Nand Devlopers, Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 1356/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63062 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-11-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , ! '#, $% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.1356/AHD/2012 ( ! ) ! ) ! ) ! ) / / / / ASSESSMENT YEAR : 2002-03) M/S.NAND DEVELOPERS SHANTI KAILASH DHAM SOCIETY B/H. UTKARSH PETROL PUMP KARELIBAUG, BARODA-390 018 ! ! ! ! / VS. THE INCOME TAX OFFICER WARD-2(2) AAYAKAR BHAVAN RACE COURSE, BARODA * $% ./+, ./ PAN/GIR NO. : AADFN 3652 Q ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 $ / APPELLANT BY : WRITTEN SUBMISSION ./*- 1 0 $ / RESPONDENT BY : SHRI T.SHANKAR, SR.D.R. !2 1 % / / / / DATE OF HEARING : 02/11/2012 34) 1 % / DATE OF PRONOUNCEMENT : 9.11.12 $5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF THE LD.CIT(A)-III, BARODA DATED 5.3.2012 PASSED FOR A.Y . 2002-03 AND THE ONLY ISSUE IS IN RESPECT OF CONFIRMATION OF LEVY OF PENA LTY OF RS.46,050/- U/S.271(1)(C) OF THE IT ACT, 1961. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) R.W.W.147 DATED 28/02/2006 AND T HE PENALTY ORDER U/S.271(1)(C) DATED 27.3.2009 WERE THAT A SURVEY U/ S.133A WAS CONDUCTED ON 20.03.2002. A STATEMENT OF SHRI MUKESH JAMNADAS S HAH WAS RECORDED ITA NO.1356/AHD /2012 M/S.NAND DEVELOPERS VS. ITO ASST.YEAR - 2002-03 - 2 - U/S.131(1A) OF IT ACT ON 20.03.2002. HE HAS ADMIT TED AN INCOME OF RS.9,18,401/- FOR THE PERIOD 1.4.2000 TO 12.02.2002 . . IT WAS NOTED BY THE AO THAT THE RETURN FOR A.Y. 2002-03, THE YEAR UNDER AP PEAL, WAS FILED ON 27.6.2002 DECLARING AN INCOME OF RS.2,85,195/-. DURING THE ASSESSMENT PROCEEDINGS, THERE WAS A REFERENCE OF A STATEMENT OF MR.MUKESH J AMNADAS SHAH, PARTNER OF THE FIRM WHICH WAS RECORDED U/S.131(1A) OF IT ACT O N 20.03.2002. HE HAS INFORMED THAT THE SAID SCHEME WAS COMPLETED DURING THE PERIOD OF AUGUST TO SEPTEMBER-2001. ACCORDING TO AO, HE HAS ALSO STATE D THAT NO ENTRY WAS LEFT TO BE DONE IN THE BOOKS OF ACCOUNTS AND A PROFIT OF RS .9,18,401/- WAS SAID TO BE THE FINAL PROFIT. HOWEVER, WHILE FILING THE RETURN THE ASSESSEE HAS CLAIMED EXPENSES INCURRED OF RS.1,29,000/-. DETAILS OF THE EXPENDITURE IS RECORDED BY THE AO WHICH WAS STATED TO BE INCURRED TOWARDS BRIC KS, CARTING, LABOUR, TILES, ROAD EXPENSES, PRINTING AND STATIONERY, ETC. IN R ESPECT OF THOSE EXPENDITURE, THE AO HAD ASKED THE ASSESSEE TO FURNISH THE SUPPOR TING EVIDENCE. THE TOTAL OF THE EXPENDITURE WAS RS.1,29,000/- AND IN THE ABS ENCE OF SATISFACTORY EXPLANATION AND THE EVIDENCES ABOUT THE RAW-MATERIA L PURCHASED COULD NOT BE FILED, THEREFORE THAT AMOUNT WAS TOTALLY ADDED IN T HE TAXABLE INCOME OF THE ASSESSEE. THEREFORE, THE IMPUGNED PENALTY WAS LE VIED ON ACCOUNT OF EXPENSES OF RS.1,29,000/- DISALLOWED BY THE AO. IN THE PE NALTY ORDER, IT WAS MENTIONED BY THE AO THAT THE IMPUGNED ADDITION OF R S.1,29,000/- WAS CHALLENGED BEFORE LD.CIT(A) WHO HAS VIDE AN ORDER D ATED 02/04/2007 HAS DIRECTED TO RESTRICT THE DISALLOWANCE OF EXPENSES U PTO 50% OF RS.1,29,000/-. IT WAS NOTED THAT 50% OF THE SAID EXPENSES HAVE ALREAD Y BEEN DISALLOWED IN A.Y. 2001-02. THE ASSESSEE HAS ALSO SUBMITTED TO THE A O THAT IF AT ALL ONLY THE REMAINING PART AMOUNTING TO RS.57,824/- COULD BE AD DED DURING THE ASSESSMENT YEAR 2002-03. HOWEVER, THE AO WAS NOT C ONVINCED AND ON THE IMPUGNED TOTAL AMOUNT OF RS.1,29,000/- A PENALTY OF RS.46,050/- WAS IMPOSED. ITA NO.1356/AHD /2012 M/S.NAND DEVELOPERS VS. ITO ASST.YEAR - 2002-03 - 3 - 3. WHEN THE MATTER WAS CARRIED BEFORE THE LD.CIT(A) , THE ACTION OF THE AO WAS CONFIRMED PRIMARILY ON THE REASON THAT THE DISA LLOWANCE OF EXPENDITURE WAS MADE SINCE THE ASSESSEE HAS NOT FURNISHED THE S UPPORTING EVIDENCES. THE ASSESSEE HAD FAILED TO EXPLAIN THE REQUIREMENT OF T HE INCURRING OF EXPENDITURE AFTER THE SEVEN MONTHS OF COMPLETION OF THE CONSTRU CTION. ACCORDING TO LD.CIT(A), THE EXPLANATION WAS A SELF-SERVING STATE MENT. THE ACTION OF THE AO OF LEVYING THE PENALTY WAS CONFIRMED. 4. FROM THE SIDE OF THE ASSESSEE, A WRITTEN SUBMISS ION HAS BEEN PLACED, WHEREIN IT WAS CONTESTED THAT ONCE 50% OF THE AMOUN T HAD ALREADY BEEN DISALLOWED IN THE IMMEDIATE PRECEDING ASSESSMENT YE AR, THEREFORE THERE SHOULD NOT BE ANY REASON FOR LEVYING THE PENALTY ON THE SA ID AMOUNT. IN THE WRITTEN SUBMISSION, A RELIANCE HAS ALSO BEEN PLACED ON AN O RDER OF ITAT B BENCH AHMEDABAD IN ASSESSEES OWN CASE TITLED AS M/S.NAN D DEVELOPERS VS. ITO (ITA NO.3063/AHD/2007 A.Y. 2001-02) ORDER DATED 3 0.10.2009, WHEREIN VIDE PARA-3 IT WAS HELD AS UNDER:- 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE SAME. IN OUR OPINION, PENALTY PROCEEDINGS AND ASSE SSMENT PROCEEDINGS BOTH THE DIFFERENT. IF AN ADDITION HAS BEEN MADE IN THE ASSESSMENT, THE ASSESSEE IS NOT DEBARRED TO PROVE THAT THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF ANY INACCURATE PARTICULARS THEREON ON THE PART OF T HE ASSESSEE. THE ADDITION HAS BEEN MADE IN RESPECT OF PROFIT ON CONSTRUCTION OF TENEMENTS AMOUNTING TO RS.57,824/- AND RS.68,490/- ON ACCOUNT OF DISALLOWA NCE U/S.40A(3). THE ASSESSEE, WE NOTED, HAD DULY SUBMITTED THE EXPLANAT ION DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE TRIAL BALANCE DOES NOT REFLECT THE TRUE STATE- OF-AFFAIRS. THE ADDITIONS ARE ALSO NOT MADE TO THE EXTENT OF STATEMENT MADE BEFORE THE DDIT. THE PENALTY HAS SIMPLY BEEN IMPOS ED ON THE BASIS OF ADDITIONS / DISALLOWANCES MADE DURING THE COURSE OF ASSESSMENT, AND THAT IS ALSO 200% OF THE TAX SOUGHT TO BE EVADED. THE EXPL ANATION SUBMITTED BY THE ASSESSEE, IN OUR OPINION, IS NOT FALSE AND THE ASSE SSEE HAS DULY SUBSTANTIATED THE SAME. IN VIEW OF THIS, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE WHERE PENALTY CAN BE SUSTAINED. WE ACCORDINGLY DELETE TH E PENALTY. ITA NO.1356/AHD /2012 M/S.NAND DEVELOPERS VS. ITO ASST.YEAR - 2002-03 - 4 - 5. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.T.SHAN KAR, HAS FILED WRITTEN SUBMISSIONS THROUGH WHICH HE HAS CONTESTED THAT ONC E THE SCHEME HAS ALREADY BEEN COMPLETED IN THE MONTH OF AUGUST-SEPTEMBER-200 1 THEN THERE WAS NO REQUIREMENT OF CLAIMING THE EXPENDITURE TOWARDS PUR CHASE OF BASIC RAW- MATERIAL. IT WAS SUBMITTED BY LD.DR THAT AFTER TH E COMPLETION OF THE PROJECT BY SEVEN MONTHS THERE WAS NO REQUIREMENT FOR ANY FURTH ER ADDITION. LD.DR HAS ALSO STATED IN THE SAID SUBMISSION THAT THE BASIC E XPENDITURE SUCH AS, CEMENT, BORING, LABOUR EXPENSES WERE NOT DULY SUPPORTED BY ANY EVIDENCES. HE HAS ALSO PLEADED THAT SINCE NO PURCHASES WERE MADE AFTE R AGUUST-2001 TILL THE SURVEY CONDUCTED IN THE MONTH OF FEBRUARY-2002, THE REFORE IT COULD HAVE BEEN A CLAIM OF BOGUS EXPENDITURE. HE HAS PLEADED TO C ONFIRM THE ORDER OF LD.CIT(A). 6. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES , WE ARE OF THE VIEW THAT THIS CASE HAD CERTAIN PECULIARITY ABOUT ITS FACTS. OUT OF THE TOTAL EXPENDITURE WHICH WAS DISALLOWED BY THE AO, THE VEHEMENT CONTENTION O F THE ASSESSEE WAS THAT THE PART OF IT HAD ALREADY BEEN DISALLOWED IN A.Y. 2001-02. NOW BEFORE US, FROM THE SIDE OF THE ASSESSEE AN ORDER OF THE ITAT B BENCH AHMEDABAD FOR A.Y. 2001-02 (IN ITA NO.3063/AHD/2007)[SUPRA] DATED 30.10.2009 HAS BEEN PLACED WHEREIN VIDE PARA-3 THE TRIBUNAL HAS TAKEN A VIEW THAT ON THE BASIS OF FACTS, NO PENALTY COULD BE SUSTAINED. 7. IN THE RESULT, CONSIDERING THE TOTALITY OF THE C IRCUMSTANCES OF THE CASE AND THE BASIS ON WHICH AN ADDITION WAS MADE, AND TH AT TOO WAS RESTRICTED TO THE AMOUNT IN DISPUTE, THEREFORE RESPECTFULLY FOLLOWING THIS DECISION OF THE TRIBUNAL, FOR THIS YEAR AS WELL, WE DEEM IT PROPER TO DIRECT THE REVENUE OFFICER TO DELETE THE PENALTY. ITA NO.1356/AHD /2012 M/S.NAND DEVELOPERS VS. ITO ASST.YEAR - 2002-03 - 5 - 8. AS A RESULT, ASSESSEES APPEAL STANDS ALLOWED. SD/- SD/- ( ! '# ) ( ) $% ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 9 / 11 /2012 6..!, .!../ T.C. NAIR, SR. PS $5 1 .7 8$7) $5 1 .7 8$7) $5 1 .7 8$7) $5 1 .7 8$7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-III, BARODA 5. 7<= .! , , / DR, ITAT, AHMEDABAD 6. = >2 / GUARD FILE. $5! $5! $5! $5! / BY ORDER, /7 . //TRUE COPY// ? ?? ?/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION ON COMPUTER DATED 5.11.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6.11.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 9.11.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9.11.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER