M/s. Tirupati Construction Co., Bharuch V. The ACIT.,Cent.Circle-2, Baroda

ITSSA 70/AHD/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1318 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-06-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGHLA
• Keywords: Unexplained expenditure; Depreciation; Peak credit; Difference of opinion
• Section: 271(1)(c); 153A

Judgement Text

TIRUPATI CONSTRUCTION CO. V. ACIT, CENTRAL CIRCLE-2, BARODA./IT(SS)A NO.70/AHD/2014 /A.Y. 2005-06 PAGE 1 OF 5 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T(SS).A NO.70/AHD/2014 [ [ / ASSESSMENT YEAR: 2005-06 M/S. TIRUPATI CONSTRUCTION CO., 3/4, BHAGYODAYA ESTATE, JADESHWAR ROAD, BHARUCH-392 011. [PAN: AACFT 9517 H] V S. ASSITANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, BARODA / APPELLANT /RESPONDENT [ /ASSESSEE BY NONE. /REVENUE BY S MT. ANUPAMA SINGHLA, SR. DR / DATE OF HEARING: 04 . 12 .2019 /PRONOUNCEMENT ON: 06 . 12 .2019 /O R D E R PER O.P.MEENA, AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV, AHMEDABAD [IN SHORT CIT(A)] DATED 09.12.2013 FOR THE ASSESSMENT YEAR 2005-06. 2. GROUND NO.1 TO 4 ARE AGAINST THE CONFIRMATION THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT IN RESPECT OF INCOME DECLARED IN RETURN U/S.153A OF RS.1,78,221/-, ALLEGED UNACCOUNTED TRANSACTION OF RS.1,76,000/- AND PEAK CREDIT OF RS.5,19,797/-. 3. BRIEF FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FARM AND IT WAS ENGAGED IN THE BUSINESS OF ROAD CONTRACTOR AND HIRING OF EQUIPMENTS. TIRUPATI CONSTRUCTION CO. V. ACIT, CENTRAL CIRCLE-2, BARODA./IT(SS)A NO.70/AHD/2014 /A.Y. 2005-06 PAGE 2 OF 5 THE RETURN OF INCOME WAS FILED ON 31-10-2005 DECLARING TOTAL INCOME OF RS.3,64,179/-. A SEARCH U/S.132 OF THE ACT WAS CARRIED OUT IN THIS GROUP ON 17-01-2007 AND PROCEEDINGS U/S.153A WERE INITIATED AND THE APPELLANT FILED RETURN DECLARING TOTAL INCOME OF RS.5,42,000/- AFTER INCLUDING ADDITIONAL INCOME OF RS.1,78,221/- AND ADDITIONAL INCOME DECLARED AT RS.1,50,945/- AS PER RE-CASTED P&L A/C. HOWEVER, THE ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S 153A ON 31-12-2008 ON TOTAL INCOME OF RS.1,36,46,620/- AFTER MAKING ADDITIONS ON ACCOUNT OF ADDITIONAL INCOME OF RS.1,78,221/- DECLARED IN THE RETURN OF INCOME, EXCESS CLAIM OF DEPRECIATION OF RS.2,14,938/-, UNACCOUNTED TRANSACTION OF RS.1,76,000/- AND PAYMENTS AS PER SEIZED DIARY ANNEXURE-A1/6 OF RS.1,27,13,285/-. 4. BEING AGGRIEVED, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 25-09-2009 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND BY CORRECTING THE ADDITION MADE TOWARDS SEIZED DIARY INTO PEAK CREDIT OF RS.6,70,742/- AND 8% OF THE RECEIPTS, BOTH AGGREGATING TO RS.12,43,477/-. MEANWHILE, THE AO ISSUED NOTICE U/S.271(1)(C) AND LEVIED A PENALTY IN RESPECT OF RETURN OF INCOME OF RS.1,78,221/-, EXCESS CLAIM DEPRECIATION OF RS.2,14,938/-, UNACCOUNTED TRANSACTION OF RS.1,76,000/- AND UNDISCLOSED INCOME OF RS.12,43,477/- TOTALING INTO RS.18,12,636/- AND LEVIED A PENALTY OF RS.6,50,285/- BEING 100% OF TAX SOUGHT TO BE. 5. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO HAD CONFIRMING THE LEVY OF PENALTY ON ACCOUNT OF ADDITIONAL INCOME TIRUPATI CONSTRUCTION CO. V. ACIT, CENTRAL CIRCLE-2, BARODA./IT(SS)A NO.70/AHD/2014 /A.Y. 2005-06 PAGE 3 OF 5 OF RS.1,78,221/- AS SAME WERE NOT DISCLOSED IN THE ORIGINAL RETURN. FURTHER, THE PENALTY IN RESPECT OF EXCESS CLAIM OF DEPRECIATION OF RS.2,14,938/- WAS DELETED AS THIS ADDITION WAS DELETED BY THE ITAT. WITH REGARD TO UNACCOUNTED TRANSACTION OF RS.31,76,000/- RELATED TO ONGC WORK, THE PENALTY WAS CONFIRMED AS THE ASSESSEE WAS NOT ABLE TO FURNISH OF SOURCE FROM WHICH THE EXPENDITURE WAS INCURRED. WITH REGARD TO ADDITION OF RS.12,43,477/-, THE CIT(A) NOTED THAT AFTER THE ORDER OF ITAT THE INCOME HAS BEEN DETERMINED AS RS.6,70,742/- WHICH INCLUDED ON ACCOUNT OF RS.1,50,945/- WHICH WAS ALREADY DISCLOSED RETURN OF INCOME FILED U/S.153A OF THE ACT, WHICH AMOUNT IS INCLUDED IN THE FIRST ISSUE OF PENALTY OF RS.1,78,221/-. THEREFORE, THE PENALTY IN RESPECT OF AMOUNT OF RS.1,50,945/- WAS DELETED AND PENALTY IN RESPECT OF BALANCE AMOUNT OF RS.5,19,797/- WAS CONFIRMED. 6. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THIS TRIBUNAL. HOWEVER, NONE FROM THE SIDE OF ASSESSEE HAS ATTENDED BEFORE US. THEREFORE, WE HAVE PROCEEDED TO DECIDE THE APPEAL AS EX-PARTE ON MERIT. 7. LD. SR. DEPARTMENTAL REPRESENTATIVE (DR) RELIED ON THE ORDER OF THE LD. CIT(A). 8. WE HAVE HEARD THE LD. SR. DR AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT PENALTY COULD NOT BE SUSTAINED IN RESPECT OF RS.1,78,221/- AS THE SAME IS BEING DULY DECLARED BY THE ASSESSEE IN RESPONSE TO FILE U/S.153A OF THE ACT. THE APPEAL FOLDER CONTAINED AN ORDER OF HONBLE GUJARAT HIGH COURT [IN TAX APPEAL NO.1181 OF 2010 TIRUPATI CONSTRUCTION CO. V. ACIT, CENTRAL CIRCLE-2, BARODA./IT(SS)A NO.70/AHD/2014 /A.Y. 2005-06 PAGE 4 OF 5 DATED 03-12-2014] IN THE CASE OF KIRTI DAHYABHAI PATEL V. ACIT HAS BEEN CITED WHEREIN IT HAS BEEN LAID DOWN THAT PENALTY U/S.271(1)(C) OF THE ACT COULD NOT BE LEVIED IF THERE IS NO VARIATION BETWEEN THE INCOME SHOWS AND THE INCOME FILED AND THE INCOME RETURN U/S.153A OF THE ACT. THE HONBLE HIGH COURT HAS ALSO DISCUSSED IN RESPECT OF EXPLANATION -5 TO SECTION 271(1)(C) AND DELETED THE PENALTY IN RESPECT OF INCOME DISCLOSED U/S.153A OF THE ACT. IN VIEW OF THESE FACTS RESPECTFULLY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT, WE DELETE THE PENALTY IN RESPECT OF DECLARED IN THE RETURN U/S.153A OF THE ACT OF AT RS.1,78,221/-. WITH REGARD TO ALLEGED UNACCOUNTED TRANSACTION OF RS.1,76,000/-, THE ASSESSEE HAS CLAIMED THAT UNACCOUNTED EXPENDITURE OF RS.1,76,000/- PAID TO ONGC IS COVERED BY THE PEAK ADDITION OF RS.6,70,742/-. THEREFORE, THE PENALTY IN RESPECT OF SAID ADDITION IS NOT SUSTAINABLE. WITH REGARD TO ADDITION OF PENALTY IN RESPECT OF ADDITION OF RS.5,19,797/-. WE FIND THAT THE ASSESSEE HAS CLAIMED THAT THIS AMOUNT HAS BEEN SUSTAINED ON ACCOUNT OF PEAL OF DEBIT AND CREDIT ENTRIES BY THE ITAT. THEREFORE, NO POSITIVE CONCEALMENT HAS BEEN ESTABLISHED AS THE ADDITION MADE ORIGINALLY IS SUBSTANTIAL REDUCED AND IT IS THE MATTER OF ESTIMATION ONLY. NO PENALTY IS LEVIABLE, WHERE THE INCOME WAS ESTIMATED ON THE BASIS OF ESTIMATION AS HELD BY THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF HARIGOPAL SINGH V. CIT, 258 ITR 85 P&H WHEREIN IT WAS HELD THAT A DIFFERENCE OF OPINION HAS COME THE ESTIMATE OF INCOME OF THE ASSESSEE. IT WOULD NOT BE SAID THAT THE ASSESSEE COMMITTED DEFAULT SO AS TO ATTRACT THE PROVISION OF SECTION TIRUPATI CONSTRUCTION CO. V. ACIT, CENTRAL CIRCLE-2, BARODA./IT(SS)A NO.70/AHD/2014 /A.Y. 2005-06 PAGE 5 OF 5 271(1)(C) OF THE ACT. THEREFORE, IN ORDER TO ATTRACT THE PENALTY U/S.271(1)(C), IT IS NECESSARY THAT THERE MUST BE PROOF OF POSITIVE CONCEALMENT AND IF THE ASSESSEE FURNISHED EXPLANATION WHICH IS FOUND SATISFACTORY, THEN NO PENALTY IS LEVIABLE. IN VIEW OF THESE FACTS, CONSIDERING THE MERIT OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT NO PENALTY IS LEVIABLE ACCORDINGLY THE PENALTY SUSTAINED BY THE LD. CIT(A) IS DELETED. ACCORDINGLY, GROUND NO.1,2 & 4 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 06.12.2019. SD/- SD/- (SANDEEP GOSAIN) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER / SURAT, DATED : 6 TH DECEMBER, 2019/ S. SAMANTA, PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER // TRUE COPY // / / TRUE COPY / ASSISTANT REGISTRAR, SURAT