VINITA RANKA, JAIPUR V. ITO-WARD-7-2, JAIPUR, JAIPUR

ITA 653/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1865 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PUNAM RAI DCIT DHK
• Assessee Lawyers: VIMAL CHOPRA
• Keywords: Accommodation entries; Non compliance
• Section: 44AD; 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 653/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 VINITA RANKA 67/94, SHEOPUR ROAD, SANGANER, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABUPR1716R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIMAL CHOPRA (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SMT. PUNAM RAI (D.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/10/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 11/12/2017 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 29.05.2017 OF CIT(A), JAIPUR ARISING FROM THE PENA LTY ORDER PASSED U/S 271A OF THE ACT FOR THE ASSESSMENT YEAR 2011-12. T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE ORDER IS BAD IN LAW AND ON FACTS 2. THAT THE ADDITION HAS BEEN MADE DESPITE OF THE F ACTS THAT THE ASSESSEE FILED HIS RETURN UNDER PRESUMPTIVE SCHEME DUE TO NON MAINTENANCE OF ACCOUNTS AND DISCONTINUANCE OF OLD F IRM AND PAID TAX ACCORDINGLY. ITA 653/JP/17_ VINITA RANKA VS. ITO 2 3. THAT DURING THE YEAR THE ADDITIONAL INCOME WAS O FFERED ON DEEMING BASIS HENCE ITS INTERPRETATION SHOULD NOT B E DRAGGED IN IMPOSING A PENALTY U/S 271A. 4. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, AL TER, AMEND, DELETE ANY GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F APPEAL. 2. THE ASSESSEE FILED ITS RETURN OF INCOME AND DEC LARED INCOME U/S 44AAD. THE CASE WAS SELECTED FOR SCRUTINY UNDER C ASS AND CONSEQUENTLY ASSESSMENT ORDER U/S 143(3) WAS PASSED ON 14.03.201 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE A SSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS BUT THE ASSESSEE COULD NOT PR ODUCE THE SAME AS THE ASSESSEE DOES NOT MAINTAINED THE BOOKS OF ACCOUNTS DURING THE YEAR UNDER CONSIDERATION. THE AO NOTED THAT THE ASSESSEE MADE TRANSACTIONS OF MORE THAN RS. 4 CRORES INCLUDING THE DEPOSITS IN THE BAN K ACCOUNTS AND OUTWARD TRANSACTIONS FROM THE BANK ACCOUNT ON WHICH THE ASS ESSEE EARNED COMMISSION BUT DID NOT MAINTAIN THE BOOKS OF ACCOUN TS. THE ASSESSMENT ORDER WAS COMPLETED ON A TOTAL INCOME OF RS. 5,58,4 10/- AS AGAINST TOTAL INCOME DECLARED BY THE ASSESSEE OF RS. 1,88,040/-. THE AO INITIATED THE PENALTY PROCEEDINGS U/S 271A AS WELL AS 271B FOR FA ILURE OF MAINTAINING THE BOOKS OF ACCOUNTS AND GETTING THE ACCOUNTS AUDITED RESPECTIVELY. THE AO PASSED THE IMPUGNED ORDERS U/S 271A AND LEVY THE PE NALTY OF RS. 25,000/- . THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFO RE THE LD. CIT(A) BUT COULD NOT SUCCEED. ITA 653/JP/17_ VINITA RANKA VS. ITO 3 3. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE PURPOSE OF MAINTAINING BOOKS OF ACCOUNT AS R EQUIRED U/S 44A IS TO ENABLE THE ASSESSING OFFICER TO COMPUTE THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. THE ASSE SSEE HAS MAINTAINED THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WHICH ENA BLED THE ASSESSING OFFICER TO ASSESS THE INCOME OF THE ASSESSEE BASED ON THE REVISED COMPUTATION SHEET FILED BY THE ASSESSEE AND ON THE BASIS OF THE ENTRY APPEARING IN THE BANK STATEMENTS. THERE IS NO MATER IAL OR EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS DUE TO DELIBERATE ACTION AND CONSEQUENTLY THE AO WAS NOT ABLE TO COMPUTING THE INCOME. THE ASSESSEE HAS MAINTAINED S UCH BOOKS OF ACCOUNTS AND DOCUMENTS WHICH ENABLE THE ASSESSING O FFICER TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE. HENCE, THE REQUIR EMENTS OF SECTION 44A HAS BEEN COMPLIED WITH BY THE ASSESSEE AND THERE I S NO DEFAULT ON THIS ACCOUNT. THE LD. AR HAS THUS SUBMITTED THAT WHEN TH E ASSESSEE ITSELF FILED A REVISED COMPUTATION OF INCOME ON THE BASIS OF THE BANK ACCOUNT TRANSACTIONS WHICH HAS BEEN ACCEPTED BY THE AO, THE N THE BOOKS OF ACCOUNTS AND DOCUMENTS MAINTAINED BY THE ASSESSEE H AS ENABLED THE AO TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE. HE HAS RELIED UPON THE DECISION OF CHANDIGARH BENCH OF THIS TRIBUNAL IN CA SE OF ACIT VS. AGARAWAL CONSTRUCTION CO. 291 ITR (A.T.) 226. HE HAS ALSO RELIED UPON THE DECISION ITA 653/JP/17_ VINITA RANKA VS. ITO 4 OF HONBLE SUPREME COURT IN CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 AS WELL AS THE DECISION IN CASE O F K.C. BUILDERS VS. ACIT 265 ITR 562. THE LD. AR HAS POINTED OUT THAT THE AS SESSEE HAS ALSO FILED CASH FLOW STATEMENT FOR THE YEAR WHICH DULY MATCHED WITH BANK ACCOUNT ENTRIES AND ON THE BASIS OF THESE DOCUMENTS AND TUR NOVER RECORDED IN THESE DOCUMENTS THE ASSESSING OFFICER HAS COMPUTED THE TOTAL INCOME. THUS THE ASSESSEE HAS SATISFIED REQUIREMENTS OF MAI NTAINING THE BOOKS OF ACCOUNTS AND THEREFORE, THE PENALTY CANNOT BE IMPOS ED. 4. ON OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE IS PROVIDING ACCOMMODATION ENTRIES WHICH WERE DETECTED BY THE ASSESSING OFFICER FROM THE BANK ACCOUNT OF THE ASSESSEE. ONLY WHEN THE AO HAS DETECTED THIS FACT, THE ASSESSEE ADMITTED THE TURNO VER OF MORE THAN RS. 4 CRORES, WHICH EXCEEDS LIMIT AS PROVIDED U/S 44A OF THE ACT. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE BANK TRANSACTION S INCLUDING THE DEPOSIT IN THE BANK AND OUTWARD TRANSACTION ARE MORE THAN R S. 4 CRORES. THE ASSESSEE THEN FILED REVISED COMPUTATION OF INCOME A ND ADMITTED THE TURNOVER OF MORE THAN RS. 4 CRORES WHICH SHOWS THAT THE ASSESSEE IS NOT ITA 653/JP/17_ VINITA RANKA VS. ITO 5 FALLING IN THE EXCLUSION OF PROVISIONS OF MAINTAINI NG THE BOOKS OF ACCOUNTS AS PER PROVISIONS OF SECTION 44AD OF THE INCOME TAX ACT. THE ASSESSEE HAS CLEARLY VIOLATED THE PROVISIONS OF SECTION 44AA OF THE ACT WHEN THE TURNOVER OF THE ASSESSEE IS EXCEEDING MINIMUM LIMIT PROVIDED UNDER THE SAID PROVISIONS. THOUGH THE TOTAL INCOME OF THE ASS ESSEE WAS ASSESSED BY THE AO AS PER THE TRANSACTION RECORDED IN THE BANK ACCOUNT HOWEVER, THE BANK ACCOUNT OF THE ASSESSEE CANNOT BE ACCEPTED OR REGARDED AS BOOKS OF ACCOUNTS AND THEREFORE, THE BANK ACCOUNT WILL NOT S UBSTITUTE THE BOOKS OF ACCOUNTS TO BE MAINTAINED BY THE ASSESSEE. IT IS A CLEAR CASE OF NON COMPLIANCE OF THE PROVISIONS OF SECTION 44AA OF THE ACT. THEREFORE, IN THE ABSENCE OF BONAFIDE EXPLANATION THE PENALTY LEVIED U/S 271A IS JUSTIFIED. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIE S BELOW. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/12/2017. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL; @ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/12/2017 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: ITA 653/JP/17_ VINITA RANKA VS. ITO 6 1. VIHYKFKHZ @ THE APPELLANT- VINITA RANKA 67/94, SHEOPUR ROAD, SANGANER, JAIPUR. 2. IZR;FKH @ THE RESPONDENT- THE ITO, WARD 7(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 653/JP/17) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR