M/s. L.R. Construction, Ahmedabad V. The ACIT.,Cent.Circle-1(2), Ahmedabad

ITSSA 178/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0268 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-07-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR SR DR
• Keywords: Condonation of delay
• Section: 133A

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) IT(SS)A NO.101/AHD/2011 [ASSTT.YEAR : 2004-2005] ACIT, CENT.CIR.1(2) AHMEDABAD. /VS. M/S.L.R. CONSTRUCTION C/O. L.G. THAKKAR 1 ST FLOOR, KASHMIRA CHAMBERS B/H. OLD HIGH COURT NAVRANGPURA, AHMEDABAD. PAN : AABPL 9316 K IT(SS)A NO.178 AND 179/AHD/2011 [ASSTT.YEAR : 2004-2005] M/S.L.R. CONSTRUCTION C/O. L.G. THAKKAR 1 ST FLOOR, KASHMIRA CHAMBERS B/H. OLD HIGH COURT NAVRANGPURA, AHMEDABAD. /VS. ACIT, CENT.CIR.1(2) AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/ // /0-. 0-. 0-. 0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI ASEEM THAKKAR + 2 3 )/ REVENUE BY : SONIA KUMAR, SR.DR 5 2 &(*/ DATE OF HEARING : 30 TH JULY, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 08/08/2014 )9 / O R D E R IT(SS)A NO.101, 178 AND 179/AHD/2011 -2- PER G.C. GUPTA, VICE-PRESIDENT: THESE APPEALS OF THE REVENUE AND THE ASSESSEE FOR THE ASSTT.YEAR 2004-2005 ARE D IRECTED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING DISPOSED OF W ITH THIS CONSOLIDATED ORDER. IT(SS)A NO.179/AHD/2011 (ASSESSEES APPEAL) 2. THIS APPEAL IS BARRED BY LIMITATION BY 2 DAYS. THE ASSESSEE HAS FILED APPLICATION FOR CONDONATION OF DELAY WITH SUPPORTIN G AFFIDAVIT EXPLAINING THE REASONS FOR DELAY IN FILING THE APPEAL BEFORE THE T RIBUNAL. WE HAVE HEARD THE PARTIES ON THE ISSUE OF CONDONATION OF DELAY IN FIL ING THE APPEAL BEFORE THE TRIBUNAL. IN THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT IT IS A FIT CASE FOR CONDONATION OF DELAY OF 2 DAYS IN FILING THE PRESEN T APPEAL BEFORE THE TRIBUNAL, AND ACCORDINGLY, THE DELAY OF TWO DAYS IS CONDONED. 3. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ASSES SMENT MADE BY THE AO U/S.153A(1)(B) R.W.S. 1243(3) OF THE INCOME TAX ACT, 1961 WHICH IS ILLEGAL AND BAD IN LAW AND THEREFORE, THE SAME REQU IRES TO BE CANCELLED. 2 . THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITIONS MERELY ON SURMISES AND CONJECTURES AND WITHOUT ANY BASIS. 3 . THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITIO N TO THE EXTENT OF 5% OF THE TOTAL AMOUNT OF BILLS ISSUED ON AN ESTIMA TE BASIS & WITHOUT ANY OTHER EVIDENCES AND MATERIAL TO SUPPORT HE ESTIMATI ON. 4 . THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THE FACT T HAT THE APPELLANT FIRM HAS RECEIVED IN CASH ONLY COMMISSION @1.5% OF THE TOTAL AMOUNT BILLS ISSUED AFTER DEDUCTION OF TDS WHICH FORMS PAR T OF THE COMMISSION. 5 . THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNTS OF THE FIRM U/S.145 (3) OF THE IT ACT, 1961 WITHOUT POINTING OUT ANY SPECIFIC DEFECT OR DISCREP ANCY THEREIN. IT(SS)A NO.101, 178 AND 179/AHD/2011 -3- 6. THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THE FACT TH AT THE AO, WHILE COMPUTING THE TOTAL INCOME OF THE APPELLANT HAS NOT CONSIDERED ALL THE EVIDENCES, STATEMENTS, AFFIDAVITS, MATERIAL AND OTH ER INFORMATION GATHERED U/S.132 AND/OR 133A OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SEARCH PROCEEDINGS & POST SEARCH PERIO D, ASSESSMENT PERIOD AS WELL AS THAT FORMING PART OF THE SEIZED R ECORDS ETC. 7. THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE AO HAS NOT CONSIDERED THE FACT THAT THE AMOUNT OF TOTAL RE CEIPTS FOR THE DEVELOPMENT OF THE LAND ETC. HAS BEEN WITHDRAWN ON THE SAME OR NEXT DAY AND GIVEN BACK TO SHRI ASHISH PATEL WHICH CAN BE VE RIFIED FORM THE EVIDENCES FOUND FROM THE SEARCH PROCEEDINGS & DULY ACCEPTED BY SHRI ASHISH PATEL. 8. THE APPELLANT SUBMITS THAT THE APPROPRIATE SET OFF THE INCOME/ADDITIONS/EXPENSES ETC. MAY KINDLY BE GIVEN, IN CASE THE ADDITIONS/DISALLOWANCES OF THE SAME IF MADE AND CON FIRMED BY THE IT AUTHORITIES FINALLY IN THE HANDS OF EITHER RADHE GR OUP, ASHISH PATEL, M/S.SAHARA INDIA COMMERCIAL CORPORATION LTD. (SICCL ), OR ALL THE FOUR PARTNERSHIP FIRMS AND THEIR PARTNERS INCLUDING THEM IN THEIR INDIVIDUAL CAPACITIES INTER SE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ONLY ISSUE IN THE GROUNDS OF THE APPEAL OF THE ASSESSEE IS REGARDING THE ASSESSMENT OF COMMISSION INCOME OF PROVIDING ACCOMMODATION BILLS BY THE ASSE SSEE. HE SUBMITTED THAT THE ISSUE IS COVERED WITH THE DECISION OF THE ITAT, AHMEDABAD BENCH IN ASSESSEES GROUP CASE OF M/S.DEVI DURGA CONSTRUCTIO N VS. ACIT FOR ASSTT.YEARS 2004-05 TO 2007-08 IN IT(SS)A.NO.181 TO 187/AHD/2011 DATED 11.7.2014, WHEREIN THE TRIBUNAL IN IDENTICAL FACTS HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE, AND HAS DIRECTED THE AO TO ASSESS THE ASSESSEE BY ESTIMATING THE COMMISSION INCOME OF THE ASSESSEE AT 2.5% OF THE TO TAL BILL AMOUNT, AS AGAINST THE RATE OF 5% APPLIED BY THE CIT(A). THE LEARNED SR.DR HAS RELIED ON THE ORDER OF THE AO. 5. WE HAVE CONSIDERED RIVAL SUBMISSION AND HAVE PER USED THE ORDERS OF THE AO AND THE CIT(A) AND ALSO THE ORDERS OF THE ITAT, AHMEDABAD IN GROUP CASE OF THE ASSESSEE IN M/S.DEVI DURGA CONSTRUCTION VS. ACIT, DATED 11.7.2014 (SUPRA). WE FIND THAT THE FACTS OF THE CASE OF THE ASSESSEE ARE IDENTICAL WITH THE IT(SS)A NO.101, 178 AND 179/AHD/2011 -4- FACTS OF THE CASE IN M/S.DEVI DURGA CONSTRUCTION AN D IN BOTH THESE CASES, THE COMMISSION INCOME WAS ESTIMATED DUE TO SEARCH AT TH E BUSINESS PREMISES OF THE RADHE GROUP AND THE ASSESSEE. THE TRIBUNAL DIRECTE D THE AO TO ESTIMATE THE COMMISSION INCOME OF THE ASSESSEE AT 2.5% OF THE TO TAL AMOUNT OF RECEIPT RECEIVED BY THE ASSESSEE. THE FACTS OF THE CASE OF THE ASSESSEE BEING IDENTICAL WITH THE FACTS OF THE CASE OF M/S.DEVI DURGA CONSTR UCTION AND THE ISSUE BEING COVERED WITH THE DECISION OF THE TRIBUNAL IN M/S.DE VI DURGA CONSTRUCTION VS. ACIT, DATED 11.7.2014 (SUPRA), WE DIRECT THE AO TO ESTIMATE THE COMMISSION INCOME OF THE ASSESSEE AT 2.5% OF THE TOTAL AMOUNT OF RECEIPTS RECEIVED BY THE ASSESSEE, AND ACCORDINGLY, THE GROUNDS OF THE APPEA L OF THE ASSESSEE ARE PARTLY ALLOWED. IT IS TO MENTION HERE THAT THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT ADDRESSED ANY ARGUMENTS ON THE LEGAL ISSUE RAISED I N THE GROUNDS OF THE APPEAL OF THE ASSESSEE INCLUDING THE GROUND NO.1 OF THE AP PEAL, AND ACCORDINGLY, THESE GROUNDS OF THE ASSESSEE ARE DISMISSED. 6. IT(SS)A.NO.101/AHD/2011 (REVENUES APPEAL) UNDER SECTION 271(1)(C) OF THE I.T.ACT. 7. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN GIVING RELIEF OF 95% OF PENALTY IMPOSED OF RS.2,17,82,690/- I.E. RS.2,06 ,93,556/- 8. IT(SS)A.NO.178/AHD/2011 (ASSESSEES APPEAL) UNDE R SECTION 271(1)(C) OF THE I.T.ACT. 9. THE ONLY GROUND OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT @100% OF THE TAX SOUGHT TO BE EVADED ON THE CONCEALED INCOME DETERMINED ONLY ON ESTIMATE BASIS AS PER THE APPELLATE ORDER DATED 2.12.2010 PASSED IN RESPECT OF QUANTUM APPEALS. HE SOUGHT TO HAVE DELETED THE PENALTY LEVIED U/S.271(1)(C) OF THE IT ACT, 1961 ON THE ESTIMATED INCOME/ADDITIONS/DETERMINED/MADE. IT(SS)A NO.101, 178 AND 179/AHD/2011 -5- 10. BOTH THESE APPEALS PREFERRED BY THE REVENUE AND THE ASSESSEE RELATE TO SOLE ISSUE OF VALIDITY OF PENALTY IMPOSED UNDER SEC TION 271(1)(C) OF THE ACT. BOTH THE PARTIES BEFORE US SUBMITTED THAT THE ISSUE OF PENALTY UNDER SECTION 271(1)(C) IS IDENTICAL WITH THE ISSUE OF VALIDITY OF PENALTY UNDER SECTION 271(1)(C) IN THE ASSESSEES GROUP CASES OF M/S.DEVI DURGA CONSTRUCTION WHEREIN THE ITAT, AHMEDABAD VIDE ITS ORDER DATED 11.7.2014 (SUPRA) FOR THE ASSTT.YEAR 2004-05 TO 2007-08 HAVE RESTORED THE ISSUE TO THE F ILE OF THE AO TO PASS DE NOVO ORDER IN ACCORDANCE WITH LAW AFTER PROVIDING REASON ABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A) AND THE ORDER OF THE TRIBUNAL IN ASS ESSEES GROUP CASES OF M/S.DEVI DURGA CONSTRUCTION DATED 11.7.2014 (SUPRA) WHEREIN THE ISSUE OF VALIDITY OF PENALTY IMPOSED UNDER SECTION 271(1)(C) HAS BEEN RESTORED TO THE FILE OF THE AO. RELEVANT PORTION OF THE ORDER OF THE TR IBUNAL (SUPRA) IN APPEAL AGAINST ORDER UNDER SECTION 271(1)(C) ARE REPRODUCE D HEREUNDER: 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) HAS HELD THAT FOR LEVY OF PENALTY IT SHOULD BE FOUND THAT ALL THE CONDITIONS OF SECTION 271(1)(C) MUST EXIST BEFORE LEVY OF PENALTY AND THAT IT IS FOR THE REVENUE TO ESTABLISH THAT SUCH CONDITIONS EXIST. WE FIND THAT THERE IS NO SUCH FINDING RECORD ED BY CIT(A) IN THE IMPUGNED ORDER PASSED BY HIM THAT ALL THE CONDITION S FOR LEVY OF PENALTY WERE FULFILLED BEFORE LEVY OF PENALTY IN THIS CASE AND THAT REVENUE HAS ESTABLISHED THAT SUCH CONDITIONS EXIST. WE FIND THA T THE ONLY FINDING RECORDED BY CIT(A) FOR CONFIRMING THE PENALTY IN TH IS CASE WAS THAT ASSESSEE WAS ABATING IN TAX EVASION. THE ACT OF ABA TEMENT IN TAX EVASION FOR SOME OTHER PERSON COULD NOT BE MADE THE BASIS F OR LEVY OF PENALTY U/S. 271(1)(C) ON THE ASSESSEE. WE FURTHER FIND THAT CIT (A) HAS PASSED A CRYPTIC ORDER. ON THESE FACTS OF THE CASE, WE ARE O F THE VIEW THAT THE IMPUGNED ORDER COULD NOT BE SUSTAINED. HOWEVER IN T HE INTEREST OF JUSTICE TO BOTH THE PARTIES, WE CONSIDER THAT IT SHALL BE A PPROPRIATE TO RESTORE THE ISSUE OF PENALTY U/S. 271(1)(C) TO THE FILE OF A.O TO PASS A DE NOVO ORDER IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE AND A.O SHALL RECORD A CLEAR FINDING O N THE ISSUE THAT THE IT(SS)A NO.101, 178 AND 179/AHD/2011 -6- CONDITIONS FOR LEVY OF PENALTY U/S. 271(1)(C) EXIST S AND PROVED IN THIS CASE. WE DIRECT ACCORDINGLY. 12. WE FIND THAT FACTS OF THE CASE OF THE ASSESSEE BEING IDENTICAL TO THE FACTS OF THE CASE IN THE ASSESSEES GROUP CASE OF M/S.DEV I DURGA CONSTRUCTION, AND WE BEING IN AGREEMENT WITH THE ORDER OF THE TRIBUNAL D ATED 11.7.2014 (SUPRA) IN THIS CASE, WE RESTORE THE ISSUE OF PENALTY UNDER SECTION 271(1)(C) TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS AS IN CASE OF M/S.DEVI D URGA CONSTRUCTION (SUPRA), TO PASS A DE NOVO ORDER IN ACCORDANCE WITH LAW, AFTER PROVIDING REAS ONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, AND THE AO SHALL RECORD A CLEAR FINDING ON THE ISSUE THAT THE CONDITIONS FOR LEVY OF PENALT Y UNDER SECTION 271(1) EXISTS AND PROVED IN THIS CASE. WE DIRECT ACCORDINGLY. 13. IN THE RESULT, QUANTUM APPEAL OF THE ASSESSEE B EING IT(SS)A.NO.179/AHD/2011 IS PARTLY ALLOWED, AND CROS S APPEALS OF THE REVENUE AND THE ASSESSEE BEING IT (SS)A.NOS.101 AND 178/AHD/2011 ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD