9911796707
TMI Blog2019 (9) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... xtrapolated to 3-4 calendar months. In so far as the remaining calendar months regular sales figure have to be adopted. Without going into the merits of calculations furnished by the assessee we deem it appropriate to restore this issue back to the file of Assessing Officer for re-computation of annual turnover in line with our aforesaid observations. Accordingly, ground Nos. 1 and 2 of the appeal by the assessee are allowed for statistical purpose. Unexplained expenditure u/s. 69C on account of unexplained expenditure - HELD THAT:- We are of considered view that once GP addition has been made by estimating unaccounted sales turnover, addition u/s. 69C is not warranted. The unaccounted expenditure could have been made by assessee from income generated from unaccounted sales. Our view is supported the judgment rendered in the case of Commissioner of Income Tax Vs. Jawanmal Gemaji Gandhi [ 1983 (10) TMI 17 - BOMBAY HIGH COURT] Addition u/s. 69B on account of unexplained initial investment - HELD THAT:- Assessee has given calculation on the basis of turnover computed after extrapolating sales of festival month to three calendar months and regular sales for remaining 9 months. Since, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income Tax (Appeals) initiating penalty proceedings and the order levying penalty clearly indicate that the charge for levy of penalty are not in coherence. The penalty has been initiated for concealment, whereas it has been levied for both the charges of section 271(1)(c) i.e. concealment of income and furnishing inaccurate particulars of income. The Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] has held that where satisfaction has been recorded for one breach u/s. 271(1)(c) and the penalty has been levied for another, such order levying penalty u/s. 271(1)(c) is not permissible. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the assessment orders for the respective assessment years, the assessee filed appeals before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) enhanced the additions. Hence, the present appeals by the assessee. 3. For the sake of convenience, we will take up the appeals of assessee for adjudication in seriatim of assessment years. ITA No. 2207/PUN/2016, (A.Y. 1998-99) 4. The assessee has raised following grounds assailing the findings of Commissioner of Income Tax (Appeals) : "1. On facts and circumstances prevailing in the case and as per provisions & Scheme of the Act it be held that, the addition of ₹ 4,55,426/- on account of gross profit on unrecorded sales is not in accordance with the provisions of the law and scheme of the Act. The addition made by the AO and that enhanced by the first appellate authority be deleted. The appellant be granted just and proper relief in this respect. 2. Without prejudice to above ground, on facts and circumstances prevailing in the case and as per provisions & Scheme of the Act, it be held that the cash found at the premises of the appellant was out of the profits of the unaccounted bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onth of October, 1997 to the entire year. The ld. AR submitted that extrapolating the sales for the month of October, 1997 to the entire year is unreasonable and unjustified as the turnover during the month of October was at peak owing to Diwali festival. During the non festival months/seasons the turnover of the firm is considerable low. The ld. AR submitted that maximum three months in the entire year can be considered as the months of festivals when the sale of dry fruits goes up. Therefore, the sale for the month of October, 1997 cannot be extrapolated to the entire year. The ld. AR furnished a table giving working of turnover and the GP calculated on the basis of aforesaid turnover. The same is reproduced here-in-below : Particulars Turnover Months Total Turnover Remarks Festival Season 4,22,160 3 12,66,480 For the festive season turnover is considered same as found for the month of October 1997 in the seized papers. Non-festive season 1,92,613 9 17,33,520 Balance amount Total 12 30,00,000 GP percentage worked out from return filed by the appellant 8.99% GP on the turnover calculated in table as above (30,00,000 *8.99%) 2,69,700 5.2 The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference in the Funds available and Investment made in October 1997 (9-6) 1,18,868 11 Initial cost of Investment (As per 4) 1,77,223 12 Gross Profit for the month of October 33,731 13 Total Addition ( 10+11) 2,62,360 5.5 The ld. AR thus prayed for deleting the additions made by the Commissioner of Income Tax (Appeals) after giving the benefit of telescopy and restricting the addition u/s. 69B as sated above. 6. On the other hand Shri Shivanand H. Kalakari representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. 7. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. It is an undisputed fact that during search operation cash ₹ 40 lakhs was seized. Shri Nanchand Bhogi Lal Shah offered seized cash to tax in the name of three group firms including assessee spread over the period of six years. The cash disclosure made by the assessee has been accepted by the Department. However, the authorities below have made addition in respect of GP on unaccounted sales. The contention of the assessee is that the cash seized during search is generat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 raised in the appeal are allowed. 10. In ground No. 5 of the appeal the assessee has assailed the addition made by Commissioner of Income Tax (Appeals) u/s. 69B on account of unexplained initial investment. The assessee has given calculation on the basis of turnover computed after extrapolating sales of festival month to three calendar months and regular sales for remaining 9 months. Since, we have restored the issue of GP addition and computation of annual turnover back to the file of Assessing Officer, the calculation of initial investment has to be re-worked based on the annual turnover computed as per the directions of Tribunal. We deem it appropriate to restore the issue back to the file of Assessing Officer. The Assessing Officer shall grant reasonable opportunity of hearing to the assessee, in accordance with law. Accordingly, ground No. 5 is allowed for statistical purpose. 11. In ground No. 6 of the appeal, the assessee has prayed for allowing telescopic effect. The unaccounted cash found during the search operation has been offered to tax by the assessee as part of undisclosed business income. The additions made during assessment proceedings are in respect of undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 2209/PUN/2016, (A.Y. 2000-01) 16. The assessee has taken following grounds : "1. On facts and circumstances prevailing in the case and as per provisions & Scheme of the Act it be held that, the addition of ₹ 2,12,376/- on account of gross profit on unrecorded sales is not in accordance with the provisions of the law and scheme of the Act. The addition made by the AO and that enhanced by the first appellate authority be deleted. The appellant be granted just and proper relief in this respect. 2. Without prejudice to above ground, on facts and circumstances prevailing in the case and as per provisions & Scheme of the Act, it be held that the cash found at the premises of the appellant was out of the profits of the unaccounted business activities of the appellant firm and the amount declared out of the cash found includes the profits earned out of the unaccounted business activities. The appellant be granted just and proper relief in this respect. 3. On the facts and circumstances prevailing in the case and as per the provisions of the Act, it be held that the addition of ₹ 1,06,665/- on account of unaccounted expenditure is unwarranted, unjust and against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned. 2. On the facts and circumstances prevailing in the case and as per the provisions of the Act, it be held that the addition of ₹ 82,735/- on account of unaccounted expenditure is unwarranted, unjust and against the provisions and scheme of the Act. The said addition be deleted and the appellant be granted just and proper relief in this regard. 3. Without prejudice to the above ground, on the facts and circumstances prevailing in the case and as per the provisions of the Act, it be held that the amount of ₹ 82,735/- on account of unaccounted expenditure has already been taxed in the hands of Mr. Nanchand Shah for A.Y.2001-02 and therefore no separate addition should be made in the hands of the appellant. The addition be deleted and the appellant be granted just and proper relief in this respect. 4. Without prejudice to the above grounds on the facts and circumstances prevailing in the case and as per the provisions and scheme of the Act, it be held that the addition on account of unaccounted expenditure amounting to ₹ 82,735/- be deleted as the said amount has already been taxed in A.Y.2000-01. The appellant be granted just and proper relief in this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f on merits. 22. The grounds raised in the appeal and facts being similar to assessment year 1998-99, the findings given by us while adjudicating the appeal of assessee in assessment year 1998-99 will apply mutatis mutandis apply to the assessment year under appeal. Accordingly, the grounds raised by the assessee are allowed for statistical purpose in the same terms. ITA No. 2211 /PUN/2016, (A.Y. 2002-03) 23. The assessee has taken following grounds : "1. On facts and circumstances prevailing in the case and as per provisions & Scheme of the Act it be held that, the addition of ₹ 1,15,352/- on account of gross profit on unrecorded sales is not in accordance with the provisions of the law and scheme of the Act. The addition made by the first appellate authority be deleted. The appellant be granted just and proper relief in this respect. 2. Without prejudice to above ground, on facts and circumstances prevailing in the case and as per provisions & Scheme of the Act, it be held that the cash found at the premises of the appellant was out of the unaccounted business activities of the appellant firm and the amount declared out of the cash found includes the profits earned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 to 2000-01 levying penalty u/s. 271(1)(c) of the Act. ITA No.383/PUN/2017, (A.Y. 1998-99) 28. The ld. AR submitted at the outset that penalty levied u/s. 271(1)(c) is liable to set aside as the charge while recording satisfaction by the Commissioner of Income Tax (Appeals) for initiating penalty proceedings and the charge mentioned in order levying penalty are not coherent. The Commissioner of Income Tax (Appeals) while initiating penalty has observe that the penalty is levied for concealment of income. However, while passing order levying penalty u/s. 271(1)(c), the Commissioner of Income Tax (Appeals) levied penalty for concealment of income and furnishing inaccurate particulars of income. The manner in which penalty has been levied is against the law laid down by the Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Samson Perinchery reported as 392 ITR 4. 29. On the other hand the ld. DR vehemently defended the impugned order and submitted that the order of Commissioner of Income Tax (Appeals) levying penalty is in accordance with the provisions of the Act. 30. Both sides heard. Orders of the authorities below examined. A perusal of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the Assessee has no notice." 33. Thus, in view of the facts of the case and judgment of Hon'ble Bombay High Court, the order levying penalty is liable to be set aside. Accordingly, the impugned order is set aside and the appeal of the assessee is allowed. ITA No.384/PUN/2017, (A.Y. 1999-2000) 34. The ld. AR submitted that the penalty has been levied by Commissioner of Income Tax (Appeals) for the impugned assessment year in respect of GP addition. The ld. AR submitted that in case the assessee's plea of allowing telescopic effect is accepted, there will not be any addition and hence the penalty would not be survive. 35. On the other hand ld. DR vehemently defended the impugned order and prayed for dismissing the appeal of assessee. 36. Both sides heard. Orders of the authorities below perused. The Commissioner of Income Tax (Appeals) has initiated and levied penalty u/s. 271(1)(c) of the Act for concealment of income with respect to GP addition. While adjudicating quantum appeals of assessee, we have restored this issue back to the file of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
