M/s. Dharamsinh Rajabhai Makwana, Anand V. The Dy.CIT.,Anand Circle, Anand

ITA 1568/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63285 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 16-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.1568/AHD/2012: AY -2005-06 M/S. DHARMSINH RAJABHAI MAKWANA, CHANDRALOK BUILDIG,BHALEJ ROAD, ANAND P. A. NO. AABFD 2427 P VS THE D. C. I. T., ANAND CIRCLE, ANAND (APPELLANT) (RESPONDENT) APPELLANT BY MS. URVASHI SHODHAN, AR RESPONDENT BY SHRI VIVEK ANAND OJHA, DR DATE OF HEARING: 09-11-2012 DATE OF PRONOUNCEMENT: 21-12-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT( A)-IV, BARODA IN APPEAL NO.CAB/IV-A-31/2010-11 DATED 09-05-2012 PASS ED U/S 250 READ WITH SECTION 271(1) ( C) OF THE IT ACT. 2. THE ASSESSEE HAS RAISED TWO GROUNDS IN ITS APPEA L, WHEREIN THE CRUX OF THE ISSUE IS THAT THE LEARNED CIT(A) HAS ERRED I N LAW AND ON FACTS BY CONFIRMING THE PENALTY LEVIED BY THE LEARNED AO FOR RS.2,37,480/- U/S 271 (1) ( C) OF THE ACT, THOUGH THE ASSESSEE HAD FURNIS HED ALL THE FACTS BEFORE THE LEARNED AO. 3. BRIEF FACTS: - THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS AS CIVIL CONTRACTOR FILED ITS RETURN OF INCOME ON 27-10-2005 . SOON AFTER THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT THE CASE WAS TA KEN UP FOR SCRUTINY ITA NO.1568/AHD/2012 (AY -2005-06) M/S. DHARMSINH RAJABHAI MAKWANA VS DCIT, ANAND CIRC LE 2 ASSESSMENT AND ORDER WAS PASSED U/S 143(3) OF THE A CT ON 27-12-2007 WHEREIN AMONGST OTHER ADDITIONS ONE OF THE ADDITION S MADE WAS ON ACCOUNT OF RETAINED PROFIT ON ASSIGNED WORK AMOUNTI NG TO RS.7,74,339/. THE LEARNED AO CAME TO SUCH CONCLUSION BECAUSE THE ASSESSEE HAD ONLY CREDITED AN AMOUNT OF RS.81,00,531/- TO THE ACCOUNT OF THE SUB CONTRACTORS OUT OF THE GROSS CONTRACT RECEIPT OF RS.90,69,706/- .THEREFORE, FOR THE DIFFERENCE OF RS.9,69,175/-, AFTER ALLOWING CERTAIN EXPENDITURE, RS.7,74,339/- WAS ADDED TO THE INCOME OF THE ASSESS EE AND THEREBY INITIATING PENALTY PROCEEDINGS. IN THE PENALTY PROC EEDINGS, THE LEARNED AO ARRIVED AT A CONCLUSION THAT FOR THE FOLLOWING AMOU NT PENALTY HAS TO BE CONFIRMED FOR FAILURE TO FURNISH TRUE AND CORRECT P ARTICULARS OF ITS INCOME: TDS WHICH WAS NOT PAID OR CREDITED TO THE SUB CONTRACTORS RS.1,88,049/- CONTRACTORS DEPOSITS NOT CREDITED TO SUB CONTRACTORS ACCOUNT RS.3,63,234/- SALVAGE INCOME (RS.1,01,000/- - RS.3,300) RS.97,700/- TOTAL RS.6,48,983/- THE LEARNED CIT(A) ALSO CONFIRMED THE PENALTY ORDER OF THE LEARNED AO BY OBSERVING AS UNDER: FROM THIS DECISION OF CIT(A) IT IS CLEARLY ESTABLI SHED THAT AT LEAST AMOUNT OF RS.6,48,983/- WAS THE INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION WHICH THE APPELLANT IS SHOWING AS LIABILITY II THE BALANCE SHEET. BY NOT OFFERING THI S AMOUNT OF RS.6,48,983/- AS ITS INCOME OR THE YEAR UNDER CONSI DERATION, THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME A ND, THEREFORE, IT IS LIABLE FOR PENALTY U/S 271(1) (C ) OF THE I. T. ACT. IT IS PERTINENT TO MENTION THAT THE AMOUNT OF TDS OF RS.1,88,049/-, SU B CONTACT DEPOSIT OF RS.3,63,254/- AND SALVAGE DEDUCTION OF R S.1,01,000/- HAVE YET BEEN PASSED ON BY THE APPELLANT TO THE SUB CONTRACTOR AND ARE STILL SHOWN AS LIABILITY IN ITS BALANCE SHEET E VEN AFTER A VERY LONG ITA NO.1568/AHD/2012 (AY -2005-06) M/S. DHARMSINH RAJABHAI MAKWANA VS DCIT, ANAND CIRC LE 3 PERIOD. THIS FACT SHOWS THAT THE APPELLANT HAS BEEN SHOWING THESE AMOUNTS AS LIABILITY IN ITS BALANCE SHEET WHICH IS NOT CORRECT AND THE SAME AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME . THE LD. CIT (A) HAS CLEARLY HELD IN HIS ABOVE ORDER THAT THE AM OUNTS OF RS.6,48,983/- ARE THE INCOME OF THE APPELLANT FOR T HE YEAR UNDER CONSIDERATION. CONSIDERING ALL THESE FACTS, I HOLD THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME AND, THEREF ORE, THE A. O. HAS RIGHTLY LEVIED THE PENALTY OF RS.2,37,480/- U/S 271 (1) ( C) OF THE I. T. ACT. I, THEREFORE, CONFIRM THIS PENALTY OF RS.2, 37,480/- AS LEVIED BY THE A. O. U/S 271 (1) ( C) OF THE I. T. ACT. IN THE QUANTUM APPEAL, THE TRIBUNAL SUSTAINED THE O RDER OF THE LEARNED CIT(A), HOWEVER, GRANTED RELIEF OF RS.97,700/- FOR THE ADDITION MADE ON ACCOUNT OF SALVAGE. 5. BEFORE US, THE LEARNED AR REITERATED HIS SUBMISS IONS BEFORE THE REVENUE AUTHORITIES WHILE AS THE LEARNED DR SUPPORT ED THE ORDERS OF THE LEARNED AO AND THE LEARNED CIT(A) AND PRAYED THAT T HE PENALTY ORDER MAY BE SUSTAINED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL PRODUCED BEFORE US. ON PERUSING THE BALANC E SHEET OF THE ASSESSEE AT PAGE 4 OF THE PAPER BOOK WE FIND THAT I N SCHEDULE D OF SUNDRY CREDITORS IT IS EXPLICITLY STATED THAT THE A SSESSEE HAS A LIABILITY OF RS.1,85,710/- TOWARDS ASSIGNED WORK TDS PAYABLE AND RS.2,339/- PAYABLE TO VIJAYBHAI BHURABHAI PRAJAPATI THUS AGGREGATING T O RS.1,88,049/-. FURTHER, IN THE SAME STATEMENT THE LIABILITY OF RS. 3,63,234/- IS SHOWN AS AMOUNT PAYABLE TOWARDS DEPOSITS ON ASSIGNED WORK. W ITH REGARD TO ADDITION MADE ON ACCOUNT OF SALVAGE FOR RS.97,700/- , WE ARE OF THE OPINION THAT CLEAR FACTS ON THE ISSUE ARE NOT BROUGHT OUT B Y THE REVENUE IN ITS ORDERS, FURTHER IN THE QUANTUM APPEAL THE TRIBUNAL HAS DELETED THIS ADDITION OF RS.97,700/-. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME BEFORE THE LEAR NED AO. IN FACT, ALL THE ITA NO.1568/AHD/2012 (AY -2005-06) M/S. DHARMSINH RAJABHAI MAKWANA VS DCIT, ANAND CIRC LE 4 FACTS ARE EXPLICITLY PRESENTED IN THE BALANCE SHEET . THE ADDITIONS ARE MADE BY THE LEARNED AO PURELY ON THE BASIS OF HIS INFERE NCE FROM THE FACTS PRODUCED BEFORE HIM WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A). IN THIS CIRCUMSTANCE, WE DO NOT FIND ANY HESITATION TO HOLD THAT THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS BEFORE THE REVENU E AUTHORITIES IN ORDER TO INVOKE PROVISIONS OF SECTION 271 (1) (C) OF THE ACT . THEREFORE, WE HEREBY DELETED THE PENALTY LEVIED BY THE LEARNED AO WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A). 7. IN THE RESULT, THE APPEAL THE ASSESSEE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-12-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA DEKA/ DEKA/ DEKA/ DEKA/ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 14-12-12 (DIRECT ON COMPUTER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 20-12-12 OTHER MEMBER: 20-12-1 2 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: