Shri Pramod Kumar Malani, Raisen v. The Assistant Commissioner of Income Tax 1(1), Bhopal

ITA 508/IND/2010 | 2003-2004
Pronouncement Date: 20-08-2010 | Result: Partly Allowed

Appeal Details

RSA Number 50822714 RSA 2010
Assessee PAN AFRPM0907L
Bench Indore
Appeal Number ITA 508/IND/2010
Duration Of Justice 24 day(s)
Appellant Shri Pramod Kumar Malani, Raisen
Respondent The Assistant Commissioner of Income Tax 1(1), Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 20-08-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 20-08-2010
Assessment Year 2003-2004
Appeal Filed On 27-07-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC-I BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO.508/IND/2010 A.Y.2003-04 PRAMOD KUMAR MALANI UDAIPURA DIST. RAISEN PAN AFRPM 0907 L APPELLANT VS ACIT-1(1) BHOPAL RESPONDENT APPELLANT BY : S/SH. H.P. VERMA & ASHISH GOY AL RESPONDENT BY : SMT. APARNA KARAN SR. DR O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I BHO PAL DATED 5.4.2010 CHALLENGING THE SUSTENANCE OF IMPOSITION O F PENALTY U/S 271(1) OF THE ACT. 2. DURING THE HEARING OF THIS APPEAL I HAVE HEARD SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL LD. COUNSEL FOR THE A SSESSEE AND SMT. APARNA KARAN LD. SR. DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE 2 ASSESSEE IS THAT THE ASSESSEE IS DEALING AS A CLOTH MERCHANT AS A RETAIL TRADE OF READYMADE GARMENTS CLOTHES AND HOSIERY F ILED ITS RETURN ON 17.6.2004. AS PER THE ASSESSEE FOR THE PURPOSES O F SUCH SALES THE PURCHASES ARE MADE MOSTLY FROM INDORE AND JABALPUR FROM WHOLESALE DEALERS. IT WAS SUBMITTED THAT OUT OF THE PHYSICAL STOCK OF RS.12 82 908/- THE STOCK TO THE EXTENT OF RS.3 55 195/- WAS ALLEGE D TO BE EXCESS STOCK AND IF THE DEDUCTION OF 5% FOR DEAD STOCK AND DISCO UNT @ 15% ON MRP IS GIVEN TO THE ASSESSEE THEN NO PENALTY REMAINS T O BE LEVIED. THE CRUX OF THE ARGUMENTS IS THAT IT IS ONLY DIFFERENCE OF V ALUATION. DURING HEARING THE LD. COUNSEL FOR THE ASSESSEE ALSO INVITED MY AT TENTION TO THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT EVEN THE TRIBUNAL AFFIRMED THE ADDITION OF RS.1 LAC IN QUANT UM APPEAL BY SUBMITTING THAT IT IS A WRONG FINDING AS NO APPEAL WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. ON THE OTHER HAND T HE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE STRONGLY DEFENDED THE I MPOSITION OF PENALTY ON THE GROUND THAT FIRSTLY THE ASSESSEE VOL UNTARILY SURRENDERED RS. 1 LAC AND NEVER MADE ANY RETRACTION. ON THE P LEA OF THE ASSESSEE IT WAS ARGUED TO BE AN AFTER-THOUGHT. THE IMPOSITION O F PENALTY WAS DEFENDED. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. R EPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE A SURVEY WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 3 13.12.2002 RESULTING INTO EXCESS STOCK OF RS.3 55 1 95/-. THE ASSESSEE SURRENDERED RS. 1 LAC TO BUY PEACE WITH THE DEPARTM ENT. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE TOOK A U TURN B Y CLAIMING THAT THE SURRENDERED EXCESS STOCK WAS OBTAINED BY APPLYING P RESSURE TACTICS. HOWEVER THE ASSESSMENT WAS FRAMED U/S 143(3) OF TH E ACT BY HOLDING THAT THERE IS UNEXPLAINED INVESTMENT OF RS.2 14 075 /- AND THE TOTAL INCOME WAS ASSESSED AT RS.3 60 035/-. THE LEARNED ASSESSING OFFICER IMPOSED PENALTY OF RS. 28 000/- U/S 271(1) OF THE ACT. ON APPEAL THE PENALTY WAS AFFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS UNDER CHALLENGE BEFORE THIS TRIB UNAL. IT IS AN ADMITTED FACT THAT NO FORMAL RETRACTION WAS MADE BY THE ASSE SSEE AND THE ASSESSEE OFFERED THE AMOUNT OF RS. 1 LAC FOR TAXATI ON DURING HIS STATEMENT RECORDED BY THE DEPARTMENT. DURING HEARIN G OF THIS APPEAL THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S BOMBAY CLOTH STORES; IT A NO. 589/IND/2005 ORDER DATED 24 TH OCTOBER 2008 WHEREIN TO THE FACTS OF THAT CASE TH E DISCOUNT AT THE RATE OF 12.5% WAS ALLOWED ON MRP AN D DEDUCTION @ 12% WAS ALLOWED FOR DEAD STOCK WHILE MAKING THE VAL UATION OF STOCK AT MRP. HOWEVER I AM NOT AGREEING WITH THIS PROPOSIT ION OF THE ASSESSEE FIRSTLY BECAUSE THAT PERCENTAGE WAS DEPENDENT ON TH E FACTS OF THAT CASE AND SECONDLY THE ASSESSEE HIMSELF CLAIMED @ 5% FOR DEAD STOCK. HOWEVER THERE IS A FORCE IN THE SUBMISSION OF THE ASSESSEE TO ACCEPT 4 THE DEAD STOCK AT 5%. THE TOTAL VALUE OF STOCK IS RS.12 82 908/- AND IF THE MRP IS ALLOWED AT 10% THEN IT COMES TO RS.1 28 291/- AGAINST THE CLAIM OF RS.1 92 436/- THUS THE DIFFERENCE COMES T O RS.64 145/- THEREFORE AT BEST THE CONCEALMENT REMAINS TO THE F IGURES OF RS. 64 145/- CONSEQUENTLY I DIRECT THE LEARNED ASSESSING OFFICE R TO CALCULATE THE PENALTY ON THE AMOUNT OF RS.64 145/- IN PLACE OF RS .1 LAC ADOPTED BY HIM. IN VIEW OF THESE FACTS THIS APPEAL OF THE AS SESSEE IS PARTLY ALLOWED. FINALLY THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH AUGUST 2010. SD/- (JOGINDER SINGH) JUDICIAL MEMBER 20 TH AUGUST 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE !DBN!