The Asstt. Commissioner of Income-tax, Amritsar. V. Sh Ravinder singh, Prop., Amritsar.

ITA 439/ASR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63544 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-10-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 01-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: K R JAIN
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO. 439(ASR)/2011 ASSESSMENT YEAR:1998-99 PAN :AMHPS5800M ASSTT. COMMR. OF INCOME TAX, VS. SH. RAVINDER SINGH CIRCLE-III, AMRITSAR. PROP. M/S. BUNTY ENTERPRISE S, S.W.ROAD, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. R.L.CHHANALIA, DR RESPONDENT BY:SH. K.R.JAIN, ADV. DATE OF HEARING:30/10/2012 DATE OF PRONOUNCEMENT:31/10/2012 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), AMRITSAR, DATED 18.05.2011 FOR THE ASSESSMENT YEAR 1998-99. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A), AMRITSAR WAS JUSTIFIED IN LAW AND ON THE FA CTS IN CANCELING THE PENALTY IMPOSED BY THE A.O. ON THE AS SESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE AND MATE RIAL BROUGHT ON RECORD. 2 2. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE INCOME IN THE PRESENT CASE WAS NOT VOLUNTARILY DISCLOSED B Y THE ASSESSEE AND THE FACTS OF THE CASES RELIED UPON ARE THUS, QU ITE DISTINGUISHABLE FROM THE FACTS OF THIS CASE. 2. THE BRIEF FACTS OF THE CASE ARE THAT INITIALLY T HE ASSESSEE FAILED TO FILE HIS RETURN OF INCOME U/S 139(1) AND HAS ULTIMATELY FILED HIS RETURN DECLARING INCOME OF RS.60,000/- ON 21.09.2005 AND THE SAID IN COME HAS BEEN CALCULATED BY CHARGING COMMISSION @ RS.50/- PER TRU CK FOR LOADING/DISPATCHING 750 TRUCKS DURING THE WHOLE PRE VIOUS YEAR. EXCEPT GRANTING OF RELIEF OF RS. 2 LACS OUT OF THE ASSESSE D INCOME OF RS.12,05,990/- HAS BEEN CONFIRMED BY THE ITAT, AMRITSAR VIDE ORDER DATED 25.7.2008 IN ITA NO.2479(ASR)/2003. ON RECEIPT OF INFORMATION FR OM THE DDI WING, AMRITSAR, THE AO AFTER MAKING INQUIRIES COMPUTED TH E TRADING RECEIPTS OF RS.45,09,850/- ON THE INFORMATION OF PAYMENT OF MAR KET FEE AMOUNTING TO RS.90,197 @ 2% AND FURTHER AFTER EXAMINING THE ASSE SSEES CURRENT ACCOUNT NO.3802 WITH J & K BANK, SHASTRI MARKET, AMRITSAR T O THE EFFECT THAT THE ASSESSEE MADE TRADING TRANSACTIONS TO THE TUNE OF R S.6,79,49,005/- AND BY APPLYING GP RATE OF 2% ON THE ADJUSTED BANK TRADING TRANSACTIONS WORKED OUT AT NET FIGURE OF RS.6,34,39,111 AND ARRIVED AT NET BUSINESS INCOME OF RS.9,05,987/- AND MAKING FURTHER ADDITION OF RS. 5 LACS TOWARDS ASSESSEES UNEXPLAINED OFFICE MAINTENANCE AND OTHER INCIDENTAL EXPENSES, COMPUTED THE 3 TOTAL INCOME AT RS.14,05,990/-. OUT OF THIS ASSESSE D INCOME, THE CIT(A) GRANTED RELIEF OF RS. 2 LACS OUT OF THE ESTIMATED A DDITION OF RS. 5 LACS AND THUS THE REMAINING RESULTANT INCOME OF RS.12,05,990 /- WAS TREATED AS ASSESSEES CONCEALED INCOME FOR WHICH PENALTY PROC EEDINGS U/S 271(1)(C) WAS INITIATED SEPARATELY. AFTER HEARING THE ASSESSE E AND AFTER REBUTTING HIS CONTENTIONS ON THE PLEA THAT THE ASSESSEE FAILED TO SUBSTANTIATE THAT HE EARNED ONLY COMMISSION INCOME @ RS.50 PER TRUCK ON 750 LOA DED TRUCKS, THE A.O. IMPOSED A MINIMUM PENALTY OF RS.3,35,000/- U/S 271 (1)(C). 3. ON APPEAL, THE LD. CIT(A), VIDE PARA 6 OF HIS OR DER CANCELLED THE PENALTY SINCE THE INCOME IS ESTIMATED BY THE AO AND THERE CANNOT BE ANY PENALTY ON ESTIMATION BASIS. THE LD. CIT(A) RELIED UPON THE DECISIONS OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BABU RAM AJIT PRASAD, 106 ITR 818, HONBLE PUNJAB & HARYANA HIGH COURT, I N THE CASE OF CIT VS. RAVAIL SINGH & CO. 254 ITR 191 (P&H), CIT VS. LAKHA NI INDIA LTD; 17 DTR 304 (P&H) AND CIT VS. HIMACHAL AGRO FOODS LTD. 9 DTR 46 (P&H). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEES COM MISSION INCOME AS WELL AS TRADING INCOME HAS BEEN DETERMINED ON ESTIMATION BA SIS BY APPLYING 2% NET PROFIT RATE. THE AO HAS ESTIMATED ANOTHER INC OME OF RS. 5 LACS TOWARDS 4 INVESTMENT IN PURCHASE OF WHEAT ON ESTIMATE BASIS W HICH WAS REDUCED TO RS. 3 LACS BY THE LD. CIT(A). THEREFORE, THE ARGUMENT M ADE BY THE LD. COUNSEL FOR THE ASSESSEE, MR. K.R. JAIN, IS FOUND TO BE CON VINCING THAT IT IS A CASE OF ESTIMATION. THE AO HAS NOT BROUGHT ON RECORD THAT T HE ASSESSEE HAS CONCEALED THE INCOME OR HAS FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. EXPLANATION 3 TO SECTION 271(1)(C) OF THE A CT, IS NOT APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. TH EREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS R IGHTLY CANCELLED THE PENALTY IN VIEW OF THE DECISIONS OF VARIOUS HIGH CO URTS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. THUS, ALL THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.439(ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST OCTOBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31ST OCTOBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. RAVINDER SINGH, ASR. 2. THE ACIT CIR.III, ASR. 3. THE CIT(A) 4. THE CIT. 5THE SR DR, ITAT, AMRITSAR.