Income Tax Appellate Tribunal - Kolkata
Central Roller Flour Mills (P)Ltd. , ... vs Department Of Income Tax on 16 July, 2014
आयकर अपीलीय अधीकरण, Ûयायपीठ - "A" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA
(सम¢)Before ौी महावीर िसंह, Ûयायीक सदःय एवं/and ौी शामीम याह
याहया,
या लेखा सदःय)
[Before Shri Mahavir Singh, JM & Shri Shamim Yahya, AM]
आयकर अपील संÉया / I.T.A Nos.1785 & 1786/Kol/2012
िनधॉरण वषॅ/Assessment Years: 1988-89 & 1989-90
Assistant Commissioner of Income-tax, Vs. M/s. Central Roller Flour Mills (P) Ltd.
Central Circle-XXI, Kolkata. (PAN: AABCC8240N)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
Date of hearing: 14.07.2014
Date of pronouncement: 16.07.2014
For the Appellant: Shri Rajendra Prasad, JCIT, Sr. DR
For the Respondent: Shri S. K. Tulsiyan, Advocate
आदे श/ORDER
Per Shri Mahavir Singh, JM :
Both these appeals by revenue are arising out of separate orders of CIT(A), Central-II, Kolkata in Appeal Nos. 23 & 26/CC-XXI/CIT(A)C-II/11-12 both dated 11.09.2012. Penalty in disputes were levied by ACIT, Central Circle-1, Patna u/s. 271(1)(c) of the Act vide his separate orders both dated 24.10.2008.
2. The only common issue in these two appeals of revenue is as regards to the order of CIT(A) deleting the penalty levied by AO u/s. 271(1)(c) of the Act on estimated addition on account of application of gross profit rate. For this, revenue has raised identically worded grounds except variance in amount and for the sake of brevity, we reproduce the ground from ITA No. 1785/Kol/2012 as under: "That on the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the penalty of Rs.3,93,358/- imposed u/s. 271(1)(c) of the Income tax Act, 1961, when the quantum addition was confirmed by the Hon'ble ITAT to the extent of GP rate of 7.5% as against the G.P. rate of 4.11% disclosed by the assessee."
3. At the outset, Ld. counsel for the assessee stated that in assessee's own case the Tribunal in AY 1987-88 and 1990-91 in ITA No. 534 & 535/K/2011 dated 20.05.2013 exactly on the same facts deleted the penalty by observing in para 4 to 6 as under:
2 ITA Nos. 1785 & 86/K/2012Central Roller Flour Mills (P) Ltd. AY 1988-89 & 1989-90
"4. It was submitted by the ld. DR that the assessee was involved in fodder scam. It was the submission that consequently the income of the assessee had been estimated by the AO at 15%. It was the submission that on appeal in the quantum proceedings, the ld. CIT(A) had reduced the income of the assessee by estimating the same at 10% and on further appeal the Tribunal had reduced the estimation to 7.5%. The ld. DR drew our attention to the order of the Co-ordinate Bench of this Tribunal in assessee's case in quantum proceedings wherein it was the submission that in para 2.8 of the order the Tribunal had recognized that Shri Dipesh Chandak who was a director of the assessee company was involved in the fodder scam and the assessee had been used as a conduit for the transactions involved in the fodder scam. It was the submission that as the assessee had not cooperated in the assessment proceedings and as the Tribunal had for the earlier assessment years estimated the income at 7.5%, had continued to estimate the income of the assessee for the year under appeal at 7.5%. It was the submission that the fact that the assessee's accounts were not reliable itself led the foundation for levy of penalty us 271(1)(c) of the Act. It was the further submission that as the assessee could not substantiate its return the AO had levied penalty u/s 271(1)(c) of the Act. It was the submission that on appeal the ld. CIT(A) had deleted the penalty levied by holding that the additions to the income was estimated on the basis of assumption and extrapolation without any definite finding of there being any amount on account of bogus purchases. Consequently the ld. CIT(A) had deleted the penalty levied for both the assessment years. It was the submission that the order of the ld. CIT(A) was liable to be reversed. He fully relied on the order of the AO.
5. In reply the ld. AR submitted that the income of the assessee had been estimated and there was no clear cut finding or evidence to show that the assessee had concealed its income or furnished inaccurate particulars of its income. It was the submission that in the course of re-assessment the accounts of the assessee had been rejected by invoking the provision of section 145 of the Act. It was the submission that the fact that the income of the assessee has been estimated itself clearly shows that there is no concealment on the part of the assessee.
6. We have considered the rival submissions. A perusal of the facts of 6. We have considered the rival submissions. A perusal of the facts of the present case shows that in the course of assessment the AO had estimated the income of the assessee at 15%. This income was reduced by the ld. CIT(A) to an estimated 10% and further reduction of the same by the Tribunal to 7.5%. Further a perusal of the order of the ld. AO shows that this issue of adjudicating the gross profit rate is also pending under appeal before the Hon'ble High Court at Patna. Thus it is clearly seen that the income of the assessee has been estimated right from the level of the AO and continues to be estimated. A perusal of the order of the ld. CIT(A) shows that he cancelled the penalty levied on the ground that the income has been estimated on the basis of assumption and extrapolation without any definite finding of their being any amount on account of bogus purchases. Further, a perusal of the penalty for both the assessment years under appeal also clearly shows that the income allegedly to have been concealed for both the assessment years are identical amounts which also gives support to the finding that the income has been estimated for both the assessment years on the basis of assumption and extrapolation. Admittedly on estimated addition to the income no penalty is leviable as no specific concealment of income or furnishing of inaccurate particulars could be pointed out on part of the assessee. In this circumstances, we are of the view that the findings of the ld. CIT(A) in canceling the penalty is on a right footing and the same is upheld."
3 ITA Nos. 1785 & 86/K/2012Central Roller Flour Mills (P) Ltd. AY 1988-89 & 1989-90
4. As the facts and circumstances and issue are exactly identical in assessee's own case for previous years and subsequent years, the issue is squarely covered. Hence, we are of the view that the findings of the CIT(A) in cancelling the penalty is on a right footing and the same is hereby upheld. Both the appeals of department are dismissed.
5. In the result appeals of revenue are dismissed.
6. Order is pronounced in the open court on 16.07.2014.
Sd/- Sd/-
शामीम याहया,
याहया लेखा सदःय महावीर िसंह, Ûयायीक सदःय
(Shamim Yahya ) (Mahavir Singh)
Accountant Member Judicial Member
Dated : 16th July, 2014
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - ACIT, Central Circle-XXI, Kolkata.
2 ू×यथȸ/ Respondent - M/s. Central Roller Flour Mills (P) Ltd.,14A, FMC Fortuna, 5th floor, 234/3A, A.J. C. Bose Road, Kolkata-700 020.
3. आयकर किमशनर (अपील)/ The CIT(A), Kolkata
4. आयकर किमशनर/ CIT Kolkata
5. ǒवभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt. Registrar.