Shri Rajesh Tiwari, V. ITO, Wd-51(3), Kolkata, Kolkata

ITA 347/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4163 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 22-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2014
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, KO LKATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM] ITA.347/KOL/2014 ASSESSMENT YEAR : 2009-10 SHRI RAJESH TIWARI -VERSUS- I.T.O., WARD 51(3) KOLKATA KOLKATA (PAN:AEAPT1894H) (APPELLANT ) (RESPONDENT) FOR THE APPELLANT : SHRI RAJEEVA KUMAR, ADVOCATE FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL. CI T(DR) DATE OF HEARING : 08.12.2016. DATE OF PRONOUNCEMENT : 09.12.2016. ORDER PER SHRI M.BALAGANESH, AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF T HE ORDER OF THE LEARNED CITA IN APPEAL NO.24/XXXII/12-13/51(3)/KOL DATED 12.11.2013 AGAINS T THE ORDER OF PENALTY LEVIED FOR THE ASST YEAR 2009-10 U/S 271(1)(C) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE A SSSESSEE IS ENGAGED IN THE BUSINESS OF GENERAL ORDER SUPPLIES AND MAINLY DERIVED INCOME FR OM JOB WORKS AND HAVE DISCLOSED INCOME FROM BUSINESS AS WELL INCOME FROM OTHER SOUR CES IN THE RETURN OF INCOME. THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAD DECLARED NET PROFIT OF 0.55% WHICH THE LD. AO CONSI DERED IT TO BE TOO LOW AND ESTIMATED THE NET PROFIT AT 2% OF THE TOTAL RECEIPT S AND MADE AN ADDITION OF RS.5,85,558/- THEREON. THE LD. AO FURTHER OBSERVED THAT THE ASSESEE HAD FURNISHED THE DETAILS OF PAYMENTS RECEIVED FROM THE PRINCIPAL M/S . BRIJSONS HOTELS PVT. LTD AND BASED ON THE CERTIFIED PAYMENTS BY THE PRINCIPAL TH E LD. AO OBSERVED THAT THE ASSESSEE HAD RECEIVED RS.6,76,08,802/- WHEREAS HE HAS ONLY D ISCLOSED RS.4,04,45,562/- IN HIS PROFIT AND LOSS ACCOUNT. ACCORDINGLY THE LD. AO APP LIED THE NET PROFIT AT 2% ON THE ITA NO.347/KOL/2014 SRI RAJESH TIWARI A.YR.2009-10 2 DIFFERENCE IN RECEIPTS OF RS.2,71,63,204 AND MADE A N ADDITION OF RS.5,43,265/- IN THE ASSESSMENT. THE ASSESSEE IN ORDER TO AVOID PROTRACT ED LITIGATION CHOSE NOT TO PREFER ANY APPEAL ON THIS QUANTUM ADDITION. THE LD. AO HAVING INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AT THE TIME OF COMPLETION OF A SSESSMENT LATER ON PROCEEDED TO LEVY PENALTY ON THE AFORESAID TWO ADDITIONS ON THE GROUND OF CONCEALMENT OF INCOME AND LEVIED PENALTY OF RS.3,97,946/- THEREON. THIS A CTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEA L BEFORE US. 3. THE LD. AR ARGUED THAT IN RESPECT OF THE FIRS T ADDITION THE LD. AO HAD ESTIMATED THE NET PROFIT AT 2% OF THE GROSS RECEIPTS WITHOUT REJE CTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ARGUED THAT THE PENALTY WAS LEVIED ON SUCH ADDITION WHICH WAS MADE ONLY ON ESTIMATE BASIS. HE ARGUED THAT IT IS WELL SETTLE D THAT THERE CANNOT BE ANY PENALTY ON ESTIMATED ADDITION WHICH IS DONE WITHOUT ANY BASIS. IN RESPECT OF THE SECOND ADDITION MADE IN THE SUM OF RS.5,43,265/- HE ARGUED THAT THE SAME WAS MADE BASED ON THE DETAILS VOLUNTARILY SUBMITTED BY THE ASSESSEE WITH REGARD TO THE TOTAL RECEIPTS FROM M/S. BRIJSONS HOTELS PVT. LTD.. HE PLEADED THAT THE MIS TAKE IN NOT ACCOUNTING THE SAID RECEIPTS WERE DUE TO THE ERROR COMMITTED BY THE ACC OUNTANT OF THE ASSESSEE. HE ARGUED THAT THE VERY FACT THAT THE SAID DETAILS WERE VOLUN TARILY SUBMITTED BY THE ASSESSEE BEFORE ANY DETECTION BY THE DEPARTMENT GOES TO PROV E THE BONA FIDE CONDUCT OF THE ASSESSEE ON WHICH NO PENALTY FOR CONCEALMENT COULD BE LEVIED. APART FROM THIS HE ALSO PLACED A COPY OF THE SHOW CAUSE NOTICE ISSUED U/S 2 74 R.W.S.271(1)(C) OF THE ACT WHEREIN HE ARGUED THAT THE LD. AO HAD NOT SPECIFIED THE SPECIFIC CHARGE (I.E. WHETHER THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME). HENCE HE ARGUED THAT THE SHOW CAUSE NOTICE ISSUED IS DEFECTIVE AND HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH O F THIS TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KO L/2010 DATED 06.11.2015 IN SUPPORT OF HIS ARGUMENT. IN RESPONSE TO THIS THE LD . DR HAD NOT ADVANCED ANY ARGUMENT ON THE PENALTY LEVIED IN RESPECT OF THE FIRST ADDIT ION AND RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IN RESPECT OF THE SECOND ADDITIO N HE ARGUED THAT NO PERSON WOULD MISS SUCH A SUBSTANTIAL AMOUNT OF RS.2.71 CRORES WH ICH WAS ADMITTEDLY RECEIVED BY THE ASSESSEE AND IT IS HIGHLY UNBELIEVABLE ON THE P ART OF THE ASSESSEE TO PUT THE ITA NO.347/KOL/2014 SRI RAJESH TIWARI A.YR.2009-10 3 COMPLETE BLAME ON THE ACCOUNTANT OF THE ASSESSEE IN THIS REGARD IN NOT RECORDING THE SAID RECEIPT. HENCE HE ARGUED THAT THE PENALTY IS E XIGIBLE IN THAT REGARD. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT PENALTY HAS BEEN LEVIED IN RES PECT OF THE FIRST ADDITION ON AN ESTIMATE BASIS BY INCREASING THE NET PROFIT FROM 0. 55% TO 2% OF THE TOTAL RECEIPTS WITHOUT REJECTING THE BOOKS OF ACCOUNTS OF THE ASSE SSEE. IT IS WELL SETTLED THAT THE PENALTY CANNOT BE LEVIED ON ESTIMATED ADDITION MADE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HENCE WE HAVE NO HESITATION IN DIRECTING THE LD. AO TO DELETE THE PENALTY THEREON. 4.1. IN RESPECT OF THE SECOND ADDITION WE FIND THAT THE ASSESSEE FROM A PERUSAL OF THE ASSESSMENT ORDER THAT THE LD. AO HAD CATEGORICALLY MENTIONED THAT THE ASSESSEE HAD FURNISHED THE DETAILS OF RECEIPTS FROM M/S. BRIJSON S HOTELS PVT. LTD, FROM WHICH THE LD. AO FOUND THAT THERE IS A DIFFERENCE IN THE TOTAL RE CEIPTS BY RS.2.71 CRORES WHICH HAD NOT BEEN ACCOUNTED BY THE ASSESSEE. WE FIND AND APP RECIATE THE BONA FIDE CONDUCT OF THE ASSESSEE IN THIS REGARD TO COME OUT CLEAN BEFOR E THE LD. AO WITHOUT UNDERSTANDING THE INTRICACIES THEREON AND BEFORE ANY DETECTION BY THE DEPARTMENT IN THAT REGARD. IN SUCH CASE THE BONA FIDE CONDUCT OF THE ASSESSEE CAN NOT BE DOUBTED WITH AND NO PENALTY WOULD BECOME EXIGIBLE ON THE SAME. HENCE WE DIRECT THE LD. AO TO DELETE THE PENALTY THEREON. WITH REGARD TO THE ALTERNATIVE ARGUMENT AD VANCED BY THE LD. DR THAT THE SHOW CAUSE NOTICE ISSUED BY THE LD. AO FOR INITIATING PE NALTY PROCEEDINGS IS DEFECTIVE, WE FIND THAT THE LD. AO HAD NOT STRUCK OUT THE IRRELEV ANT PORTION IN THE SHOW CAUSE NOTICE FOR PENALTY AND ACCORDINGLY IT CAN BE SAFELY CONCLU DED THAT HE HAD NOT SPECIFIED THE SPECIFIC CHARGE LEVELED AGAINST THE ASSESSEE I.E. W HETHER HE HAD CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. WE FIND THAT THE RELIANCE PLACED BY THE LD. AR ON THE DECISION OF TH E CO-ORDINATE BENCH OF THIS TRIBUNAL (SUPRA) CLEARLY SUPPORTS THE ARGUMENTS ADV ANCED BY THE ASSESSEE. HENCE IN ANY CASE WE HOLD THAT THE PENALTY IS NOT EXIGIBLE I N THE FACTS AND CIRCUMSTANCES OF THE CASE AND WE HEREBY CANCEL THE LEVY OF THE SAME. ITA NO.347/KOL/2014 SRI RAJESH TIWARI A.YR.2009-10 4 5. IN THE RESULT THE APPEAL OF THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE COURT ON 09.12.2016. SD/- SD/- [N.V.VASUDEVAN] [M.BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 09.12.2016. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. RAJESH TIWARI, PROP. OF M/S OF TIWARI & SONS, 59 /41/35, GHOSH PARA ROAD, HAZINAGAR, PIN-743135. 2 THE I.T.O., WARD-51(3), KOLKATA. 3. THE CIT(A)-XXXII, KOLKATA 4. THE C IT-XVII, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES