The ACIT, Circle-7, Ahmedabad V. M/s. Techno Tele Project, Ahmedabad

ITA 261/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9421 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN KUMAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 261/AHD/2014 & C.O. NO. 110/AHD/14 (ASSESSMENT YEAR: 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-7, AHMEDABAD M/S. TECHNO TELE PROJECTS, 301, AKAR COMPLEX, DARPAN SIX ROADS, NARANPURA, AHMEDABAD- 380013 V/S V/S M/S. TECHNO TELE PROJECTS, 301, AKAR COMPLEX, DARPAN SIX ROADS, NARANPURA, AHMEDABAD- 380013 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-7, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AACFT3652K APPELLANT BY : SHRI PRAVIN KUMAR, SR. D.R . RESPONDENT BY : SHRI VINIT MOONDRA, A.R. ( )/ ORDER DATE OF HEARING : 13 -01-201 7 DATE OF PRONOUNCEMENT : 16 -01-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NO. 261/AH D/2014 & C.O. 110/A/14 . A.Y. 2008-09 2 1. ITA NO. 261/AHD/2014 AND C.O. NO.110/AHD/2014 ARE A PPEALS BY THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE DIR ECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-IV, AHMEDABAD DATED 01 .01.2013 PERTAINING TO A.Y. 2008-09. 2. THE GRIEVANCE OF THE REVENUE RELATES TO THE DELETIO N OF THE PENALTY OF RS. 12,92,590/- LEVIED U/S. 271(1)(C) OF THE ACT. THE C ROSS OBJECTION OF THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD. CIT( A). 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 26.11.2010 MADE U/S. 143(3) OF THE ACT. THE ASSESSE E IS ENGAGED IN THE BUSINESS AS CONTRACTOR FOR LAYING TELEPHONE CABLE L INE. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS NOT SHOWN ANY CLOSING STOCK I N THE PROFIT AND LOSS ACCOUNT. THE A.O. WAS OF THE OPINION THAT IT IS IMP ROBABLE THAT NO STOCK WOULD BE ON HAND AT THE END OF THE YEAR. AFTER DISC USSING THE IMPUGNED ISSUE WITH THE ASSESSEE, THE WORK IN PROGRESS WAS C OMPUTED AT RS. 41,83,158/- AND WAS TREATED AS THE CLOSING STOCK OF THE ASSESSEE AND THE ADDITION OF THE SAME WAS MADE. PENALTY PROCEEDINGS WERE SEPARATELY INITIATED U/S. 271(1)(C) OF THE ACT FOR NON DISCLOS URE OF INCOME. 5. THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE QUANTUM ADDITION MADE IN THE ASSESSMENT ORDER. ITA NO. 261/AH D/2014 & C.O. 110/A/14 . A.Y. 2008-09 3 6. DURING THE COURSE OF THE PENALTY PROCEEDINGS, THE A SSESSEE WAS ASKED TO SHOW CAUSE WHY PENALTY SHOULD BE LEVIED FOR THE IMP UGNED ADDITION. 7. IT WAS EXPLAINED THAT THERE IS NO CONCEALMENT AS NO GOODS ARE INVOLVED IN THE LINE OF BUSINESS AS STOCK AND ONLY LABOUR EXPEN SES INCURRED ARE TAKEN AS WORK IN PROGRESS. 8. THIS CLAIM OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE A.O. WHO LEVIED THE PENALTY OF RS. 12,92,590/- U/S. 271(1)(C) OF TH E ACT. 9. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CONTENTION. 10. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) OBSERVED THAT ALL THE DETAILS WERE DISCLOSED BY THE ASSESSEE IN HIS AUDITED STATEMENT OF ACCOUNT. THE LD. CIT(A) FURTHER OBSERVED THAT ON THE BASIS OF THE DETAILS GIVEN IN THE AUDITED STATEMENT OF ACCOUNT, THE A.O. HAS WORKED OUT THE WORK IN PROGRESS. THE FIRST APPELLATE AUTHORITY DI RECTED THE A.O. TO DELETE THE PENALTY SO LEVIED HOLDING THAT SINCE ALL THE DE TAILS WERE MADE AVAILABLE MERELY BECAUSE THE A.O. WAS OF A DIFFERENT OPINION WOULD NOT BE SUFFICIENT TO LEVY THE IMPUGNED PENALTY. 11. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. ITA NO. 261/AH D/2014 & C.O. 110/A/14 . A.Y. 2008-09 4 12. THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN S TATED BEFORE THE LOWER AUTHORITIES. 13. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT THE RETURN OF INCOME WAS ACC OMPANIED BY THE AUDIT REPORT IN FORM 3CB AND 3CD ALONG WITH AUDITED STATE MENT OF ACCOUNT. IT IS TRUE THAT IN THIS LINE OF BUSINESS ONLY EXPENSES RE LATE TO THE LABOUR PAYMENTS. THE ASSESSEE HAS CHARGED ITS PROFIT AND L OSS ACCOUNT WITH THE ENTIRE LABOUR PAYMENT MADE DURING THE YEAR UNDER CO NSIDERATION. WE FIND THAT THE A.O. WAS OF THE OPINION THAT PART OF SUCH LABOUR PAYMENT, BEING ONGOING PROJECT, FORM PART OF WORK IN PROGRESS AND ACCORDINGLY IN QUANTUM PROCEEDINGS ADDITION WAS MADE. 14. THIS BY ITSELF SHOW THAT ALL THE DETAILS WERE MADE AVAILABLE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ITSELF MERELY BECAUSE THE A.O. WAS OF THE DIFFERENT VIEW WOULD NOT TRIGGER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. TAKING A LEAF OUT OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 IT R 158, WE DECLINE TO INTERFERE. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ITA NO. 261/AH D/2014 & C.O. 110/A/14 . A.Y. 2008-09 5 16. IN THE LIGHT OF OUR AFORESAID FINDINGS, THE C.O. OF THE ASSESSEE BECOMES INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON 16 - 01- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 16 /01/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD