Indukuri Srinivasa Murthy Raju, Rajahmundry V. THE ITO, WARD - 3, Rajahmundry

ITA 475/VIZ/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9673 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARAYANA RAO
• Keywords: Bonafide belief

Judgement Text

ITA NO.475/VIZAG/2014 INDUKURI SRINIVASA MURTHY RAJU, RAJAHMUNDRY 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.475/VIZAG/2014 ( / ASSESSMENT YEAR: 2007-08) INDUKURI SRINIVASA MURTHY RAJU, RAJAHMUNDRY VS. ITO, WARD - 3, RAJAHMUNDRY [PAN: AALPI4868B ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M. NARAYANA RAO, DR / DATE OF HEARING : 16.11.2016 / DATE OF PRONOUNCEMENT : 28.11.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST ORDER OF THE CIT(A), VISAKHAPATNAM DATED 27.5.2014 FOR THE ASSES SMENT YEAR 2007- 08. ITA NO.475/VIZAG/2014 INDUKURI SRINIVASA MURTHY RAJU, RAJAHMUNDRY 2 2. FACTS ARE IN BRIEF THAT ASSESSEE IS A TRANSPORT CONTRACTOR FILED HIS RETURN OF INCOME BY ADMITTING COMMISSION INCOME FRO M SUPPLY OF VEHICLES OF ` 2,66,770/-. THE GROSS RECEIPTS ADMITTED BY THE AS SESSEE DURING THE YEAR IS AT ` 1,36,30,774/-. HOWEVER, THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS. THE ASSESSING OF FICER NOTED THAT AS PER THE PROVISIONS OF SECTION 44AA OF THE INCOME TA X ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'), THE ASSESSEE IS REQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNTS AS ITS GROSS RECEIPTS EXC EEDED THE PRESCRIBED LIMIT OF ` 40 LAKHS. HENCE, THE A.O. INITIATED THE PENALTY P ROCEEDINGS U/S 271A OF THE ACT. IT WAS SUBMITTED BEFORE THE A.O. THAT HE IS ONLY RECEIVING THE COMMISSION FOR BROKING THE VEHICLES A ND THEREFORE REQUIREMENT OF THE MAINTENANCE OF REGULAR BOOKS OF ACCOUNTS OR AUDITED BOOKS OF ACCOUNTS DOES NOT ARISE. HOWEVER, THE A.O . HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND LEVIED THE PENA LTY U/S 271A OF THE ACT. 3. ON APPEAL, CIT(A) CONFIRMED THE ORDER OF THE A.O . 4. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THAT THOUGH THE ASSESSEE HAS RECEIVED A GROSS TOTAL RECEIPTS OF ` 1,36,30,774/-. HE HAS ONLY RECEIVED A COMMISSION OF 2.5% AMOUNTING TO ` 2,66,770/-. ITA NO.475/VIZAG/2014 INDUKURI SRINIVASA MURTHY RAJU, RAJAHMUNDRY 3 THE ASSESSEE IS OF THE OPINION THAT THE INCOME RECE IVED BY HIM IS BELOW THE STATUTORY REQUIREMENT U/S 44AA OF THE ACT, THER EFORE, NO BOOKS OF ACCOUNTS WERE MAINTAINED. 4. ON THE OTHER HAND, THE LD. D.R. HAS SUPPORTED TH E ORDER PASSED BY THE A.O. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE IS A TRANSPORT CONTRACTOR RECEIVING COMMIS SION OF ` 2,66,770/-. THE CASE OF THE A.O. IS THAT THE GROSS RECEIPTS OF THE ASSESSEE ARE OF ` 1,36,30,774/-, HE OUGHT TO HAVE MAINTAINED BOOKS OF ACCOUNTS, BUT HE FAILED TO MAINTAIN THE SAME, THEREFORE, IMPOSED PEN ALTY U/S 271A OF THE ACT. WE FIND THAT THOUGH THE TURNOVER IS ABOVE THE PRESCRIBED LIMIT AS PER SECTION 44AA OF THE ACT, BUT THE COMMISSION REC EIVED BY THE ASSESSEE IS ONLY ` 2,66,770/-. THE EXPLANATION OF THE ASSESSEE IS TH AT HE HAS RECEIVED THE AMOUNT WHICH IS BELOW THE PRESC RIBED LIMIT U/S 44AA OF THE ACT. HE IS UNDER BONAFIDE BELIEF THAT NO BO OKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED. 5. BY CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE, WE FIND THAT THE BELIEF OF THE ASSESSEE IS A BONAFIDE BELIE F AND ALSO A REASONABLE BELIEF AND THEREFORE NO PENALTY CAN BE LEVIED U/S 2 71A OF THE ACT. THUS, ITA NO.475/VIZAG/2014 INDUKURI SRINIVASA MURTHY RAJU, RAJAHMUNDRY 4 THE PENALTY LEVIED BY THE AUTHORITIES BELOW IS CANC ELLED AND APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH NOV16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 28.11.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT INDUKURI SRINIVASA MURTHY RAJU, S-2, SAI SREE NILAYAM, 86-1-3/6, J.N. ROAD, RAJAHMUNDRY 2. / THE RESPONDENT THE ITO, WARD-3, RAJAHMUNDRY 3. ) / THE CIT, RAJAHMUNDRY 4. ) ( ) / THE CIT(A), RAJAHMUNDRY 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM