The Nain Co-op L/C Society, Kaithal V. DCIT, Kurukshetra

ITA 271/CHANDI/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2430 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: PERMIL KUMA R GOEL
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.271 /CHD/2013 (ASSESSMENT YEAR : 2006-07) THE NAIN CO-OP L/C SOCIETY, VS. THE D.C.I.T., V & PO NAINA, CIRCLE KURUKSHETRA. KAITHAL. PAN: AABAT0787F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PERMIL KUMAR GOEL RESPONDENT BY : SHRI J.S.NAGAR, DR DATE OF HEARING : 25.06.2013 DATE OF PRONOUNCEMENT : 27.06.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KARNAL DATED 22.01.2013 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE PEN ALTY LEVIED U/S 271(1)(C) OF INCOME TAX ACT, 1961 (IN SHORT THE AC T). 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST LEVY OF PENALTY U/S 271(1)(C) OF THE ACT OF RS.1,34,600/-. 3. THE BRIEF FACTS IN THE CASE ARE THAT THE ASSESSE E WAS A SOCIETY ENGAGED IN CIVIL CONTRACT BUSINESS. DURING THE YEA R UNDER CONSIDERATION THE ASSESSEE HAD DECLARED GROSS RECEI PTS OF RS.37,48,911/-. AS THE ASSESSEE HAD FAILED TO PROD UCE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER 2 INVOKED PROVISIONS OF SECTION 145 OF THE ACT AND ES TIMATED THE PROFIT @ 12% OF THE GROSS RECEIPTS. 4. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER. 5. THE TRIBUNAL IN ITA NO.343/CHD/2011 VIDE ORDER D ATED 31.5.2011 UPHELD THE REJECTION OF BOOKS OF ACCOUNT. HOWEVER, THE ESTIMATION OF INCOME WAS RESTRICTED TO 8% OF THE GR OSS RECEIPTS. THE TRIBUNAL ALSO HELD THE ASSESSEE TO BE GENUINE S OCIETY ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(V I) OF THE ACT. THE ASSESSING OFFICER WHILE GIVING APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL VIDE ORDER DATED 12.10.2011 RECOMPUTED THE GROSS INCOME OF THE ASSESSEE AT RS.2,72,893/-, AGAINST WHICH DED UCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT HAS BEEN ALLOWED A T RS.2,69,772/- AND BALANCE TAXABLE INCOME HAS BEEN DETERMINED AT R S.3121/-. 6. THE ASSESSING OFFICER, HOWEVER, HELD THE ASSESSE E TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AS THE B OOK RESULTS DECLARED BY THE ASSESSEE WERE NOT VERIFIABLE AND TH E REJECTION OF BOOKS OF ACCOUNT WAS UPHELD. ON ESTIMATION OF THE PROFITS IN THE HANDS OF THE ASSESSEE I.E. @ 12% OF THE GROSS RECEI PTS, THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) OF T HE ACT AT RS.1,34,600/-. THE CIT (APPEALS) UPHELD THE LEVY O F PENALTY U/S 271(1)(C) OF THE ACT AND DIRECTED THE ASSESSING OFF ICER TO REVISE THE ORDER U/S 271(1)(C) OF THE ACT BY GIVING EFFECT TO THE ORDER OF THE TRIBUNAL IN REDUCING GP RATE FROM 12% TO 8% ON GROSS RECEIPTS. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). SHRI PERMIL KUMAR GOEL APPEARED ON BEHA LF OF THE ASSESSEE AND SHRI J.S.NAGAR PUT IN APPEARANCE ON BE HALF OF REVENUE AND PUT FORWARD THEIR CONTENTIONS. 3 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN CIVIL CONSTRUCTION AND I N THE ABSENCE OF THE BOOKS OF ACCOUNT BEING PRODUCED BY THE ASSESSEE , THE INCOME IN THE HANDS OF THE ASSESSEE WAS ESTIMATED BY APPLYING NP RATE OF 8% BY THE TRIBUNAL. HOWEVER, THE INCOME DETERMINED IN THE HANDS OF THE ASSESSEE WAS LIABLE TO DEDUCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT AS THE ASSESSEE WAS FOUND TO BE A SOCIETY. PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN INITIATED IN THE CASE OF THE ASSESSEE AS THE INCOME OF THE ASSESSEE WAS ESTIMATED BY APPL YING NP RATE ON THE GROSS RECEIPTS FOR THE YEAR UNDER APPEAL. WE F IND NO MERIT IN LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON SUCH ES TIMATION OF PROFITS IN THE HANDS OF THE ASSESSEE. SECONDLY, TH E INCOME ESTIMATED IN THE HANDS OF THE ASSESSEE IS FURTHER L IABLE TO DEDUCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT AND ONLY BAN K INTEREST OF RS.3121/- HAS BEEN HELD TO BE TAXABLE IN THE HANDS OF THE ASSESSEE. IN VIEW THEREOF ALSO, THERE IS NO MERIT IN LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, WE DIRECT THE A SSESSING OFFICER TO DELETE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JUNE, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :_27 TH JUNE, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 4