The ACIT, Circle-1, RAJKOT-GUJARAT V. M/s. Atul Buildcon Pvt. Ltd., RAJKOT-GUJARAT

ITA 404/RJT/2011

• Counselvise Citation: 40424914 RSA 2011
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-05-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: DV LALCHANDANI

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVAST AVA, AM ITA NOS. 404 & 405/RJT/2011. / ASSESSMENT YEARS:2000-01 & 2001-02. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, RAJKOT. ( */ APPELLANT) VS. M/S. ATUL BUILDCON PVT. LTD., RAAT RANI, 1, PANCHVATI SOCIETY, NR, BHAKTIDHAM TEMPLE, RAJKOT. PAN : AABCA8204C. +,*/ RESPONDENT - / REVENUE BY SHRI M. K. SINGH, D.R /- / ASSESSEE BY SHRI DV LALCHANDANI, ADVOCATE - / DATE OF HEARING 29-05-2012 - / DATE OF PRONOUNCEMENT 08-06-2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THESE TWO APPEALS BY THE REVENUE ARE AGAINST THE COMMON ORDER DATED 30-08-20 11 CANCELING THE PENALTY OF RS.3,27,133/- AND RS.1,50,910/- LEVIED BY AO U/ S.271(1)(C) OF THE I.T. ACT OF CIT (A)-II, RAJKOT FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02 RESPECTIVELY. BOTH THESE APPEALS WERE HEARD ON THE SAME DATE, ARG UED BY COMMON REPRESENTATIVE, THEREFORE, WE PROCEED TO DECIDE BOT H THESE APPEALS BY THIS COMMON ORDER. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SALE OF FLATS AND SHOP S. FOR BOTH THE ASSESSMENT YEARS, THE AO FRAMED ASSESSMENT U/S.143(3) OF THE I NCOME-TAX ACT WHEREIN ON COMPARISON OF COST OF CONSTRUCTION AS REPORTED BY T HE DVO AND AS DISCLOSED BY THE ASSESSEE, AO WORKED OUT THE DIFFERENCE OF RS.86 ,30,973/- FOR THE ASSESSMENT YEAR 2000-01 AND RS.3,70,137/- FOR THE A SSESSMENT YEAR 2001-02 ITA NOS. 404 & 405/RJT/2011 2 AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE. ON APPEAL, THE LD. CIT(A) DELETED THE ENTIRE ADDITION OF RS.86,30,973/ - FOR THE ASSESSMENT YEAR 2000-01 AND CONFIRMED THE ADDITION OF RS.3,70,134/- U/S.154 FOR THE ASSESSMENT YEAR 2001-02. ON FURTHER APPEAL BY BOTH SIDES, THE TRIBUNAL VIDE ORDER DATED 31- 03-2006 ADOPTED 5% OF COST OF CONSTRUCTION DISCLOSE D BY THE APPELLANT AS UNDERVALUATION OF THE COST OF CONSTRUCTION AND REST RICTED THE ADDITIONS TO RS.8,49,695/- (I.E. 5% OF RS.1,69,93,902 FOR A.Y. 2 000-01) AND RS.11,433/- (I.E.5% OF RS.2,28,677 FOR A.Y. 2001-02) BY RELYING ON ITS OWN DECISION IN THE CASE OF M/S. NALANDA HOUSING DEVELOPMENT LTD., RAJK OT. THE SAID DECISION HAS ALSO BEEN REFERRED IN THE CASE OF M/S. ROYAL ENTERP RISES IN ITA NO.281/RJT/2001 AND 286 & 287/RJT/2003. THE HONBLE ITAT ALSO UPHE LD THE DECISION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.3,70,134/- FOR ASSESSMENT YEAR 2001-02. 3. SUBSEQUENTLY, IN RESPECT OF BOTH THE ASSESSMENT YEARS, AO LEVIED THE PENALTY U/S.271(1)(C) OF RS.3,27,133/- AND RS.1,50, 910/- FOR THE ASSESSMENT YEAR 2000-01 AND 2001-02 RESPECTIVELY. ON APPEAL, IN TH E IMPUGNED ORDER DATED 30- 08-2011, THE LD. CIT(A)-II, RAJKOT CANCELLED THE PE NALTY FOR BOTH THE ASSESSMENT YEARS LEVIED BY AO U/S.271(1)(C) ON THE GROUND THAT HONBLE GUJARAT HIGH COURT HAS ADMITTED THE APPEAL OF THE ASSESSEE AGAINST THE ADDITION CONFIRMED BY THE TRIBUNAL. AGGRIEVED WITH THIS ORDER OF LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL FOR BOTH THE ASSESSMENT YEARS. 4. AT THE OUTSET, SHRI D. V. LALCHANDANI APPEARED O N BEHALF OF THE ASSESSEE POINTED OUT THAT THE ORDER OF LD. CIT(A) CANCELING THE PENALTY FOR BOTH THE ASSESSMENT YEARS BE UPHELD AS THE LD. CIT(A) DELETE D THE ENTIRE ADDITION FOR THE ASSESSMENT YEAR 2000-01 AND CONFIRMED THE ADDITION ONLY TO THE EXTENT OF RS.3,70,134/-. ON FURTHER APPEAL, TRIBUNAL HAS CON FIRMED THE ADDITION ONLY TO THE EXTENT OF 5% OF RS.1,69,93,902/- FOR THE ASSESSMENT YEAR 2000-01 AND RS.11,433/- I.E. 5% OF RS.2,28,677/- PLUS RS.3,70,1 34/- FOR THE ASSESSMENT YEAR 2001-02. THE COUNSEL OF THE ASSESSEE CONTENDED THA T IT IS SETTLED LAW THAT FOR ESTIMATION OF COST OF CONSTRUCTION, WITHOUT REJECTI NG THE BOOKS OF ACCOUNTS OF THE ITA NOS. 404 & 405/RJT/2011 3 ASSESSEE CANNOT BE LEVIED. HE SUBMITTED THAT COST OF CONSTRUCTION IS DULY RECORDED IN THE BOOKS OF ACCOUNTS AND ADDITION HAS BEEN MADE PURELY ON ESTIMATED BASIS. THEREFORE, ON THIS GROUND, THE VIE W TAKEN BY THE LD. CIT(A) CANCELING THE PENALTY LEVIED U/S.271(1)(C) FOR BOTH THE ASSESSMENT YEARS BE UPHELD. 5. ON THE OTHER HAND, SHRI M. K. SINGH, D.R. APPEAR ED FOR THE REVENUE POINTED OUT THAT SINCE THE PENALTY HAS BEEN CONFIRM ED ONLY IN RESPECT OF ADDITION CONFIRMED UP-TO THE TRIBUNAL. THEREFORE, PENALTY WA S RIGHTLY LEVIED AND THERE IS NO JUSTIFICATION WHATSOEVER FOR CANCELING THE SAME. 6. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT TR IBUNAL IN QUANTUM APPEAL FOR BOTH THE ASSESSMENT YEARS CONFIRMED THE ADDITION ONLY TO THE EXTENT OF 5%. THE ASSESSEE MAINTAINED THE REGULAR BOOKS OF ACCOUNTS A ND ADDITION HAS NOT BEEN MADE ON ACCOUNT OF NON-ENTRY THE PARTICULAR EXPENDI TURE IN THE BOOKS OF ACCOUNTS. IN THESE CIRCUMSTANCES, WE ARE OF THE V IEW THAT ADDITION TO THE EXTENT OF 5% OF COST OF CONSTRUCTION IS CONFIRMED PURELY O N ESTIMATED BASIS FOR PENALTY U/S.271(1)(C) IS NOT LEVIABLE. ON THIS REASON, WE DECLINE TO INTERFERE. 9. IN THE RESULT, BOTH THE APPEAL OF REVENUE ARE DI SMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 08-06-2012. /RAJKOT ITA NOS. 404 & 405/RJT/2011 4 - -- - +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-THE ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-1, RAJKOT. 2. +,* / RESPONDENTM/S. ATUL BUILDCON PVT. LTD., RAJKOT. 3. : / CONCERNED CIT-I, RAJKOT. 4. :- / CIT (A)-II, RAJKOT.. 5. 4 +, , / DR, ITAT, RAJKOT. 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.