Abdul Rahman Usmani, Bhopal V. CIT(A0-II, Bhopal

ITA 724/Ind/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0720 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-02-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 24-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S SOLANKI
• Keywords: Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA.NO.724/IND/2019 ASSESSMENT YEAR 2014-15 SHRI ABDUL REHMAN, 16, PATRA PARIGHAT, NEAR KAMLA PARK, BHOPAL PAN : ABAPU7525L : APPELLANT V/S ACIT-4(1), BHOPAL : REVENUE ASSESSEE BY SHRI S.S. SOLANKI, CA REVENUE BY S HRI HARSHIT BARI, SR.DR DATE OF HEARING 1 8 .02.2021 DATE OF PRONOUNCEMENT 19 .02.2021 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2014-15 IS D IRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX-II (I N SHORT LD. CIT], INDORE DATED 09.07.2017 WHICH IS ARISING OUT OF TH E ORDER U/S ABDUL REHMAN ITA NO.724/IND/2019 2 271(1)(C) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 31.05.2017 FRAMED BY ACIT-4(1), BHOPAL. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1.CIT(A)-II, BHOPAL HAS PASSED THE APPELLATE ORDER IMPOSING PENALTY U/S 271(1)(C) OF INCOME TAX ACT, 1961 OF RS.573064/- ON THE GROUNDS OF CONCEALMENT OF INCOME MERE ON THE BASIS OF OPINION AND SHIFTED THE ONUS OF PROOF TO THE ASSESSEE WHICH IS UNJUST AS THE ASSESS EE WAS ACTING BONAFINE AND HAD NOT CONCEALED ANY INCOME IN THE RELEVANT AS SESSMENT YEAR. 2. PENALTY IMPOSED TORS.5,73,064/- UNDER SECTION 2 71(1)(C ) IS REQUESTED TO BE DELETED BY YOUR HONOUR. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER VARY AND OR DELETE ALL OR ANY OF ABOVE GROUNDS.. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINE SS OF TRANSPORT. E-RETURN FILED ON 29.11.14 DECLARING INCOME OF RS. 15,31,266/-. CASE SELECTED FOR SCRUTINY THROUGH CASS FOLLOWED BY SERVING OF STATUTORY NOTICES. ASSESSMENT COMPLETED U/S 143(3) OF THE ACT ON 25.11.2016 AFTER MAKING ADDITION TOWARDS DISALLOWAN CE OF TRANSPORT EXPENSES AT RS.18,54,576/- THEREBY ASSESSING THE IN COME AT RS.33,85,842/-, ABDUL REHMAN ITA NO.724/IND/2019 3 4. PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. SUBSE QUENTLY PENALTY PROCEEDINGS WERE CARRIED OUT DURING WHICH ASSESSEE SUBMITTED THAT THE PENALTY SHOULD NOT BE LEVIED ON ADHOC DISALLOWA NCE. LD. A.O WAS NOT SATISFIED AND HE LEVIED THE PENALTY AT RS.5 ,73,064/- U/S 271(1)(C) OF THE ACT. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) BUT FAILED TO SUCCEED. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 6. LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE PAPER BOOK RUNNING FROM PAGE NO. 1 TO 36 AND ALSO THE PAPER B OOK OF CASE LAWS FILED IN SUPPORT OF THE CONTENTION THAT THE LD. A.O WAS NOT JUSTIFIED IN LEVYING THE PENALTY. LD. COUNSEL FOR THE ASSESS EE ALSO SUBMITTED THAT THE ADDITION ON WHICH THE PENALTY HAVE BEEN LE VIED IS IN THE NATURE OF ADHOC DISALLOWANCE ON WHICH THE PENALTY W AS NOT WARRANTED. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUPPO RTED THE ORDERS OF BOTH THE LOWER AUTHORITIES. ABDUL REHMAN ITA NO.724/IND/2019 4 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. ASSESSEES SOLE ISSUE IS AGAINST THE LEVY OF PENALTY AT RS.5,73,064/- BY THE LD. A.O AND CONFIRMED BY LD . CIT(A). THIS PENALTY WAS LEVIED ON DISALLOWANCE OF TRANSPORT EXP ENSES ON 18,54,576/-. 9. WE FIND THAT ASSESSEE PAID TRANSPORT CHARGES TO VARIOUS VENDORS. LD. A.O POINTED OUT THAT THE TRANSPORT CH ARGES PAID TO M/S KOSAR TRANSPORT COMPANY ARE IN CASH AND PAYMENT FOR EACH DAY IS RS.35,000/- AND NO PAYMENTS WERE MADE THROUG H CHEQUE. IN PARA 3.2 OF THE ASSESSMENT ORDER DATED 25.11.201 6 LD. A.O HAS COMPUTED THE DISALLOWANCE OBSERVING THAT SINCE THE PAYMENTS ON TRANSPORT CHARGES AT RS.1,23,63,840/- ARE MADE IN C ASH DURING THE YEAR THEY ARE DOUBTED AND FAIL THE TEST OF COMPARIS ON OF THE ASSESSEES PAYMENT OF SIMILAR TYPE OF EXPENSES TO O THER VENDORS. RAISING THIS DOUBT LD. A.O MADE ADHOC DISALLOWANCE @15% OF RS.1,23,63,850/- AND DISALLOWED RS.18,54,576/-. 10. ON GOING THROUGH THE ABOVE OBSERVATION OF THE L D. A.O WE FIND THAT THE DISALLOWANCE IS ADHOC IN NATURE. LD. A.O HAS NOT DOUBTED THE GENUINENESS OF THE TRANSPORT CHARGES PAID TO M/ S KOSAR ABDUL REHMAN ITA NO.724/IND/2019 5 TRANSPORT COMPANY BY BRINGING ANY ADVERSE MATERIAL ON RECORD. PENALTY U/S 271(1)(C) OF THE ACT IS LEVIED FOR CONC EALMENT OF INCOME OR FURNISHING THE INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE PENALTY HAS BEEN LEVIED BY THE LD. A.O FOR FUR NISHING THE INACCURATE PARTICULARS OF INCOME BUT NOWHERE FROM T HE ASSESSMENT ORDER OR THE PENALTY ORDER IS DISCERNABLE THAT WHAT TYPE OF PARTICULARS HAVE BEEN FILED INCORRECTLY BY THE ASSE SSEE. NO EFFORTS WERE MADE BY THE LD. A.O DURING THE COURSE OF ASSES SMENT PROCEEDINGS TO EXAMINE THE GENUINENESS OF THE TRANS ACTION OF TRANSPORT CHARGES PAID BY THE ASSESSEE TO M/S KOSAR TRANSPORT COMPANY. JUST BECAUSE THE PAYMENTS WERE MADE IN CAS H CANNOT BE A BASIS TO DOUBT THE GENUINENESS OF THE EXPENDITURE . SINCE THE DISALLOWANCE ARE MADE ON ADHOC BASIS BY APPLYING T HE RATE OF 15%, HOLDING THE ASSESSEE LIABLE TO PAY PENALTY FOR FURN ISHING INACCURATE PARTICULARS OF INCOME CANNOT BE HELD TO BE JUSTIFIE D. 11. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AT RS.5,73,064/-. GROUND NO.1 &2 OF THE ASSESSEES APPEAL ARE ALLOWED. ABDUL REHMAN ITA NO.724/IND/2019 6 12. GROUND NO.3 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 13. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19 .02.2 021 ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 19 FEBRUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE