The ITO. Ward-5(3), Ahmedabad V. M/s. ROCKLINE PROJECTS LTD., Ahmedabad

ITA 3319/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50590 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-09-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 15-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI D.K. TYAGI, JM AND A.K. GARODIA, A.M . INCOME-TAX OFFICER, WARD 5(3), AHMEDABAD. ROCKLINE PROJECTS LTD., B-14/15, SWAGAT COMPLEX, PUSHPKUNJ, MANINAGAR, AHMEDABAD. APPELLANT VS. RESPONDENT APPELLANT BY :- SHRI VINOD TANWANI, SR.DR RESPONDENT BY:- SHRI S. N. SOPARKAR, SR.ADVOCATE. DATE OF HEARING 13/9/2011 DATE OF PRONOUNCEMENT -16/9/2011. O R D E R PER D.K. TYAGI, JUDICIAL MEMBER . THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) DATED 05/10/2009. SINCE THE AP PEALS PERTAIN TO THE SAME ASSESSEE AND THE ISSUE INVOLVED IS COMMON, THE SE ARE TAKEN UP TOGETHER FOR DISPOSAL BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED IN THESE APPEALS RELATE TO DELET ION OF PENALTY LEVIED OF RS.3,30,775/- (FOR ASST. YEAR 1998-99) AND RS.1,51, 438/- (FOR ASST. YEAR 2003-04) RESPECTIVELY U/S 271(1)(C). ITA NOS 3319 &3320/AHD/2009. ASST. YEARS 1998-99 & 2003-04 ITA NOS.3319 & 3320/AHD/2009 ASST. YEARS 1998-99 & 2003-04 2 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN THE BUSINESS OF DEVELOPMENT OF HOUSING PROJECTS. FOR AS ST. YEAR 1998-99 AND 2003-04 THE ASSESSEE FILED RETURNS OF INCOME DECLAR ING LOSS AT RS.1029/- AND RS.4,01,744/- RESPECTIVELY. ASSESSMENT FOR ASS T. YEAR 1998-99 WAS FRAMED U/S 143(3) OF THE ACT BY DETERMINING TOTAL I NCOME AT RS.12,73,336/- BY REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE BY INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT AND FOLLOWI NG ADDITIONS WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE:- 10% OF WIP RS.6,18,823/- UNEXPLAINED CASH CREDITS U/S 68 RS.2,04,500/- OTHER INCOME AND INTEREST AS SHOWN IN PROFIT AND LOSS ACCOUNT RS.4,50,013/- ON APPEAL, LD. CIT(A) REDUCED ESTIMATED 10% WIP TO 8% WIP AND DELETED ADDITION IN RESPECT OF RS.2,04,500/- BEING CASH CREDITS. THE AO ISSUED A SHOW CAUSE NOTICE U/S 271(1)(C) R.W .S. 274 OF THE ACT AND THEN AFTER PASSING PENALTY ORDER LEVYING MINIMU M PENALTY OF RS.3,30,775/- ON ADDITIONS, CONFIRMED BY LD. CIT(A) , BEING ADDITION OF RS.4,95,058/- IN RESPECT OF ESTIMATED PROFIT 8% OF WIP AND RS.4,50,013/- IN RESPECT OF OTHER INCOME AND INTEREST SHOWN IN PR OFIT AND LOSS ACCOUNT. 3. FOR ASST. YEAR 2003-04 ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT BY DETERMINING TOTAL INCOME AT RS.2,15,954/- AF TER REJECTING BOOKS OF ITA NOS.3319 & 3320/AHD/2009 ASST. YEARS 1998-99 & 2003-04 3 ACCOUNTS BY INVOKING PROVISIONS OF SECTION 145(3) O F THE ACT AND MAKING FOLLOWING ADDITIONS - 10% OF WIP RS.12,918/- OTHER INCOME AND INTEREST AS SHOWN IN PROFIT AND LOSS ACCOUNT RS.2,03,036/- ON APPEAL, LD. CIT(A) REDUCED ESTIMATED 10% OF WIP TO 8% WIP. THE AO ISSUED A SHOW CAUSE NOTICE U/S 271(1)(C) R.W.S. 274 OF THE ACT AND THEREAFTER PASSED THE PENALTY ORDER LEVYING MINIMUM PENALTY OF RS.1,51,438/- ON ADDITIONS, CONFIRMED BY THE LD. CI T(A) BEING ADDITION OF RS.10,334/- IN RESPECT OF ESTIMATED PROFIT 8% OF WI P. 4. THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) WH EREIN IT WAS SUBMITTED THAT THE ASSESSEE HAD PREFERRED APPEALS B EFORE THE TRIBUNAL AGAINST THE ORDER PASSED BY THE THEN CIT(A) FOR ASS T. YEARS 1998-99 AND 2003-04. THE TRIBUNAL HAD PASSED ONE CONSOLIDATED O RDER FOR FOUR APPEALS FILED BY THE ASSESSEE FOR ASST. YEARS 1996-97, 1998 -99, 1999-00 AND 2003-04 AND ONE APPEAL FILED BY THE DEPARTMENT FOR ASST. YEAR 1999-00. THE TRIBUNAL HAD DELETED THE ADDITION MADE BY THE A O IN RESPECT OF ADDITION OF 105 WIP OF HOUSING PROJECTS, WHICH WAS REDUCED BY THE THEN CIT(A) AT 8% WIP OF HOUSING PROJECTS. COPY OF THE T RIBUNALS ORDER WAS ENCLOSED WITH THE WRITTEN SUBMISSION. IN RESPECT OF ADDITION OF OTHER INCOME SHOWN IN PROFIT & LOSS ACCOUNT FOR ASST. YEA R 1999-00 THE THEN CIT(A) HAD HELD THAT WHEN ASSESSEES INCOME FROM BU SINESS IS ESTIMATED, ITA NOS.3319 & 3320/AHD/2009 ASST. YEARS 1998-99 & 2003-04 4 THERE CANNOT BE ANY FURTHER ADDITION TOWARDS INCOME FROM OTHER SOURCES, WHICH IS CONFIRMED BY THE TRIBUNAL. ACCORDINGLY, TH E ASSESSEE SUBMITTED THAT THE GROUND OF ASSESSEE IS ALLOWED BY THE TRIBU NAL IN RESPECT OF ADDITION MADE BY THE AO CONFIRMED BY THE CIT(A) AND THEREFORE PENALTY LEVIED BY THE AO BE DELETED. 5. THE LD. CIT(A) CONSIDERED THE FACTS AND CIRCUMST ANCES OF THE CASE AND SUBMISSIONS MADE BY THE ASSESSEE AND DELETED TH E PENALTY LEVIED BY THE AO BY OBSERVING AS UNDER :- 3. I HAVE CONSIDERED THE WRITTEN SUBMISSIONS OF TH E APPELLANT AND FACTS OF THE CASE. ON APPEAL FILED BY THE APPELLANT , THE HONBLE ITAT, AHMEDABAD BENCH B AHMEDABAD, DELETED THE ADDITION S MADE BY THE AO (ON THE BASIS OF WHICH PENALTY WAS LEVIED) VIDE ITS ORDER IN ITA NO.2908/AHD/2007 DATED 31/3/2008. 4. PENALTY CANNOT STAND ON ITS OWN, INDEPENDENT OF THE ASSESSMENT. IN VIEW OF THE DECISION OF THE HONBLE TRIBUNAL I HOLD THAT THE PENALTY LEVIED BY THE AO IN THIS CASE CANNOT BE SUSTAINED. RELIANC E IS PLACED IN THIS REGARD ON THE DECISION OF VARIOUS HIGH COURTS CITED AT 167 ITR 880, 168 ITR 846, 174 ITR 402, 176 ITR 189, 183 ITR 59, 189 ITR 786, 200 ITR 206 AND 211 ITR 470, IMPLIEDLY APPROVED BY THE SUPR EME COURT IN THE CASE OF K.C. BUILDERS AND ANR. VS. ACIT 265 ITR 562 ). 5. IN THE RESULT, PENALTY LEVIED U/S 271(1)(C) STAN DS CANCELLED AND ASSESSEES APPEAL STANDS ALLOWED. AGAINST THIS ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. DR RELIED ON THE ORDERS PASSED BY THE AO . WHEREAS THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDERS PASSE D BY THE LD. CIT(A) AND ITA NOS.3319 & 3320/AHD/2009 ASST. YEARS 1998-99 & 2003-04 5 SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASST. YEARS 1996- 97, 1998-99, 2003-04 & 1999-00 HAS DELETED THE IMPU GNED QUANTUM ADDITIONS ON THE BASIS OF WHICH THE PENALTIES WERE LEVIED. (COPY OF ORDER OF THE TRIBUNAL IN ITA NOS. 4036/A/2003, 1444/AHD/2 007, 1445/AHD/2007 AND 45/11/AHD/2007 IS PLACED ON RECOR D). SO HE SUBMITTED THAT THE PENALTIES LEVIED BY THE AO HAVE RIGHTLY BEEN CANCELLED BY THE LD. CIT(A). THE ORDERS OF LD. CIT(A) MAY KIN DLY BE UPHELD. THE SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE REMAINE D UNCONTROVERTED BY THE REVENUE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED OPINION THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTIES. THE PROPOSITION THAT NO PENALTY UNDE R SECTION 271(1)(C) CAN BE LEVIED IF QUANTUM IN RESPECT OF WHICH LEVY OF PE NALTY IS PROPOSED, IS DELETED, HAS BEEN HELD BY SEVERAL AUTHORITIES SUCH AS ADDL. CIT VS. BADRI PRASAD KASHI PRASAD (1993) 200 ITR 206 (ALL), PRABH AT OIL TRADERS VS. ITO (1996) 218 ITR (AT) 39 ITAT (AHD), CITY DRY FIS H CO. VS. CIT (1999) 238 ITR 63 (A.P.), CIT VS. MD. BUX SAUKAT AL I (2004) 265 ITR 326 (RAJ) AND CIT VS. SHISHPAL (2002) 255 ITR 187 ( RAJ). IN VIEW OF THE ABOVE, WE UPHOLD THE ORDERS OF LD. CIT(A) AND DISMI SS THE APPEALS FILED BY THE REVENUE. ITA NOS.3319 & 3320/AHD/2009 ASST. YEARS 1998-99 & 2003-04 6 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 16/9/2011. SD/- SD/- (A. K. GARODIA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 16/9/2011. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 13/9/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 14/9/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..