ACIT, Hyderabad V. Shri A Sudhakar Reddy, Hyderabad

ITA 1307/HYD/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6615 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASADA REDDY
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1307/HYD/10 : A SSTT. YEAR 2006-07 ASSTT COMMISSIONER OF INCOME - TAX, CIRCLE 4(1), HYDERABAD V/S. SRI A.SUDHAKAR REDDY, HYDERABAD ( PAN - ADDPA 2613 B ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.V.PRASADA REDDY RESPONDENT BY : SHRI S.RAMA RAO O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2006-07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS). 2. THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE I S REGARDING VALIDITY OF PENALTY IMPOSED UNDER S.271(1)(C) OF THE INCOME- TAX ACT, 1961. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RE LIED ON THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM OF EXPENSES WITH VOUCHERS O R ANY OTHER DOCUMENTARY EVIDENCE IN SPITE OF OPPORTUNITY ALLOWED TO THE ASS ESSEE. HE SUBMITTED THAT THE ASSESSEE WAS GUILTY OF FURNISHING INACCURATE PA RTICULARS OF INCOME BY CLAIMING EXPENSES, WHICH SEEM TO BE NOT GENUINE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS A CONTRACTOR AND MOST OF THE CONTRACTS EXECUTED BY THE ASSESSEE DURING THE RELEVANT PERIOD WERE IN REMOTE AREAS OF JHARKHAND STATE. HE SUBMITTED THAT THERE WAS ABSENCE OF ROAD TRANSPORTATION FACILITIES, ITA NO.1307/HYD/10 SHRI A.SUDHAKAR REDDY, HYDERABAD 2 ETC. AND THE LAW AND ORDER SITUATION WAS ALSO NOT G OOD. THE ASSESSEE HAS COVERED 800 REMOTE VILLAGES FOR ITS CONTRACT WORKS IN VERY DIFFICULT SITUATION, AND THEREFORE, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO GO BACK TO THOSE REMOTE AREAS AND OBTAIN MISSING VOUCHERS. HE SUBMI TTED THAT THE ADDITION MADE BY REJECTING THE BOOKS OF ACCOUNT OF THE ASSES SEE WAS BY WAY OF ESTIMATE ONLY AND NOT BASED ON ANY EVIDENCE OR MATE RIAL WITH THE DEPARTMENT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ASSESSEE, AN INDIVIDUAL, WAS CARRYING ON BUSINESS O F ELECTRICAL CONTRACTS. DURING THE RELEVANT PERIOD, THE ASSESSEE HAS EXECUT ED CONTRACT WORKS IN THE RURAL AND REMOTE AREAS OF JHARKHAND STATE. THE REVENUE COULD NOT CONTROVERT THE SUBMISSION OF THE ASSESSEE THAT HE HAS EXECUTED THE CONTRACT WORKS IN 800 REMOTE VILLAGES OF JHARKHAND STATE, WHERE THERE IS ABSENCE OF PROPER ROADS AND TRANSPOR TATION FACILITIES, ETC. AND THE LAW AND ORDER SITUATION WAS NOT GOOD. THE ASSES SEE HAS GIVEN A BONA FIDE EXPLANATION FOR NOT BEING ABLE TO GO BACK TO THE REMOTE AREAS OF ITS CONTRACT WORKS AND OBTAIN THE MISSING VOUCHERS. WE FIND THAT MERELY BECAUSE THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLA IM OF EXPENSES WITH DOCUMENTARY EVIDENCE, IT COULD NOT BE SAID THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTI CULARS OF INCOME. THE DEPARTMENT HAS NOT ESTABLISHED THAT ANY ITEM OF EXP ENSES CLAIMED BY THE ASSESSEE WAS BOGUS OR INFLATED BY THE ASSESSEE. WE FIND THAT MERELY BECAUSE CERTAIN DISALLOWANCE HAS BEEN MADE BY THE A SSESSING OFFICER, WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE BY WAY OF F ILING AN APPEAL, IT COULD NOT BE CONCLUDED THAT THE ASSESSEE WAS GUILTY OF CO NCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME. THE FA CTS OF THE CASE MAY JUSTIFY THE ESTIMATION OF INCOME OR DISALLOWANCE OF CERTAIN CLAIM OF EXPENSES MADE BY THE ASSESSEE, BUT DO NOT JUSTIFY IMPOSITION OF P ENALTY UNDER S.271(1)(C) OF THE ACT ON THE ASSESSEE. IN THE FACTS OF THE CA SE, WE HOLD THAT THE CIT(A) ITA NO.1307/HYD/10 SHRI A.SUDHAKAR REDDY, HYDERABAD 3 WAS JUSTIFIED IN CANCELLING THE PENALTY UNDER S.271 (1)(C) OF THE ACT AND ACCORDINGLY THE ORDER OF THE CIT(A) IS CONFIRMED A ND THE GROUNDS OF APPEAL OF THE REVENUE ARE REJECTED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 30 TH JUNE, 2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 30 TH JUNE, 2011 COPY FORWARDED TO: 1. SRI A.SUDHAKAR REDDY, FLAT NO.404, EGK ENCLAVE, H.NO.1-8-566, RTC CROSS ROADS, BESIDES BAWARCHI HOT EL, HYDERABAD 2. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 4(I ) , HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS), V, HYDERABAD. 4. COMMISSIONER OF INCOME - TAX - IV , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.