The ITO, Ward-5(2), RAJKOT-GUJARAT V. M/s. Kishan Transport, RAJKOT-GUJARAT

ITA 239/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2367 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 03-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M J CHARANIA
• Assessee Lawyers: MJ RANPURA
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROU GH E - COURT AT AHMEDABAD] THE INCOME TAX OFFICER, WARD - 5(2), RAJKOT (APPELLANT) VS M/S. KISHAN TRANSPORT, 6, GANDHI CHAMBERS, GONDAL ROAD, RAJKOT PAN:AACFK2539C (RESPONDENT) REVENUE BY : S H RI M.J. CHARANIA , SR. D . R. ASSESSEE BY: S H RI M.J. RANPURA , A.R. DATE OF HEARING : 12 - 01 - 2 016 DATE OF PRONOUNCEMENT : 20 - 01 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THI S REVENUE S APPEAL FOR A.Y. 2003 - 04 , AR ISES FROM ORDER OF THE CIT(A) - IV, RAJKOT DATED 22 - 01 - 2014 IN APPEAL NO. CIT(A) - IV/0078/ 10 - 11 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 239 / RJT /20 14 A SSESSMENT YEAR 200 3 - 04 I.T.A NO. 239/RJT /20 14 A.Y. 2003 - 04 PAGE NO ITO VS. M/S. KISHAN TRANSPORT 2 2. THE REVENUE S SOLE SUBSTANTIVE GROUND CHALLENGES THE LOWER APPELLATE ORDER DELETING SECTION 271(1) (C) PENALTY OF RS. 10,37,306/ - IMPOSED BY THE ASSESSING OFFICER IN ORDER DATED 29 - 10 - 2010. FACTS OF THE CASE ARE IN A NARROW COMPAS S. THE ASSESSEE - FIRM IS A CIVIL CONTRACTOR. THE ASSESSING OFFICER COMPLETED A REGULAR ASSESSMENT IN ITS CASE ON 22 - 03 - 2006 ASSESSING TOTAL INCOME AT RS. 48,13,950/ - AGAINST RETURNED INCOME OF RS. 57,062/ - . HE REJECTED ASSESSEE S BOOKS U/S. 145 OF THE AC T THEREBY ADOPTING GP @ GROSS CONTRACTUAL RECEIPTS OF RS. 6,44,76,155/ - COMING TO RS. 51,58,092/ - AND ALLOWED INTEREST AND PARTNER S REMUNERATION OF RS. 7,56,867/ - . THIS WAS FOLLOWED BY YET ANOTHER ADDITION IN OTHER INCOME TO THE TUNE OF RS. 4,12,723/ - OV ER AND ABOVE PROFIT OF CONSTRUCTION RECEIPTS @ 8% HEREINABOVE. THE ASSESSEE S TOTAL INCOME ACCORDINGLY STOOD COMPUTED AT R S. 48,13,950/ - AFTER PARTNER S REMUNERATION AND INTEREST PAID ETC. THE ASSESSING OFFICER ALLEGED CONCEALMENT AND FURNISHING OF INACCU RATE PARTICULARS OF INCOME AGAINST THE ASSESSEE FOR INITIATING THE IMPUGNED PENALTY PROCEEDINGS . THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) IN HIS ORDER DATED 14 - 11 - 2006 REDUCED THE ABOVE STATED GP RATE FROM 8% TO 4.54% OF GROSS CONTRACTUAL RECEIPTS. THE REVENUE CHALLENGED THE SAID ORDER BEFORE THE TRIBUNAL. A CO - ORDINATE BENCH RE - DETERMI N E D THE ABOVE STATED PROFIT RATIO TO 5%. THE SAME RESULTED IN ADDITION OF RS. 28,79,664/ - . THE ASSESSING OFFICER RESUMED PE NAL TY PROCEEDING AND THAT HELD IN HIS ORDE R THAT ALL THIS ATTRACTED SECTION 271(1)(C) PENALTY AND ORDERED ACCORDINGLY. I.T.A NO. 239/RJT /20 14 A.Y. 2003 - 04 PAGE NO ITO VS. M/S. KISHAN TRANSPORT 3 3. THE CIT(A) REVERSES ASSESSING OFFICER S ACTION BY HOLDING THAT THE IMPUGNED GP ADDITION IS BASED ON PURE ESTIMATION WHICH IS NEITHE R CONCEALMENT NOR THAT OF FURNISHING OF I NACCURATE PARTICULARS OF INCOME . CATENA OF CASE LAW IS ALSO QUOTED IN SUPPORT. 4. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. RELEVANT FACTS NARRATED HEREINABOVE ARE NOT REPEATED FOR THE SAKE OF CONVENIENCE AND BREVITY. THERE IS NO DISPUTE THA T ALL THE AUTHORITIES IN QUANTUM PROCEEDING RIGHT FROM ASSESSING OFFICER TO THE TRIBUNAL HAVE PROCEEDED ON ESTIMATION BASIS IN DETERMINING VARIED GROSS PROFIT RATIO @ 8%, 4.5% AND 5% OF ASSESSEE S GROSS CONTRACTUAL RECEIPTS (SURPA). THE HON BLE JURISDICTI ONAL HIGH COURT IN (2013) 32 TAXMANN.COM 192 (GUJ) CIT VS. WHITELENE CHEMICALS HOLDS THAT SUCH A PENALTY IS NOT LEVIABLE IN CASE OF GP ADDITION BASED ON PURE ESTIMATION. THE REVENUE IS UNABLE TO POINT OUT ANY DISTINCTION ON FACTS OR LAW. WE CONFIRM CIT(A ) S FINDINGS UNDER CHALLENGE IN THESE FACTS AND CIRCUMSTANCES. THE REVENUE S SOLE SUBSTANTIVE GROUND RAISED IN THE INSTANT APPEAL FAILS. 5. THIS REVENUE S APPEAL IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 01 - 201 6 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 20 /01/2016 I.T.A NO. 239/RJT /20 14 A.Y. 2003 - 04 PAGE NO ITO VS. M/S. KISHAN TRANSPORT 4 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, I TAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT