Mr. Pratap Singh Bhandari, Dehradun V. ITO, Dehradun

ITA 5197/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3968 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 18-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-5197/DEL/2015 ( ASSESSMENT YEAR: 2010-11) PRATAP SINGH BHANDARI 17, BHATT SHOPPING COMPLEX HARIDWAR ROAD DEHRADUN AGLPB9798B VS ITO WARD 2(1) DEHRADUN ASSESSEE BY NONE REVENUE BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE O RDER DATED 06.07.2015 IN APPEAL NO. 340/CIT (A)/DDN/2013 -14 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)- DEHRADUN (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS GROSSLY ERRED IN NOT APPRECIATI NG THE FACT THAT THE ASSESSING OFFICER ITSELF MENTIONED IN ITS ASSESSMENT ORDER THAT I ESTIMATE THE RECEIPTS OF T HE ASSESSEE & APPLY A NET PROFIT RATE OF 8% OF TOTAL T URNOVER. DATE OF HEARING 18.09.2017 DATE OF PRONOUNCEMENT 09.10.2017 2 ITA NO. 5197/DEL/2015 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT (A) HAS GROSSLY ERRED IN NOT APPRECIATI NG THE FACT THAT THE ASSESSING OFFICER DID THE ASSESSMENT ON THE BASIS ON ITS ESTIMATE NOT ON SURRENDER MADE BY ASSE SSEE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD.CIT (A) HAS GROSSLY ERRED IN UPHOLDING THAT SURRENDER/VOLUNTARY DISCLOSURE DID NOT PREVENT LEVY OF PENALTY. THE ASSESSEE NEVER ASKED IN APPEAL BEFORE THE LD.CIT (A) THAT PENALTY SHOULD NOT BE LEVIED ON BAS IS OF SURRENDER OF INCOME. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, OR DELETE ANY GROUNDS AS AND WHEN ADVISED. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL DEALING IN THE BUSINESS OF TRADING OF FIRE DETECTION/PROTECTION/SUPPRESSION EQUIPMENTS AND ACC ESSORIES AND OTHER CONTRACTS OF CIVIL NATURE WITH THE GOVERNMENT TO DERIVE INCOME. FOR THE AY 2010-11 HE FILED HIS RETURN OF INCOME ON 15.10.2010 DECLARING A TOTAL INCOME OF RS. 9,20,515 /- BUT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CONFRON TED WITH CERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNT. BY LETTER DATED 21.12.2012 WHILE OFFERING AN EXPLANATION IN RESPECT OF THE BOOKS OF ACCOUNT THE ASSESSEE CAME FORWARD WITH A PROPOSAL T HAT TO AVOID DISPUTES AND LITIGATION IT WAS AGREEABLE FOR HIM TO GET THE INCOME ASSESSED AT 8% OF THE TOTAL RECEIPTS THE RATE WHICH IS APPLICABLE TO CIVIL WORKS. HE FURTHER STATED THAT THERE WAS A SA LE OF 87.50 LAKHS DURING THE YEAR AND THE PROFIT RATE WAS ALREADY ABO VE THE 3 ITA NO. 5197/DEL/2015 PREVAILING RATE ON RETAIL TRADING. AO ACCEPTED THE SAME, AND WHILE REJECTING THE BOOKS OF ACCOUNT IN VIEW OF THE DISCR EPANCIES AND PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE AT 8% OF THE TOTAL RECEIPTS AND REACHED THE INCOME AT RS. 18 LACS. AO INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT AND CONCLUDED THEM BY WAY OF ORDER DATED 31.03.2010 BY LEVYING A PENALTY OF RS. 2,75,000/-. APPEAL PREFERRED BY THE ASSESSEE ON THE GROUND THAT THE PENALTY CANNOT BE SUSTAINED WHEN THE ADDITION WAS MADE BY E STIMATION OF INCOME BY APPLICATION OF FLAT RATE, WAS DISMISSED B Y THE LD. CIT (A), HENCE, THIS APPEAL. 3. LD. AR REITERATED BEFORE US THE SAME STAND TAKEN BEFORE THE LD. CIT (A). IT IS THE ARGUMENT OF THE LD. DR THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED BECAUSE OF TH E DISCREPANCIES AND THE INCOME HAD TO BE ESTIMATED AT 8% I.E. APPLI CABLE TO THE CIVIL CONTRACTS, AS SUCH, THE PENALTY PROCEEDINGS A RE SUSTAINABLE. 4. WE HAVE CAREFULLY GONE THROUGH THE RECORD. IN T HIS MATTER ON IDENTIFYING THE CERTAIN DISCREPANCIES IN RESPECT OF THE BOOKS OF ACCOUNT, AO SOUGHT THE EXPLANATION OF THE ASSESSE A ND ESTIMATED THE INCOME AT 8%. HERE IN THIS MATTER, THERE IS NO ADJUDICATION IN 4 ITA NO. 5197/DEL/2015 THE BOOKS OF ACCOUNT IN THE LIGHT OF THE EXPLANATIO N OF THE ASSESSEE AND THE ADDITIONS ARE NOT BASED ON THE ENTRIES IN T HE BOOKS OF ACCOUNT SO AS TO REACH A CONCLUSION THAT THE ASSESS EE SUPPRESSED ANY TRANSACTION AMOUNTING TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. IN THE ABSENCE OF ANY S PECIFIC FINDING POINTING OUT THE AMOUNT THAT WAS ACTUALLY CONCEALED OR INACCURATE PARTICULARS FURNISHED, WITH REFERENCE TO THE BOOKS OF ACCOUNT OF THE ASSESSEE, MERE ESTIMATE OF INCOME OF THE ASSESSEE A T 8% DOES NOT AUTOMATICALLY EMPOWER THE ASSESSING OFFICER TO INVO KE THE PROVISIONS U/S 271 (1)(C) OF THE ACT. WITH THIS VI EW OF THE MATTER, ON FACTS, WE ARE CONVINCED THAT THERE IS NEITHER CO NCEALMENT OF INCOME NOR IS THERE FURNISHING OF INACCURATE PARTIC ULARS. IN THIS CASE, AS SUCH, WE FIND IT DIFFICULT TO SUSTAIN THE ORDERS OF THE AUTHORITIES BELOW, AND ACCORDINGLY WE QUASH THE SAM E. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 09.10.2017 *KAVITA ARORA 5 ITA NO. 5197/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI