Income Tax Appellate Tribunal - Ahmedabad
Shri Dinesh S. Patel,, Ahmedabad vs The Acit, Cent. Circle -2(1),, ... on 2 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH
(BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
& SHRI MAHAVIR PRASAD, JUDICIAL MEMBER)
IT(SS)A. Nos: 281 & 282/AHD/2013
(Assessment Years: 2009-10 & 2010-11)
Dinesh S. Patel 7, Ganesh V/S ACIT, Central Circle-2(1),
Estate, Naroda Road, Ahmedabad
Ahmedabad-380025
(Appellant) (Respondent)
PAN: AGVPP0448A
Appellant by : Shri Tej Shah, AR
Respondent by : Shri Ashish Pophare, Sr. D.R.
(आदे श)/ORDER
Date of hearing : 28 -02-2017
Date of Pronouncement : 02-03-2017
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
1. IT(SS)A Nos. 281 & 282/Ahd/2013 are appeals by the Assessee preferred against the very same order of the Ld. CIT(A)-IIII, Ahmedabad dated 17.05.2013 pertaining to A.Y. 2009-10 & 2010-11.
2 IT(SS)A Nos. 281 & 282/Ahd/2013. A.Ys. 2009-10 & 2010-11
2. Since the First Appellate Authority has disposed these appeals by a common order, therefore, they were heard together and are disposed of by this common order for the sake of convenience.
3. The common grievance in the impugned appeals relate to the levy of penalty u/s. 271A of the Act.
4. A search action was conducted at the premises u/s. 132 of the Act in which a note book was seized and the entries in the note book found to be unaccounted sales transactions of Rs. 3.93 crores and 3.56 crores for pertaining to the financial years 2008-09 & 2009-10. The A.O. was of the firm belief that since the assessee is not maintaining any books of accounts, therefore, the income could be determined only by taking an estimate. Accordingly, net profit @ 6% was taken after considering all the material available on record.
5. Penalty proceedings u/s. 271A were initiated as the A.O. was satisfied that the assessee has failed to comply with the provision of Section 44AA of the Act by not maintaining proper books of accounts so as to enable the Assessing Officer to compute his total income in accordance with the provisions of the Act. The A.O. levied penalty of Rs. 25,000/- each for the impugned assessment years.
6. The assessee carried the matter before the ld. CIT(A) but without any success.
3 IT(SS)A Nos. 281 & 282/Ahd/2013. A.Ys. 2009-10 & 2010-11
7. Before us, the ld. counsel for the assessee heavily relied upon the decision of the Co-ordinate Bench in the case of Bhikhabhai K. Patel IT(SS)A Nos. 279 & 280/Ahd/2013 for A.Ys. 2009-10 & 2010-11. It is the say of the ld. counsel that on identical set of facts, the Tribunal has deleted the penalty levied u/s. 271A of the Act.
8. The ld. D.R. could not bring any distinguishing decision in favour of the revenue.
9. We have carefully perused the orders of the authorities below. It is true that a note book was found at the time of search. It is equally true that the entries relating to the unaccounted sales triggered the estimation of profit @ 6%. This by itself shows that the A.O. used the entries in the impounded note book for completing the assessment. Therefore, the Officer was not deprived in any way in computing the income of the assessee.
10.The Tribunal in the case of Bhikhabhai K. Patel (supra) had the occasion to consider identical facts and the relevant findings of the Tribunal read as under:-
4. Before us, the ld.counsel for the assessee contended that there is no dispute with regard to the proposition that if an assessee failed to maintain books of accounts, and other documents as required under section 44AA, then penalty under section 271A can be imposed upon the assessee. He further contended that no specific type of books of accounts is being provided either under section 44AA or under the relevant rules, which was required to be maintained by an assessee.
It is not the case that the assessee was not maintaining any books. He was 4 IT(SS)A Nos. 281 & 282/Ahd/2013 . A.Ys. 2009-10 & 2010-11 maintaining a diary which disclosed the turnover, and the basis of turnover mentioned in the diary. The Id.AO has made addition to the total income of the assessee in both the years. Therefore, the assessee cannot be visited with penalty. In support of his contentions, he relied upon the order of the ITAT in the case of ITO Vs. Dinesh Paper Mart, 70 ITD 274 (Nag.) and in the case of Sant Construction Co. Vs. ITO, 86 TAXMAN 268 (Delhi)(Mag.). He placed on record copy of both these decision. On the other hand, the ld.DR relied upon the order of the AO.
5. We have duly considered rival contentions and gone through the record carefully. In the case of Dinesh Paper Mart (supra), the assessee was a partnership firm and was maintaining books of accounts, which was audited as per section 44AB of the Act, but those books could not be produced before the AO in spite of several opportunities. The AO harboured a belief that the assessee was not maintaining books of accounts, and therefore, visited the assessee with penalty. In this background, the Tribunal got occasion to examine the nature of books of accounts required to be maintained under section 44AA of the Income Tax Act. It has been held that section does not provide any specific type of books of accounts. It only talks about the accounts and documents, which can enable the AO to adduce the true income of the assessee. In the present case also, the assessee was maintaining a diary, which had helped the AO to work out the alleged unaccounted sales. Therefore, in our opinion, the Id.AO was not justified to impose the penalty under section 271A of the Act. We allow both the appeals and delete the impugned penalty.
11.Facts being identical, respectfully following the findings of the Tribunal (supra), we direct the A.O. to delete the penalty from each assessment years under consideration.
5 IT(SS)A Nos. 281 & 282/Ahd/2013. A.Ys. 2009-10 & 2010-11
12.In the result, the appeals filed by the Assessee are allowed.
Order pronounced in Open Court on 02 - 03- 2017
Sd/- Sd/-
(MAHAVIR PRASAD) (N. K. BILLAIYA)
JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER
Ahmedabad: Dated 02 /03/2017
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT (Appeals) -
4. The CIT concerned.
5. The DR., ITAT, Ahmedabad.
6. Guard File.
By ORDER
Deputy/Asstt.Registrar
ITAT,Ahmedabad