Income Tax Appellate Tribunal - Ahmedabad
Jayantilal Joitaram Patel, Ahmedabad vs Acit, Circle-6, Ahmedabad on 9 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH
(BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
& SHRI MAHAVIR PRASAD, JUDICIAL MEMBER)
ITA. Nos: 1718 & 1719/AHD/2013
(Assessment Years: 2005-06 & 2006-07)
Jayantilal Joitaram Patel V/S Asst. Commissioner of
A/30, Ankur Society, Opp. Income Tax, Circle-6,
Priya Cinema, N.H. 8, Ahmedabad
Krishnanagar,
Ahmedabad-382346
(Appellant) (Respondent)
PAN: AFTPP5830R
Appellant by : Shri M.S. Chhajed, AR
Respondent by : Shri Keyur Patel, Sr. D.R.
(आदे श)/ORDER
Date of hearing : 08 -03-2017
Date of Pronouncement : 09 -03-2017
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
1. ITA Nos. 1718 & 1719/Ahd/2013 are appeals by the Assessee preferred against two separate orders of the Ld. CIT(A)-XI, Ahmedabad dated 15.05.2013 pertaining to A.Ys. 2005-06 & 2006-07 respectively.
2 ITA Nos. 1718 & 1719/Ahd/2013. A.Ys. 2005-06 & 2006-07
2. The common grievance in both these appeals relate to the levy of penalty u/s. 271(1)(c) of the Act.
3. The roots for the levy of penalty lie in the assessment order made u/s. 143(3) r.w.s. 147 of the Act dated 24.12.2010. The assessments were completed by making an addition of Rs. 64,86,975/- in A.Y. 2005-06 and Rs. 24,33,735/- in A.Y. 2006-07. The additions in both the assessment years were made by treating the purchases of the assessee as bogus.
4. The quantum additions made by the A.O. in the respective assessment years travelled up to the Tribunal and the Tribunal vide order dated 26.10.2012 in ITA Nos. 878 & 879/Ahd/2012 has directed the A.O. to apply net profit rate on bogus purchase @ 12.5% for both the years.
5. Taking a leaf out of this finding of the Tribunal, the A.O. proceeded by levying penalty u/s. 271(1)(c) of the Act.
6. The assessee could not succeed before the First Appellate Authority and hence the appeals before us.
7. We find that on identical set of facts, the Hon'ble High Court of Gujarat in Tax Appeal No. 800 of 2008 in the case of Rameshchandra A. Shah has held as under:-
6.1. So far as the issue involved in appeals no. 833 to 836 of 2005 is concerned, in view of the decisions cited hereinabove by learned 3 ITA Nos. 1718 & 1719/Ahd/2013 . A.Ys. 2005-06 & 2006-07 advocate for the appellant we are of the opinion that the penalty has been wrongly imposed under section 271(1)(c) of the Act. In the case of Krishi Tyre Retreading and Rubber Industries (supra), it has been held that the addition had been sustained purely on estimate basis and no positive fact or finding had been found so as to even make the addition which was pure guess work, no penalty under section 271(1)(c) of the Act could be said to be leviable on such guess or estimation. We therefore answer the issue involved in appeals no. 833 to 836 of 2005 in the negative and in favour of the assessee."
8. As no distinguishing decision in favour of the revenue has been brought to our notice by the ld. D.R., respectfully following the decision of the Hon'ble Jurisdictional High Court (supra), we decide the impugned appeals in favour of the assessee and against the revenue. The A.O. is accordingly directed to delete the penalty in both the yeas under consideration.
9. In the result, the appeals of the Assessee are allowed.
Order pronounced in Open Court on 09 - 03- 2017
Sd/- Sd/-
(MAHAVIR PRASAD) (N. K. BILLAIYA)
JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER
Ahmedabad: Dated 09/03/2017
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.