Mr. Dynamic Electrical Switchgear Pvt. Ltd., Noida V. ITO, Noida

ITA 821/DEL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5527 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 16-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: P K RASTOGI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DLEHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER I.T.A. NO.821/DEL/2016 ASSESSMENT YEAR: 2010-11 DYNAMIC ELECTRICAL SWITCHGEAR P. LTD., VS INCOME- TAX OFFICER, D-83, SECTOR 20-, NOIDA. CIRCLE-1, NOIDA. (PAN: AAACD8153C) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P.K. RASTOGI, CA RESPONDENT BY: SHRI KAUSHLENDRA TI WARI, SR. DR ORDER DATE OF HEARING: 11.04.2018 DATE OF PRONOUNCEMENT: 13.04.2018 PER K. NARSIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 29.12.2015 PASSED BY TH E LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1, NOIDA (FOR SHORT CIT(A))), ASSESSEE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENG AGED IN THE BUSINESS OF SUPPLY OF ALL KINDS OF ELECTRICAL GOODS AND ALSO ENG AGE IN THE BUSINESS OF WORK CONTRACT OF ELECTRICAL SUPPLY, FIXING AND INSTALLATI ON OF VARIOUS KINDS OF ELECTRICAL WORKS. ASSESSEE IS ALSO DOING FIXING AND INSTALLATI ON FOR SOME OF THE PARTIES WITH/ WITHOUT MATERIALS AS PER TERMS OF CONTRACT. MAJOR I NCOMES OF THE ASSESSEE ARE THROUGH SALES OF GOODS, JOB WORK RECEIPTS AND WORK CONTRACT RECEIPTS. ASSESSEE 2 HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 27.09.2010 DECLARING TOTAL INCOME OF RS. 35,96,710/-. DURING C OURSE OF ASSESSMENT PRECEDING THE ASSESSEE PRODUCED THE AUDITED BALANCE SHEET, BANK STATEMENT AND OTHER INFORMATION ASKED BY THE ASSESSING OFFICER . BUT AS PER THE ASSESSING OFFICER THESE INFORMATION/DETAILS WERE NOT COMPLETE AND NOT SUPPORTED BY NECESSARY BILL/ VOUCHERS ETC. IN VIEW OF INCOMPLETE INFORMATION THE ASSESSING OFFICER COMPUTED THE PROFIT ON ESTIMATED BASIS THAT IS @ 8% OF CONTRACT RECEIPT AND 5% SALES OF ELECTRICAL GOODS. 3. SIMULTANEOUSLY, THE LEARNED AO INITIATED PENALTY P ROCEEDINGS AND CONCLUDED THAT BY WAY OF ORDER DATED 27.9.2013 WITH T HE LEVY OF PENALTY OF RS.6 LACS U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (T HE ACT). APPEAL PREFERRED BY THE ASSESSEE TO THE LEARNED CIT(A) WAS DISMISSED BY WAY OF IMPUGNED ORDER STATING THAT THE ASSESSEE HAD ACCEPTED THE ADDITION OF RS.18,78,381/- BY NOT FILING ANY APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY AND ON THAT GROUND THE PENALTY IS JUSTIFIED. 4. CHALLENGING THE IMPUGNED, THE ASSESSEE IS IN APP EAL BEFORE US STATING THAT THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHI NG OF INACCURATE PARTICULARS THEREOF. LD. AR SUBMITTED THAT ALL THE FACTS OF INC OME AND EXPENDITURE WERE DISCLOSED BY THE ASSESSEE AND ALL THE PARTICULARS OF INCOME WERE ALSO FURNISHED WHILE FILING OF THE RETURN OF INCOME AND DURING THE COURSE OF ASSESSMENT, BUT THE LEARNED ASSESSING OFFICER HAS MADE AD HOC ADDITION BASED ON 8% ON CONTRACT RECEIPTS AND 5% ON SALES OF ELECTRICAL GOODS, WITHO UT ANY FACT/MATERIAL INFORMATION ON RECORDS. LASTLY HE SUBMITTED THAT WH EN THE INCOME WAS DETERMINED ON ESTIMATE BASIS, NO PENALTY U/S 271(1)( C) CAN BE LEVIED. THE 3 LEARNED AR PLACED RELIANCE ON THE DECISION OF THE H ONBLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. (2010) 323 ITR 158 (SC). 5. PER CONTRA, LEARNED DR SUBMITTED THAT THERE ARE NO BONA FIDES IN THIS APPEAL AND VIDE PARA 5 OF THE IMPUGNED ORDER, LEARN ED CIT(A) OBSERVED THAT INSTEAD OF ACTING WITH CLEAN HANDS, THE ASSESSEE AL LEGED THAT THE REVENUE DID NOT SERVE THE ORDER ON THE ASSESSEE BY POST AND THE SAME WAS RECEIVED BY THE CA, WHO NEITHER PROVIDED THE COPY TO THE ASSESSEE NOR IN FORMED THE ASSESSEE ABOUT THE SAME. FOR WANT OF BONA FIDES, ,LEARNED DR SUBM ITTED THAT THE APPEAL IS LIABLE TO BE DISMISSED. LD. DR PLACED RELIANCE ON T HE DECISIONS REPORTED IN UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS FF2007) 295 ITR 244], CIT VS ZOOM COMMUNICATION (P.) LTD. [2010] 327 ITR 510 (DELHI) , CIT VS MOSER BAER INDIA LTD. 20091 315 ITR 460 (SC), C1T VS GOLD COIN HEALTH FOOD (P.) LTD 304 ITR 308 (SC), MAK DATA P. LTD VS. CIT T38 TAXMANN.COM 448 (SC), STEEL INGOTS LTD VS. CIT [296 ITR 228] AND CIT VS ESCORTS FINANCE LTD [2010] 328 ITR 44 (DELHI), AND ARGUED THAT WHERE THERE IS DIFFERENCE BETWEEN INCOME ASSES SED AND INCOME RETURNED TO CONSIDERABLE EXTENT, EXPLANATION TO SECTION 271( 1)(C) BECAME APPLICABLE AND ASSESSEE HAVING FAILED TO DISCHARGE ONUS BEING CAST ON ASSESSEE BY VIRTUE OF SAID EXPLANATION, ASSESSING OFFICER WAS JUSTIFIED IN IMP OSING PENALTY. 6. WE HAVE PERUSED THE RECORD IN THE LIGHT ON EITHE R SIDE. IN THE ASSESSMENT ORDER DATED 18.3.2013, LEARNED AO CLEARLY OBSERVED T HAT THE ACCOUNTS OF THE ASSESSEE WERE AUDITED AND THE COPY OF THE AUDIT REPO RT WAS FURNISHED AND THE ASSESSEE FURNISHED VARIOUS DOCUMENTS INCLUDING THE COPY OF BANK ACCOUNT DURING THE ASSESSMENT PROCEEDINGS WHICH WERE LOOKED INTO A ND VERIFIED. HOWEVER, INASMUCH AS THE ASSESSEE FAILED TO PRODUCE THE BILL S AND VOUCHERS ALONG WITH THE 4 DETAILS, AND LEDGERS OF PARTY WISE PURCHASES, LEARNE D AO PROCEEDED TO ASSESS THE INCOME OF THE ASSESSEE ON ESTIMATE BASIS. 7. IT IS PERTINENT TO NOTE THAT THE BOOKS OF ACCOUN TS ARE NOT REJECTED BY THE LEARNED AO NOR ANY SPECIFIC IRREGULARITY OR DISCREPAN CY IN THE FURNISHED MATERIAL WAS POINTED OUT BY THE LEARNED AO. ADMITTEDLY, ACCOU NTS WERE AUDITED AND THE COPY OF AUDIT REPORT WAS AVAILABLE WITH THE AO BESID ES WHICH ADMITTEDLY THE ASSESSEE FURNISHED VARIOUS DOCUMENTS INCLUDING COPY OF BANK ACCOUNT DURING THE ASSESSMENT PROCEEDINGS. IT IS NOT A CASE WHERE WRO NGFUL CLAIM WAS MADE BY THE ASSESSEE OR THE LEARNED AO FINDING OUT ANY SPECIFIC DISCREPANCY IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. AS A MATTER OF FACT, BOO KS WERE NOT REJECTED. ONLY REASON THAT THE BILLS AND VOUCHERS ALONG WITH DETAI LS AND LEDGERS OF PARTY WISE PURCHASES WERE NOT FILED LEARNED AO RESORTED TO ASS ESS THE INCOME ON ESTIMATE BASIS. NOW, THE QUESTION IS WHETHER THE DIFFERENCE IN THE INCOME ASSESSED BY THE AO AND THE RETURNED INCOME AMOUNTS TO ANY CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF. 8. IN CIT VS. AERO TRADERS P. LTD., 322 ITR 316 (DE L), THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT NO PENALTY U/S 271(1)(C) CAN B E IMPOSED WHEN THE INCOME IS DETERMINED ON ESTIMATE BASIS AND A SIMILAR VIEW IS TAKEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HARIGOPAL SINGH VS CIT (2002) 258 ITR 85 AND HONBLE GUJARAT HIGH COURT IN CIT VS SHUBHAS H TRADING CO., 221 ITR 110 (GUJ). IN CIT VS. SANGRUR VANASPATI MILLS LTD 2008 303 ITR 53 P H, IT IS HELD THAT, - .THAT IN ORDER TO ATTRACT CLAUSE (C) OF SECTION 271(1) OF THE ACT, IT IS NECESSARY THAT THERE MUST BE CONCEALMENT BY THE ASSESSEE OF T HE PARTICULARS OF HIS INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INC OME. THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE NOT ATTRACTED TO CASES WHERE THE IN COME OF AN ASSESSEE 5 IS ASSESSED ON ESTIMATE BASIS AND ADDITIONS ARE MAD E THEREIN. IT WAS HELD THAT WHEN THE ADDITION HAD BEEN MADE ON THE BASIS OF EST IMATE AND NOT ON ACCOUNT OF ANY CONCRETE EVIDENCE OF CONCEALMENT, THEN THE P ENALTY WAS NOT LEVIABLE. 9. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT IT IS NOT A CASE OF THE LEARNED AO POINTING OUT ANY SPECIFIC DI SCREPANCY IN THE BOOKS OF ACCOUNTS TO DEMONSTRATE THAT THERE IS EITHER CONCE ALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF BUT IT IS A CASE WHERE THOUGH THE ACCOUNTS OF THE ASSESSEE ARE AUDITED AND REPORT OF THE AUDITORS IS MADE AVAILABLE, STILL FOR NON PRODUCTION OF CERTAIN VOUC HERS AND BILLS, LEARNED AO PROCEEDED TO ESTIMATE THE INCOME WITHOUT REJECTING THE BOOKS OF ACCOUNTS. IN THESE CIRCUMSTANCES, BY FOLLOWING PRECEDENCE LAID DO WN BY THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE APEX COUR T, WE FIND IT DIFFICULT TO SUSTAIN THE PENALTY. THE PENALTY IS, THEREFORE, DELE TED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH APRIL, 2018. SD/- SD/- (N.K. SAINI) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 13 TH APRIL, 2018 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR