BASERA CONSTRUCTION, MUMBAI V. ACIT CEN CIR 9, MUMBAI

ITA 7743/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3317 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2011
• Court: TRIBUNAL
• Department Lawyers: S RAVICHANDRAN
• Assessee Lawyers: B G SAKARIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH (JM) & SHRI B.R. BASKARAN (AM) I.T.A. NO. 7743 /MUM/ 20 1 1 (ASSESSMENT YEAR 200 8 - 0 9 ) M/S. BASERA CONSTRUCTION PLOT NO. 112, GROUND FLOOR 6 TH ROAD TPS - III, KHAR WEST MUMBAI - 40 0 052. VS. ACIT CC - 9 CGO BUILDING ANNEXE M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAAFB4438R ASSESSEE BY SHRI B.G. SAKARIA DEPARTMENT BY SHRI S. RAVICHANDRAN DATE OF HEARING 28 . 8 . 201 6 DATE OF PRONOUNCEMENT 2 . 9 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.8.2011 PASSED BY LEARNED CIT(A) - 37, MUMBAI CONFIRMING THE PENALTY OF ` 1,76,540/ - LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE I.T. A CT. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF UNDERTAKING CIVIL WORKS CONTRACT FROM THE GOVERNMENT, SEMI GOVERNMENT BODIES. IT FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF ` 9,31,535/ - . IN THE STATEMENT OF TOTAL INCOME THE ASSESSEE HAD CLAIMED EXEMPTION FOR AGRICULTURAL INCOME OF ` 15,47,860/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE EXPENSES CLAIMED BY THE ASSESSEE INCLUDED A SUM OF ` 5,71,328/ - RELATING TO AGRICULTURAL ACTIVITIES , BUT THE ASSESSEE DI D NOT DISALLOW THE SAME WHILE COMPUTING THE TOTAL INCOME . WHEN THE ASSESSING OFFICER POINTED OUT THE SAME , THE ASSESSEE AGREED FOR DISALLOWANCE OF THE SAME AND ALSO FILED A REVISED COMPUTATION OF TOTAL INCOME. THE ASSESSING OFFICER ACCORDINGLY COMPLETED TH E ASSESSMENT AND THEREAFTER LEVIED PENA LTY U/S. 271(1)(C) OF THE ACT ON M/S. BASERA CONSTRUCTION 2 AGRICULTURAL EXPENSES OF ` 5,71,328/ - DISALLOWED IN THE ASSESSMENT PROCEEDINGS. 3. THE ASSESSEE SUBMITTED THAT IT H AS INADVERTENTLY OMITTED TO DISALLOW AGRICULTURAL EXPENSES AND IT W AS ALSO DUE TO TYPOGRAPHICAL ERROR. IT WAS SUBMITTED THAT NET AGRICULTURAL INCOME OF 9,76,532/ - SHOULD HAVE BEEN DEDUCTED FROM THE PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT , BUT THE GROSS AGRICULTURAL AMOUNT OF ` 15,47,860/ - WAS DEDUCTED . THE ASSESSING O FFICER WAS NOT CONVINCED WITH THE ABOVE SAID EXPLANATION S AND ACCORDINGLY LEVIED PENALTY OF ` 1,76,540/ - U/S. 271(1)(C) OF THE I.T. ACT. LEARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE IS PLACED AT PAGE NO. 57 OF THE PAPER BOOK. A P ERUSAL OF THE SAME WOULD SHO W THAT THE ASSESSEE HAS SHOWN GROSS AGRICULTURAL INCOME OF ` 15,47,860/ - SEPARATELY IN THE INCOME SIDE , WHERE AS AGRI CULTURAL EXPENSE S HAS NOT BEEN SHOWN SEPARATELY IN THE EXPENDITURE SIDE . WE NOTICE THAT IT HAS BEEN CL UBBE D WITH OTHER EXPENSES. WHILE COMPUTING THE TOTAL INCOME, T HE ASSESSEE SHOULD HAVE DEDUCTED NET AGRICULTURAL INCOME (GROSS AGRICULTURAL INCOME LESS E XPENSES) FROM THE PROFIT DECLARED IN THE PROFIT AND LOSS ACCOUNT. INSTEAD , THE ASSESSEE HAS DEDUCTED GROSS AGRICULTURAL INCOME SHOWN IN THE INCOME SIDE FROM PROFIT. ACCORDING TO THE ASSESSEE MISTA KE HAS OCCURRED BY INADVERTENCE AND HENCE THE ASSESSEE HAS IMMEDIATELY AGREED TO THE DISALLOWANCE OF AGRICULTURAL EXPENSES , WHEN IT WAS POINTED OUT BY THE ASSESSING OFFICER. WE NOTICED THAT THE ASSESSEE HAS ALSO FILED REVISED COMPUTATION OF INCOME BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCE EDINGS. FROM THE FACTS NARRATED ABOVE, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THE MISTAKE HAS OCCURRED BY INADVERTENCE . WE NOTICE THAT ALL THE MATERIAL RELATING TO THE COMPUTATION OF INCOME HAS BEEN FILED BY THE ASSE SSEE BEFORE THE ASSESSING OFFICER. M/S. BASERA CONSTRUCTION 3 5. EXPLANATION 1 TO SEC. 271(1)(C) PROVIDES FOR THE SITUATIONS AS TO WHEN AN ADDITION SHALL BE DEEMED TO BE TAKEN AS CONCEALMENT OF INCOME, I.E . , (A) WHEN A PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATI ON WHICH IS FOUND TO BE FALSE OR (B) THOUGH THE PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF INCOME HA VE BEEN DISCLOSED. 6. THE ASSESSEE, IN THE INSTANT CASE, HAS EXPLAINED THAT THE AGRICULTURAL EXPENSES WERE OMITTED TO BE DISALLOWED BY INADVERTENCE. WE HAVE NOTICED THAT THE ASSESSEE HAS NOT SHOWN THE AGRICULTURAL EXPENSES SEPARATELY IN THE PROFIT AN D LOSS ACCOUNT, BUT IT HAS CLUBBED THE SAME ALONG WITH OTHER EXPENSES. HENCE, ON THE FACE OF THE PROFIT AND LOSS ACCOUNT, THE AGRICULTURAL INCOME WAS TAKEN AT GROSS INCOME AND THERE WAS A POSSIBILITY OF NOT CONSIDERING THE EXPENSES. OTHERWISE, WE NOTI CE THAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS MATERIAL AND RELEVANT TO THE COMPUTATION OF INCOME. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON IT UNDER EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT BY PLA CING ALL MATERIAL AVAILABLE BEFORE IT AND OFFERING AN EXPLANATION , THOUGH IT COULD NOT BE SUBSTANTIATED . ACCORDINGLY, WE ARE OF THE VIEW THAT LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY U/S. 271(1)(C) OF THE ACT. ACCORDINGLY, WE SET ASIDE T HE ORDER OF LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY. 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 . 9 .2016 SD/ - SD/ - (MAHAVIR SINGH ) (B.R.BASK ARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2/ 9 / 20 1 6 COPY OF THE ORDER FORWARDED TO : M/S. BASERA CONSTRUCTION 4 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS