M/s. Roop Sons & Co., Amritsar. V. The Income tax Officer, Amritsar.

ITA 736/ASR/2013

• Counselvise Citation: 73620914 RSA 2013
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAM BAHL
• Keywords: Business income; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 736 (ASR)/2013 ASSESSMENT YEAR: 2006-07 PAN: AABFR2682N M/S ROOP SONS & CO., BHALLA VS. INCOME TAX OFFICER , STREET, PRATAP BAZAR, CHHEHARTA, WARD 3(3), AMRIT SAR AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL, CA RESPONDENT BY: SH. MAHAVIR SINGH, SR.DR DATE OF HEARING: 26.02.2014 DATE OF PRONOUNCEMENT: 28.02.2014 ORDER PER BENCH 1. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST IMPUGNED ORDER DATED 13.11.2013 PASSED BY LEARNED CIT(A), AM RITSAR, FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS: I. THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ), AMRITSAR, HAS GROSSLY ERRED IN CONFIRMING THE PENAL TY U/S 271(1)(C) OF INCOME TAX ACT, 1961 AT RS. 84,006/- LEVIED BY I NCOME TAX OFFICER, WARD 3(3), AMRITSAR. II. THAT BOTH LEARNED INCOME TAX OFFICER, WARD 3(3), AM RITSAR AND COMMISSIONER OF INCOME TAX(APPEALS), AMRITSAR HAVE FAILED TO APPRECIATE THAT NO PENALTY U/S 271(1)(C) WAS EXIGIB LE IN CASES OF ESTIMATED ADDITION AND G.P. RATE ADDITION AS HELD B Y PUNJAB & HARYANA HIGH COURT AND AMRITSAR BENCH OF INCOME TAX APPELLANT TRIBUNAL, AMRITSAR. III. THAT THE PENALTY OF RS. 84,006/- UPHELD BY WORTHY C OMMISSIONER OF INCOME TAX (APPEALS), AMRITSAR, MAY KINDLY BE DE LETED. 2 I.T.A. NO. 736 (ASR)/2013 ASSESSMENT YEAR: 2006-07 2. THE FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE FIRM DERIVING BUSINESS INCOME FROM CARRYING OUT CIV IL CONTRACTS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.10.2006 D ECLARING BUSINESS INCOME OF RS. 35,230/- ALONG WITH AUDITED STATEMENT OF ACCOUNTS AND AUDIT REPORT AS REQUIRED UNDER SECTION 44AB OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). HOWEVER, WHILE COMPLETING THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER PROCEEDED TO DETERMINE ITS TO TAL TAXABLE INCOME BY APPLYING G.P. RATE OF 8% OVER TOTAL CONTRACT RECEIP TS OF RS. 49,54,961/- AS THE ASSESSEE FIRM FAILED TO SUBSTANTIATE ITS RETURN VERSION BY NOT PRODUCING COMPLETE BOOKS OF ACCOUNTS, INCLUDING PURCHASE BILL S, EXPENSES VOUCHERS AND COPIES OF BANK ACCOUNT. AFTER GIVING APPEAL EFF ECT TO THE CIT(A), AMRITSARS APPELLATE ORDER DATED 17.06.2010, THE IN ITIALLY ASSESSED INCOME OF RS. 3,97,400/- GETS REDUCED TO RS. 2,84,8 00/- BY ALLOWING REMUNERATION AND INTEREST PAID TO PARTNERS AS WELL AS DEPRECIATION AMOUNTING RESPECTIVELY TO RS. 48,000/-, RS. 21,678/ - AND RS. 42,921/- RESPECTIVELY. THE ASSESSING OFFICER COMPLETED THE P ENALTY PROCEEDINGS AFTER AFFORDING HEARING OPPORTUNITY AND AFTER CONSI DERING THE ASSESSEES EXPLANATION, TO LEVY A MINIMUM PENALTY OF RS. 84,00 6/- BY HOLDING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME AND EXPLANATION BELOW SECTION 271[1][1][C] IS RIGHTLY A PPLICABLE AS THE 3 I.T.A. NO. 736 (ASR)/2013 ASSESSMENT YEAR: 2006-07 ASSESSEE HAS FAILED TO SUBSTANTIATE ITS EXPLANATION BEING GENUINE AND BONA FIDE AND HAS APPARENTLY FAILED TO FURNISH ALL MATER IAL FACTS NECESSITATED TO COMPUTE ITS TRUE TAXABLE INCOME. BY FINDING THAT TH E ASSESSEES DEFAULT IN FURNISHING INACCURATE PARTICULARS OF ITS INCOME STA NDS ESTABLISHED, THE ASSESSING OFFICER PROCEEDED TO LEVY A CONCEALMENT P ENALTY OF RS. 84,006/- VIDE PENALTY ORDER DATED 27.03.2012. 3. BEING AGGRIEVED WITH THE PENALTY ORDER DATED 27. 03.2012, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED FIRST A PPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 13.11.2013 DISMISSED THE APPEAL FILED BY THE ASSESSEE. NOW, THE ASSESSEE BEING AGGRIEVED WITH TH E ORDER OF LEARNED FIRST APPELLATE AUTHORITY, FILED THE PRESENT APPEAL . 4. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE REVENUE AUTHORITY HAS IMPOSED THE PENALTY IN DISPUTE ON THE ADDITION WHICH WAS BASED ON ESTIMATION. HE REQUESTE D THAT NO PENALTY IS LEVIABLE WHERE THE ADDITION IS MADE ON ESTIMATION A S HAS BEEN HELD BY VARIOUS HON'BLE COURTS. IN SUPPORT OF HIS ARGUMENT, HE HAS ALSO FILED A SMALL PAPER BOOK, CONTAINING PAGES FROM 1 TO 19, IN WHICH HE HAS ATTACHED THE COPY OF I.T.A.T., AMRITSAR BENCH ORDER DATED 05.11.2004 IN THE CASE OF M/S CHAWLA TRADERS; COPY OF I.T.A.T., A MRITSAR BENCH ORDER DATED 23.12.2005 IN THE CASE OF M/S LOVELY STONE CR USHING CO., AMRITSAR; COPY OF I.T.A.T., AMRITSAR BENCH ORDER DA TED 16.11.2005 IN 4 I.T.A. NO. 736 (ASR)/2013 ASSESSMENT YEAR: 2006-07 THE CASE OF M/S NARULA CRUSHING CO., AMRITSAR; HARI GOPAL SINGH VS. COMMISSIONER OF INCOME TAX, PUNJAB & HARYANA HIGH C OURT REPORTED AT 258 ITR 85 (P&H); COMMISSIONER OF INCOME TAX VS. RA VAIL SINGH & CO., PUNJAB & HARYANA HIGH COURT REPORTED AT 254 IT R 191 (P&H); AND COMMISSIONER OF INCOME TAX VS. DHILLON RICE MILLS R EPORTED AT 256 ITR 447 (P&H). 5. ON THE CONTRARY, LEARNED DR RELIED UPON THE ORDE R PASSED BY LEARNED CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US AND WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AND F ILED ITS RETURN OF INCOME AT RS. 35,230/- ON 31.10.2006. WE ARE ALSO O F THE VIEW THAT IT IS A CASE OF ESTIMATION OF INCOME AND THE REVENUE AUTHOR ITY HAS IMPOSED THE PENALTY IN DISPUTE UNDER SECTION 271(1)(C) OF THE A CT ON ESTIMATION OF INCOME WHICH IS NOT PERMISSIBLE UNDER THE LAW. 7. KEEPING IN VIEW THE ORDERS OF THIS BENCH AS WELL AS THE JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT, ATT ACHED WITH THE PAPER BOOK AND MENTIONED SUPRA, WE ARE OF THE VIEW THAT T HIS BENCH HAS CANCELLED THE SIMILAR PENALTY ON THE ADDITION WHICH WAS MADE PURELY ON ESTIMATION BASIS AND HON'BLE JURISDICTIONAL HIGH CO URT HAS ALSO TAKEN THE SAME VIEW, AS TAKEN BY THIS BENCH. WE ARE OF THE VI EW THAT THE ISSUE IS 5 I.T.A. NO. 736 (ASR)/2013 ASSESSMENT YEAR: 2006-07 SQUARELY COVERED BY THE AFORESAID DECISIONS/JUDGMEN TS OF THIS BENCH AND HON'BLE JURISDICTIONAL HIGH COURT THEREFORE, THE PE NALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYE OF LAW AND WE CANCEL THE PEN ALTY ORDER DATED 27.03.2012 PASSED UNDER SECTION 271(1)(C) OF THE AC T BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH FEBRUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S ROOP SONS & CO., BHALLA STREET, PRATAP BAZAR, CHHEHARTA, AMRITSAR 2. INCOME TAX OFFICER, WARD 3(3), AMRITSAR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.