DCIT., Circle-10(1), Hyderabad, Hyderabad v. Sri Lakshmi Narayana Appavaru, Secunderabad

ITA 120/HYD/2015 | 2010-2011
Pronouncement Date: 29-04-2015 | Result: Dismissed

Appeal Details

RSA Number 12022514 RSA 2015
Assessee PAN AAYPA9025D
Bench Hyderabad
Appeal Number ITA 120/HYD/2015
Duration Of Justice 2 month(s) 24 day(s)
Appellant DCIT., Circle-10(1), Hyderabad, Hyderabad
Respondent Sri Lakshmi Narayana Appavaru, Secunderabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-04-2015
Assessment Year 2010-2011
Appeal Filed On 04-02-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI P.M.JAGTAP ACCOUNTANT MEMBER ITA NO.120/HYD/2015 : ASSESSMENT YEAR 2010 - 11 DY. COMMISSIONER OF INCOME - TAX CIRCLE 10(1) HYDERABAD V/S. SHRI LAKSHMI NARAYANA APPAVARU SECUNDERABAD. (PAN A A YPA 9025 D ) (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.13/HYD/2015 (IN ITA NO.120/HYD/2015) : ASSESSMENT YEAR 2010 - 11 SHRI LAKSHMI NARAYANA APPAVARU SECUNDERABAD. (PAN A A YPA 9025 D ) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 10(1) HYDERABAD (CROSS OBJECTOR) (APPELLANT IN APPEAL) DEPARTMENT BY : SHRI RAJAT MITRA DR ASSESSEE BY : SMT. SREELATA DATE OF HEARING 27.4.2015 DATE OF PRONOUNCEMENT 29.4.2015 O R D E R PER G.C.GUPTA VICE PRESIDENT: THIS APPEAL BY THE R E VENU E AND CROSS OBJECTION BY TH E ASSESSEE FOR THE ASSESSMENT YEAR 2010 - 11 ARE DI R ECTED A GAIN S T THE O R DER O F THE COMMISSIONER OF INCOME - TAX(APPEALS) VI HYDERABAD . THESE ARE BEIN G DISPOSED OF WITH THIS CONSOLIDATED ORDER. I TA NO. 120/H YD/20 15 & CO THEREIN SHRI LAKSHMI N AR A YANA APPAVARU SECUN D ERABAD 2 ITA NO.120/HYD/2015(REVENUES APPEAL) 2. GROUN D S OF AP P E A L O F THE RE VENU E ARE AS UN D ER - 1. THE CIT(A) ERRED ON FACTS AND IN LAW. 2. THE LD. CIT(A) OUGHT NOT TO HAVE D E LETED A PART OF PENALTY SIN C E THE PRIMARY ONUS WAS NO T AT ALL DISCHARGED BY TH E ASSESSEE AND THE EXPENDITURE WAS NO T ESTABLI S H E D WITH EVIDEN C E AS INCURRED. 3. THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THE ASSESSEE KNOWINGLY C LAIM E D EXPENDITURE THAT WAS CLEARLY DISALLO W ABL E U/S. 40(A)(IA) OF THE ACT TH E REBY INFLATING THE EXPENDITURE CLAIMED AND WHEN CONFRONTED OFFERED THE SAME TO TAX. 4. THE LD. CIT(A) OUGHT TO H AV E APPRECIATED THE FACT THAT NO RELIEF CAN B E AWARDED TO TH E ASSESSEE AS P E R TH E RATIO O F THE LANDMARK JU D GMENT OF THE APEX COU R T IN TH E CA S E OF DHARMEN D RA TE X TILE PRO C ESSORS (306 ITR 287) W H ICH IS SQUARELY APPLI C ABL E TO TH E FACTS OF THE ASSESSEES CASE. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDERS OF THE ASSESSING OFFICER. HE RE F ERRED TO THE RELEVANT PO R TION OF THE O R DER O F PENALTY PASSED BY THE ASSESSING OFFICER. 4 . THE LEARNED COUN S EL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN THE BU S IN ES S OF MINING IN WARANGAL DI S TRICT AND THE BU S IN E SS IS MAINLY LABOU R ORIENTED AND CERTAIN DISALLO W ANCES WERE MADE BY TH E ASSESSING OFFICER FOR WHICH PENALTY U N D ER S.271(1)(C) OF TH E A C T HAS B E EN LEVIED BY HIM. THE ASSESSING OFFICER HAS ALSO LEVIED PENALTY ON DISALLOWANCE UN D ER S.40(A)(IA). SHE SUBMITTED THAT T H E DISALLOWANCES WERE MADE ON ACCOUN T OF ESTIMATION AND ALSO ON ACCOUNT OF FAILU R E TO DEDUCT TAXES AND A LL THE FACTS RELATING TO THE SAID DISALLOW ANCE WERE VERY MUCH BORNE ON RECORD AND THE DISALLOWANCE S H AVE BEEN MADE ON ES T IMATION OR ON TECHNICAL GROUNDS. ASSESSE E HAS RELIED ON TH E O R DE R O F THE CIT(A). I TA NO. 120/H YD/20 15 & CO THEREIN SHRI LAKSHMI N AR A YANA APPAVARU SECUN D ERABAD 3 5. W E HAVE CON S I D ERED THE RIVAL SUBMI S SION S AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND TH E CIT(A). WE FIND TH A T THE BUSINESS OF TH E ASSESSEE I S THAT OF MINING IN WARANGAL DISTRICT AND WAS IN C URRIN G SUB S TANTIAL E XPEN S ES TOWARDS LABOU R PAYM E N T S A S THE BU S IN E SS OF THE ASSESSEE IS LABOU R ORIE NTED. CERTAIN DISALLO W ANCES W E RE MADE ON AD - HOC BASIS BY WAY OF ESTIMATION ONLY. SOME OTHER AMOUNTS WERE DISALLOWED ON ACCOUNT OF FAILURE O F TH E ASSESSEE TO DEDUCT TAXES AT SOU R CE. W E FIND TH A T ALL TH E FACTS MATERIAL FOR THE ASSESSMENT WERE DISCLOSED BY TH E ASSESSEE AT THE TIM E OF ASSESSMENT ITSELF. IT WAS ON THE BASIS OF THE RECORD SUPPLIED BY THE ASSESSEE ON THE BASIS OF WHICH CERTAIN DISALLOWANCES WE RE MADE BY THE ASSESSING OFFICER. MERELY BE CAUSE CERTAI N DISALLOWANCES WERE MADE ON ESTIMATION BASIS OR DUE TO NON - DEDUCTION OF TAX AT SOURCE. IT COULD NOT BE SAID THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME. THE ISSUE IS COVERED IN F A VOUR OF TH E ASSESSEE WITH THE DECISION OF THE HONBLE A P EX COURT IN THE CA S E OF RELIANCE P ETRO PROD U CTS LTD. (322 ITR 158) . ACCORDINGLY WE HOL D TH A T THERE IS NO MISTAKE IN TH E O R D E R O F THE CIT(A) ON THI S I S SUE WHI C H IS ACCORDINGLY CON F I R M E D AND THE G R OUNDS O F APP E AL OF TH E REVENUE ARE DISMISSED. CROSS OBJ E CTION NO.13/HYD/2015 OF THE ASSESSEE: 6. GROUNDS OF TH E ASSESSEE IN T HE CROSS OBJECTION ARE AS UN D ER - ON THE FACTS AND CIRCUMSTANCES OF TH E CA S E AND IN LAW THE O R DER O F THE LD. CIT(A) PASSED U/S. 250 OF THE I.T. ACT 1961 WAS UNJU ST I F IED. I TA NO. 120/H YD/20 15 & CO THEREIN SHRI LAKSHMI N AR A YANA APPAVARU SECUN D ERABAD 4 THE LD. CIT(A) HAS UPHELD PENALTY U/S. 271(1)(C) OF THE I.T. ACT 1961 ON THE ADDITION MADE TOWARDS UNILATERAL WRITING OFF OF TRADING LIABILITY AND TREATED AS INCOME U/S.41(1) WHICH INVOLVES NEITHER CONCEALMENT NOR FURNISHING INA CCURATE PARTICUL A RS OF INCOME. 7. LEARNED COU N SEL FOR THE ASSESSEE SU BM I T TED THAT T H E CIT(A) HAS CON F I R M E D THE PENALTY UN D ER S.271(1)(C) OF TH E A C T ON THE ADDITION MADE TOWARDS UNILATERAL WRIT ING OFF OF TH E TRADE LIABILITY TR E ATED AS INCOME UN D ER S.41 ( 1)OF THE AC T BY THE ASSESSEE. SHE SUBMITTED T H A T MOSTLY LABOU RERS A RE FROM BIHAR AND ORISSA AND THERE WERE OUTSTANDING LIABILITIES OF PAYM E N T S TO BE MADE TO LABOURERS AND DUE TO THEIR NO T COMING BACK TO CLAIM THE OUTSTANDING AMOUNT S DUE TO THEM THE ASSESSEE ITSELF UNILATERALLY WRITTEN OFF THE SAID AMOUNT AND OFFERED THE SAME FOR TAXATION IN THE ASSESSMENT YEAR 2010 - 11. SHE SUBMI T TED THAT THE ASSESSEES BONA FIDES ARE ESTABLISHED AS IT HAS OFFERED VOLUNTARILY SIMILAR AMOUNT O F OU T STANDIN G LIABILITIE S FOR TAX PURPOSES IN THE SUB S EQUENT ASSESSMENT YEAR 2014 - 15 ALSO. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE HA S RELIED ON TH E O R DER OF THE ASSESSING OFFICER AND THE CIT(A). 9. WE HAVE CON S IDERED THE RIVAL SUBMI S SION AND PERUSED THE O R DERS O F THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE CL AI M OF THE ASSESSEE THAT THE AMOU N T OF OUTSTANDING TRADE LIABILITY REPRESENTING AMOUNTS PAYABLE TO THE LABOURERS WAS WRITTEN OFF BY TH E ASSESSEE UNI L ATERALLY AND WAS OFFERED FOR TAXATION VOLUNTARI LY BY THE ASSESSEE COUL D NO T BE CONTROVER T ED ON BEHALF O F THE RE VENUE. T H E ASSESSEE S CLAIM THAT IT HAS SIMILARLY OFFERED FOR TAXATION THE OUTSTANDING LABOU R PAYMENTS IN THE SUBSEQUENT ASSESSMENT YEAR 2014 - 15 A LSO BY WRIT I NG OFF THE AMOUNT UNIL ATE RALLY SH OWS THE BONA I TA NO. 120/H YD/20 15 & CO THEREIN SHRI LAKSHMI N AR A YANA APPAVARU SECUN D ERABAD 5 F IDE CON D U C T O F THE ASSESSEE. THE FACTS RELEVANT TO ASSESSMENT WERE DISCLOSED BY THE ASSESSEE IN TH E RETURN OF INCOME FILED WITH TH E DEPARTMENT. THE ASSESSEE HAS FIL E D STATEMENT OF ACCOUNT ALONGWITH THE COMPUTATION OF IN C OM E FOR TH E ASSE SSMENT YEAR 2014 - 15 WHEREIN IT HAS O F FERED THE AMOUN T OUT STANDING TO THE CRE D ITORS AS DEEMED INCOME UN D ER S.41(1) OF THE ACT. IN TH E SE FACTS OF THE CA S E WE ARE OF THE VIEW THAT THE CON D U C T OF THE ASSESSEE IS BONA FIDE AND ALL M A TERIAL FACTS RELEVANT TO ASSESSMENT W E RE DISCLOSED BY THE ASSESSEE AND THE AMOUNT IN QUESTION WAS OFFERED FOR TAXATION FOR THE REL E VANT YEAR AS WELL AS SUBSEQUENT ASSESSMENT YEAR 2014 - 15 VOLUN T ARILY UN D ER S.41(1) OF THE ACT. NO CASE FOR LEVY OF PENALTY UN D ER S.271(1)(C) OF TH E AC T COULD B E MADE OUT BY TH E REVENUE. AC C OR D INGLY THE P E N A LTY LEVIED UN D ER S.271(1)(C) OF THE AC T ON THI S COUN T I S CANCELLED AND THE G R OUND S OF C ROSS OBJECTION OF TH E ASSESSEE ARE ALLO WE D. 10. IN TH E R E SULT APPEAL O F TH E REV E NU E I S DISMI S SED AND THE CROSS OBJECTION OF TH E ASSESSEE IS ALLO W ED. ORDER PRONOUNCED IN THE COURT ON 29 TH APRIL 2015 SD/ - SD/ - ( P.M.JAGTAP ) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT D T/ - 29 TH APRIL 201 5 COPY FORWARDED TO: 1. SHRI LAKSHMI NARAYANA APPAVARU PROP: LAKSHMI NARAYANA MINERALS PLOT NO.5 ROAD NO.1 JUPITER COLONY CANTONMENT AREA SECUNDERABAD. 2 . DY. COMMISSIONER OF INCOME - TAX CIRCLE 10 (1) HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) VI HYDERABAD 4. COMMISSIONER OF INCOME - TAX V HYDERABAD DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S