Assistant Commissioner of Income-tax, V. Rebari Puranshingh Jaikishan, Aurangabad

ITA 1858/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85010 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 14-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Agreed addition
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1858/PN/2013 (A.Y: 2007-08) ACIT, CIRCLE-2, AURANGABAD APPELLANT VS. REBARI PURANSINGH JAIKISHAN, REBARI TEMPO SERVICES, GUT NO.29, 30, 31, AURANGABAD-PUNE ROAD, WALUJ, AURANGABAD RESPONDENT APPELLANT BY : SHRI RAJESH DAMOR RESPONDENT BY : NONE DATE OF HEARING : 24.09.2014 DATE OF PRONOUNCEMENT : 24.09.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABA D FOR A.Y. 2007-08 ON THE FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS AND CIRCUMSTANCE OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), AURAN GABAD IS CORRECT IN DELETING THE PENALTY U/S 271(1)(C) OF THE ACT IMPOSED BY THE AO. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS), AURANGABAD WAS CORRECT IN RELYING ON THE DECISION I N THE CASE OF CIT VS. INDIAN METALS & FERRO ALLOYS LTD (1994) 117 CTR (ORISSA), ESPECIALLY WHEN THE FACTS ARE NOT SQUAREL Y APPLICABLE TO ASSESSEE'S CASE . 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES ON THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), AURANGABAD WAS CORRECT IN DELETING THE PENALTY, WHE N IT IS EVIDENT FROM THE RECORDS THAT THE ASSESSEE HAS NOT PREFERRED APPEAL AGAINST THE ASSESSMENT ORDER U/S 143(3) PASS ED BY THE AO IN WHICH ASSESSEE HAS ADMITTED THE MISTAKE OF SH OWING INCOME FROM OTHER SOURCES IN THE GUISE OF AGRICULTU RAL INCOME. 4. IN THE DECISION OF : POLO SINGH & CO. VS CIT(DEL)98 ITR 564 CIT VS KRISHNA & CO.(MAD) 120 ITR 144 WHEREIN IT IS HELD THAT PENALTY U/S 271(1)(C) IS LE VIABLE ON AGREED ADDITION. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE ASSESSING OFFICER BE RESTORED AND THAT OF THE COMMISSIONER OF INCOME-TAX (APPEALS), AURANGABAD BE VACATED. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY GROUNDS OF APPEAL. 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE ACT IVITY OF RUNNING A PETROL PUMP AND ALSO ENGAGED IN THE ACTIV ITY OF TRANSPORT OPERATOR. THE ASSESSEE HAS FILED RETURN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME AT RS.7,79,193/-. THE ASSES SING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE AT RS.22,42,587 /-. THE ASSESSING OFFICER HAS MADE VARIOUS ADDITIONS INCLUD ING ADDITION OF RS.13,22,457/- ON ACCOUNT OF CLAIM OF EXCESSIVE AGR ICULTURAL INCOME AND ADDITION OF RS.1,11,967/- U/S 40A(3) OF THE ACT ON ACCOUNT OF CASH PAYMENTS TOWARDS EXPENDITURE. THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS.4,45,139/- U/S 271 (1)(C) OF THE ACT ON THE ADDITIONS OF RS.13,22,457/- AND RS.1,11,967/ -. 2.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS GRANTED RELIEF TO THE SAME. THE SAME HAS BEEN OPPOSED BEFO RE US ON BEHALF OF THE REVENUE, INTER ALIA, HAS SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY U/S 271(1)(C) OF THE ACT IMPOSED BY THE ASSESSING OFFICER ON BOTH ACCOUNTS AS DISCUSSED ABOVE. ACCORDINGLY, THE ORDER OF CIT(A) BE SET ASIDE AND T HAT OF ASSESSING OFFICER BE RESTORED. NONE APPEARED ON BEHALF OF TH E ASSESSEE, SO THE MATTER IS BEING DECIDED EXPARTE ON THE BASIS OF ARGUMENTS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD. 2.2 AFTER GOING THROUGH THE ARGUMENTS OF LEARNED DE PARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS CLAIMED TOTAL AGRICULTURAL INCOME FROM THE TOTA L AGRICULTURAL LAND BELONGING TO REBARI FAMILY AND DECLARED THE SA ME IN HIS RETURN OF INCOME. THE ASSESSEE HAS ALSO CLAIMED TH AT MOST OF THE MEMBERS OF THE FAMILY ARE ACTIVELY WORKING IN HIS B USINESS AND THE BUSINESS THOUGH SHOWN AS PROPRIETARY BUSINESS, THE SAME WAS IN FACT FAMILYS BUSINESS AND THE SAME WAS RUN IN THE NAME OF THE ASSESSEE AS HE IS THE MAIN ACTIVE PERSON OF THE FAM ILY. THIS EXPLANATION PUT FORWARD BY THE ASSESSEE WAS FOUND P LAUSIBLE BY THE CIT(A). IT WAS ALSO OBSERVED BY THE CIT(A) THA T THE ASSESSEE HAS DISCLOSED ALL THE FACTS ABOUT ANCESTRAL AGRICUL TURAL LAND HOLDING IN THE NAMES OF VARIOUS MEMBERS OF THE FAMILY AND H AS NOT CONCEALED ANY FACTS FROM THE ASSESSING OFFICER. TH E ASSESSING OFFICER HAS LEVIED PENALTY FOR FURNISHING OF INACCU RATE PARTICULARS OF INCOME, WHICH COULD NOT BE APPROVED BECAUSE THE ASS ESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF HIS INCOME. TH ERE IS NOTHING ON RECORD TO SUGGEST THAT THE ASSESSEE HAS FURNISHE D INACCURATE PARTICULARS OF INCOME. IN VIEW OF THIS, THE ASSESS ING OFFICER WAS NOT JUSTIFIED IN LEVYING PENALTY U/S 271(1)(C) OF T HE ACT IN RESPECT OF ADDITION OF RS.13,22,457/- ON THE GROUND THAT THE A SSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORD INGLY, THE SAME WAS RIGHTLY DELETED BY THE CIT(A) BY WAY OF REASONE D FINDING, WHICH NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 3. THE NEXT ISSUE IS WITH REGARD TO LEVYING PENALTY U/S 271(1)(C) OF THE ACT ON ADDITION OF RS.1,11,967/- U/S.40A(3) OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS INCURRED EXPENDITURE AMOUNTING TO RS.5,59,833/- IN CASH IN CONTRAVENTIONS OF PROVISIO NS OF SECTION 40A(3) OF THE ACT. THE ASSESSING OFFICER HAS, THER EFORE, MADE ADDITION OF RS.1,11,967/- UNDER THE PROVISIONS OF S ECTION 40A(3) OF THE ACT AND LEVIED PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF THIS ADDITION. 3.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE ON THIS ACCOUNT AS WELL. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE REVENUE, INTER A LIA, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY U/S 271(1 )(C) OF THE ACT IMPOSED BY THE ASSESSING OFFICER. NONE APPEARED ON BEHALF OF THE ASSESSEE, SO THE MATTER IS BEING DECIDED EXPARTE. 4. AFTER GOING THROUGH THE ARGUMENTS OF LEARNED DEP ARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS LEVIED PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF ADDITION OF RS.1,11,967/- U/S 40A(3) OF THE ACT STA TING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. THE STAND OF THE ASSESSEE HAS BEEN THAT THE CASH PAYMEN TS IN THE BUSINESS OF TRANSPORTATION WERE INEVITABLE AND HAVE BEEN MADE AS PER PREVAILING TRADE PRACTICE. THE ASSESSEE HAS FU RTHER CONTENDED THAT HE HAS NOT FURNISHED INACCURATE PARTICULARS OF HIS INCOME. MOREOVER, THE PENALTY U/S 271(1)(C) IS NOT LEVIABLE IN RESPECT OF NOTIONAL ADDITIONS SUCH AS ADDITIONS U/S 40A(3) OF THE ACT AS IN SUCH CASES NO ACTUAL INCOME WAS EARNED BY THE ASSES SEE. 4.1 THE ITAT, DELHI BENCH IN THE CASE OF GHISARAM T ARACHAND VS. ITO (1998) 60 TTJ 30 (DELHI) HAS LAID DOWN THAT IN RESPECT OF DISALLOWANCE U/S 40A(3), PENALTY CANNOT BE LEVIED. IN VIEW OF ABOVE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN L EVYING THE PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE AC T IN RESPECT OF ADDITION OF RS.1,11,967/- ON THE GROUND THAT THE AS SESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORD INGLY, THE SAME WAS RIGHTLY DELETED BY THE CIT(A). 4.2 IN THE RESULT, THE ORDER OF CIT(A) DELETING THE PENALTY U/S.271(1)(C) OF THE ACT ON ACCOUNT OF FURNISHING O F INACCURATE PARTICULARS OF INCOME ON BOTH ACCOUNTS, NEEDS NO IN TERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADA V) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 24 TH SEPTEMBER, 2014 GCVSR COPY TO:- 1) THE DEPARTMENT 2) ASSESSEE 3) THE CIT(A), AURANGABAD 4) THE CIT, AURANGABAD 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, PUNE.