Asstt. Commissioner of Income Tax, Faizabad V. M/s Ram Paltan Jaiswal & Others, Faizabad

ITA 735/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2067 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-09-2015
• Assessment Year: 1994-1995
• Appeal Filed On: 19-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 28

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.735/LKW/2014 ASSESSMENT YEAR 1994-95 M/S RAM PALTAN JAISWAL & OTHERS, SUNCHCHITTAGANJ, FAIZABAD PIN 224188 PAN ADLPO 0225 F VS ACIT, CIRCLE-FAIZABAD (RESPONDENT) (APPELLANT) S HRI AMIT NIGAM , DR APPELLANT BY NONE RESPONDENT BY 22/09/2015 DATE OF HEARING 09/10/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I, LUCKNOW DATED 18.06.2014 FOR THE AY 1994-95. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING PENALTY U/S 271(1)(C) OF THE ACT BY HOLDING THAT ESTIMATION OF SALES MADE BY THE AO BY MULTIPLYING 2.5 TO BID MONEY HAS NO BASIS IGN ORING THE FACT THAT IN ABSENCE OF THE SALES RATE FIXED BY STATE GOVERNM ENT IN RESPECT OF COUNTRY LIQUOR WAS NOT ALLOWABLE, THE FINDINGS OF T HE HON'BLE ITAT, AGRA BENCH IN THE CASE OF GOVIND PRASAD KRISHNA CAN NOT BE APPLIED IN THE PRESENT CASE 2. LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING PENALTY U/S 271(1)(C) OF THE ACT BY HOLDING AN ADDITION MADE ON THE BASIS OF ESTIMATION CANNOT BE SUBJECT MATTER OF PENALTY FOR CONCEALMENT OF 2 PARTICULARS OF INCOME IGNORING THE FACT THAT THE AO S ASSESSMENT MADE ON HIGHER RATE IN VIEW OF THE HON'BLE ITAT'S ORDER DATED 28.11.2002 ITSELF INDICATES THAT THERE IS A CONCEALMENT OF INC OME. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, IN SPI TE OF NOTICE AND HENCE, WE PROCEED TO DECIDE THE APPEAL OF THE REVENUE EX-PART E, QUA THE ASSESSEE. LD. DR OF THE REVENUE SUPPORTED THE PENALTY ORDER. 4. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR OF T HE REVENUE AND GONE THROUGH THE ORDERS OF THE LD. AUTHORITIES BELOW. WE FIND THAT AS PER FACTS NOTED BY THE LD. CIT(A) IN PARA 2 OF HIS ORDER, THE ASSESSEE FILED RETURN OF INCOME, DECLARING AN INCOME OF RS.68,160/- AND THE ASSESSEE IS A COUN TRY LIQUOR CONTRACTOR. THE ASSESSMENT WAS ORIGINALLY COMPLETED AT TOTAL INCOME OF RS.6,49,840/- AND THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A) AND HE ALLOWED PART RELIEF. THE DEPARTMENT FILED SECOND APPEAL BEFORE T HE TRIBUNAL AND THE TRIBUNAL SET ASIDE THE ORDER AND RESTORED THE MATTER BACK TO THE AO FOR FRESH DECISION AS PER PROVISIONS OF SECTION 28 TO 43C OF THE ACT AND IN V IEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF A. SANYASI RAO & OTHERS R EPORTED IN 219 ITR 330. THE AO COMPLETED THE ASSESSMENT VIDE ORDER DATED 29.03.200 4 AT AN INCOME OF RS.20,75,195/-. WHILE DOING SO, THE AO COMPUTED THE INCOME OF THE ASSESSEE BY ESTIMATING THE SALES AT 2.5 TIME OF BID MONEY/LICEN SE FEE AND APPLYING NET PROFIT RATE OF 4% INSTEAD OF 2.75% APPLIED IN ORIGINAL ASSESSME NT. AGAIN THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) BUT WITHOUT SUCCESS AN D WHEN SECOND APPEAL WAS FILED BEFORE THE TRIBUNAL, THE TRIBUNAL SET ASIDE THE ASS ESSMENT AND RESTORED THE MATTER BACK AGAIN TO THE FILE OF THE AO. THE AO COMPLETED THE ASSESSMENT AT AN INCOME OF RS.20,75,195/- VIDE ORDER DATED 15.12.2008 BY OBSER VING THAT IN ABSENCE OF SALE RATES FIXED BY THE STATE GOVERNMENT IN RESPECT OF C OUNTRY LIQUOR, THE FINDINGS OF THE AGRA BENCH OF THE TRIBUNAL IN THE CASE OF GOVIND PR ASAD KRISHNA KUMAR CANNOT BE APPLIED IN THE PRESENT CASE. AS PER THIS ORDER ALSO , THE AO AGAIN COMPUTED INCOME OF THE ASSESSEE BY ESTIMATING THE SALES AT 2.5 TIME OF BID MONEY/LICENSE MONEY 3 AFTER APPLYING NET PROFIT RATE OF 4%. HENCE, IT IS SEEN THAT WHATEVER INCOME IS ULTIMATELY ASSESSED BY THE AO IS ON THE BASIS OF ES TIMATE OF SALE AS WELL AS APPLYING NET PROFIT RATE OF 4%. NOW THE QUESTION IS WHETHER FOR SUCH ADDITION BY WAY OF ESTIMATION OF INCOME, PENALTY IS JUSTIFIED OR NOT. LD. CIT(A) FOLLOWED THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CA SE OF CIT VS. RAJ BANS SINGH REPORTED IN 276 ITR 351(ALL.) AND ALSO IN THE CASE OF CIT VS. ARJUN PRASAD AJIT KUMAR REPORTED IN 214 CTR 355 (ALL.) WHERE IT WAS HELD TH AT ON ESTIMATION OF INCOME IN THE ABSENCE OF ANY FINDING THAT THE ASSESSEE HAS DELIBE RATELY CONCEALED THE INCOME, PENALTY IS NOT JUSTIFIED. IN THE PRESENT CASE ALSO, THE INCOME ASSESSED IS ONLY ON THE BASIS OF ESTIMATION OF INCOME WITHOUT ANY MATERIAL ON RECORD SHOWING THAT IT IS A POSITIVE CASE OF CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME AND THEREFORE, IN OUR CONSIDERED OPINION, LD . CIT(A) HAS RIGHTLY DELETED THE PENALTY IN THE FACTS OF THE PRESENT CASE, WE HOLD T HAT THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A). 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED:09/10/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR