Sh. Mangat Rai Contractor, Bathinda V. The ACIT, Bathinda

ITA 27/ASR/2008

• Counselvise Citation: 2720914 RSA 2008
• Duration Of Justice: 3 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-12-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 18-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K BANSAL
• Keywords: Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: AMRITSAR BENC H: AMRITSAR BEFORE SRI H L KARWA, HONBLE VICE PRESIDE NT AND SHR D K SRIVASTAVA, HONBLE ACCOUNANT MEMBER ITA NO. 27/ASR/2008 AY: 2002-03 SHRI MANGAT RAI V A.C.I.T. CIRCLE BATHINDA SCF 9, BHARAT NAGAR BIBI WALA ROAD, BATHINDA ACDPR 1202 J APPELLANT BY: SHRI S.K. BANSAL RESPONDENT BY: SHRI TARSEM LAL DATE OF HEARING: 07.12.2011 DATE OF PRONOUNCEMENT: 07.12.2011 ORDER D K SRIVASTAVA : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 21.1 1.2007, ON THE FOLLOWING GROUNDS:- 1(A) THAT THE LD. CIT(A) WRONGLY CONFIRMED THE PEN ALTY U/S 271(1)(C) AT RS. 1,07,100/-. 1(B) THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FA CTS THAT ADDITIONS WERE MADE BY THE AO ON SUSPICION AND DISA LLOWANCES OF EXPENSES ONLY. 2. THAT THE ORDER IS BAD IN LA AS WELL AS ON FACTS. 3. THAT NO SATISFACTION WAS RECORDED BY THE AO IN THE BODY OF ASSESSMENT RECORD, HENCE BAD IN LAW. 2. THE ASSESSEE IS A CONTRACTOR. HE HAS FILED HIS R ETURN OF INCOME RETURNING TOTAL INCOME AT RS. 9,92,744/-. THE ASSE SSMENT U/S 143(3) OF THE INCOME-TAX ACT, 1961 WAS COMPLETED ASSESSING TH E TOTAL INCOME AT RS. 14,61,040/-. PERUSAL OF THE ASSESSMENT RECORD S HOWS THAT THE AO HAS DISALLOWED A SUM OF RS. 3,50,000/- OUT OF THE E XPENSES ON LABOUR, MATERIAL AND OTHER EXPENSES ON THE GROUND THAT THE Y WERE NOT VERIFIABLE. APPEAL FILED BY THE ASSESSEE AGAINST TH E AFORESAID MANGAT RAI V. A.C.I.T. ITA NO. 27/ASR/2008 2 DISALLOWANCE MADE BY THE AO, HAS BEEN DISMISSED BOT H BY THE LD. CIT(A) AND BY THIS TRIBUNAL. IT IS WITH REFERENCE TO THE AFORESAID DISALLOWANCE THAT THE IMPUGNED PENALTY HAS BEEN LEV IED BY THE AO. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE PENALTY LE VIED BY THE AO U/S 271(1)(C) OF THE ACT. 3. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF A PPEAL, IT WAS SUBMITTED THAT THE ASSESSEE HAD MADE FULL AND TRUE DISCLOSURE OF ALL THE FACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCO ME. HE SUBMITTED THAT MERE DISALLOWANCE OF EXPENSES WAS NOT SUFFICIENT FO R LEVY OF PENALTY AND ACCORDINGLY PRAYED THAT THE IMPUGNED PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A) SHOULD BE CANCELLED. 4. IN REPLY THE LD. DR SUPPORTED THE ORDER PASSED B Y THE LD. CIT(A) AND THE AO. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. IT IS STATED IN THE ASSESSMENT RECORD THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE DULY AUDITE D. THE IMPUGNED DISALLOWANCE HAS BEEN MADE OUT OF THE EXPENSES CLAI MED BY THE ASSESSEE. HOWEVER THERE IS NO MATERIAL ON RECORD TO HOLD THAT THE ASSESSEE HAS CONCEALED ANY FACT MATERIAL TO THE COM PUTATION OF HIS TOTAL INCOME. IN OUR OPINION, MERE DISALLOWANCE OF EXPEN SES IS NOT SUFFICIENT FOR LEVY OF PENALTY. IN THIS VIEW OF THE MATTER, THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A), IS CANCELLED. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 07.12.2011 SD/- SD/- (H L KARWA) (D K SRIVASTAVA) VICE PRESIDENT ACCOUNTANT MEMBER AMRITSAR, 07.12.2011 MANGAT RAI V. A.C.I.T. ITA NO. 27/ASR/2008 3 SURESH COPY TO:- 1. THE APPELLANT, SHRI MANGAT RAI 2. THE RESPONDENT, A.C.I.T. CIRCLE I, BATHINDA 3. THE CIT(A), BATHINDA 4. THE LD. CIT, BATHINDA 5. THE D.R., INCOME TAX DEPARTMENT, AMRITSAR