Sri Ramesh Kumar Panda, Dhenkanal V. ITO, Ward-2, Dhenkanal

ITA 69/CTK/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3742 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P K MISHRA
• Keywords: Business income
• Section: 147

Judgement Text

1 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO S . 69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 SRI RAMESH KUMAR PANDA,S/O. PRAVAKAR PANDA AT: KUNJAKANTA, PO: DHENKANAL. , VS. ITO, WARD - 2, DHENKANAL. PAN/GIR NO. AMJPP 1155 A (APPELLANT ) .. ( RESPONDENT ) ASSE SEE BY : SHRI P.K. MISHRA , AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 14 /06 / 2017 DATE OF PRONOUNCEMENT : /06 / 2017 O R D E R THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2, BHUBANESWAR DATED 2.11.2016 U/S.143(1) OF THE ACT AND SEPARATE ORDERS BOTH DATED 7. 1 1.2016 U/S.271(1)(C) AND 271B OF THE ACT FOR THE ASSESSMENT YEAR 2011 - 12. 2. IN ITA NO.69/CTK/2017, THE GRIEVANCE O F THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE ASSESSEE AS A TRADER IN PLACE LAND BROKER/COMMISSION AGENT AND ESTIMATING THE INCOME AT 8% OF GROSS RECEIPTS. 2 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 3. I HAVE HEARD THE RIVAL SUBMISSIONS, P ERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF REAL ESTATE. HE FILED THE RETURN OF INCOME DISCLOSING TOTAL INCOME AT RS.6,09,900/ - AND THE ASSESSMENT WAS COMPLETED ON 26.2.2014 U/S.143(3) AT AN INCOME OF RS.17,21,410/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THERE ARE CASH AND CHEQUE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AS UNDER: SL. NO. NAME OF THE BANK TYPE OF ACCOUNT ACCOUNT NUMBER AMOUNT DEPOSITED DURING THE F.Y. 2010 - 11 BOTH CASH AND CHEQUE. AMOUNT DEPOSITED IN CASH 01 SYNDICATE BANK. DKL S.B. 808322000023 952 75,37,600/ - 51,11,600/ - 02 ICICJ BANK DKL S.B. 077501500163 1,49,19,235/ - 47,38,300/ - 03 CANARA BANK, DKL S.B. 112408 2,00,000/ - 50,000/ - , TOTAL 2,26,56,835/ - 98,99,900/ 4. THE ASSESSEE WAS REQUIRED TO PRODUCE BOOKS AND ACCOUNT AND OTHER DETAILS IN RESPECT OF THE TOTAL INCOME DECLARED IN THE RETUR N OF RS.7,01,300/ . THE ASSESSEE COULD NOT PRODUCE BOOKS OF ACCOUNT AND OTHER DETAILS CALLED BY THE ASSESSING OFFICER. IN THE ABSENCE OF BOOKS OF ACCOUNT, BILLS AND VOUCHERS, THE ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSESSEE AT 8% OF GROSS R ECEIPTS OF RS.2,26,56,835/ - AND COMPUTED THE INCOME AT RS.18,12,547/ - . 5. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 3 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 6. BEFORE ME, IT WAS SUBMITTED BY THE LD A.R. OF THE ASSESSEE BY FILING A CHART FOR THE IMMEDIATELY PRECEDING AND SUCCEEDING ASSESSMENT YEARS THAT IN THE ASSESSMENT YEAR 2009 - 2010, THE ASSESSEE HAD SHOWN INCOME ON LAND COMMISSION/BROKERAGE AGENT OF RS.2,93,500/ - IN THE ASSESSMENT YEAR 2010 - 2011, AND IN THE ASSESSMENT YEAR 2012 - 13 RS.5,78,200/ - RS.4,15,200/ - , RESPECT IVELY AND THE SAME WAS ACCEPTED BY THE DEPARTMENT U/S.143(1) OF THE ACT. HE SUBMITTED THAT IN ONE YEAR, THE DEPARTMENT HAS ACCEPTED THE ASSESSEE AS LAND BROKER/COMMISSION AGENT, THEN IN THE SUBSEQUENT ASSESSMENT YEAR ON THE VERY SAME SET OF FACTS, THE DEP ARTMENT CANNOT TURN AROU ND AND TREAT THE ASSESSEE AS DOING BUSINE SS OF REAL ESTATE AND DETERMINE THE INCOME BY APPLYING THE RATE OF 8% TO THE GROSS RECEIP TS DEPOSITED IN THE BANK . FOR THIS, RELIANCE IS PLACED ON THE DECISION OF HONBLE SUPREME COURT RADHA SOAMI SATSANG VS. COMMISSIONER OF INCOME TAX, 193 ITR 321 (SC ), WHEREIN, IT WAS HELD THAT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. THEREFORE CONSISTENCY SHOULD BE MAINTAINED IN THE PRESENT YEAR UNDER APPEAL AND THE INTEREST INCOME SHOULD BE ASSESSED UNDER THE HEAD BUSINESS INCOME. LD A.R. ALSO RELIED ON THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. 358 ITR 295(SC), WHEREIN, IT HAS BEEN HELD AS UNDER: 4 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 THAT A CONSISTENT VIEW HAD BEEN TAKEN IN FAVOUR OF THE ASSESSEE ON THE QUESTIONS RAISED, STARTING WITH THE ASSESSMENT YEAR 1992 - 93, THAT THE BENEFITS UND ER THE ADVANCE LICENCES OR UNDER THE DUTY ENTITLEMENT PASS BOOK DID NOT REPRESENT THE REAL INCOME OF THE ASSESSEE. THERE WAS NO REASON FOR THE COURT TO TAKE A DIFFERENT VIEW UNLESS THERE WERE VERY CONVINCING REASONS, WHICH THERE WERE NOT. 7. HENCE, LD A. R. PRAYED THAT ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE DELETED AND THE RETURN OF INCOME OF THE ASSESSEE SHOULD BE ACCEPTED. 8. LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. I FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS SHOWN INCOM E ON LAND COMMISSION/BROKERAGE AGENT IN ASSESSMENT YEAR 2009 - 10, 2010 - 2011 AND 2012 - 13, WHICH WAS ACCEPTED BY THE DEPARTMENT AS UNDER: ASST.YEAR GROSS DEPOSITS IN BANK (RS. COMMISSION RECEIVED OUT OF THE SAID DEPOSIT % OF COMMISSION OUT OF GROSS DEPOSITS 2009 - 10 94,67,740 2,93,500 3.10 % 2010 - 11 2,50,95,245 5,78,200 2.30 % 2012 - 13 1,33,93,550 4,15,200 3.10 % THE ASSESSEE HAS SHOWN THE INCOME OF RS.7,01,300/ - ON LAND COMMISSION/BROKERAGE AGENT FOR THE ASSESSMENT YEAR 2011 - 12 AND THE ASSESSING OFFICER HAS TREATED THE ASSESSEE IN THE BUSINESS OF REAL ESTATE AND DETERMINED THE INCOME AT 8% OF THE GROSS RECEIPTS DEPOSITED IN THE BANK. ON A PERUSAL OF ABOVE CHART, IT IS SEEN THAT THE ASSESSEE HAD SHOW N COMMISSION/BROKERAGE INCOM E OF 3.10% ON BANK DEPOSIT OF RS.94,67,740/ - 5 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 IN ASSESSMENT YEAR 2009 - 10 , COMMISSION/ BROKERAGE INCOME OF 2.30% ON BANK DEPOSIT OF RS.2,50,95,245/ - IN ASSESSMENT YEAR 2010 - 2011 AND COMMISSION INCOME OF 3.10% ON BANK DEPOSIT OF RS.1,33,93,550/ - IN ASSESSME NT YEAR 2012 - 13. I FURTHER FIND THAT THE ASSESSEE HAS SHOWN COMMISSION INCOME OF 3.09% ON BANK DEPOSIT OF RS.2,26,56,835/ - IN THE IMPUGNED ASSESSMENT YEAR. THUS, I FIND THAT THE FACTS OF THE CASE IN THE IMPUGNED ASSESSMENT YEAR ARE IDENTICAL TO THE FACTS OF THE CASE IN ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2012 - 13, RESPECTIVELY, WHEREIN, COMMISSION INCOME SHOWN BY THE ASSESSEE WAS ACCEPTED BY THE DEPARTMENT U/S.143(1) OF THE ACT. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT TO SHOW THAT ANY P ROCEEDINGS U/S.263 OR 147 OF THE ACT WERE TAKEN BY THE ASSESSING OFFICER FOR THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS, WHERE COMMISSION INCOME SHOWN BY THE ASSESSEE WAS ACCEPTED. THEREFORE, IN VIEW OF THE DECISIONS OF HONBLE SUPREME COURT IN THE CAS E OF RADHASOAMI SATSANG AND EXCEL INDUSTRIES LTD (SUPRA), THE DEPARTMENT CANNOT TAKE A DIFFERENT VIEW ON A SETTLED ISSUE UNLESS THERE ARE CHANGE IN FACTS IN THE SUBSEQUENT ASSESSMENT YEARS. RESPECTFULLY FOLLOWING THE SAME, I SET SET ASIDE THE ORDER S OF THE LOWER AUTHORITIES AND DELETE THE ADDITI ON OF RS.11,11,247/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 10. IN ITA NO.70/CTK/2017, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.2,02,970/ - U/S 271(1)( C) OF THE ACT. 6 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 11. I HAVE ALREADY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN THE QUANTUM APPEAL , WHICH WAS THE VE RY BASIS OF LEVYING THE PENALTY U/S.271(1)(C) OF THE ACT , AND, THEREFORE, THE PENALTY ORDER OF ASSESS ING OFFICER DOES NOT SURVIVE. MY VIEW FINDS SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE K.C.BUILDERS VS. ACIT, 265 ITR 562 (SC), WHEREIN, IT WAS HELD TAHT WHERE AN ORDER OF ASSESSMENT OF REASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON THE AS SESSEE HAS ITSELF BEEN FINALLY SET ASIDE OR CANCELLED BY THE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND THE SAME IS LIABLE TO BE CANCELLED . HENCE, I SET ASIDE THE ORDERS OF LOWER AUT HORITIES AND DELETE THE PENALTY OF RS.2,02,970/ - LE VIED U/S.271(1)(C) OF THE ACT A ND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 12. IN ITA NO.71/CTK/2017, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY U/S.271B OF THE ACT OF R S.1,00,000/ - NOT NON GETTING THE ACCOUNTS AUDITED. 13. I FIND THAT THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S.271B OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT GOT ITS ACCOUNT AUDITED U/S.44AB OF THE ACT. I FIND THAT THE ASSESSING O FFICER HIMSELF HAS HELD THAT THE ASSESSEE HAS NO T PRODUCED BOOKS OF ACCOUNT, BILLS AND VOUCHER AND, THEREFORE, DETERMINED THE INCOME OF THE ASSESSEE BY APPLYING 8% TO THE GROSS RECEIPTS DEPOSITED IN THE BANK. THUS, WHEN THE ASSESSING OFFICER HAS COME TO T HE CONCLUSION THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF 7 ITA NOS.69,70 & 71/CTK/2017 ASSESSMENT YEAR: 2011 - 12 ACCOUNT, THEREFORE, IT CANNOT BE PRODUCED BEFORE HIM AND THE QUESTION OF GETTING ITS ACCOUNTED AUDITED U/S.44AB DOES NOT ARISE. AT BEST, THE ASSESSING OFFICER COULD HAVE LEVIED PENALTY U/S.271A O F THE ACT FOR NON - MAINTENANCE OF BOOKS OF ACCOUNT BY THE ASSESSEE. HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE PENALTY OF RS.1,00,000/ - LEVIED U/S.271B OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 14 . IN THE RESULT, APP EAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /06 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 30 /0 6 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SRI RAMESH KUMAR PANDA,S/O PRAVAKAR PANDA AT: KUNJAKANTA, PO: DHENKANAL 2. THE RESPONDENT. ITO, WARD - 2, DHENKANAL 3. THE CIT(A) - 2, BHUBANESWAR. 4. PR.CIT - 2, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//