD PRATAPNAGAR BARODA. PAN : ABOPD 2129 A /VS. ITO WARD-5(1) BARODA. ( (( ( - - - - / APPELLANT) ( (( (./ - ./ - ./ - ./ - / RESPONDENT) 01 2 3 %/ ASSESSEE BY : MS. URVASHI SHODHAN * 2 3 %/ REVENUE BY : SHRI O.P. BATHEJA SR.DR 5 2 16)/ DATE OF HEARING : 24 TH JULY 2013 7&8 2 16)/ DATE OF PRONOUNCEMENT : 26-07-2013 %9 / O R D E R PER GARODIA ACCOUNTANT MEMBER: THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF THE CIT(A)-V BARODA DATED 14.12.2012 FOR A.Y.2005-2006. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF T HE APPELLANTS CASE IN CONFIRMING THE ACTION OF THE LD. AO OF LEVY ING PENALTY U/S.271(1)(C) OF THE ACT OF RS.4 04 045/- ON THE ER RONEOUS PLEA THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCO ME. ITA NO.426/AHD/2013 -2- 2. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS OF THE APPELLANTS CASE IN NOT APPRECIATING THE FACT T HAT THE APPELLANT HAS NEITHER FURNISHED INACCURATE PARTICULARS OF HIS INCOME NOR CONCEALED ITS PARTICULARS AND THE ADDITION/DISALLOW ANCE MADE TO THE RETURNED INCOME IS NOT THE CONCEALED INCOME OF THE APPELLANT. 3. IT IS SUBMITTED BY THE LEARNED AR OF THE ASSESSE E THAT IN THIS CASE THE ADDITIONS MADE BY THE AO WERE CONFIRMED BY THE LEARNED CIT(A) TO THE EXTENT OF 30% AND WHEN THE MATTER WAS CARRIED BEFORE THE TRIBUNAL BY BOTH SIDES THE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE RETAININ G THE CONFIRMATION OF DISALLOWANCE TO THE EXTENT OF 25% OF ADDITION MADE BY THE AO. HE SUBMITTED THAT UNDER THESE FACTS IT IS TO BE ACCEP TED THAT PART ADDITION CONFIRMED BY THE TRIBUNAL IS ON ESTIMATION BASIS AL ONE AND UNDER THESE FACTS PENALTY IS NOT JUSTIFIED. IN SUPPORT OF THI S CONTENTION SHE PLACED RELIANCE ON THE TRIBUNAL DECISION RENDERED IN THE C ASE OF RAJLAXMI PRINTS PVT. LTD. VS. ITO IN ITA NO.809/AHD/2010 ORDER DAT ED 15.6.2012. AS AGAINST THIS THE LEARNED DR OF THE REVENUE SUPPORT ED THE ORDER OF THE LEARNED CIT(A). HE ALSO PLACED RELIANCE ON THE TRI BUNAL DECISION RENDERED IN THE CASE OF SHYAM BEHARI VS. ACIT 43 S OT 129 (DELHI). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THIS ISSUE WAS DECIDED BY THE CIT(A) ON THIS BASIS THAT EVEN THOUGH THE ADDITIONAL INCOME EARNED BY TH E ASSESSEE HAS BEEN ESTIMATED IT HAS TO BE REMEMBERED THAT ESTIMATION HAS TO BE RESORTED TO BECAUSE THE ASSESSEE DID NOT RECORD GENUINE TRANSAC TIONS OF PURCHASE IN HIS BOOKS OF ACCOUNT. NOW IN LIGHT OF THESE FACT S WE HAVE TO EXAMINE THE APPLICABILITY OF TRIBUNAL DECISION CITED BY THE LEARNED AR OF THE ASSESSEE RENDERED IN THE CASE OF RAJLAXMI PRINTS PV T. LTD. VS. ITO (SUPRA). PARA-6 OF THIS DECISION OF THE TRIBUNAL I S RELEVANT AND HENCE WE REPRODUCE THE SAME HEREINBELOW: ITA NO.426/AHD/2013 -3- 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO T HE FACTS AND SUBMISSIONS MADE BY THE PARTIES. THE HONBLE CO-ORD INATE BENCH IN THE IDENTICAL FACTS IN ITA NO.2836/AHD/2007 HAS FOL LOWED THE VIEW OF THE TRIBUNAL IN THE CASE OF LALIT THAKAR (HUF) VS. ITO WARD 3(4) AHMEDABAD IN ITA NO.608/AHD/2006 DATED 16.05.2006 W HERE THE FACTS WERE THAT THE ASSESSING OFFICER ESTIMATED AND DETERMINED THE INCOME OF THE ASSESSEE AND A PENALTY WAS LEVIED. HO WEVER LD. CIT(A) IN THE CASE IN HAND RELIED ON THE JUDGMENT OF HONB LE HIGH COURT OF MADHYA PRADESH IN THE CASE OF C.I.T. (ADDL.) VS. SM T. CHANDRAKANTA REPORTED IN 205 ITR 607 (M.P.) IN THAT CASE ISSUE B EFORE THE HONBLE HIGH COURT OF MADHYA PRADESH WAS WHETHER THE TRIBUN AL WAS JUSTIFIED IN CANCELING THE PENALTY ON THE GROUND THAT INCOME WAS DETERMINED ON THE BASIS OF ESTIMATION. HONBLE HIGH COURT OBSERVE D AND HELD AS UNDER:- THAT BEING SO IT IS DIFFICULT TO SWALLOW THAT SIN CE THE ASSESSEES INCOME WAS ASSESSED ON ESTIMATION BASIS THE ASSESS EE WAS NOT LIABLE TO ANY PENALTY. INSTEAD WE FIND THAT TH E REASON ASSIGNED BY THE TRIBUNAL HAVE NO BASIS UNDER THE LA W. WE THEREFORE HAVE NO HESITATION IN HOLDING THAT THE A PPELLATE TRIBUNAL TOOK AN ABSOLUTELY INCORRECT VIEW OF LAW B Y EXONERATING THE ASSESSEE FROM PENALTY. WE FIND THAT THIS JUDGMENT OF THE HONBLE HIGH COUR T WAS NOT CONSIDERED BY THE HONBLE CO-ORDINATE BENCH AND IT FOLLOWED THE D ECISION OF THE CO-ORDINATE BENCH RENDERED IN THE CASE OF LALIT THAKHAR (HUF) V S. ITO IN ITA NO.608/AHD/2006. HOWEVER THE FACTS OF THIS CASE AR E DISTINGUISHABLE FROM THE FACTS OF THE JUDGMENT OF HONBLE HIGH COURT OF MADH YA PRADESH IN THE CASE OF CIT (ADDL.) VS. SMT. CHANDRAKANTA REPORTED IN 205 I TR 607 (M.P.). IN THE CASE IN HAND LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE OF 25% OF THE PURCHASE PRICE OUT OF UNEXPLAINED PURCHASES ON THE BASIS THAT 25% OF SUCH PURCHASE PRICE WERE DISALLOWED TO COMPENSATE F OR THE DISCREPANCIES. IN THE CASE OF CIT VS. SMT. CHANDRAK ANTA (SUPRA) THE FACTS WERE THAT THE ASSESSEE DID NOT MAINTAIN BOOKS OF ACCOUNT. RETURN WAS FILED BY SHOWING A LOSS OF RS.50 000/- AND THAN REVISED BY SHOWING PROFIT OF RS.7500/-. SINCE THE ASSESSEE WAS NOT MA INTAINING BOOKS THE INCOME SHOWN BY THE ASSESSEE IN THE ORIGINAL AS WEL L AS IN THE REVISED RETURN WAS AN ESTIMATE. UNDER THESE FACTS IT WAS H ELD BY HONBLE M.P. HIGH COURT THAT IT IS NOT ACCEPTABLE THAT SINCE THE INCOME OF THE ASSESSEE WAS ASSESSED ON ESTIMATE BASIS PENALTY IS NOT LEVIABLE. IN THE PRESENT CASE THE ASSESSEE IS MAINTAINING BOOKS AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN BOOKS AND MAKIN G ADDITION ON THAT BASIS ADDITION IS MADE BY ESTIMATING THE INCOME. T HEREFORE FACTS ARE DIFFERENT AND HENCE THIS JUDGMENT IS NOT APPLICABL E WITH PRESENT CASE. 6. FROM THE ABOVE PARA OF THE TRIBUNAL ORDER WE FI ND THAT THE TRIBUNAL HAS DULY CONSIDERED THE JUDGMENT OF THE HO NBLE MADHYA ITA NO.426/AHD/2013 -4- PRADESH HIGH COURT RENDERED IN THE CASE OF CIT VS. SMT. CHANDRAKANTA REPORTED IN 205 ITR 607 (MP) ON WHICH RELIANCE WAS PLACED BY THE LEARNED CIT(A) ALSO. IN THE CASE OF SMT. CHANDRAKA NTHA (SUPRA) IT WAS HELD BY THE HONBLE MP HIGH COURT THAT IT IS NOT AC CEPTABLE THAT SINCE THE INCOME OF THE ASSESSEE WAS ASSESSED ON ESTIMATE BAS IS THE PENALTY IS NOT LEVIABLE. REGARDING THE FACTS OF THAT CASE DECIDED BY THE HONBLE MP HIGH COURT IT IS NOTED BY THE TRIBUNAL IN THAT CAS E THAT THE ASSESSEE DID NOT MAINTAIN BOOKS OF ACCOUNTS AND RETURN WAS FILED BY SHOWING A LOSS OF RS.50 000/- AND THE SAME WAS REVISED BY SHOWING A P ROFIT OF RS.7 500/- AND THE ASSESSEE WAS NOT MAINTAINING BOOKS AND THE REFORE THE INCOME SHOWN BY THE ASSESSEE IN THE ORIGINAL AS WELL AS IN THE REVISED RETURN WAS ON ESTIMATE BASIS. IN THE PRESENT CASE THERE IS N O DISPUTE THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNTS AND NO SPECIFIC D EFECTS IN THE BOOKS HAVE BEEN POINTED OUT AND THE BOOKS WERE NOT REJECT ED ALSO. HENCE THIS JUDGMENT OF THE HONBLE MP HIGH COURT IS NOT APPLIC ABLE IN THE PRESENT CASE AND THE TRIBUNAL DECISION CITED BY THE LEARNE D AR OF THE ASSESSEE IS SQUARELY APPLICABLE. REGARDING THE TRIBUNAL DECISI ON ON WHICH RELIANCE HAS BEEN PLACED BY THE LEARNED DR OF THE REVENUE W E FIND THAT AS PER THE FACTS OF THAT CASE THE ASSESSES WAS MAINTAINING TW O SETS OF BOOKS ONE WAS MEANT FOR SHOWING TO INCOME TAX AUTHORITIES AND OTHER FOR HIMSELF AND ADDITIONS WERE MADE ON THE BASIS OF THESE DOCUM ENTARY EVIDENCES. IN THE PRESENT CASE THIS IS NOT THE ALLEGATION OF THE REVENUE THAT THE ASSESSEE IS MAINTAINING TWO SETS OF BOOKS AND THE DISALLOWA NCE IN THE PRESENT CASE IS NOT ON THE BASIS OF ANY DOCUMENTARY EVIDENCES A S IN THAT CASE. HENCE THIS TRIBUNAL DECISION IS NOT RELEVANT IN THE FACTS OF THE PRESENT CASE. AFTER CONSIDERING THE FACTS OF THE PRESENT CASE IN ITS ENTIRETY AND BY FOLLOWING THE TRIBUNAL DECISION RENDERED IN THE CAS E OF RAJLAXMI PRINTS PVT. LTD. VS. ITO (SUPRA) WE HOLD THAT IN THE PRES ENT CASE PENALTY ITA NO.426/AHD/2013 -5- IMPOSED BY THE AO AND CONFIRMED BY THE LEARNED CIT( A) IS NOT SUSTAINABLE. THE SAME IS DELETED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE STAND S ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT ( # ## #. .. .% %% % . .. .&'( &'( &'( &'( /A.K. GARODIA) %) * /ACCOUNTANT MEMBER VK* C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD