Amar Kantak Coal Carriers Pvt. Ltd, New Delhi V. DCIT, New Delhi

ITA 4811/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5711 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 21-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Keywords: Document seized; Documents seized
• Section: 143(3); 145

Judgement Text

I.T.A. NO.4811 /DEL/ 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 4811/DEL/2009 ASSESSMENT YEAR : 2003-04 M/S AMAR KANTAK COAL CARRIERS DCIT, PVT. LTD., 111, MASJID MOTH VILLAGE, CIRCLE-1(1), NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AAACA-7036-P APPELLANT BY : SHRI TARUN KUMAR, C.A. RESPONDENT BY : SHRI A.K. MONGA, SR. DR. ORDER PER A.K. GARODIA, AM: THIS IS AN ASSESSEE'S APPEAL DIRECTED AGAINST THE O RDER OF LD CIT(A)-IV, NEW DELHI DATED 16.9.2009 FOR ASSESSMENT YEAR 2003- 04. 2. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER:- ACTION OF THE CIT(A) IN CONFIRMING THE PENALTY OF RS.7,38,000/- BY THE ASSESSING OFFICER U/S 271(1)( C ) OF THE INCOME TAX ACT, 1961 IS UNJUST, ILLEGAL, ARBITRARY AND AGAINST THE FACTS AND CIRCUM STANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IS A TRANSPORTER AND ENGAGED IN THE BUSINESS OF TRANSPORTATION OF COAL F ROM MINES. DURING THIS YEAR, THE ASSESSEE CARRIED OUT WORK AT WORK SITE AT KALIN GA OCP, P.O. DERA, DISTT. ANGUL, ORISSA. IT IS OBSERVED BY THE ASSESSING OFFI CER ON PAGE NO.2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS DECLARED TOT AL TRANSPORTATION CHARGES . I.T.A. NO.4811/DEL/09 2/5 RECEIVED AT RS.1192.79 LAKHS AS COMPARED TO RS.462. 51 LAKHS IN THE PRECEDING YEAR. IT IS ALSO OBSERVED BY THE ASSESSING OFFICER THAT THE GROSS INCOME DECLARED BY THE ASSESSEE ON ACCOUNT OF TRANSPORTATION CHARGE S HAS RISEN BY ALMOST 2.58 TIMES BUT LOADING CHARGES ARE DECLARED ONLY 42.25% AS COMPARED TO PREVIOUS YEAR. THE REASON FOR THIS HAS BEEN NOTED BY THE ASS ESSING OFFICER THAT THIS IS BECAUSE OF ADDITIONS MADE BY THE ASSESSEE OF TWO TI PPERS DURING THE YEAR. THEREAFTER, THE ASSESSING OFFICER SAYS THAT THE ASS ESSEE HAS DECLARED NET PROFIT OF RS.17.55 LAKHS ONLY WHICH IS AROUND 1.39% OF TOT AL TURNOVER DECLARED OF RS.1253.81 LAKHS AS AGAINST NET PROFIT DECLARED OF RS.15.00 LAKHS AGAINST TURNOVER OF RS.606.95 LAKHS IN THE PRECEDING YEAR A ND THE PERCENTAGE OF NET PROFIT IN THE PRECEDING YEAR COMES TO 2.47% ALTHOUG H IN THAT YEAR ALSO, NET PROFIT PERCENTAGE ASSESSED BY THE ASSESSING OFFICER AS PER ORDER PASSED U/S 143(3) OF THE ACT IS 2.77%. IN THE PRESENT YEAR, THE ASSESSI NG OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE @ 5% OF TURNOVER AND IN THIS MANNER, HE MADE ADDITION OF RS.45,16,308/-. BEING AGGRIEVED, THE ASSESEE CA RRIED THE MATTER IN APPEAL BEFORE LD CIT(A) WHO HAS RESTRICTED THE ADDITION TO THE EXTENT OF 3% NET PROFIT OF TOTAL TURNOVER AS AGAINST 5% NET PROFIT OF TOTAL TU RNOVER ASSESSED BY THE ASSESSING OFFICER. IT WAS POINTED OUT BY THE LD AR OF THE ASSESSEE BEFORE US THAT THE MATTER WAS CARRIED BEFORE THE TRIBUNAL AND THE TRIBUNAL ORDER IN QUANTUM APPEALS OF THE REVENUE AND THE ASSESSEE IS AVAILABL E ON PAGES 1-3 OF THE PAPER BOOK AS PER WHICH, THE TRIBUNAL HAS RESTRICTED THE NET PROFIT TO BE ADOPTED IN THE PRESENT YEAR TO THE EXTENT OF 2.,77% OF TOTAL TURNO VER. IN THE MEANTIME, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)( C ) OF THE ACT AND IMPOSED A PENALTY OF RS.7.38 LAKHS WHICH WAS IMPOSE D AFTER GIVING EFFECT TO THE ORDER OF LD CIT(A) BUT EFFECT OF TRIBUNAL ORDER IN QUANTUM APPEAL WAS NOT GIVEN BECAUSE THE TRIBUNAL ORDER IS DATED 31.3.2009 AND T HE PENALTY ORDER WAS PASSED ON 31.7.2008. THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE LD CIT(A) BUT WITHOUT SUCCESS AND NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT IS SUBMITTED BY THE LD AR OF THE ASSESSEE THA T INCOME IN THE PRESENT CASE IS FINALIZED ON ESTIMATE BASIS. THE ASSESSING OFFICER ESTIMATED THE INCOME AT 5% ON TOTAL TURNOVER, LD CIT(A) RESTRICTED THE S AME TO 3% AND THE TRIBUNAL HAS . I.T.A. NO.4811/DEL/09 3/5 RESTRICTED THE SAME TO 2,.77%. IT IS SUBMITTED THAT ON THIS ESTIMATED ADDITION, NO PENALTY SHOULD BE IMPOSED BECAUSE NO CASE HAS BEEN MADE OUT REGARDING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IT IS ALSO SUBMITTED THAT BOOKS OF ACCOUNTS AND VOUCHERS WERE PRODUCED BEFORE THE ASSESSING OFFICER. RELIANCE WAS PLACED ON THE JUDGM ENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. S. RAHMAT KHAN BIR BAL KHAN BADRUDDIN & PARTY AS REPORTED IN 240 ITR 778. IT IS ALSO SUBMITTED TH AT IN THAT CASE ALSO, ESTIMATED ADDITION WAS MADE AND PARTLY CONFIRMED BY THE TRIBU NAL AND UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNAL THAT THE PENALTY IS NOT JU STIFIED AND THIS DECISION OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE HON'BLE RAJASTHA N HIGH COURT AND SINCE THE FACTS IN THE PRESENT CASE ARE SIMILAR, THE PENALTY IMPOSED IN THE PRESENT CASE SHOULD ALSO BE DELETED. RELIANCE WAS ALSO PLACED ON ANOTHER JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT RENDERED IN THE CASE O F SHIV LAL TAK V. CIT AS REPORTED IN 251 ITR 373. 5. LD DR OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. RELIANCE WAS PLACED BY HIM ON THE FOLLOWING TWO TRI BUNAL DECISIONS:- A) BRIJ LAL GOYAL V. CIT 88 ITD 413 (DEL.). B) ITO V. RK BROS 87 ITD 649. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY BOTH SIDES. WE FIND THAT IN THE PRESENT CASE NO SPECIFIC DEFECT COULD BE POINTED OU T IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THE ADDITION WAS ULTIMATELY CONFIR MED BY THE TRIBUNAL TO THE EXTENT OF 2.77% OF TOTAL TURNOVER. THE RELEVANT PA RA OF THIS TRIBUNAL DECISION IN QUANTUM APPEAL IS PARA NO.5 OF I.T.A. NO.3279 AND 3 33/DEL/2007 DATED 31.3.2009. PARA NO.5 IS REPRODUCED BELOW FOR THE S AKE OF READY REFERENCE:- PARA NO.5. WE HAVE HEARD THE PARTIES AND CONSIDER ED THE RIVAL SUBMISSIONS. WHEN THE BOOKS RESULTS OF THE ASSESSEE ARE ACCEPTED AT 2.77% THERE SEEMS TO BE NO REASON FOR ADOPTING A HI GHER PERCENTAGE AT . I.T.A. NO.4811/DEL/09 4/5 5% BY THE ASSESSING OFFICER AND 3% BY THE CIT(A). T HE RATE OF 2.77% HAS MADE AFTER MEETING THE DISALLOWANCES AS MENTIONED B Y THE ASSESSING OFFICER. WE, THEREFORE, TALKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE, DIRECT THE ASSESSING OFF ICER TO ADOPT THE RATE OF 2.77% IN THE YEAR UNDER CONSIDERATION AND WORKED OU T THE ADDITION ON THAT BASIS. THE CONTENTION OF THE ASSESSEE THAT IT WAS N OT A FIT CASE FOR APPLYING THE PROVISIONS OF SECTION 145 IS NOT WARRANTED AS T HE ASSESSEE HAD NOT PRODUCED THE DETAILS OF EXPENDITURE AND THE VOUCHER S REQUIRED BY THE ASSESSING OFFICER DESPITE OPPORTUNITIES ALLOWED TO THE ASSESSEE. WE, ORDER ACCORDINGLY. 7. FROM THE ABOVE FINDING OF THE TRIBUNAL IN QUANTU M APPEAL OF THE ASSESSEE AND REVENUE, WE FIND THAT THE TRIBUNAL HAS DECIDED THIS ISSUE ON THE BASIS THAT THE ASSESSEE COULD NOT PRODUCE THE DETAILS OF EXPEN DITURE AND THE VOUCHERS REQUIRED BY THE ASSESSING OFFICER DESPITE OPPORTUNI TIES. IN THIS REGARD, IT WAS SUBMITTED BEFORE US THAT SINCE THE ASSESSEE IS WORK ING AT REMOTE PLACE OF ORISSA, FURNISHING ENTIRE VOUCHERS AND EVIDENCES BEFORE THE ASSESSING OFFICER WAS NOT POSSIBLE AT THE RELEVANT POINT OF TIME. UNDER THESE FACTS, WE ARE IN AGREEMENTWITH LD AR OF THE ASSESSEE THAT ALTHOUGH ADDITION WAS MA DE AND PARTLY CONFIRMED BY THE TRIBUNAL BUT THERE IS NO CONCLUSIVE EVIDENCE RE GARDING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE DULY AUDITED. THE TURNOVER OF THE ASSESSEE COMPANY HAS INCREASED IN THE PRESENT YEAR BY 2.58 TIMES. WHEN THE TURNOVER INCREASES, IT IS NOT NECESSARY THAT THE PERCENTAGE OF NET PROFIT WIL L REMAIN SAME IN ALL THE CASES IN ALL YEARS BECAUSE GENERALLY, THE INCREASED TURNO VER COMES AT LESSOR RATE. ALTHOUGH IT IS NOT NECESSARILY IN ALL CASES BUT IN MOST OF THE CASES FOR THE PURPOSE OF INCREASE IN TURNOVER, GENERALLY THE RATES ARE LO WERED AND THE RATE OF NET PROFIT GOES DOWN. IN VIEW OF THIS FACT, WE FEEL THAT IMPO SITION OF PENALTY IS NOT JUSTIFIED ON ACCOUNT OF SUCH ESTIMATED ADDITION. THE JUDGMENT S OF HON'BLE RAJASTHAN HIGH COURT CITED BY THE ASSESSEE ALSO SUPPORT THE CASE O F THE ASSESSEE. RESPECTFULLY FOLLOWING THESE JUDGMENTS AND IN VIEW OF THE FACTS OF THE PRESENT CASE, WE ARE OF . I.T.A. NO.4811/DEL/09 5/5 THE CONSIDERED OPINION THAT PENALTY UNDER THESE FAC TS IS NOT JUSTIFIED AND WE THEREFORE DELETE THE SAME. 8. REGARDING TWO TRIBUNAL DECISIONS CITED BY THE LD DR OF THE REVENUE, WE FIND THAT THE FACTS OF THESE CASES ARE DIFFERENT AN D HENCE THESE JUDGMENTS HAVE NO RELEVANCE IN THE PRESENT CASE. THE FIRST TRIBUNA L DECISION IS IN THE CASE OF BRIJ LAL GOYAL (SUPRA). IN THIS CASE, THE FACTS ARE THAT THERE WAS SEARCH AND IN SEIZED DOCUMENTS EXTRA SALES WERE FOUND. THE FACTS OF THE PRESENT CASE ARE DIFFERENT AND HENCE THIS TRIBUNAL DECISION HAS NO RELEVANCE I N THE PRESENT CASE. SIMILARLY IN THE CASE OF RK BROS (SUPRA) ALSO, FACTS ARE DIFF ERENT. IN THAT CASE, ADDITIONAL RECEIPTS WERE UNEARTHED BY THE ASSESSING OFFICER ON THE BASIS OF BANK STATEMENT OF THE ASSESSEE SHOWING EXCESS RECEIPTS AND ADDITIO N IN INCOME WAS MADE ON THAT BASIS. SINCE FACTS ARE DIFFERENT, THIS TRIBUN AL DECISION ALSO HAS NO RELEVANCE IN THE PRESENT CASE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH MAR CH, 2010. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 12.3.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. (ITAT, NEW DELHI).