M/s Sinha Construction Pvt Ltd., Kolkata V. D.C.I.T. Cir - 11,Kolkata., Kolkata

ITA 335/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99897 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 18-02-2013
• Court: TRIBUNAL
• Department Lawyers: D LAHIRI
• Assessee Lawyers: N O N E
• Section: 44AD; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO. 335/KOL/2013 ASSESSMENT YEAR: 2001-02 M/S. SINHA CONSTRUCTION PVT. LTD. VS. DEPUTY COMM ISSIONER OF INCOME-TAX, (PAN: AADCS6522R) CIRCLE-11, KOLKATA ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 09.10.2015 DATE OF PRONOUNCEMENT: 15.10.2015 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI D. LAHIRI, JCIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XII, KOLKATA IN APPEAL NO. 543/XII/CIR-11/09-10 DATED 29.11.2012. ASSESSM ENT WAS FRAMED BY DCIT, CIR-11, KOLKATA U/S. 144 OF THE INCOME-TAX ACT, 1961 (HEREI NAFTER REFERRED TO AS THE ACT) FOR AY 2001-02 VIDE ITS ORDER DATED 29.03.2004. PENALTY WAS IMPOSED BY DCIT, CIRCLE-11, KOLKATA U/S. 271(1)(C) OF THE ACT VIDE HIS ORDER DA TED 30.03.2007. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE LEVY OF PENALTY BY AO U/S. 271(1)(C) OF THE ACT . 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. THE ASSESSEE CLAIM ED THAT IT HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND OTHER RECORDS. BUT THE AO NOT ED IN HIS ASSESSMENT ORDER THAT THE ASSESSEE IS UNABLE TO FURNISH BOOKS OF ACCOUNT AND OTHER DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS DUE TO THE REASON THAT TH E SAME WERE SEIZED BY SALES TAX AUTHORITIES U/S. 66 OF THE WEST BENGAL SALES TAX AC T, 1994. ACCORDINGLY, AO COMPLETED ASSESSMENT U/S. 144 OF THE ACT AND ESTIMA TED THE INCOME BY APPLYING THE PROVISIONS OF SECTION 44AD OF THE ACT BY APPLYING N ET PROFIT @ 8%. AGGRIEVED AGAINST THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO RESTRICTED THE ADDITION AT RS. 1 LAC ON THE BASIS OF ESTIMATION OF ADDITION FOR THE REASON THAT THERE MAY BE SOME UNACCOUNTED PURCHASES. FOR THIS, HE RE CORDED THE FOLLOWING FINDINGS: I HAVE CONSIDERED THE ASSESSEES EXPLANATION IN THE MATTER. IT IS A FACT THAT IN THE CONSTRUCTION BUSINESS SOME PURCHASES HAVE TO BE MAD E FROM LOCAL INFLUENTIAL PEOPLE OF THE AREA IN ORDER TO ENSURE SMOOTH WORKING AT THE S ITE. IT IS ALSO A FACT THAT STONE SHIPS AND SAND HAVE BEEN USED BY THE ASSESSEE FOR ITS CO NSTRUCTION WORK. THE BILLS HAVE BEEN PAID BY CHEQUE. HOWEVER, HAVING SAID THIS IT CANNO T BE DENIED THAT THE ASSESSEE COULD NOT FURNISH THE CURRENT ADDRESS OR PRODUCE THE PART Y. I AM OF THE OPINION THAT THE ISSUE CALLS FOR AN ESTIMATED ADDITION AND RS.1,00,000/- I S ADDED ON THIS ACCOUNT TO THE RETURNED INCOME. 2 ITA NO.335/KOL/2013 SINHA CONSTRUCTION PVT. LTD. AY 2001-02 AGGRIEVED AGAINST LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO CONFIRMED THE PENALTY ONLY ON TH E BASIS THAT THE CIT(A) HAS RESTRICTED THE ADDITION AT RS. 1 LAC AND LATER ON T HE SAME WAS CONFIRMED BY ITAT. AGAINST CONFIRMATION OF PENALTY ON THIS ESTIMATED ADDITION OF RS.1 LAC, NOW ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 4. THIS ADDITION WAS CONFIRMED BY TRIBUNAL BEING AN ESTIMATED ADDITION. THE AO STARTED PENALTY PROCEEDINGS AND LEVIED PENALTY U/S. 271(1)(C) OF THE ACT ON ESTIMATED ADDITION OF RS. 1 LAC. 5. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE GONE THROUGH THE PENALTY ORDER AND NOTICED THAT THE AO HAS NO WHERE PROVED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME ONLY CHARGE WAS THAT THE ASSE SSEE COULD NOT FURNISH THE ADDRESS OF THE PARTIES OR PRODUCED THE PARTIES WITH WHOM THE A SSESSEE HAS MADE PURCHASE TRANSACTIONS. WE FIND THAT EVEN THE CIT(A) HAS RES TRICTED THE ADDITION JUST ON ESTIMATE BASIS AND ON DOUBTS. THE AO OR THE CIT(A) HAS NEVE R TRIED TO REQUISITE THE BOOKS OF ACCOUNT FROM SALES TAX AUTHORITIES WHEREBY ADMITTED POSITION IS THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT, WHICH WERE SEIZED BY S ALES TAX AUTHORITIES. THIS IS PURELY AN ESTIMATION OF INCOME AND MOREOVER, THE A O HAS NO WHERE BROUGHT OUT ON RECORD THAT THE ASSESSEE HAS CONCEALED THE PARTICUL ARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN SUCH A SITUATION, WE DEL ETE THE PENALTY AND REVERSE THE ORDERS OF THE LOWER AUTHORITIES. THE APPEAL OF ASSESSEE IS A LLOWED. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15.10.2 015. SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15TH OCTOBER, 2015 JD. SR. P.S 3 ITA NO.335/KOL/2013 SINHA CONSTRUCTION PVT. LTD. AY 2001-02 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. SINHA CONSTRUCTION PVT. LTD., 84A, LAKE VIEW ROAD, KOLKATA-700025 2 RESPONDENT DCIT, CIR-11, KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .