Kharait Lal Verma, New Delhi V. ITO, Rohtak

ITA 4451/DEL/2011

• Counselvise Citation: 445120114 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 05-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE
• Assessee Lawyers: RAJEEV CHAWLA
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH D DD D : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SMT.DIVA SINGH SMT.DIVA SINGH SMT.DIVA SINGH SMT.DIVA SINGH, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.4451/DEL/2011 4451/DEL/2011 4451/DEL/2011 4451/DEL/2011 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007- -- -08 0808 08 SHRI KHARAIT LAL VERMA, SHRI KHARAIT LAL VERMA, SHRI KHARAIT LAL VERMA, SHRI KHARAIT LAL VERMA, A AA A- -- -5, PANCHSHEEL GARDEN, 5, PANCHSHEEL GARDEN, 5, PANCHSHEEL GARDEN, 5, PANCHSHEEL GARDEN, NAVEEN SHAHDA NAVEEN SHAHDA NAVEEN SHAHDA NAVEEN SHAHDARA, RA,RA, RA, DELHI DELHI DELHI DELHI 110 032. 110 032. 110 032. 110 032. PAN : PAN : PAN : PAN : AAHPV4610L. AAHPV4610L. AAHPV4610L. AAHPV4610L. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1, 1,1, 1, ROHTAK. ROHTAK. ROHTAK. ROHTAK. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV CHAWLA, ADVOCATE. RESPONDENT BY : MS.SUSAN GEORGE, DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A), ROHTAK DATED 21 ST JULY, 2011 FOR THE AY 2007-08. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN THIS A PPEAL IS AGAINST THE LEVY OF PENALTY OF ` 25,000/- LEVIED UNDER SECTION 271A OF THE INCOME-TAX ACT, 1961. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS OFFE RED INCOME UNDER SECTION 44AD, THEREFORE, IT WAS NOT NECESSARY FOR T HE ASSESSEE TO MAINTAIN THE BOOKS OF ACCOUNT. HE ALSO STATED THAT THE ASSESSEE IS CARRYING ON A SMALL BUSINESS OF SELLING THE SCHOOL BOOKS AND HIS TURNOVER WAS ONLY ` 11,50,800/-. THEREFORE, THE ASSESSEE REMAINED UNDER A BONA FIDE BELIEF THAT HE IS NOT REQUIRED TO MAINTAIN THE BOO KS ITA-4451/DEL/2011 2 OF ACCOUNT. HE, THEREFORE, REQUESTED FOR THE CANCE LLATION OF THE PENALTY LEVIED UNDER SECTION 271A. 4. THE LEARNED DR, ON THE OTHER HAND, STATED THAT D URING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT DISCLOSED THE TURNOVER CORRECTLY AND THERE WAS SUPPRESSION OF THE TURNOVER OF ` 12,60,000/-. THUS, THE ASSESSEES ACTUAL TURNOVER WAS MORE THAN ` 23 LAKHS AS AGAINST ` 11,50,800/- DISCLOSED BY HIM. THE SUPPRESSION OF THE TURNOVER IS ACCEPTED BY THE ITAT IN THE QUANTUM APPEAL. HE, THEREFORE, SUBMITTED THAT WHEN THE ASS ESSEE HAS NOT EVEN DISCLOSED THE TURNOVER CORRECTLY, HE CANNOT TAKE TH E SHELTER OF SECTION 44AD FOR NOT MAINTAINING THE BOOKS OF ACCOUNT. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. AS PER SECTION 44AA(2) OF THE ACT, IF THE TURNOVER OF THE ASSESSEE FROM THE B USINESS OR PROFESSION EXCEEDS ` 10 LAKHS, THE ASSESSEE IS REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT. EVEN AS PER ASSESSEES ADMISSION, HIS TUR NOVER IS MORE THAN ` 10 LAKHS. NOW, THE ASSESSEE CLAIMS THAT HE OFFERED THE INCOME UNDER SECTION 44AD, THEREFORE, HE IS EXEMPTED FROM MAINTA INING THE BOOKS OF ACCOUNT AS PROVIDED UNDER SECTION 44AA. HOWEVER, I N OUR OPINION, IF AN ASSESSEE CLAIMS THE BENEFIT OF SPECIAL PROVISION FOR COMPUTATION OF INCOME FROM BUSINESS PROVIDED UNDER SECTION 44AD, T HE SINE QUA NON IS THAT THE ASSESSEE SHOULD CORRECTLY DISCLOSE HIS TURNOVER BECAUSE THE INCOME IS TO BE ESTIMATED ON THE BASIS OF THE TURNO VER. AN ASSESSEE WHO DOES NOT DISCLOSE THE TURNOVER CORRECTLY CANNOT CLAIM THE BENEFIT OF NOT MAINTAINING THE BOOKS OF ACCOUNT. IN THIS C ASE, IN THE QUANTUM PROCEEDINGS, THE ITAT HAS UPHELD THAT THE ESTIMATE OF TURNOVER BY THE ASSESSING OFFICER WAS CORRECT. THE RELEVANT FINDIN G OF THE ITAT VIDE ORDER DATED 20 TH SEPTEMBER, 2011 PASSED IN ITA NO.6012/DEL/2010 READS AS UNDER:- ITA-4451/DEL/2011 3 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE AND W E HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE NATURE OF TRADE AND PROFIT MARG INS IN THIS TRADE. THE ESTIMATE OF TURNOVER IS BASED ON T HE CASE TRANSACTIONS RECORDED IN THE OD ACCOUNT WITH STANDA RD CHARTERED BANK. HENCE, WE FIND NO MERITS IN ASSESS EES PLEA. WE UPHOLD THE ESTIMATE OF TURNOVER. NOW, ON THE ISSUE OF ESTIMATING PROFIT ON THIS TURNOVER, WE ARE OF THE VIEW THAT CIT(A)S ESTIMATE IS LITTLE BIT ON HIGHER SIDE. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE DIRECT TO ESTIMATE THE PROFIT ON THE ADDITIONAL TURNOVER WHICH HAS BEEN WORKED AT RS.12,60,000/- @ 8%. WE WOULD ALSO LIKE TO MENTION THAT FOR ESTIMATING THE PROFIT @ 8%, THE LEARNED AR HAS ALSO CONSENTED. WE ORDER ACCORDINGLY. 6. THE ABOVE FINDING OF THE ITAT CLEARLY PROVES THA T THE ASSESSEE DID NOT DISCLOSE THE TURNOVER CORRECTLY. THEREFORE , IN OUR OPINION, THE LEVY OF PENALTY FOR NON-MAINTENANCE OF BOOKS OF ACC OUNT WAS CORRECT. WE UPHOLD THE SAME AND DISMISS THE ASSESSEES APPEA L. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 23 RD NOVEMBER, 2012. SD/- SD/- ( (( (DIVA SINGH DIVA SINGH DIVA SINGH DIVA SINGH) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 23.11.2012 VK. ITA-4451/DEL/2011 4 COPY FORWARDED TO: - 1. APPELLANT : SHRI KHARAIT LAL VERMA, SHRI KHARAIT LAL VERMA, SHRI KHARAIT LAL VERMA, SHRI KHARAIT LAL VERMA, A AA A- -- -5, PANCHSHEEL GARDEN, 5, PANCHSHEEL GARDEN, 5, PANCHSHEEL GARDEN, 5, PANCHSHEEL GARDEN, NAVEEN SHAHDARA, NAVEEN SHAHDARA, NAVEEN SHAHDARA, NAVEEN SHAHDARA, DELHI DELHI DELHI DELHI 110 032. 110 032. 110 032. 110 032. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1, R 1, R 1, R 1, ROHTAK. OHTAK. OHTAK. OHTAK. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR