Devki Nandan Bindal, New Delhi V. ITO, New Delhi

ITA 790/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3818 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 23-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Section: 271(1)(c); 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: B NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI A.K.GARODIA, ACCOUNTANT MEMBER ITA NO: 790 /DEL/2010 ASSESSMENT YEAR : 2005-06 A N D ITA NO: 791 /DEL/2010 ASSESSMENT YEAR : 2006-07 DEVKI NANDAN BINDAL VS. ITO, WARD 28 (3) 6224 C, KUCHA SHIV MANDIR NEW DELHI KATRA BARYAN, FATEHPURI DELHI 110 006 (APPELLANT) (RESPOND ENT) APPELLANT BY : NONE RESPONDENT BY : SRI HK LAL, D.R. O R D E R PER C.L.SETHI, JUDICIAL MEMBER THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAIN ST TWO SEPARATE ORDERS DATED 31 ST DECEMBER, 2009 PASSED BY THE LDCIT(A) CONFIRMING THE PENALTY AMOUNTING TO RS. 89,530/- AND RS. 52,68 0/- LEVIED BY THE A.O. U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2005-06 AND 2006-07 RESPECTIVELY. IN THESE CASES THE ASSESSMEN T WAS COMPLETED BY THE A.O. U/S 153A READ WITH S. 143(3) WHEREIN INCOM E FROM COMMISSION 2 ON DRAFT DISCOUNTING WAS DETERMINED BY ADOPTING THE RATE OF COMMISSION AT RS. 70 PER LAKH. CONSEQUENTLY, N ADDITION OF RS . 2,98,422/- AND RS. 1,89,963/- WAS MADE IN THE ASSESSMENT FOR THE A.Y. 2005-06 AND 2006- 07 RESPECTIVELY. THE AO ALSO INITIATED PENALTY PRO CEEDINGS U/S 271(1)(C) WITH REGARD TO THE ADDITION MADE BY HIM. AFTER ISS UING THE SHOW CAUSE NOTICE AND HEARING THE ASSESSEE, HE AO LEVIED THE P ENALTY AMOUNTING TO RS.. 89,530/- AND RS. 52,680/- WHICH HAS BEEN CONF IRMED BY THE LD.CIT(A). 2. WE HAVE HEARD THE LD.D.R. NONE WAS PRESENT FOR THE ASSESSEE. WE HAVE CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORDS. IN THE ASSESSMENT ORDER FOR BOTH THE A.YS IT HAS BEEN MENT IONED BY THE A.O. THAT IN THE ABSENCE OF DETAILS THE ASSESEE HAD AGRE ED TO DETERMINE THE INCOME FROM COMMISSION AT RS. 70/- PER LAKH AND TH E AO THEN ACCORDINGLY ESTIMATED THE COMMISSION BY ADOPTING TH E RATE OF COMMISSION AT RS. 70/-. THE A.O. IN THE ASSESSMENT HAD MENTIONED THAT THE RATE OF COMMISSION PER LAKH HAS BEEN ESTIMATED AT RS. 70/-, IN THE LIGHT OF THE FACT THAT THE ASSESEES A.R. AGREED TH AT COMMISSION MAY BE DETERMINED AT RS. 70/- PER LAKH, WHICH WAS FOUND T O BE REASONABLE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE . IT IS THUS CLEAR THAT ADDITION WAS MADE PURELY ON THE BASIS OF ESTIMATE A ND NOT ON THE BASIS OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH I NDICATING THAT THE ACTUAL RATE OF COMMISSION EARNED BY THE ASSESSEE WA S RS. 70/- PER LAKH. THE LD.CIT(A)S OBSERVATION THAT RS. 70/- HAS BEEN DETERMINED ON THE 3 BASIS OF SOME MATERIAL FOUND DURING THE COURSE OF SEARCH IS WITHOUT ANY BASIS. IN THE COURSE OF HEARING, THE LD.D.R. HAS NOT BEEN ABLE TO POINT OUT ANY MATERIAL FOUND DURING THE COURSE OF SEARCH FROM WHICH IT COULD BE ESTABLISHED THAT THE ASSESSEE WAS EARNING COMMIS SION @ RS.70/- PER LAKH. WE ARE, THEREFORE, OF THE OPINION THAT TH E ADDITION MADE BY THE A.O. IS PURELY BASED ON THE ASSESEES CONCESSION AN D NOT ON THE BASIS OF ANY MATERIAL DETECTED BY THE DEPARTMENT. THEREFORE , IT IS NOT A FIT CASE WHERE PENALTY U/S 271(1)(C) CAN BE LEVIED. WE THER EFORE CANCEL THE PENALTY LEVIED UPON THE ASSESSEE AND ALLOW THESE TW O APPEALS FILED BY THE ASSESSEE. 3. IN THE RESULT BOTH THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. THIS DECISION WAS PRONOUNCED IMMEDIATELY AFTER CON CLUSION OF THE HEARING ON 9.6.2010. (A.K.GARODIA) (C.L.SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: JUNE, 2010 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CI T(A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR // C O P Y // 4