The DCIT, Circle-1, Surat V. M/s. Karpara Project Engg.Pvt.Ltd., Surat

ITA 984/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85822 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 04-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUN TANT MEMBER DEPUTY COMMISSIONER OF INCOME TAX, ROOM NO. 108, AAYAKAR BHAVAN, MAJURA GATE, SURAT (APPELLANT) VS M/S. KARPARA PROJECT ENGG. PVT. LTD, J-1,2, JAY JALARAM SOCIETY, B/H. LAKE VIEW GARDEN, PIPLOD, SURAT PAN: AABCK 8206 A (RESPONDENT) REVENUE BY: SHRI B.L. YADAV, D.R. ASSESSEE BY: WRITTEN SUBMISSION DATE OF HEARING : 27-02-2015 DATE OF PRONOUNCEMENT : 13-03- 2015 / ORDER PER : MUKUL KR. SHRAWAT, JUDICIAL MEMBER:- THIS IS AN APPEAL FILED BY THE REVENUE ARISING FRO M THE ORDER OF CIT(A)-I, SURAT DATED 21-01-2011. FOLLOWING MAIN G ROUND HAS BEEN RAISED:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S . 271(1)(C) INSPITE ITA NO. 984/AHD/2011 ASSESSMENT YEAR 2005-06 I.T.A NO. 984/AHD/2011 A.Y. 2005-06 PAGE NO DCIT VS. M/S. KARPARA PROJECT ENGG. PVT. LTD 2 OF THE FACT THAT NEITHER DID THE ASSESSEE HAD SHOWN THE CLOSING STOCK OF WIP NOR DID IT PRODUCE BOOKS OF ACCOUNTS AND SUP PORTING EVIDENCES TO SUBSTANTIATE ITS CLAIM IN RESPECT OF W AGES AND UNVERIFIABLE EXPENSES. 2. AT THE OUTSET, IT IS HEREBY NOTED THAT ON THE DA TE OF HEARING NO-ONE HAS APPEARED FROM THE SIDE OF THE RESPONDENT BUT A WRITTEN SUBMISSION ALONG WITH AN ORDER OF THE TRIBUNAL HAS BEEN FILED WITH A REQUEST TO DECIDE THIS APPEAL OF THE REVENUE ACCORDINGLY. ON THE OT HER HAND, FROM THE SIDE OF THE REVENUE LD. D.R., SHRI B.L. YADAV, APPEARED AND PLACED RELIANCE ON THE PENALTY ORDER. 3. WE HAVE PERUSED THE PENALTY ORDER U/S. 271(1)(C) DATED 19 TH MARCH, 2010. THE IMPUGNED PENALTY WAS LEVIED IN RESPECT OF THE FOLLOWING ADDITIONS:- (I) ADDITION ON ACCOUNT OF CLOSING STOCK OF WORK- -IN-PROGRESS: RS. 13,77,737/- (II) DISALLOWANCE OUT OF WAGES: RS. 22,79,637/- (III) DISALLOWANCE OUT OF UNVERIFIABLE EXPENSES RS. 17,13,042/- 4. THE PRESENT FACTUAL POSITION IS THAT ITAT C BE NCH, AHMEDABAD IN ITA NO. 2261 AND 2341/AHD2008 A.Y. 2005-06 ORDER DA TED 10-02-2012 IN ASSSESSEES OWN CASE HAS DELETED ALL THE THREE ADDI TIONS. 4.1 IN RESPECT OF THE ADDITION PERTAINING TO AN ES TIMATED WORK-IN- PROGRESS THE RESPECTED CO-ORDINATE BENCH HAS MENTI ONED AN ANOTHER ORDER FOR A.Y. 2004-05 PRONOUNCED IN ASSESSEES OWN GROUP CASE BEARING ITA NO. 1080/AHD/2008 AND THEREUPON HELD THAT NO AM OUNT OF CONTRACT RECEIPT WOULD REMAIN WITHOUT TAX BECAUSE THE WORK I N PROGRESS WAS SHOWN AS RECEIPTS IN THE SUBSEQUENT YEARS AND THAT THE SA ME TREATMENT OF THE I.T.A NO. 984/AHD/2011 A.Y. 2005-06 PAGE NO DCIT VS. M/S. KARPARA PROJECT ENGG. PVT. LTD 3 WORK-IN-PROGRESS WAS GIVEN IN THE PRECEDING YEARS A ND THAT THE PROFIT DECLARED WAS COMPARABLE WITH THE PROFITS OF THE ASS ESSEE IN THE PAST HENCE THE IMPUGNED ADDITION PERTAINING TO WORK-IN-P ROGRESS WAS HELD AS NOT SUSTAINABLE IN THE EYES OF LAW. 4.2 ABOUT ADHOC DISALLOWANCE OF 5% PERTAINING TO WA GES, IT WAS NOTED THAT THE AO HAD REPEATED THE ADDITIONS FOLLOWING A. Y. 2004-05, HOWEVER FOR THAT YEAR THE TRIBUNAL HAS HELD THE MATTER IN F AVOUR OF THE ASSESSEE AS PER THE REFERENCE MADE HEREINABOVE. HENCE, FOR THE YEAR UNDER CONSIDERATION AS WELL, THE IMPUGNED ADDITION ON ACC OUNT OF WAGES DISALLOWANCE WAS DELETED. 4.3 LIKEWISE THE ADDITION PERTAINING TO UNVERIFIABL E EXPENSES, IT WAS NOTED BY THE TRIBUNAL THAT MERELY AN ADHOC DISALLOW ANCE WAS MADE ALTHOUGH MOST OF THE EXPENSES WERE VERIFIABLE FROM THE BANK STATEMENT HENCE THE IMPUGNED ADHOC ADDITION WAS DIRECTED TO B E DELETED. 4.4 SINCE ALL THE ADDITIONS WERE DELETED BY THE RES PECTED CO-ORDINATE BENCH, THEREFORE, THE IMPUGNED CONCEALMENT PENALTY DOES NOT SURVIVE. THE VIEW TAKEN BY LD. CIT(A) IS HEREBY CONFIRMED AN D THE GROUND RAISED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 13/03/2015 A.K. I.T.A NO. 984/AHD/2011 A.Y. 2005-06 PAGE NO DCIT VS. M/S. KARPARA PROJECT ENGG. PVT. LTD 4 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,