M/s. R.T. Construction, Hooghly v. ITO, Ward - 1(3), Hooghly, Hooghly

ITA 1147/KOL/2010 | 2006-2007
Pronouncement Date: 28-01-2011

Appeal Details

RSA Number 114723514 RSA 2010
Bench Kolkata
Appeal Number ITA 1147/KOL/2010
Duration Of Justice 7 month(s) 19 day(s)
Appellant M/s. R.T. Construction, Hooghly
Respondent ITO, Ward - 1(3), Hooghly, Hooghly
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 28-01-2011
Assessment Year 2006-2007
Appeal Filed On 09-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH : KOLKATA () BEFORE . . . . . . . . !' !' !' !' /AND . .. . . .. .! !! ! # ) [BEFORE HONBLE SRI D. K. TYAGI JM & HONBLE SRI C . D. RAO AM] '$ '$ '$ '$ / I.T.A NO. 1147/KOL/2010 %&' !() %&' !() %&' !() %&' !()/ // / ASSESSMENT YEAR : 2006-07 M/S. R. T. CONSTRUCTION -VS- INCOME-TAX OFFICER WD-1(3) HOOGHLY (PA NO.AAHFR 9692 J) ( + /APPELLANT ) (-+ / RESPONDENT ) FOR THE APPELLANT: SRI S. M. SURANA FOR THE RESPONDENT : SRI S. C. JAIN . / ORDER PER D. K. TYAGI JM ( . . . . . . . . ) THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE LD. CIT(A) KOLKATA DATED 28.04.2010 FOR ASSESSMENT YEA R 2006-07 ON THE GROUND OF CONFIRMING THE PENALTY IMPOSED U/S. 271A OF THE ACT . 2. BRIEFLY STATED FACTS AS OBSERVED BY THE ASSESSIN G OFFICER ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER CALLED FOR BOOKS OF ACCOUNTS. IN RESPONSE THE ASSESSEE ARGUED THAT IT WAS FILING THE RETURN OF INCOME AS PER THE PROVISIONS OF SECTION 44AD OF THE I. T. ACT AS IT W AS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WITH TURNOVER BEING LESS THAN RS. 40 L AKH. THE ASSESSING OFFICER DID NOT ACCEPT THIS CONTENTION ON THE GROUND THAT THE ASSES SEE WAS A DEVELOPER AND BUILDER CONSTRUCTING RESIDENTIAL FLATS AND SELLING THEM. T HEREFORE ACCORDING TO ASSESSING OFFICER THE PROVISIONS OF SECTION 44AD ARE NOT APP LICATION. IN VIEW OF THIS THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE D EFAULTED AS PER THE PROVISIONS OF SECTION 44AA OF THE I. T. ACT FOR NOT MAINTAINING T RUE AND COMPLETE BOOKS OF ACCOUNTS. ACCORDINGLY HE IMPOSED PENALTY OF RS.25 000/- U/S. 271A OF THE I. T. ACT. IN APPEAL THE LD. CIT(A) CONFIRMED THE PENALTY SO IMPOSED BY THE A.O. BEING FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 2 3. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L FOR THE ASSESSEE WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFOR E THE LOWER AUTHORITIES FURTHER SUBMITTED THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT COMPRISING OF P&L ACCOUNT ETC. AS PER THE PROVISIONS OF SECTION 44AD OF THE I. T. ACT AND FILED ALONG WITH THE RETURN AND THE ASSESSING OFFICER HIMSELF GAVE F INDING THAT THE BOOKS OF ACCOUNTS THOUGH MAINTAINED WERE NOT PRODUCED FOR VERIFICATIO N. HE FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE DEFAULTED AS PER THE PROVISIONS OF SECTIO N 44AA OF THE I. T. ACT FOR NOT MAINTAINING TRUE AND COMPLETE BOOKS OF ACCOUNTS. A CCORDINGLY HE IMPOSED PENALTY OF RS.25 000/- U/S. 271A OF THE ACT. THIS ACTION OF T HE ASSESSING OFFICER IS COMPLETELY UNJUST IMPROPER AND WITHOUT ANY BASIS AS THE ASSES SEE WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WITH TURNOVER BEING LESS THAN RS . 40 LAKHS. HE ALSO SUBMITTED THAT THERE IS NO REQUIREMENT LAID DOWN IN THE STATUTE WH ICH NECESSITATES THE MAINTENANCE OF ACCOUNTS BY THE ASSESSEE IN ACCORDANCE WITH SECTION 44AA OF THE ACT. HE ALSO SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMI NG THE PENALTY WHEN THE ASSESEES CASE WAS COVERED BY SECTION 44AD THE INCOME WAS AS SESSED AS SUCH AS MENTIONED IN THE ORDER OF THE LD. CIT(A) IN QUANTUM APPEAL. HE A LSO PLACED RELIANCE ON A DECISION IN THE CASE OF BLUE HEAVEN CONSTRUCTION VS. ITO ITA N O.1000/KOL/2009 ASSESSMENT YEAR 2005-06 DATED 13.11.2009. HE LASTLY CONTENDED THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE PENALTY IMPOSED U/S. 271A IS NOT IN ACCORDANCE WITH LAW AND THE SAME SHOULD BE DELETED IN FULL. 4. ON THE OTHER HAND THE LD. DR HEAVILY PLACED REL IANCE ON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE FIRM IS CARRYING ON BUSINESS OF CIVIL CONSTRUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER MADE AN ADDITION OF RS.90 440/- BEING 5% OF WORK-IN-PROGRESS ON THE GRO UND THAT CORRECTNESS OF THE WORK- IN-PROGRESS IS DOUBTFUL IN ABSENCE OF PROPER BOOKS OF ACCOUNTS. THE ASSESSING OFFICER ALSO INITIATED PROCEEDINGS U/S. 271A OF THE I. T. A CT FOR NOT MAINTAINING BOOKS OF ACCOUNTS. THE ASSESSEE FILED APPEAL AGAINST THE AD DITION OF RS.90 440/- CLAIMING THAT THE ASSESSEE HAS SHOWN HIS INCOME DURING THE YEAR BY AP PLYING THE PROVISION OF SECTION 3 44AD OF THE ACT. THE LD. CIT(A) ACCEPTING THE PLEA OF THE ASSESSEE ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION MADE OF RS .90 440/-. HOWEVER IN THE PROCEEDINGS U/S. 271A THE PENALTY IMPOSED BY THE A SSESSING OFFICER FOR NOT MAINTAINING THE BOOKS OF ACCOUNTS HAVE BEEN CONFIRM ED BY THE LD. CIT(A) WHICH ACCORDING TO US IS NOT PROPER. ONCE THE INCOME SHOW N BY THE ASSESSEE BY APPLYING THE PROVISIONS OF SECTION 44AD OF THE ACT IS ACCEPTED PENALTY FOR NOT MAINTAINING THE BOOKS OF ACCOUNTS CAN BE LEVIED. THEREFORE THE PE NALTY IMPOSED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS HEREBY D ELETED. THE ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.1.20 11 SD/- SD/- . . ! # . . (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( # # # #) )) ) DATED : 28 TH JANUARY 2011 !/0 %&12 %3! JD.(SR.P.S.) . 4 -%%5 65(7- COPY OF THE ORDER FORWARDED TO: 1 . + / APPELLANT M/S. R. T. CONSTRUCTION 16 G. T. ROAD UTTARPARA HOOGHLY-712 258 2 -+ / RESPONDENT ITO WARD-1(3) HOOGHLY 3 . %.& / THE CIT KOLKATA 4. %.& ( )/ THE CIT(A) KOLKATA. 5 . !=% -%& / DR KOLKATA BENCHES KOLKATA 5 -%/ TRUE COPY .&>/ BY ORDER ? '2 /DEPUTY REGISTRAR .