Crown Realtors Pvt.Ltd., Hyd, Hyderabad V. ITO, Ward-1(2), Hyd, Hyderabad

ITA 1068/HYD/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6142 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-09-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 18-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1068/HYD/2015 ASSESSMENT YEAR: 2003-04 M/S. CROWN REALTORS (PVT) LTD., HYDERABAD [PAN: AACCC2341K] VS INCOME TAX OFFICER, WARD-1(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI MOHD. AFZAL, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 15-09-2016 DATE OF PRONOUNCEMENT : 21-10-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX(APPEALS)-I, HYDERABAD DA TED 04-06-2015 CONFIRMING THE PENALTY OF RS. 1,19,070/- (WRONGLY SHOWN AS RS. 1,62,322/- BY THE CIT(A)) U/S. 271(1)( C) OF THE INCOME TAX ACT [ACT]. 2. BRIEFLY STATED, ASSESSEE, A REALTOR FILED RETURN OF INCOME OF RS. 9,998/-. IN THE P&L A/C IT HAS SHOWN THE RECEIPTS FRO M SUB- CONTRACT WORKS AT RS. 23 LAKHS AND COMMISSION ON SALE OF PLOTS AT RS. 1,50,000/-. IT HAS CLAIMED EXPENSES TOWARDS CON STRUCTION AT RS. 34,53,250/-, ADMINISTRATIVE EXPENSES AT RS. 2,25,5 70/- AND I.T.A. NO. 1068/HYD/2015 M/S. CROWN REALTORS (PVT) LTD., :- 2 -: CERTAIN EXPENDITURE WRITTEN-OFF AT RS.4,392/-. AS ASSE SSEE- COMPANY WENT OUT OF THE BUSINESS AND AS THERE WERE NO S UPPORTING STAFF, ASSESSEE DID NOT PRODUCE ANY DOCUMENTS IN SUPPO RT OF THE INCOME DECLARED AND EXPENSES CLAIMED. INVOKING THE PROVISIONS OF SECTION 144, AO ESTIMATED THE INCOME ON CIVIL CONSTRUCTIO N WORKS AT 8% OF GROSS RECEIPTS I.E., 8% OF RS. 23 LAKHS AT RS . 1,84,000/-. AO ALSO SEPARATELY BROUGHT TO TAX THE COMMISSION ON SA LE OF PLOTS AT RS. 1,50,000/- WITHOUT ALLOWING ANY EXPENDITURE. EVEN THOUGH ASSESSEE CLAIMED DEDUCTION U/S. 80-IB IN THE COMPUTATI ON OF INCOME, THE SAME WAS NOT ALLOWED AS ASSESSEE DID NOT FURNISH REQUIRED PARTICULARS. AO INITIATED THE PENALTY PROCEED INGS AND CONSIDERING THE INCOME DETERMINED AND LEVIED PENALTY OF RS. 1,19,070/-. IT WAS CONTENDED BY ASSESSEE BEFORE THE AO THAT EXPENDITURE COULD NOT BE SUBSTANTIATED AS ASSESSEE HAS GONE OUT OF THE BUSINESS AND THERE ARE NO SUPPORTING STAFF. IT WAS FURTHER SUBMITTED THAT INCOME WAS ESTIMATED AND NO PENALTY CAN B E LEVIED ON ESTIMATED INCOME. AO HOWEVER, DID NOT AGREE AND LEVIED THE PENALTY. LD.CIT(A) ALSO CONFIRMED THE SAME. 3. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE DOCUMENTS ON RECORD, WE ARE OF THE OPINION THAT PENALT Y U/S. 271(1)(C) IS NOT ATTRACTED ON THE FACTS OF THE CASE. EVE N THOUGH ASSESSEE HAS CLAIMED CERTAIN EXPENDITURE AND ALSO MA DE A CLAIM U/S. 80-IB, THE CLAIMS AND EXPENDITURE COULD NOT BE S UBSTANTIATED AS STATED BY ASSESSEE. AO IN THE ORDER U/S. 144 HAS R EJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME AT 8% OF THE G ROSS RECEIPTS SHOWN BY ASSESSEE ITSELF. MERE ESTIMATION OF INCOME DOES NOT LEAD TO LEVY OF PENALTY AND THERE ARE VARIOUS JUDI CIAL PRONOUNCEMENTS ON THIS ISSUE THAT ESTIMATION OF INCOME DO ES NOT I.T.A. NO. 1068/HYD/2015 M/S. CROWN REALTORS (PVT) LTD., :- 3 -: ATTRACT PENALTY FOR CONCEALMENT OF INCOME. THE OTHER IN COME WHICH WAS BROUGHT TO TAX IS THE ADMITTED INCOME OF COMMISSION ONLY. HAD THE AO DISALLOWED THE CLAIM U/S. 80-IB, THEN ALSO , MERE DISALLOWANCE OF A CLAIM MADE IN THE COMPUTATION DOES NOT ATTRACT ANY PENALTY AS CONSIDERED BY THE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS P. LTD., [322 ITR 158]. C ONSIDERING THAT ASSESSMENT WAS COMPLETED BY REJECTING THE BOOKS OF ACCOUNT AND ESTIMATED INCOME ON GROSS RECEIPTS, WE ARE OF THE OPINION THAT THE FACTS DOES NOT ATTRACT PENALTY U/S. 271(1)(C). IN V IEW OF THE ABOVE, ASSESSEES GROUNDS ARE ALLOWED AND ORDER OF PENALTY IS SET ASIDE. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2016 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 21 ST OCTOBER, 2016 TNMM COPY TO : 1. M/S. CROWN REALTORS (PVT) LTD., HYDERABAD. C/O. MOHD. AFZAL, ADVOCATE, 11-5-465, FLAT NO. 402, SHERSONS RESIDENCY, CRIMINAL COURT ROAD, RED HILLS, HYDERABA D. 2. THE INCOME TAX OFFICER, WARD-1(2), HYDERABAD. 3. CIT(APPEALS)-I, HYDERABAD. 4. PR.CIT-I, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.