The ITO, Ward-9(4),, Ahmedabad v. Shri Atul S. Mehta,, Ahmedabad

ITA 589/AHD/2014 | 2007-2008
Pronouncement Date: 27-11-2017 | Result: Dismissed

Appeal Details

RSA Number 58920514 RSA 2014
Assessee PAN AFQPM2370G
Bench Ahmedabad
Appeal Number ITA 589/AHD/2014
Duration Of Justice 3 year(s) 9 month(s)
Appellant The ITO, Ward-9(4),, Ahmedabad
Respondent Shri Atul S. Mehta,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-11-2017
Date Of Final Hearing 13-07-2017
Next Hearing Date 13-07-2017
First Hearing Date 13-07-2017
Assessment Year 2007-2008
Appeal Filed On 26-02-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER THE ITO WARD - 9(4) AHMEDABAD (APPELLANT) VS SHRI A T UL S. MEHTA M.K. HOUSPATEL ESTATE NR. OLD CHANDOLA OCTROI NAKAS NAROL AHMEDABAD - 382405 PAN AFQPM2370G (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 20 - 11 - 2 017 DATE OF PRONOUNCEMENT : 27 - 11 - 2 017 / ORDER P ER : AMARJIT SINGH ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 AR ISES FROM ORDER OF THE CIT(A) - XV AHMEDABAD DATED 26 - 12 - 2013 IN PROCEEDINGS UNDER SECT ION 271(1 ) (C) OF THE INCOME TAX ACT 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I T A NO . 589 / A HD/20 14 A SSE SSMENT YEAR 200 7 - 08 I.T.A NO. 589 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI ATUL S. MEHTA 2 1A). THE LD. COMMISSIO NER OF INCOME - TAX (APPEALS) - XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELET ING THE PENALTY OF RS.74 18 771/ - LEVIED U/S. 271(1)(C) OF THE ACT. 1B). THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO IGNORE EXPLANATION 1 OF PROVISION OF SECTION 271(1) (C) OF THE ACT WHICH LAYS DOWN THAT WHERE ASSESSEE'S EXPLANATION IN RESPECT OF ANY MATTER WAS NOT FOUND 'SATISF ACTORY' PROVISION OF SECTION 2 71(1) (C) OF THE ACT WERE ATTRACTED FOR FURNISHING INACCURATE PARTI CULARS OF INCOME. 2). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - XV AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3). IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMM ISSIONER OF INCOME - TAX (APPEALS) - XV AHMEDABAD MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. IN THIS CASE RETURN OF INCOME DECLARING INCOME OF RS. 9 95 990/ - WAS FILED ON 26 TH OCTOBER 2007. SUBSEQUENTLY THE CASE WAS SELECTED UN DER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF T HE ACT ON 25 TH SEPTEMBER 2008. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS INTRODUCED CAPITAL TO THE AMOUNT OF RS. 39 30 624/ - THE ASSESSEE WAS ASKED TO PRODUCE THE DETAIL IN RESPECT OF SOURCE OF INTRODUCTION OF CAPITAL DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE FAILED TO FURNISH THE SUPPORTING EVIDENCES OF CAPITAL INTRODUCTION . CONSEQUENTLY ADDITION OF RS. 39 30 624/ - WAS MADE TO THE TOTAL INCOM E OF THE ASSESSEE . P ENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WAS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME . DURING THE COURSE OF ASSESSMENT PROCEEDINGS O N FURTHER VERIFICATION OF THE BOOKS OF ACCOUNT AND DETAILS THE ASSESSING OF FICER HAS ALSO NOTICED THAT ASSESS EE HAS OBTAINED FRESH LOAN OF RS. 9 LACS DURING THE YEAR UNDER CONSIDERATION FROM SMT. RATANKUNVAR . TO PROVE THE I.T.A NO. 589 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI ATUL S. MEHTA 3 GENUINENESS OF THE AFORESAID LOAN TRANSACTIONS THE ASSESSEE WAS ASKED TO PRODUCED DE TAILS SUCH AS CONFIRMAT ION BANK STATEMENT AND PAN ETC. B UT THE ASSESSEE FAILED TO SUBMIT THE AFORESAID INFORMATION THEREFORE THE ASSESSING OFFICER HAD ADDED THE AMOUNT U/S. 68 AS UNACCOUNTED CASH CREDIT TO THE TOTAL INCOME OF THE ASSESSEE . THE PENALTY PROCEEDINGS U/S. 271(1)( C) OF THE ACT FOR CONCEALMENT OF PARTICULARS OF INCOME WAS INITIATED . ON FURTHER VERIFICATION OF PROFIT AND LOSS ACCOUNT THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS PAID FREIGHT PAYMENT OF 2 50 86 492/ - TO TRUCK OWNER S . OUT OF THE TOTAL PAYMENT TH E ASSESSEE HAS DEDUCTED TDS ON RS. 11 61 679/ - AND FOR RS. 5 52 275 / - . THE ASSESSEE CLAIMED REMAINING AMOUNT NOT LIABLE TO DEDUCT TDS AS HE HAS COLLECTED FORM NO. 15J AND FURTHER EXPLAINED THAT THE PAYMENTS WERE BELOW 20 000/ - . T HE ASSESSING OFFICER ON V ERIFICATION OF LEDGER ACC OUNT OF EVERGREEN TRANSPORT AND MOVEX LOGISTIC (MAIN CONTRACTOR OF ASSESSEE) FROM THE BOOKS OF T HE ASSESSEE STATED THAT ALL THE PAYMENTS MADE WAS ABOVE RS. 20 000/ - ON WHICH THE ASSESSEE WAS LIABLE TO DEDUCT TDS U/S. 194C OF THE A CT. THEREFORE THE ASSESSING OFFICER DISALLOWED THE AMOUNT O F RS. 2 39 24 763/ - U/S. 40(A)(IA) FOR NOT DEDUCTING TDS ON WHICH PENALTY PROCEEDINGS U/S. 271(1)(C) WAS INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A) HAS CONFIRMED T HE ADDITION TO THE EXTENT OF FOLLOWING AMOUNT: - (I) ADDITION OF RS. 39 30 624/ - U/S. 68 (II) ADDITION OF RS. 9 00 000/ - (III) ADDITION OF RS . 2 19 64 923/ - I.T.A NO. 589 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI ATUL S. MEHTA 4 THEREAFTER THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS.90 44 758 U/S 271(1)(C) OF ACT ON THE QUANTUM ADDITION OF RS.2 67 95 547 SUSTAINED BY THE CIT(A) . 4. THE ASSESSEE PREFERRED APPEAL BEFORE T HE LD. CIT(A). THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEEE BY OBSERVING AS UNDER: - I AM INCLINED WITH THE CONTENTION OF A.O THAT IN THE ABSENCE OF ANY REPLY/EXPLANATION AGAINST THE SHOW CAUSE N OTICE FOR PENALTY U/S. 271(1)(C ) OF T HE ACT EXPLANATION 1 TO 271 (1)(C ) OF THE ACT COMES IN PICTURE AND A.O IS JUSTIFIED IN LEVYING THE PENALTY . BUT EVEN IN THESE CIRCUMSTANCES THE A.O HAS T O DRAW A PROPER SATISFACTION IN RESPECT OF VARIOUS ISSUES FOR WHICH PENALTY HAS TO BE IMPOSED. IT IS A SETTLED LEGAL PREPOSITION THAT ASSESSMENT AND PENALTY ARE TWO DIFFERENT AND DISTINCT PROCEEDINGS AND IT IS NOT IN EACH AND EVERY CASE WHERE ADDITION IS M ADE THE PENALTY IS EXIGIBLE. IN REFERENCE TO ADDITION FOR DISALLOWANCES U/S. 40(A)(IA) OF THE ACT FOR AN ADDITION OF RS. 2 19 64 923/ - AIL THE DETAILS WERE SUBMITTED BY APPELLANT AND WERE BEFORE THE A.O AS WELL AS LD. CIT(A). IT IS FROM THE SAID DETAILS O NLY DEFAULT OF NON DEDUCTION OF TDS WAS FOUND. AS FAR AS GENUINELY OF SUCH TRANSACTION WITH AMOUNT THERE WAS NO AMBIGUITY I.E. BOTH A.O AND LD . CIT(A) ADMITTED THE SAME AS GENUINE AND ALLOWABLE EXPENDITURE WHICH APPELLANT CLAIMED IN HIS BOOKS OF ACCOUNT. IT IS ONLY BECAUSE OF DEEMING FICTION OF SECTION 40(A)(IA) OF THE ACT SUCH EXPENDITURE WERE DISALLOWED. THE APPELLANT'S BOOKS OF ACCOUNTS WERE AUDITED AND THE AUDITOR HAS NOT MADE ANY ADVERSE REMARKS IN THE TAX AUDIT REPORT. FURTHER APPELLANT DO COMPLIED (THOUGH PARTLY AS HELD BY A.O. AS WELL AS LD . CIT(A) PROVISIONS OF TDS BY DEDUCTING TDS ON RS. 11 61 679/ - AND COLLECTING FORM 151'FROM FREIGHT EXPENSES OF RS. 552275 BUT FAILED IN DEDUCTING TDS FROM OTHER EXPENDITURE BECAUSE MAJOR PAYMENTS WERE MADE BY CO NTRACTORS ON BEHALF OF APPELLANT WHO HAD NOT DEDUCTED TDS. IT IS ALSO TRUE THAT THESE EXPENDITURE ARE ALLOWABLE IN ANY SUBSEQUENT YEAR ON THE BASIS OF TDS PAYMENT. IT IS THEREFORE IN MY VIEW THE SATISFACTION OF FURNISHING INACCURATE PARTICULARS CANNOT BE DRAWN FOR SUCH GENUINE AND ALLOWABLE TRANSACTIONS FOR WHICH ALL THE DETAILS WERE REFLECTED AND SUBMITTED. THE A.O IN A MECHANICAL WAY AFTER THE ADDITION BEING CONFIRMED APPLIED EX PLANATION 1 TO SECTION 271(1)(C ) OF THE ACT AND IMPOSED THE PENALTY W HICH IS NOT SUSTAIN ABLE AS FAR AS LEGAL PREPOSITION FOR IMPOSITION OF PENALTY FOR SUCH LARGE AMOUNT IS CONCERNED. IN REFERENCE TO DISALLOWANCES OF SUCH EXPENSES THE APPELLANT IS ALREADY SUFFERING HUGE TAX LIABILITY FOR ALMOST ENTIRE EXPENDITURE AND AGAIN IMPOSITI ON OF PENALTY FOR SUCH ADDITION WILL BE STRETCHING THE PURPOSE OF SECTION 40(A)(IA) OF THE ACT TO UNREASONABLE LIMIT. IT IS THEREFORE THE PENALTY SO IMPOSED ON D ISALLOWANCES OF RS. 2 19 64 923/ - IS DIRECTED TO BE DELETED. I N REFERENCE TO OTHER ADDITION U/ S. 68 OF THE ACT THE APPELLANT FAILED TO GISCNARGE ITS ONUS TO PROVE SOURCE OF FUNDS. I AM INCLINED WITH A.O THAT THE SAME BEING OUT OF THE PREVIEW OF TAX AUDIT AND IN THE AB SENCE OF ANY SATISFACTORY REPLY INVOCATION OF PROVISION OF EXPLANATION 1 T O SECT ION 271(1)(C ) OF THE ACT IS JUSTIFIED. PENALTY SO IMPOS ED ON ADDITION OF RS. 39 30 624/ - AND RS. 900000/ - IS THEREFORE UPHELD AND CONFIRMED. 6. THE APPELLANT'S GROUND IS PARTLY ALLOWED. I.T.A NO. 589 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI ATUL S. MEHTA 5 5 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US LD. DEPARTM ENTAL REPRESENTATIVE HAS STATED IN RESPECT OF QUANTUM ADDITION NOBODY HAS APPEARED BEFORE THE CO - ORDINATE BENCH O F THE ITAT THEREFORE THE QUANTUM ADDITION ORDER IN THE CASE OF THE ASSESSEE WAS DISMISSED BY THE HON BLE ITAT VIDE ITA NO. 2806/AHD/2010 DA T ED 22 ND NOVEMBER 2013. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSAL OF THE MATERIAL ON RECORD WE OBSERVED THAT THAT LD. CIT(A) HAS ALLOWED PART RELIEF TO THE ASSSESSEE ON THE PENALTY LEVIED BY THE ASSESSING OFFICER PERTAINING TO THE DEF AULT OF NON - REDUCTION OF TDS . THE LD. CIT(A) HELD THAT BECAUSE OF DEEMING FICTION OF SECTION 40(A)(IA) OF THE ACT SUCH EXPENDITURE WERE DISALLOWED. HE HAS HOWEVER STATED THESE EXPENDITURE ARE ALLOWABLE IN ANY SUBSEQUENT YEAR ON THE BASIS OF TDS PAYMENT . THEREFORE HE CONCLUDED THAT PART OF THE PENALTY LEVIED ON THIS ISSUE IS NOT BASED ON FURNISHING OF INACCURATE PARTICULARS OF INCOME. AFTER CONSIDERING THE DETAILED FINDINGS OF THE LD. CIT(A) WE ARE NOT INCLINED TO INTERFERE IN THE DECISION OF THE LD. CIT(A) . THEREFORE THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 11 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /11 /2017 I.T.A NO. 589 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI ATUL S. MEHTA 6 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER / /