SHRI SHOEB HASSONJEE, Nagpur V. I.T.O. WARD -4(2), Nagpur

ITA 253/NAG/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2219 (ITAT-NAGPUR)
• Duration Of Justice: 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 25-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D RAVI KUMAR
• Keywords: Business income; Depreciation; Bonafide belief

Judgement Text

1 ITA NOS. 253 & 254/NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NOS.253 & 254/NAG/2016. ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 SHRI SHOEB HASSONJEE, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 4(2), NAGPUR. PAN AAJPH7839P APPELLANT. RESPONDENT. APPELLANT BY : SHRI UMANG AGRAWAL. RESPONDENT BY : SHRI D. RAVI KUMAR. DATE OF HEARING : 12 - 05 - 2016 DATE OF PRONOUNCEMENT : 12 TH MAY, 2016 O R D E R THESE ARE APPEALS BY THE ASSESSEE FOR ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 RESPECTIVELY. THE COMMON ISSUE RAISED IS THAT TH E LEARNED CIT(APPEALS) ERRED IN SUSTAINING THE PENALTY OF RS.25,000/ - EACH U/S 271 A OF I.T. ACT. SINCE THE FACTS ARE IDENTICAL, I AM ADJUDICATING THE ISSUE WITH FACTS AND FIGURES FROM ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE IN THIS CASE IS AN INDIVIDUAL AND NATURE OF BUSINESS SHOWN IS INCOME FROM HOUSE PROPERTY AND INCOME FROM SUPERVISION CHARGES. THE BRIEF FACTS OF THE CASE LEADING TO LEVY OF PENALTY AS EMANATING FROM THE AOS ORDER ARE AS UNDER : 2. THE ASSESSEE WAS ASKED TO FILE VARIOUS DETAILS LIKE C OPY OF BANK STATEMENT, PROOF OF PREPAID & S.A. TAXES, LOAN CONFIRMATION, PROOF OF DEDUCTIONS CLAIMED UNDER CHAPTER - VI A OF THE INCOME TAX ACT - 1961, COMPUTATION OF INCOME, ETC. THE DETAILS FILED ARE SEEN. 2 ITA NOS. 253 & 254/NAG/2016. 3. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE BOOKS OF ACCOUNT ALONG - WITH BILLS AND VOUCHERS. THE COUNSEL FOR THE ASSESSEE STATED VIDE ORDER SHEET ENTRY DATED 23.12.2013, THAT THE ASSESSEE HAS NOT MAINTAIN THE BOOKS OF ACCOUNT. THE ASSESSEE HAS RECEIVED SUPERVISION CHARGES FROM DUDHE & CONS, AND SHOWN THE S AME AS A BUSINESS INCOME. THE ASSESSEE HAS RECEIVED TOTAL SUPERVISION CHARGES OF RS.7,34,614/ - AND CLAIMED DEPRECIATION OF RS.1,23,120/ - AND INTEREST ON CAR LOAN OF RS.71,550/ - . THE NET INCOME OF RS.5,39,944/ - WAS SHOWN FROM BUSINESS. THE COUNSEL FOR ASSE SSEE HAS FILED ON 30.12.2013 THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT. AS THE ASSESSEE HAS SHOWN BUSINESS INCOME OF RS.5,39,944/ - AND HE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT, THEREFORE, THE PENALTY PROCEEDING U/S 271A ARE SEPARATELY INITIAT ED. 3. IN THE PENALTY PROCEEDINGS THE ASSESSEE SUBMITTED THAT THE BUSINESS ACTIVITY OF THE ASSESSEE CONSISTED ONLY OF SUPERVISION CHARGES FROM A SINGLE PARTY ONLY . IT WAS SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE SAID SUPERVISION CHARGES FOR SUPERVISING THE ACTIVITY OF A PETROL PUMP. IT WAS SUBMITTED THAT THE ASSESSEE DURING ASSESSMENT PROCEEDINGS HAD PRODUCED ALL THE DETAILS REGARDING THE BUSINESS RECEIPTS SUCH AS BANK BOOK SO AS TO CORRECTLY DETERMINE THE BUSINESS INCOME OF THE ASSESSEE. HOW EVER, THE AO WAS NOT SATISFIED. HE PROCEEDED TO LEVY A PENALTY OF RS.25,000/ - U/S 271 A OF THE I.T. ACT. 4. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) CONFIRMED THE PENALTY. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LEAR NED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE SAID SUPERVISION CHARGES FROM M/S DUDHE & SONS. HE SUBMITTED THAT THE ENTIRE SUPERVISION CHARGES AROSE OUT OF ONE JOURNAL ENTRY PASSED BY THE SAID PARTY AT THE END OF THE CLOSE OF THE YEAR. IN THESE CIRCUMSTANCES, LEARNED COUNSEL SUBMITTED THAT WHEN THE ENTIRE BUSINESS ACTIVITY WAS CONFINED TO ONE JOURNAL ENTRY AND ASSESSEE HAS SUBMITTED ALL THE OTHER DETAILS LIKE BANK BOOK ETC. IN THIS REGARD, LEVY OF PENALTY IN THIS CASE FOR NON MAIN TENANCE OF BOOKS OF ACCOUNT IS NOT JUSTIFIED. HE SUBMITTED THAT THE AO HAS ALSO ACCEPTED THE RETURN OF INCOME AS SUBMITTED BY THE ASSESSEE. IT IS NOT THE CASE THAT ANY DEFICIENCY WHATSOEVER WAS NOTED BY THE AO IN THE COMPUTATION OF INCOME AND THE INCOME DI SCLOSED BY 3 ITA NOS. 253 & 254/NAG/2016. THE ASSESSEE. IN THESE CIRCUMSTANCES, LEARNED COUNSEL SUBMITTED THAT PENALTY SHOULD NOT BE LEVIED. 7. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. UPON CAREFUL CONSIDERATION I FIND THAT THE ASSESSEE IN THIS CASE HA S RECEIVED SUPERVISION CHARGES FROM M/S DUDHE & SONS BY MEANS OF JOURNAL ENTRY AT THE END OF THE YEAR. IN THESE CIRCUMSTANCES I AM OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE HAD SUBMITTED THE BANK ACCOUNT AND OTHER DETAILS, LEVY OF PENALTY U/S 271 A F OR NON MAINTENANCE OF BOOKS OF ACCOUNT CANNOT BE SAID TO BE JUSTIFIED. SINCE ONLY ONE JOURNAL ENTRY CONSISTED OF THE BUSINESS RECEIPT OF THE ASSESSEE, IT CAN BE SAID THAT THE ASSESSEE WAS UNDER A BONAFIDE BELIEF T HAT MAINTENANCE OF CASH BOOK, LEDGER ETC. IN THIS REGARD WAS NOT REQUIRED. IN THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE ASSESSEE SHOULD NOT BE VISITED WITH THE RIGOURS OF PENALTY. ACCORDINGLY I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 9. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF MAY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 12 TH MAY, 2016. 4 ITA NOS. 253 & 254/NAG/2016. COPY FORWARDED TO : 1. SHOEB HASSONJEE, 98, BEHIND ST THOMAS CHURCH, NEW COLONY, NAGPUR - 4440001. 2. I.T.O., WARD - 4(2), NAGPUR. 3. C.I.T. , NAGPUR. 4. CIT(APPEALS), - 4 , NAGPUR. 5. D.R., ITAT, RAIPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.