Smt. Parul Chaudhary, Meerut V. ITO, Meerut

ITA 6124/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6388 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 ITA NO. 6124/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .NO. 6124/DEL/2015 (ASSESSMENT YEAR-2010-11) APPELLANT BY SH. ROHIT AGGARWAL, CA RESPONDENT BY SH. RAJESH KUMAR, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 18/09/2015 PASSED BY CIT(A)- MEERUT FOR ASSESSMENT YEAR 2010-2 2. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. THAT THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE BY CONFIRMING THE PENALTY OF RS.2,80,287/- AS IMPOSED BY THE LD. A.O ALLEGEDLY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME SO AS TO CONCEAL THE PARTICULARS OF INCOME AND THE SUBMISSIONS OF TH E APPELLANT HAVE NOT BEEN CONSIDERED IN RIGHT PERSPECTIVE THEREOF. 2. THAT THE OBSERVATION OF THE ID.CIT(A) THAT THE APPELLANT HAS DELIBERATELY CONCEALED THE PARTICULARS OF INCOME SO AS TO MISLEA D THE A.O. AND EVADE TAX IS UNJUST AND UNLAWFUL AND IN ANY CASE THE TAX SOUGHT TO BE EVADED WAS ONLY RS. 1,66,918/- (I.E. TOTAL TAX OF RS.2,80, 287.00 (LESS) -TDS NOT CLAIMED FOR RS.1,13,369.00) AND THEREFORE THE PENAL TY @ 100% OF TAX PARUL CHAUDHARY A-9, RADHA GARDEN MAWANA RAOD, MEERUT AHDPC9869P (APPELLANT) VS ITO WARD 2(1) MEERUT (RESPONDENT) DATE OF HEARING 29.03.2017 DATE OF PRONOUNCEMENT 30.03.2017 2 ITA NO. 6124/DEL/2015 SOUGHT TO BE EVADED OUGHT TO HAVE BEEN RESTRICTED A T RS.1,66,918/- ONLY. 3. THAT WITHOUT PREJUDICE TO ABOVE GROUNDS AND ON T HE FACTS OF THE CASE, THE PENALTY UNDER REFERENCE OUGHT TO HAVE BEEN REDU CED TO RS.1,06,430/- AFTER ALLOWING THE BENEFIT OF UNCLAIM ED TDS AND THE ESTIMATED ADDITION WITH REFERENCE TO THE DECLARED R ECEIPTS, WHICH WAS NOT LIABLE TO CONCEALMENT PENALTY BEING BASED PUREL Y ON ESTIMATION. 4. THAT WITHOUT PREJUDICE TO ABOVE, THE ORDER UNDER APPEAL CONFIRMING THE IMPUGNED PENALTY IS TOTALLY UNLAWFUL AND UNJUST AND DESERVES TO BE SET ASIDE OR MODIFIED. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ADVERTISING UNDER THE NAME & STYLE OF M/S -SHIKA ADVERTISING AGENCY. THE ASSESS EE FILED HER RETURN OF INCOME ON 15.10.2010 DECLARING TOTAL INCOME OF RS.6 ,61,410/-, WHICH INCLUDED AN INCOME OF RS.4,55,360/- FROM ADVERTISING BUSINES S ON DECLARED RECEIPTS OF RS.65,10,984/-. THE ASSESSEE HAS MAINTAINED HER BO OKS OF ACCOUNT ON CASH SYSTEM AND DECLARED HER GROSS RECEIPTS OF RS.65,10, 984/- IN HER RETURN OF INCOME. ON VERIFICATION OF FORM 26AS, THE A.O. FOUN D THE GROSS RECEIPTS OF RS. 1,36,24,460/- AS AGAINST THE DECLARED GROSS RECEIPT S AS ABOVE AND THE AMOUNT OF DIFFERENCE OF RS.71,13,476/- WAS TREATED AS UNDI SCLOSED RECEIPTS. THE ASSESSEE EXPLAINED DURING ASSESSMENT PROCEEDINGS TH AT SHE HAD MAINTAINED BOOKS OF ACCOUNT ON CASH SYSTEM AND THE AMOUNT OF I NCOME, WHICH WAS ACTUALLY RECEIVED BY THE ASSESSEE, WAS ACCOUNTED FO R AND THE EXPENSES INCURRED BY THE APPELLANT WITH REFERENCE TO THE SAID RECEIPT S ONLY WERE ACCOUNTED FOR. ALL EXPENSES RELATING TO THE WORK, PAYMENT OF WHICH WAS NOT RECEIVED, WERE NEITHER PAID NOR ACCOUNTED FOR BY HER AND THE ASSESSEE ALSO DID NOT CLAIM CREDIT OF TDS OF RS.1,13,369/- DEDUCTED ON SUCH UNACCOUNTED RECEI PTS OF RS.71,13,476/-. THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED BY EST IMATING NET PROFIT OF 10% ON TOTAL RECEIPTS OF RS.1,36,24,460/-, RESULTING IN A TOTAL ADDITION OF RS.9,07,086/- BEING THE AMOUNT OF RS.7,11,348/- TOW ARDS PROFIT FROM ALLEGED UNDISCLOSED RECEIPTS AND RS.1,95,738/- TOWARDS ESTI MATED ADDITION IN DISCLOSED INCOME OF RS.4,55,360/- ON DECLARED RECEI PT OF RS.65,10,984/-. THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ADDITI ON SO MADE BY THE ASSESSING 3 ITA NO. 6124/DEL/2015 OFFICER. 4. DURING PENALTY PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT THERE WAS NO INTENTION WHATSOEVER ON THE PART OF THE ASSE SSEE TO CONCEAL THE INCOME AND TO FURNISH INACCURATE PARTICULARS THEREOF AND T HE DIFFERENCE IN THE RECEIPTS WAS ONLY ON ACCOUNT OF METHOD OF ACCOUNTING ADOPTED BY HER. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS OUT RIGHTLY OFFERED THE ESTIMATED INCOME FOR ASSESSMENT @ 9%-10% OF THE DIFFERENCE IN RECEIPTS. IT WAS ALSO CLAIMED, THAT THE CREDIT OF TDS OF RS.1,13,369/- ON RS.71,13,476/ - WAS NOT TAKEN BY THE ASSESSEE AND THE AMOUNT OF TAX SOUGHT TO BE EVADED, IF ANY, HAS TO BE REDUCED BY THAT AMOUNT AND THEREFORE IF THE PENALTY HAS TO BE IMPOSED, THAT BE RESTRICTED TO RS. 1,66,918/- AS AGAINST THE PENALTY OF RS.2,80,287/- BEING 100% OF TAX ON TOTAL AMOUNT OF ADDITION. THE A.O. D ID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE AND IMPOSED PENALTY OF RS.2,80,287/- UNDER SECTION 271 (1)(C) OF THE ACT @ 100% OF TOTAL TAX D UE ON THE TOTAL AMOUNT OF ADDITION. 5. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN AP PEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT NO P ENALTY SHOULD HAVE BEEN IMPOSED AND BE CONFIRMED WITH REFERENCE TO THE ADDI TION OF RS.1,95,738/-, BEING THE ESTIMATED ADDITION WITH REFERENCE TO THE DECLARED RECEIPTS OF RS.65,10,984/- AS THE SAME WAS MADE PURELY ON THE B ASIS OF AN ESTIMATION. THE CIT(A) VIDE ORDER DATED 06.05.2015, DISMISSED A SSESSEES APPEAL BY UPHOLDING THE PENALTY OF RS.2,80,287/- AS IMPOSED B Y THE ASSESSING OFFICER. 6. THE ASSESSEE IS BEFORE US AGAINST THE SAID ORDER OF THE CIT(A). 7. THE LD. AR SUBMITTED THE ASSESSEE HAS MAINTAINED ITS ACCOUNT MAINLY ON CASH BASIS AND THE AMOUNT OF INCOME FROM AN ADVERTI SEMENT BUSINESS RECEIVED BY THE ASSESSEE UP TO 31/3/2010 WAS ACCOUNTED IN TH E BOOKS OF ACCOUNTS. THE ASSESSEE CLAIM AMOUNT OF STAFF SALARY AT RS.60,23,0 00/- IN THE PROFIT AND LOSS 4 ITA NO. 6124/DEL/2015 ACCOUNT RELATED TO DECLARE GROSS RECEIPTS OF RS. 65 , 10,984/-. THE LD. AR FURTHER SUBMITS THAT THE ASSESSING OFFICER IS WRONG IN OBSERVING THAT SINCE THE ASSESSEE HAS NEITHER SHOWN THE RECEIPTS NOR THE EXP ENDITURE COMPLETELY THE NET PROFIT OF M/S ANSHIKA ADVERTISING AGENCY WAS ESTIMA TED AT 10% OF THE GROSS RECEIPTS OF RS.1,36,24,416/- WHICH WERE AMOUNTED TO RS.13,62,446/- AS THE NET PROFIT OF RS.4,55,316/- WAS ALREADY SHOWN BY TH E ASSESSEE. THE ASSESSING OFFICER ADDED THE DIFFERENCE OF RS.9,07,086/-. THE LD. AR SUBMITTED THAT THERE IS NO CONCEALMENT ON PART OF THE ASSESSEE. THEREFO RE, THE PENALTY ORDER WAS NOT INCONSONANCE IN THE PROVISIONS OF SECTION 274/2 71 (A)(C) OF THE INCOME-TAX- ACT. THE LD. AR ALSO RELIED UPON THE JUDGMENT OF TH E HONBLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. RAJ BANS SINGH 276 ITR 351 AS WELL AS THE JURISDICTIONAL DELHI HIGH COURT DECISION IN CASE OF CIT VS. AERO TRADERS (P) LTD. 322 ITR 316. 8. THE LD. DR SUBMITTED THAT THERE IS NO CLEAR INDI CATION THAT THE ACCOUNTS WAS MAINTAINED BY CASH BASIS OR BY MERCANTILE BASIS . THE LD. DR FURTHER SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAS RIGHTLY IMPOSES THE PENALTY TO THE ASSESSEE. 6. WE HAVE HEARD BOTH THE PARITIES. THE ASSESSEE H AS OFFERED THE ESTIMATED INCOME FOR ASSESSMENT @ 9%-10% OF THE DIFFERENCE IN RECEIPTS. THE ASSESSEE CLAIMED THAT CREDIT OF TDS OF RS.1,13,369/- ON RS.7 1,13,476/- WHICH WAS NOT TAKEN BY THE ASSESSEE AND THE AMOUNT OF TAX SOUGHT TO BE EVADED, IF ANY, HAS TO BE REDUCED BY THAT AMOUNT. ALL EXPENSES RELATING TO THE WORK, PAYMENT OF WHICH WAS NOT RECEIVED, WERE NEITHER PAID NOR ACCOU NTED FOR BY HER AND THE ASSESSEE ALSO DID NOT CLAIM CREDIT OF TDS OF RS.1,1 3,369/- DEDUCTED ON SUCH UNACCOUNTED RECEIPTS OF RS.71,13,476/-. THE ASSESSM ENT OF THE ASSESSEE WAS COMPLETED BY ESTIMATING NET PROFIT OF 10% ON TOTAL RECEIPTS OF RS.1,36,24,460/-, RESULTING IN A TOTAL ADDITION OF RS.9,07,086/- BEIN G THE AMOUNT OF RS.7,11,348/- TOWARDS PROFIT FROM ALLEGED UNDISCLOS ED RECEIPTS AND RS.1,95,738/- TOWARDS ESTIMATED ADDITION IN DISCLOS ED INCOME OF RS.4,55,360/- 5 ITA NO. 6124/DEL/2015 ON DECLARED RECEIPT OF RS.65,10,984/-. THUS, IT IS CLEARLY A CASE OF ESTIMATED ADDITION FOR WHICH THERE WAS NO CONCEALMENT ON PART OF THE ASSESSEE. THE DEPARTMENT CANNOT ON ITS OWN DECIDE THAT THERE IS C ONCEALMENT WHEN ALL THE RECORDS WERE REVEALED DURING THE ASSESSMENT PROCEED INGS BY THE ASSESSEE. THE ASSESSEE AT NO POINT OF TIME HAS CONCEALED ANY INCO ME AS SUCH. FURTHER, IT IS SETTLED LAW THAT NO PENALTY CAN BE IMPOSED WHEN THE ADDITION IS MADE ON ESTIMATE BASIS. THE CIT(A) FAILED TO LOOK INTO THES E ASPECTS. 7. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH OF MARCH, 2017. SD/- SD/- (R.S. SYAL) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 30/03/2017 *R.NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 30/03/2017 SR. PS 2. DRAFT PLACED BEFORE AUTHOR SR. PS 6 ITA NO. 6124/DEL/2015 30/03/2017 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 3 1 .03.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 3 1 .03.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.