P.Periasamy, Trichy V. DCIT, Trichy

ITA 1586/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52167 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 23-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: S KEERTHIRAJAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1586/MDS/2011 ASSESSMENT YEAR : 2006-07 SHRI P. PERIASAMY, NO. 15, MULLAIVASAL STREET, DEENADAYALU NAGAR, THIRUVERUMBUR, TRICHY-620 013. V. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-IV, TRICHY. [PAN: AGIPP6897M] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. KEERTHIRAJAN, CA RESPONDENT BY : SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL DATE OF HEARING : 12-12-2011 DATE OF PRONOUNCEMENT : 12-12-2011 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(APPEA LS), TIRUCHIRAPALLY IN ITA NO. 63/2009-10 DATED 27-07-2011 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI S. KEERTHIRAJAN, CA REPRESENTED ON BEHALF O F THE ASSESSEE AND SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ASSESSEE IS AN INDIVIDUAL WHO IS DOING THE BUSINESS OF CIVIL CONTRACT AND LORRY HIRING AS ALSO I.T.A. NO.1586/MDS/2011 2 HAVING SHARE INCOME AND ACCRUED INTEREST ON KVP. I T WAS THE SUBMISSION THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE REL EVANT ASSESSMENT YEAR DISCLOSING AN INCOME OF ` 5,00,709/-. IT WAS THE SUBMISSION THAT IN THE COU RSE OF ASSESSMENT THE ASSESSING OFFICER HAD CALLED FOR THE BOOKS OF A CCOUNTS OF THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE BOOKS OF ACCOUNTS WERE W ITH THE SALES TAX DEPARTMENT, THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT S FOR VERIFICATION. IT WAS THE SUBMISSION THAT AS THE ASSESSEE COULD NOT PRODUCE T HE BOOKS OF ACCOUNTS, THE ASSESSING OFFICER HAD ESTIMATED THE INCOME OF THE A SSESSEE FROM CIVIL CONTRACT WHICH WAS DISCLOSED BY HIM AT NEARLY 3.52% TO 6%. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSING OFFICER HAD ALSO ESTIMATED THE I NCOME FROM THE LORRY HIRE DISCLOSED BY THE ASSESSEE AT ` 1,26,200/- TO ` 2,10,000/-. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE ASSESSING OFFICER HAD ALSO LE VIED PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. IT WAS THE SUBMISSION THAT ON APPEAL THE LEARNED CIT(A) HAD CONFIRMED THE PENALTY LEVIED ON THE GROUND THAT THE ASSESSEE HAD NOT FILED ANY APPEAL AGAINST THE ASSESSMENT. I T WAS THE SUBMISSION THAT THE ASSESSEE HAD NOT FILED ANY APPEAL AS HE WAS ADVISED THAT CONSIDERING THE COST OF LITIGATION IT WAS NOT WORTH FILING AN APPEAL. IT W AS THE FURTHER SUBMISSION THAT THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACC URATE PARTICULARS. IT WAS THE SUBMISSION THAT THE ADDITION ON ACCOUNT OF THE ESTI MATION OF THE CONTRACT RECEIPT ITSELF AT 6% WAS WITHOUT APPLYING ANY COMPARATIVE M ETHOD OR BY COMPARING THE ASSESSEES OWN ACCOUNTS FOR THE EARLIER OR SUBSEQUE NT YEARS. IT WAS FURTHER I.T.A. NO.1586/MDS/2011 3 SUBMITTED THAT THE ENHANCEMENT IN THE INCOME FROM T HE PLYING OF LORRIES WAS ALSO PURELY ON ESTIMATE BASIS. IT WAS THE SUBMISSION TH AT ON AN ESTIMATED ADDITION NO PENALTY MAY BE LEVIED. 4. ON A SPECIFIC QUERY FROM THE BENCH AS TO WHY HE DID NOT REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER, IT WA S SUBMITTED THAT THE ASSESSEE DID NOT RECEIVE THE SECOND NOTICE DATED 17-06-2009. IT WAS THE SUBMISSION THAT IN REGARD TO THE FIRST NOTICE, ORAL SUBMISSIONS HAD BE EN PLACED BY THE ASSESSEES REPRESENTATIVE, WHICH WERE NOT CONSIDERED. IT WAS THE SUBMISSION THAT THE PENALTY LEVIED WAS ON THE BASIS OF ADDITIONS MADE ON ESTIMA TE BASIS AND THE PENALTY MAY BE CANCELLED. 5. IN REPLY, THE LEARNED STANDING COUNSEL SUBMITTED THAT THE ASSESSEES TURNOVER FROM CIVIL CONTRACT WAS NEARLY ` 1,10,00,000/- AND THE ASSESSEE WAS BOUND TO MAINTAIN HIS BOOKS OF ACCOUNTS. AS THE ASSESSEE HA D NOT MAINTAINED BOOKS OF ACCOUNTS, THE INCOME WAS ESTIMATED AT 6% AS ALSO IN COME FROM THE PLYING OF LORRY. HE VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE WIT H THE SALES TAX DEPARTMENT. THIS SUBMISSION OF THE ASSESSEE HAS NOT BEEN DISPRO VED BY THE ASSESSING OFFICER. THE ASSESSEE HAS ALSO PLACED BEFORE THE ASSESSING O FFICER HIS PRIMARY ACCOUNTS I.T.A. NO.1586/MDS/2011 4 BEING NOTE BOOK CONTAINING THE DETAILS OF THE JELLY , SAND ETC. PURCHASED. IT IS NOTICED THAT ON ACCOUNT OF THE NON-PRODUCTION OF TH E BOOKS OF ACCOUNTS, THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED BOTH FROM THE CI VIL CONTRACT AS ALSO FROM THE RUNNING OF THE LORRIES. HOW THE ASSESSING OFFICER HAS FIXED THE GROSS CONTRACT RECEIPTS AT 6% IS NOT KNOWN. IN ANY CASE, THE QUA NTUM OF THE ADDITION IS NOT BEFORE US. CLEARLY, THE ADDITIONS HAD BEEN MADE ON LY ON ESTIMATED BASIS. ESTIMATED ADDITIONS CANNOT LEAD TO LEVY OF PENALTY A S IT DOES NOT MEAN THAT THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INAC CURATE PARTICULARS OF HIS INCOME. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW T HAT THE FACTS IN THE PRESENT CASE DO NOT LAY A GROUND ENOUGH FOR THE LEVY OF PENALTY UNDER SECTION 271(1)(C). CONSEQUENTLY, THE PENALTY AS LEVIED BY THE ASSESSIN G OFFICER AND AS CONFIRMED BY THE LEARNED CIT(A) ON BOTH THE COUNTS, BEING ON ACC OUNT OF THE ESTIMATED ADDITION OF THE CIVIL CONTRACT INCOME AS ALSO THE ESTIMATED INCOME FROM LORRY HIRE, STANDS DELETED. IN THE CIRCUMSTANCES, APPEAL OF THE ASSES SEE IS ALLOWED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 12-12-2 011. SD/- SD/- (DR. O. K. NARAYANAN) (GEORGE MATHAN) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 12 TH DECEMBER, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GU ARD FILE