ACIT,Aurangabad, V. Salim Ahmed Khan, Aurangabad

ITA 938/PUN/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3081 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 13-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADDED SAME T O TOTAL INCOME OF
• Assessee Lawyers: RE VEALED THAT AT ONE TIME HAS
• Keywords: Bonafide belief
• Section: 40A(3)

Judgement Text

!'#$% &'' #% '()*+ +,--.#//00'!1,--)2-3% //00' // 2 04 0'(5$' 6 , 7289 7:3);--) 10': <'' ==0 '' =1+/'/00 =7: <' /=0 9 PER SHAILENDRA KUMAR YADAV JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-II, AURANGABAD DT. 16-04-2007 AGAINST THE D ELETION OF PENALTY LEVIED U/S. 271(1)(C ) HAS BEEN OPPOSED. 2. ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CON STRUCTION. SURVEY ACTION WAS CONDUCTED IN THIS CASE IN THE YEAR UNDER CONSIDERATION WHEREIN ASSESSEE OFFERED AN AMOUNT OF RS. 23,50,136 /- FOR TAXATION AS SECURED ADVANCE WHICH THE ASSESSEE STATED THAT AD VANCE IS NOTHING BUT CONTRACT RECEIPT FROM APMC. AS THIS AMOUNT WAS DECLARED DURING THE COURSE OF THE SURVEY, THE A.O. LEVIED THE PENAL TY U/S. 271(1)(C ) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. FURT HER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O OBSERVED THAT ASSES SEE HAS MADE PURCHASES IN CASH TO THE TUNE OF RS. 30,00,000/-. ACCORDINGLY, HE ITA NO 938/PN/2007 SHRI SALIM AHMED KHAN, A.Y.2003-04 PAGE OF 3 2 DISALLOWED 20% OF THIS AMOUNT AND ADDED THE SAME T O THE TOTAL INCOME OF THE ASSESSEE AND HE ALSO LEVIED PENALTY U/S. 271 (1)(C ) FOR THIS DISALLOWANCE. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHO GRANTED RELIEF ON BOTH THE COUNTS. SAME HAS BEE N OPPOSED BEFORE US AND LD A.R. HEAVILY RELIED ON THE ORDER OF THE A .O ON BOTH ACCOUNTS. ON THE OTHER HAND, LD. A.R. HAS FILED WRITTEN NOTE WHEREIN LD. A.R. FOR THE ASSESSEE HAS SUPPORTED THE IMPUGNED ORDER OF LD CIT(A). 3. AFTER GOING THROUGH ALL THE MATERIAL ON RECORD, WE FIND MAINLY PENALTY HAS BEEN LEVIED BECAUSE AS PER A.O, IT WAS DURING THE COURSE OF SURVEY THAT ASSESSEE WAS ASKED TO GIVE DETAILS ON ADVANCES AND IN RESPONSE TO THESE ADVANCES, ASSESSEE OFFERED THIS A MOUNT. CIT(A) HAVING VERIFIED THE FACTS ON RECORD OBSERVED THAT IN STATEMENTS RECORDED DURING THE COURSE OF SURVEY, ASSESSEE HAS OFFERED R S. 23,50,136/- ON HIS OWN UNDER BONAFIDE BELIEF AS IS EVIDENT FROM AN SWER TO QUESTION NO. 19 OF HIS STATEMENT RECORDED DURING SURVEY UNDER 13 3A ON 21.9.2005. THEREFORE, CIT(A) RIGHTLY OBSERVED THAT IT CANNOT B E SAID THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOME. ACCOR DINGLY, HE WAS JUSTIFIED IN DELETING THE PENALTY ON THIS ACCOUNT. 4. WITH REGARDS TO PENALTY BASED ON DISALLOWANCE UN DER SECTION 40A(3), CIT(A) FOUND FROM THE PERUSAL OF THE DOCUME NTS FILED AND IN PARTICULAR, LEDGER ACCOUNT FILED BY THE ASSESSEE RE VEALED THAT AT ONE TIME, ASSESSEE HAS NOT MADE PAYMENTS MORE THANRS.20 ,000/-. IN VIEW OF THESE FACTS, SEC. 40A(3), SECTION 40A(3) WAS NOT TO BE ATTRACTED, OBSERVED BY THE LD CIT(A). THERE WAS NO EVIDENCE O N RECORD TO SUGGEST THAT ASSESSEE HAS MADE PAYMENT ABOVE RS. 20 ,000/-. IN SPTE ITA NO 938/PN/2007 SHRI SALIM AHMED KHAN, A.Y.2003-04 PAGE OF 3 3 OF THIS, ASSESSEE AGREED FOR THE ADDITION TO AVOID THE LITIGATION. IN VIEW OF ABOVE DISCUSSION, CIT(A) OBSERVED THAT THERE WAS NO DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO REDUCE ITS I NCOME. IT WAS ALSO FOUND THAT IT WAS NOT THE CASE FOR FILING OF INACCU RATE PARTICULAS OF INCOME, BECAUSE AUDITOR HAD CERTIFIED THAT NO PAYME NT HAS BEEN MADE ABOVE RS. 20,000/- AND ACCORDINGLY, THERE WAS NO VI OLATION OF PROVISION OF SEC. 40A(3). IN VIEW OF THE ABOVE, ASSESSEE UND ER BONAFIDE BELIEF ACTING UPON AUDITORS REPRT AND THE ACTUAL FACTS, FILED HIS STATEMENT OF ITS INCOME AS FAR AS SECTION 40A(3) IS CONCERNED. SO, PENALTY UNDER THE PROVISIONS OF SEC. 271(1)(C ) WAS NOT JUSTIFIED AND RIGHTLY DELETED BY THE CIT(A). WE UPHOLD THE SAME. 5. AS A RESULT, APPEAL FILED BY THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22TH DECEMBER 2010. +2 +2 #&'' % # 9!9>% $9 !' #$# % & ' ' $( ) ( ) *( )&+), -( )&+).++ -( )!((/010' 2( 3 0 +' )4)