Deputy Commissioner of Income-tax, V. M/s. B.C. Biyani Projects Pvt. Ltd., Jalgaon

ITA 2170/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8455 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Tax effect
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.2170/PN/2013 (ASSESSMENT YEAR: 2009-10) THE JT. COMMISSIONER OF INCOME TAX, RANGE-2, JALGAON . APPELLANT VS. M/S. B.C. BIYANI PROJECTS PVT. LTD., BIYANI CHAMBERS, PROFESSOR COLONY, JAMNER ROAD, BHUSAWAL, DIST : JALGAON PAN: AACCB3617R . RESPONDENT APPELLANT BY : SHRI P.S. NAIK RESPONDENT BY : SHRI M.K. KULKARNI DATE OF HEARING : 21-10-2014 DATE OF PRONOUNCEMENT : 31-10-2014 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CI T(A)-2, NASHIK, DATED 11.09.2013 RELATING TO ASSESSMENT YEAR 2009 -10 AGAINST ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN CANCELLING THE PENALTY U/S 271(1) (C ) OF THE I.T ACT, 1961 OF RS.16,72,898/- RELYING ON HIS PREDECESSOR'S DECISION OF DELETING THE QUANTUM ADDITION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE LD. CIT(A) DELETING THE QUANTUM ADDITION OF RS.49,21,734/- AND APPEAL HAS BEEN FILED BY THE DEPARTMENT BEFORE THE HO NBLE ITAT, PUNE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE APPELLANT PRAYS THE HON'BLE ITAT TO CANCEL THE ORDER O F THE CIT(A) AND UPHOLD THE ORDER OF THE A.O FOR IMPOSING PEN ALTY U/S.271(1)(C) OF RS.16,72,734/-. ITA NO.2178/PN/2013 SHRI VENKATESH NAGARI SAH. PAT SANSTHA MARYADIT 2 4. THE APPELLANT CRAVES LEAVE TO AMEND, ADD, ALTER THE ABOVE GROUNDS LATER, IF FELT NECESSARY. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT RS.16,72,890/-. 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE WA S ENGAGED IN THE BUSINESS OF CIVIL CONTRACT WORK AND WAS UNDERTAKING GOVERNMENT CONTRACT IN VARIOUS STATES. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER MADE ENQUIRIES AND SOUGH T INFORMATION UNDER SECTION 133(6) OF THE ACT. CERTAIN DIFFEREN CES WERE FOUND IN VARIOUS ACCOUNTS WHICH ARE TABULATED UNDER PARA 4.5 AT PAGE 3 OF THE ASSESSMENT ORDER, TOTALING RS.9,55,699/-. FURTH ER, DIFFERENCE WAS FOUND IN THE ACCOUNT OF BALAJI TRADERS, SANWAD TOTALIN G RS.39,66,057/-. THE ASSESSEE FAILED TO RECONCILE THE SAID ST ATEMENTS BEFORE THE ASSESSING OFFICER. HOWEVER, VIDE PARA 4.5 (CONCLU DING AT PAGE 4), THE LETTER OF THE ASSESSEE HAS BEEN REFERRED TO , IN WHICH THE ASSESSEE IN ORDER TO PURCHASE PEACE OF MIND AND TO AVO ID LITIGATION, HAD OFFERED SUM OF RS.9,55,677/- FOR TAXATION PURPOSES. T HE ASSESSING OFFICER MADE AN ADDITION OF RS.49,21,734/- AS THE A SSESSEE COULD NOT RECONCILE THE DIFFERENCE IN THE ACCOUNTS OF THE P ARTIES FROM INFORMATION WAS RECEIVED UNDER SECTION 133(6) OF THE ACT. 5. THE CIT(A) NOTED THAT SINCE THE ASSESSING OFFICER HAD MADE THE ADDITION BY REJECTING THE BOOK RESULTS AND ESTIMATING PRO FIT @ 14%, THERE WAS NO MERIT IN FURTHER ADDITION OF RS.39,66,057/-. I T WAS FURTHER HELD THAT ASSESSING OFFICER WAS ALSO NOT JUSTIFIED IN MAKING ANY SEPARATE ADDITION OF RS.9,55,677/- ON ACCOUNT OF DIFFERE NCES IN THE STATEMENT OF ACCOUNTS OF SOME OTHER PARTIES AS THE ASS ESSEE HAD ITA NO.2178/PN/2013 SHRI VENKATESH NAGARI SAH. PAT SANSTHA MARYADIT 3 RECONCILED THE DIFFERENCES ALONG WITH COPIES OF BILLS AND THEIR STATEMENTS. IT WAS ALSO FURTHER HELD THAT THE ADDITION O N ACCOUNT OF TRADING ADDITION I.E. RS.8.34 CRORES WOULD TAKE CARE OF ADDITIO N OF RS.9,55,677/-. 6. THE REVENUE FILED AN APPEAL BEFORE THE TRIBUNAL AGAINST THE DELETION OF ADDITION OF RS.9,55,677/-, IN WHICH, NO GROUNDS OF A PPEAL WERE RAISED BY THE REVENUE AGAINST THE DELETION OF THE A DDITION OF RS.39,66,057/-. THE TRIBUNAL IN ITA NO.2427/PN/2012 VIDE CONSOLIDATED ORDER IN ITA NOS.2426 & 2427/PN/2012 ALONG WITH CO NOS.2 & 3/PN/2013, VIDE ORDER DATED 15.01.2014, DISMISSED T HE APPEAL OF THE REVENUE BEING NOT MAINTAINABLE BECAUSE OF T HE LOW TAX EFFECT. 7. THE ASSESSING OFFICER MEANWHILE COMPLETED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND HELD TH E ASSESSEE TO HAVE FURNISHED IN-ACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY OF RS.16,72,899/- UNDER SECTION 271(1)(C) OF THE ACT ON ADDIT ION OF DIFFERENCES IN ACCOUNTS TOTALING RS.49,27,734/-. SINCE THE AS SESSEE HAD DURING THE COURSE OF ASSESSMENT OFFERED 14% PROFIT ON THE TOTAL CONTRACT BUSINESS RESULTING IN ADDITION OF RS.8.34 CRORES, NO PENALTY PROCEEDINGS WERE INITIATED AGAINST THE SAID ESTIMATION. IN VIEW OF THE ORDER OF CIT(A) DELETING THE QUANTUM ADDITION OF RS.49,21,73 4/-, CIT(A) DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(A) ALSO OBSERVED THAT IN CASE HIGHER COURTS REVE RSED THE ORDER OF CIT(A), THEN THE DEPARTMENT WOULD BE AT LIBERTY TO TAKE ACTION AS PER SECTION 275(1) OF THE ACT. ITA NO.2178/PN/2013 SHRI VENKATESH NAGARI SAH. PAT SANSTHA MARYADIT 4 8. THE REVENUE IS IN APPEAL AGAINST THE SAID DELETION OF PE NALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 9. IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRES ENTATIVE FOR THE ASSESSEE THAT BOTH THE ADDITIONS WERE DELETED BY T HE CIT(A) AND AGAINST ONE ADDITION I.E. RS.9,55,677/- THOUGH THE DEPARTME NT HAD FILED AN APPEAL BEFORE THE TRIBUNAL, THE SAME WAS DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLA CED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E RECORD. PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED UPON T HE ASSESSEE IN VIEW OF TWO ADDITIONS MADE IN THE HANDS OF THE ASSESSEE I.E. RS.9,55,677/- ON ACCOUNT OF DISCREPANCIES IN VARIOUS ACCOU NTS WHICH ARE TABULATED UNDER PARA 4.5 OF THE ASSESSMENT ORDER. ANOTHER ADDITION OF RS.39,66,057/- WAS MADE IN THE HANDS OF THE AS SESSEE ON ACCOUNT OF DISCREPANCY IN THE ACCOUNT OF BALAJI TRADERS, S ANWAD. VARIOUS DISCREPANCIES WERE FOUND IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE, WHICH WERE CONFRONTED TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE IN VIEW THEREOF, OFFERED AN ADDITIONAL INCOME OF RS.8.34 CRORES BEING ESTIMATION OF PROFITS @ 14% ON THE TURNOVER OF RS.59.66 CRORES. THE CIT(A), IN VIEW OF THE SAID ADDITION OF RS.8.34 CRORES MADE IN THE HANDS O F THE ASSESSEE, DELETED THE PENALTY LEVIED ON ACCOUNT OF THE DIS CREPANCIES IN ACCOUNTS I.E. RS.39,66,057/- AND ALSO SEPARATE ADDITION OF RS.9,55,677/- ON ACCOUNT OF DIFFERENCE IN ACCOUNTS OF SOME OTHER ITA NO.2178/PN/2013 SHRI VENKATESH NAGARI SAH. PAT SANSTHA MARYADIT 5 PARTIES WAS ALSO DELETED. THE REVENUE DID NOT FILE ANY AP PEAL AGAINST THE DELETION OF RS.39,66,057/-, BUT FILED AN APPEAL AGAINST THE DELETION OF RS.9,55,677/-, WHICH WAS DISMISSED BY THE TRIBUNAL BECAUS E OF THE LOW TAX EFFECT. IN VIEW OF THE SAME, THE POSITION AT PRESE NT IS THAT BOTH THE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE I.E. RS. 9,55,677/- AND RS.39,66,057/- HAVE BEEN DELETED. IN THE ABSENCE OF ANY ADDITION BEING MADE IN THE HANDS OF THE ASSESSEE, THE ASSESSEE C ANNOT BE HELD TO BE EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. UPHOLDING THE ORDER OF CIT(A) IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT, WE DISMISS THE GROUNDS OF APPEA L RAISED BY THE REVENUE. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2014. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 31 ST OCTOBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE DEPARTMENT 2) THE ASSESSEE; 3) THE CIT(A)-2, NASHIK; 4) THE CIT-2, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE