ASST CIT CIR 20(3), MUMBAI vs. SAJIT IQBAL QUERESHI, MUMBAI

अपीलाथ� क� ओर से /By Appellant : Shri Vachaspati Tripathi, D.R. ��यथ� क� ओर से/By Respondent :Smt. Neelam Jadhav, A.R. सुनवाई क� तार�ख/Date of Hearing : 06.06.2016 घोषणा क� तार�ख/Date of Pronouncement : 24.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-31, Mumbai, dated 04.03.2013 for A.Y. 2008-09 on following grounds:

A.Y. 08-09 [ACIT vs. Shri Sajit Iqbal Quereshi] Page 2

“I The Ld. CIT(A)erred on the facts and circumstances of the case and in law in directing the AO to delete penalty u/s 271(1)(c) amounting to Rs.4,93,378/-.

II On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred on not considering that the assessee has failed to prove with evidence that he is only a commission agent, the assessee has not satisfactorily reconcile the commission income vis a vis TDS certificate thereby leading to rejection of books and estimating income.

III The Ld. CIT(A) has erred in ignoring the facts that the estimation of income was accepted by the assessee. The assessee has failed to discharge the onus cast on him to prove that the income declared by him was not inaccurate. Therefore the case is covered by the explanation to section 271(1)(c) of the I.T. Act, 1961.”

2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and after considering the same, CIT(A) granted relief to the assessee.

2.2 Same has been opposed on behalf of Revenue inter alia submitting that CIT(A) erred in deleting the penalty u/s. 271(1)(c) of the Act amounting to Rs. 4,93,378/-. Assessee A.Y. 08-09 [ACIT vs. Shri Sajit Iqbal Quereshi] Page 3 failed to establish that he is only a Commission Agent, he has not satisfactorily reconcile the commission income vis-à-vis TDS certificate. In facts and circumstances, Assessing Officer was justified in levying the penalty u/s. 271(1)(c) of the Act. Accordingly, ld. Departmental Representative submitted that the order of CIT(A) be set aside and that of order of Assessing Officer be restored. On the other hand, ld. Authorized Representative supported the order of CIT(A).

2.3 After going through rival submissions and perused the material on record, we find that in this case, addition has been made to the income returned by assessee primarily on account of estimation of assessee’s income by Assessing Officer. This estimation was based on rejection of assessee’s claim of being Commission Agent for the marketing of Telugu Films dubbed in Hindi by the Assessing Officer who held that assessee was doing business as holder of the power of attorney. Thus, there is clear difference in the interpretation of facts and circumstances to the assessee’s business and Assessing Officer. Assessing Officer has drawn inferences based on the details submitted by assessee during assessment proceedings and assessee has not been shown to have received any additional income which was not declared by him. However, there is no quantification of the amount that was concealed or with respect to which inaccurate particulars have been furnished. There is only an estimation of income of assessee based on Assessing Officer’s perception. Assessing Officer has not brought on record any facts through external or third party A.Y. 08-09 [ACIT vs. Shri Sajit Iqbal Quereshi] Page 4 enquiries that may support his stand that assessee had concealed his income or furnished inaccurate particulars of income. No specific transactions with reference to which either information or income was withheld from the Revenue authorities by assessee have been pointed out. Regarding the disallowance of claim of VAT, merely making an incorrect claim will not amount to furnishing of inaccurate particulars. Even though assessee has accepted quantum addition and disallowances made. It is settled legal position that quantum and penalty are different proceedings. Moreover, higher income has been determined by Assessing Officer on account of estimation which was not sound basis for penalty in question and same has been deleted by CIT(A). This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.

Pronounced in the open Court on this the 24th day of June, 2016.