Babulal K.Daga, Ahmedabad vs Department Of Income Tax

आयकर अपील सं./I.T.A. No.2070/Ahd/2011 ( नधा रण वष / Assessment Year : 2006-07) The DCIT बनाम/ Shri Babulal K Daga Circle-9 Vs. Prop.of Porbandar Road Lines Ahmedabad 810, PB Parekh Tower Opp.Vanijya Bhavan Kankaria, Ahmedabad थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : ADQPD 8962 R (अपीलाथ# /Appellant) .. ($%यथ# / Respondent)

अपीलाथ# ओर से / Appellant by : Shri M.K. Singh, Sr.DR $%यथ# क' ओर से/Respondent by : Shri P.F. Jain, AR

ु वाई क' तार*ख / सन Date of Hearing 24/03/2015 घोषणा क' तार*ख /Date of Pronounce ment 10/04/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-XV, Ahmedabad ('CIT(A)' in short) dated 28/06/2011 pertaining to Assessment Year (AY) 2006-07. The Revenue has raised the following grounds of appeal:-

ITA No.2070/Ahd/2011 DCIT vs. Shri Babulal K Daga Asst.Year - 2006-07 -2-

1) The Ld.Commissioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the penalty of Rs.5,54,289/- levied u/s.271(1)(c) of the Act.

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.Commissioner of Income-tax (Appeals)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored.

2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 31/12/008. While framing the assessment order, the Assessing Officer (AO in short) made various disallowances and assessed the income at Rs.2,46,87,352/- against the total declared income by the assessee at Rs.69,27,336/-. The AO also initiated penalty proceedings u/s.271(1)(c) of the Act. The AO subsequently made disallowance of Rs.14,60,450/-, disallowance on account of non-payment of TDS of Rs.53,824/- & disallowance on account of other miscellaneous expenses of Rs.1,32,456/- and levied a penalty of Rs.5,54,289/-. Against this, the assessee filed an appeal before the ld.CIT(A), who after considering the submissions, allowed the appeal. Aggrieved by the order of the ld.CIT(A), now the Revenue is in appeal before us.

3. The ld.Sr.DR supported the order of the AO and submitted that the ld.CIT(A) was not justified in deleting the addition.

ITA No.2070/Ahd/2011 DCIT vs. Shri Babulal K Daga Asst.Year - 2006-07 -3-

3.1. On the contrary, ld.counsel for the assessee submitted that the order of the ld.CIT(A) and submitted that the ld.CIT(A) has passed a well-reasoned order based on the facts. He submitted that the additions were made on adhoc basis by way of estimation.

4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has given findings in paras-4 to 6 of his order by holding as under:-

" 4. It is seen that penalty has bee imposed of Rs.53,824 (wrongly mentioned in para 8 of the penalty order by the AO as Rs.52,824) on the addition made u/s.40(a)(ia) in the assessment order passed u/s.143(3) on 31.12.2008 on account of non-payment of TDS on freight expenses. Penalty on this amount is directed to be deleted because the appellant had himself declared in the Audit Report filed with the return the freight expenses at Rs.1,38,13,824 disallowed u/s.40(a)(ia) due to non-payment of TDS, however in the computation of income filed with the return the assessee added only Rs.1,37,60,000 and therefore the AO added Rs.53,824 that is the difference in the two figures. In my view the appellant had not concealed or furnished inaccurate particulars and had made due disclosures in the return, therefore the penalty of Rs.53,824 is directed to be deleted.

5. It is seen that the penalty has been imposed on disallowance made of Rs.14,60,450/- in the assessment order passed u/s.143(3) dated 31.12.2008 out of total claim of Rs.9,73,63,349 on account of freight, trip expenses, diesel expenses, tyre expenses and truck expenses because the expenditure was found unverifiable, voluminous and mostly in cash by the AO. The adhoc addition of ITA No.2070/Ahd/2011 DCIT vs. Shri Babulal K Daga Asst.Year - 2006-07 -4-

Rs.14,60,450 made at 1.5% of claim of various expenses totalli8ng to Rs.9 crore odd was upheld vide this office appellate order dated 22.7.2009.

Vide written submission dated 17.3.2011 it was stated that the addition was made on lumpsum, adhoc basis without any concrete finding about filing of wrong particulars and concealment of income. It was stated that such additions cannot under any circumstances be called as concealment and that no penalty should be imposed. With respect to penalty imposed on 1/6th disallowance of Rs.1,32,456 out of various expenses like depreciation on car, vehicle running expense, travelling, telephone and office expenses totalling to Rs.7,94,740. It was stated that the addition was reduced to Rs.1,00,894 vide CIT(A) order dated 22.7.2009. With respect to the above two estimated additions several case laws were cited in support of non-levy of penalty."

4.1. It is not disputed that the addition was made on lump-sum, adhoc basis. Moreover, the above finding of the ld.CIT(A) is not controverted by the Revenue by placing any material on record. Therefore, we do not see any reason to interfere with the order of the ld.CIT(A) as the ld.CIT(A) has rightly followed the ratio laid down by the Hon'ble Punjab & Haryana High Court rendered in the case of CIT vs. Ajaibsingh & Co. reported at (2002) 253 ITR 630 (P&H) and also the ratio laid down by the Hon'ble Apex Court rendered in the case of CIT vs. Reliance Petro Products reported at 322 ITR 158(SC). Thus, ground No.1 of Revenue's appeal is rejected.

5. Ground Nos.2 & 3 are general in nature which require no independent adjudication.

ITA No.2070/Ahd/2011 DCIT vs. Shri Babulal K Daga Asst.Year - 2006-07 -5-

6. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Court on Friday, the 10th day of April, 2015 at Ahmedabad.

Sd/- Sd/- (एन.एस.सैनी) (कुल भारत) लेखा सद य या यक सद य ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 10/ 04 /2015 ट*.सी.नायर, व. न.स./T.C. NAIR, Sr. PS

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ# / The Appellant

2. $%यथ# / The Respondent.

3. संबं4धत आयकर आयु6त / Concerned CIT

4. आयकर आयु6त(अपील) / The CIT(A)-XV, Ahmedabad

5. 7वभागीय $ त न4ध, आयकर अपील*य अ4धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड; फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स%या7पत $ त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 24.3.15(dictation-pad 5+pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ..26.3.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......10.4.15

7. Date on which the file goes to the Bench Clerk.....................10.4.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................