M/s. Janta Rajani Transport, JAMNAGAR V. The Income Tax Officer, Ward-2(1), JAMNAGAR

ITA 59/RJT/2013

• Counselvise Citation: 5924914 RSA 2013
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 18-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM ITA NO. 59/RJT/2013 ASSESSMENT YEAR: 2005-06 M/S JANTA RAJANI TRANSPORT K V ROAD, NR. OLD PETROL PUMP JAMNAGAR PAN : AACFJ 3398 L V. ITO, WARD-2(1), JAMNAGAR DATE OF HEARING : 14.08.2013 DATE OF PRONOUNCEMENT : 30.09.2013 ASSESSEE BY : SHRI CHETAN AGARWAL, CA REVENUE BY : SHRI AVINASH KUMAR, DR ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A), JAMNAGAR ON 23.01.2013, ON THE FOLLOWING GROUNDS:- 1. HON. CIT (A) HAD ERRED IN LAW AS WELL AS ON FAC T IN CONFIRMING PENALTY U/S 271(1)(C). 2. THE ASSESSEE IS A FIRM. IT IS ENGAGED IN TRANSPO RT BUSINESS. IT FILED ITS RETURN OF INCOME ON 30.09.2008 RETURNING TOTAL INCOME AT R S. NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER PERUS ED FORM NO.26AS AND COMPARED THE RECEIPTS SHOWN IN FORM NO.26AS WITH RE CEIPTS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. HE NOTICED THAT THE ASSESSEE HAD NOT SHOWN RECEIPTS FROM SIX PARTIES AGGREGATING TO RS.7,43,99 0/- IN ITS BOOKS OF ACCOUNTS. THEREFORE, HE ESTIMATED 10% OF THE AFORESAID RECEIP TS AS INCOME OF THE ASSESSEE AND CONSEQUENTLY BROUGHT THE SAME TO THE CHARGE OF INCOME-TAX, WITH THE FOLLOWING OBSERVATIONS:- THE ASSESSEES REPLY WAS CONSIDERED CAREFULLY. THE ENTRIES IN FORM NO.26AS CLEARLY SHOWS THAT THE ASSESSEE HAS RECEIVE D COMMISSION INCOME IN RESPECT OF THESE FREIGHT INCOME AMOUNTING TO RS. 7,43,990/- OVER AND ABOVE THE COMMISSION INCOME SHOWN BY HIM IS HIS BOO KS OF ACCOUNTS. FURTHER THE RELEVANT COMMISSION INCOME HAS NOT BEEN RECEIVED IN THE NORMAL BANKING CHANNEL. THE ASSESSEE CANNOT EXPLAIN PROPERLY AS TO WHY THESE AMOUNTS APPEARING IN FORM NO.26AS HAS NOT BEE N ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. ACCORDINGLY I HEREBY MAKE AN ADDITION OF 2 59-RJT-2013- JANTA RAJANI TRANPORT RS.74,399/- (WHICH IS 10% OF THE FREIGHT INCOME NOT RECORDED IN THE BOOKS OF ACCOUNTS) IN RESPECT OF COMMISSION INCOME ARISIN G OUT OF THESE TRANSACTION. PENALTY PROCEEDINGS U/S.271(1)(C) OF T HE ACT ARE ALSO INITIATED FOR CONCEALING PARTICULARS OF INCOME. CREDIT FOR CO RRESPONDING TDS OF RS.15,515 IS GIVEN IN RESPECT OF THESE RECEIPTS. 3. PROCEEDINGS FOR LEVY OF PENALTY U/S 271(1)(C) WE RE ALSO INITIATED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS EVI DENT FROM PARAGRAPH 3 OF THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER ON 07 .06.2011, THE ASSESSEE DID NOT COMPLY WITH THE SHOW-CAUSE NOTICES ISSUED BY TH E ASSESSING OFFICER U/S 271(1)(C) READ WITH SECTION 274 OF THE INCOME-TAX A CT. THE ASSESSING OFFICER, THEREFORE, PRESUMED THAT THE ASSESSEE HAD NOTHING T O SAY AGAINST HIS PROPOSAL TO LEVY PENALTY U/S 271(1)(C). RELYING UPON THE JUDGME NTS IN K.P MADHUSUDAN V. CIT, 251 ITR 99 (SC) AND UNION OF INDIA V. DHARMENDRA TE XTILES PROCESSORS, (2008) 306 ITR 277 (SC), THE ASSESSING OFFICER LEVIED PENA LTY AMOUNTING TO RS.22,990/-, WHICH IS THE MINIMUM LEVIABLE U/S 271(1)(C) OF THE INCOME-TAX ACT. 4. ON APPEAL, THE LD CIT(A), BY A WELL REASONED ORD ER, HAS CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER, WITH THE F OLLOWING OBSERVATIONS:- 10. I HAVE CONSIDERED THE EXPLANATIONS, ARGUMENTS, AND JUDICIAL DECISIONS SUBMITTED BY THE APPELLANT, BUT, NEITHER THE EXPLANATION IS SUBSTANTIATED WITH ANY EVIDENCE, NOR THE JUDICIAL D ECISIONS HAVE ANY DIRECT BEARING WITH THE FACTS OF THE APPELLANTS CASE. THE ADDITIONS INCOME OF RS.74,399/- DETERMINED BY THE AO IS AN IMPORTANT FA CT WHICH IS MATERIAL FOR COMPUTATION OF THE TOTAL INCOME OF THE APPELLANT FO R THE YEAR AND THE SAME WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED BY IT. THE PARTICULARS PERTAINING TO SUCH INCOME HAVE NOT BEEN INCORPORATE D IN THE RETURN OR IN THE PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE BEFOR E THE ASSESSING OFFICER. THE EXPLANATIONS OF THE ASSESSEE ARE FAR FROM SATIS FACTORY AND ARE NOT CAPABLE OF SUBSTANTIATING THEMSELVES WITH ANY SUPPO RTING EVIDENCE, HENCE HAS BEEN RIGHTLY REJECTED BY THE AO. AS IT IS A CLE AR CASE OF FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF PARTICULA RS OF INCOME FOR WHICH, THE EXPLANATION OFFERED BY THE APPELLANT REMAINED U NSUBSTANTIATED, I 3 59-RJT-2013- JANTA RAJANI TRANPORT CONSIDER THE ACTION OF LEVYING PENALTY UNDER SECTIO N 271(1)(C) BY THE AO TO BE IN ORDER, HENCE, RELYING ON THE DECISION OF THE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277 AND CIT VS. ATUL MOHAN BINDAL (SC) 317 ITR 1 DISCUS SED (SUPRA), I CONFIRM THE ORDER OF THE AO. 5. AGGRIEVED BY THE ORDER PASSED BY LD CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL, THE LD AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS. HIS PRINCIP AL SUBMISSIONS ARE THREE-FOLD: (I) THE ASSESSEE IS A MERE TRANSPORT COMMISSION AGENT A ND THEREFORE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ESTIMATING I NCOME AT 10% OF THE FREIGHT RECEIPTS NOT DISCLOSED BY THE ASSESSEE; (II) APPLICATION OF NET PROFIT @ 10% ON UNDISCLOSED RECEIPTS WAS BASED ON MERE ESTIMATION W ITHOUT ANY EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE HAD RECEIVED THAT INCOME; AND (III) ADDITION ON ACCOUNT OF ESTIMATION OF COMMISSION INCOME DOES NOT AMOUNT TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S 271(1)(C). IN SUPPORT OF HIS SUBMISSIONS, HE HAS RELIED UPON SEVERAL JUDGMENTS, NAMELY; A) CIT V. BHARAT MINERALS SALES CORPN., 253 ITR 419 (CAL) B) DR. RAVI PAUL V. ASSTT. CIT, (2002) 74 TTJ (ASR- TRIB) 146 C) NATIONAL TEXTILES V. CIT (2001) 249 ITR 125 [GUJ ] D) CIT V. METAL PRODUCTS OF INDIA (1984) 150 ITR 71 4 (P&H) E) D. M. MANASVI V. CIT (1972) 86 ITR 557 (SC) F) DY. CIT V. KALPAKA BAZAR (1993) 46 ITD 221 (COCH -TRIB) G) ITO V. SHRI BHAGAT SINGH, 172 TAXATION 109 (DEL- TRIB) H) RAM CHAND RAM KISHAN CHAWLA V. ITO (1992) 198 IT R 176 (DEL-TRIB) TM I) ITO V. MADAN LAL (2003) 78 TTJ (JOD-TRIB) 573 J) CIT V. M. M. RICE MILLS, 253 ITR 17 (P&H) K) BOMBAY HARDWARE SYNDICATE V. CIT (1978) 114 ITR 586 (MAD) L) CIT V. AARKAY SAREE MUSEUM (1991) 187 ITR 147 (B OM) M) CIT V. RAVAIL SINGH & CO. (2002) 254 ITR 191 (P& H) N) HARIGOPAL SINGH V. CIT (2002) 258 ITR 85 (P&H) O) CIT VS. DHILLON RICE MILLS (2002) 256 ITR 447 (P &H) 4 59-RJT-2013- JANTA RAJANI TRANPORT P) CIT V. ARJUN PRASAD AJIT KUMAR (2008) 1 DTR (ALL ) 272. Q) CIT V SANGRUR VANASPATI MILLS LTD. (2008) 21 (I) ITCL 341 (P&H-HC) 6. IN REPLY, THE LD DR SUPPORTED THE ORDER PASSED B Y THE LD CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. WE HAVE ALSO PERUSED THE ORDERS OF ASSESSMENT AND P ENALTY PASSED BY THE ASSESSING OFFICER AS ALSO THE APPELLATE ORDER PASSE D BY THE LD CIT(A). THE ASSESSEE HAS CITED A LARGE NUMBER OF CASES IN SUPPO RT OF HIS APPEAL. THE ISSUE AS TO WHETHER THE ASSESSEE HAS CONCEALED OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME IS ESSENTIALLY A QUESTION OF FACT. THE FACTS OF THE CASE ARE LOUD AND CLEAR. IT IS ONLY AFTER COMPARISON OF RECEIPTS SHOWN IN FORM NO.26AS WITH THE RECEIPTS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS THAT THE ASSESSING OFFICER COULD DETECT THAT THE ASSESSEE HAD CONCEALED RECEIPTS AGG REGATING TO RS.7,43,990/- BY NOT INCORPORATING THEM IN ITS BOOKS OF ACCOUNT. IT IS A CLEAR CUT CASE WHERE THE ASSESSEE HAS NOT ONLY CONCEALED THE PARTICULARS OF ITS INCOME BUT ALSO FURNISHED INACCURATE PARTICULARS OF ITS INCOME WHILE FILING R ETURN OF INCOME. THE CASE OF THE ASSESSEE SQUARELY FALLS WITHIN THE AMBIT OF SECTION 271(C) READ WITH EXPLANATION (1) THERETO. THE LD CIT(A) HAS PASSED A WELL REASON ED ORDER. WE SEE NO REASON TO INTERFERE WITH THE SAME. HIS ORDER IS CONFIRMED. TH E APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 30.09.2013 SD/- SD/- (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 30.09.2013 BT COPY OF ORDER FORWARDED TO:- 1. APPELLANTM/S JANTA RAJANI TRANSPORT, K V ROAD, NR. OLD PETROL PUMP, JAMNAGAR 2. RESPONDENT- ITO, WARD-2(1), JAMNAGAR 3. CONCERNED CIT-, JAMNAGAR 4. CIT (A), JAMNAGAR 5. DR, ITAT, RAJKOT 6. GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT