M/s Osho Associates, Gwalior V. A.C.I.T., Circle-3, Gwalior

ITA 132/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0744 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 30-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: MANUJ SHARMA
• Keywords: Corroborative evidences; Set aside
• Section: 271(1)(c); 44AD; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 132/AGRA/2013 ASSTT. YEAR : 2005-06 M/S. OSHO ASSOCIATES, VS. A.C.I.T., CIRCLE-3, 25, SATYADEO NAGAR, GWALIOR. GWALIOR. (PAN: AADFJ 8620 N) (APPELLANT) (RESPONDENT) APPELLANT BY : S/SRI RAJENDRA SHARMA & MANUJ SHARM A, ADV. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 02.07.2013 DATE OF PRONOUNCEMENT OF ORDER : 05.07.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), GWALIOR DATED 21.01.2013 FOR THE ASSESSMENT YEAR 20 05-06, CHALLENGING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME AT RS.3,80,217/- FROM CONTRACT BUSINESS. SURVEY U/S. 1 33A WAS CONDUCTED ON 23.02.2005 ON THE PREMISES OF THE ASSESSEE. THE ST ATUTORY NOTICES WERE ISSUED FOR COMPLETION OF ASSESSMENT AND ASSESSEE WAS TO PRODUC E BOOKS OF ACCOUNTS, BILLS, ITA NO. 132/AGRA/2013 2 VOUCHERS AND OTHER SUPPORTING DOCUMENTS. THE ASSESS EE, HOWEVER, DID NOT PRODUCE THESE THINGS BEFORE THE AO. THE AO, THEREFORE, PROP OSED AS TO WHY EXPARTE ASSESSMENT ORDER U/S. 144 BE NOT MADE AND NET PROFI T RATE OF 8% SHOULD NOT BE APPLIED AS PER PROVISIONS CONTAINED U/S. 44AD OF TH E IT ACT, WHICH IS APPLICABLE TO THE PERSONS ENGAGED IN CIVIL CONSTRUCTION WORK. THE ASSESSEE EXPLAINED THAT INFORMATION HAVE ALREADY BEEN PROVIDED TIME TO TIME AND AS REGARDS THE PROFIT RATE, IT WAS STATED THAT 60% OF THE COST UNDER PRADHAN MA NTI SADAK GRAMIN YOJNA WAS INCREASED ON DIESEL, BITUMEN, CEMENT AND ON LABOUR. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND APPLIED PROFIT RATE OF 8% ON THE TOTAL CONTRACTUAL RECEIPTS OF RS.2,73,70,360/- AND COMPUTED TOTAL INC OME OF THE ASSESSEE AT RS.21,89,628/-. THE LD. CIT(A), HOWEVER, VIDE ORDER DATED 21.08.2008 SUSTAINED THE ADDITION OF RS.1,00,000/- ON THIS ISSUE AND ALL OWED THE APPEAL OF THE ASSESSEE PARTLY. THE REVENUE WENT IN APPEAL BEFORE THE TRIBU NAL IN ITA NO. 704/2008 AND THE APPEAL OF THE DEPARTMENT HAS BEEN DISMISSED VID E ORDER DATED 17.09.2010. THE AO ACCORDINGLY LEVIED PENALTY U/S. 271(1)(C) IN A S UM OF RS.36,592/-. THE LD. CIT(A) CONFIRMED THE PENALTY AND DISMISSED THE APPE AL OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION IS MADE ON ESTIMATE BASIS, ON WHICH PENALTY IS NOT LEVIABLE AN D RELIED UPON SEVERAL JUDGMENTS IN RESPECT OF HIS CONTENTIONS, WHICH HAVE BEEN CONS IDERED IN THE CASE OF LAXMI ITA NO. 132/AGRA/2013 3 NARAYAN SHIVHARE VS. JCIT IN ITA NO. 68/AGRA/2013 B Y ITAT, AGRA BENCH VIDE ORDER DATED 28.06.2013. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. THE FACTS NOTED ABOVE ARE NOT IN DISPUTE. ITAT, AGRA BE NCH IN THE CASE OF LAXMI NARAYAN SHIVHARE VS. JCIT (SUPRA) VIE ORDER DATED 2 8.06.2013 HELD AS UNDER : 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE A SSESSEE DID NOT PRODUCE THE RECORD/DETAILS BEFORE THE AO. THE ASSES SEE ALSO DID NOT PRODUCE BOOKS OF ACCOUNT AND VOUCHERS. THEREFORE, T HE AO HAS TO RESORT TO ESTIMATE OF INCOME. THE MATTER ULTIMATELY TRAVELED TO THE TRIBUNAL AND HIGHER PROFIT RATE WAS FURTHER REDUCED AND ULTIMATELY ADDITION WAS MADE TO THE EXTENT OF RS.9,38,907/-. T HE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF INCOME IN THE RETU RN OF INCOME. MERELY BECAUSE SUPPORTING EVIDENCES COULD NOT BE PRODUCED, HIGHER INCOME WAS ESTIMATED. HONBLE CHATTISGARH HIGH COURT IN TH E CASE OF CIT VS. VIJAY KUMAR JAIN (SUPRA) HELD THAT NON-PRODUCTION O F BOOKS OF ACCOUNT AND ESTIMATE OF HIGHER NET PROFIT DID NOT F IND IT JUSTIFIED TO LEVY THE PENALTY. THE OTHER DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE CLEARLY SUPPORT THE CASE OF THE ASSESSEE T HAT ON MERE ESTIMATE OF INCOME, PENALTY IS NOT LEVIABLE. HONBLE ALLAHAB AD HIGH COURT IN THE CASE OF CIT VS. ARJUN PRASAD AJIT KUMAR (SUPRA) HELD THAT PENALTY ITA NO. 132/AGRA/2013 4 COULD NOT BE IMPOSED ON THE BASIS OF ESTIMATING SAL ES AND APPLYING NET PROFIT FOR THE PURPOSE OF MAKING ADDITION. ALL THES E DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE CLEARLY SUPPORT TH E CONTENTION OF THE ASSESSEE THAT PENALTY IS NOT LEVIABLE ON ESTIMATE O F INCOME. FOLLOWING THE SAME DECISIONS, WE DO NOT FIND IT TO BE A FIT C ASE FOR LEVY OF PENALTY. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW AND CANCEL THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 5. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DECISION, WE ARE OF THE VIEW THAT THE PENALTY IS NOT LEVIABLE IN THE MA TTER. THE LD. CIT(A) IN THE QUANTUM ORDER DATED 21.08.2008 WHILE CONFIRMING THE ADDITION OF RS.1,00,000/- HAS SPECIFICALLY NOTED IN THE ORDER THAT THE AO HAS NOT MADE OUT ANY CASE OF REJECTION OF ACCOUNTS BECAUSE THE ACCOUNTS BOOKS WE RE ALREADY IN POSSESSION OF THE DEPARTMENT AS IMPOUNDED DURING THE SURVEY. ADDITION OF RS.1,00,000/- WAS, HOWEVER, CONFIRMED ON THE REASONS TO TAKE CARE OF I NADMISSIBLE AND PART EXPENDITURES CLAIMED BUT NOT RELATED TO THE BUSINES S OF THE ASSESSEE. AFORESAID ORDER OF THE LD. CIT(A) HAS BEEN CONFIRMED BY THE T RIBUNAL BY DISMISSING THE APPEAL OF THE REVENUE VIDE ORDER DATED 17.09.2010. THEREFORE, MERE ADDITION TO INCOME OF THE ASSESSEE ON THE ABOVE REASONS, WOULD NOT BE SUFFICIENT TO HOLD THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOM E OR FILED INACCURATE PARTICULARS ITA NO. 132/AGRA/2013 5 OF INCOME. PENALTY IS, THEREFORE, NOT LEVIABLE IN T HE MATTER. BY FOLLOWING THE DECISION IN THE CASE OF LAXMI NARAYAN SHIVHARE VS. JCIT (SUPRA), WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENA LTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY