KUMUD CHAND JAIN HUF, Jaipur v. ITO, Jaipur

ITA 121/JPR/2016 | 2008-2009
Pronouncement Date: 26-10-2016 | Result: Allowed

Appeal Details

RSA Number 12123114 RSA 2016
Assessee PAN AAEHK0120M
Bench Jaipur
Appeal Number ITA 121/JPR/2016
Duration Of Justice 8 month(s) 17 day(s)
Appellant KUMUD CHAND JAIN HUF, Jaipur
Respondent ITO, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 26-10-2016
Assessment Year 2008-2009
Appeal Filed On 08-02-2016
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHES (SMC) JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 121 & 122/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS: 2008-09 & 2008-09 SHRI KUMUD CHAND JAIN HUF PROP. M/S. K.S. EXPORTS 63 SHOPPING CENTRE NEAR PITAL FACTORY BANIPARK JAIPUR CUKE VS. THE ITO WARD- 3 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAEHK 0120 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/10/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 26 /10/2016 VKNS'K@ ORDER PER BHAGCHAND AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD. CIT(A) ALIGARH (CAMP OFFICE AT J AIPUR ) DATED 30-12- 2015 FOR THE ASSESSMENT YEAR 2008-09 U/S 271A AND D ATED 30-12-2015 FOR THE ASSESSMENT YEAR 2008-09 U/S 271B OF THE ACT RES PECTIVELY. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN RESPECTIVE APPEALS. ITA NO. 121/JP/2016 SHRI KUMUD CHAND JAIN HUF VS. ITO WARD- 3 (2) JA IPUR . 2 ITA NO. 121/JP/2016 A.Y. 2008-09 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N HOLDING THE ORDER PASSED BY AO U/S 271A OF THE I.T. ACT IS NOT BARRED BY LIMITATION AND THEREBY AFFIRMING THE LEGALITY OF THE ORDER. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE LEVY OF PENALTY U/S 271A AT RS. 25 000/- . 2.1 AT THE OUTSET OF THE HEARING THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF PENALTY OF RS. 25 000/- CONFIRMED BY TH E LD. CIT(A) U/S 271A OF THE ACT. THE LD. AR OF THE ASSESSEE FURTHER SUBM ITTED THAT THIS ISSUE IS COVERED BY THE ORDER DATED 12-09-2016 OF THIS BENC H IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2007-08 IN ITA NO. 120 /JP/2016. 2.2 THE LD. DR COULD NOT CONTROVERT THE SUBMISSION OF THE ASSESSEE AT THE TIME OF HEARING. HOWEVER HE RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE SUBMISSION OF THE LD. AR OF THE ASSESSEE THAT THIS ISSUE IS COVERED BY THIS BENCH I N ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2007-08 WHEREIN THE BENCH OBSER VED AS UNDER:- 2.4 IN VIEW OF THE SIMILAR FACTS AND CIRCUMSTANCES OF T HE ASSESSEES CASE WITH THE CASE OF SHRI KUMUD CHAND J AIN VS. ITO (SUPRA) AND THE OBSERVATIONS MADE HEREINABOVE I DI RECT TO DELETE THE PENALTY OF RS. 25 000/- U/S 271A OF THE ACT. T HUS THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 121/JP/2016 SHRI KUMUD CHAND JAIN HUF VS. ITO WARD- 3 (2) JA IPUR . 3 TAKING INTO CONSIDERATION ALL THE FACTS AND CIRCUM STANCES OF THE CASE AND ALSO THE DECISION OF THIS BENCH IN ASSESSEE'S OWN C ASE FOR THE ASSESSMENT YEAR 2007-08 (SUPRA) I DIRECT TO DELETE THE ADDITI ON OF RS. 25 000/-. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 122/JP/2016 A.Y. 2008-09 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N HOLDING THE ORDER PASSED BY AO U/S 271B OF THE I.T. ACT IS NOT BARRED BY LIMITATION AND THEREBY AFFIRMING THE LEGALITY OF THE ORDER. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY U/S 271B AT RS.1 00 000/- . 2.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N NOT APPRECIATING THE CONTENTION OF THE ASSESSEE THA T NO PENALTY U/S 271B WOULD BE IMPOSED WHEN PENALTY U/S 271A HAS ALWAYS BEEN IMPOSED. HE HAS FURTHER ERRED IN NO T ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE G ROSS RECEIPTS OF THE A IS MUCH LOWER THAN THE LIMITS PRE SCRIBED U/S 44AB AND THUS ASSESSEE IS NOT REQUIRED TO GET ITS A CCOUNTS AUDITED. 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H UF FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 DECLARING IT S TOTAL INCOME AT RS. 1 53 813/-. IN THE RETURN FILED IN ITR 4 SALES OF THE ASSESSEE WERE SHOWN AT RS. 16 80 47 697/-. THE AO THUS DETERMINED THE T OTAL INCOME AT RS. 35 38 990/- DURING ASSESSMENT IN THE ASSESSMENT ORDER DATED 24-12- 2010. IN FIRST APPEAL THE LD. CIT(A) VIDE HER ORDE R IN ITA NO. 623/10-11 ITA NO. 121/JP/2016 SHRI KUMUD CHAND JAIN HUF VS. ITO WARD- 3 (2) JA IPUR . 4 DATED 24-11-2011 UPHELD THE METHOD OF CALCULATION O F NET PROFIT ADOPTED BY THE AO AND CONFIRMED THE ADDITION OF RS. 7 05 21 5/- OUT OF RS. 8 40 238/-. IT IS ALSO NOTED FROM THE PENALTY ORDER THAT DURING THE COURSE OF PROCEEDINGS THE AO FOUND THAT NEITHER THE ASSESS EE HAD MAINTAINED ANY BOOKS OF ACCOUNT NOR GOT ITS BOOKS OF ACCOUNT AUDIT ED BY THE CHARTERED ACCOUNTANT. SINCE THE SALES OF THE ASSESSEE EXCEEDE D RS. 40 LAKHS THEREFORE IT WAS REQUIRED TO GET ITS ACCOUNTS AUDI TED BY AN ACCOUNTANT BEFORE THE SPECIFIED DATE AND FURNISH THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH AC COUNTANT AS PER PROVISIONS OF SECTION 44AB OF THE ACT. THE AO OBSER VED THAT THE ASSESSEE NEITHER GOT ITS ACCOUNTS AUDITED BY AN ACC OUNTANT NOR FURNISHED THE AUDITED REPORT AS REQUIRED U/S 44AB OF THE ACT AND ACCORDING TO HIM THE ASSESSEE VIOLATED THE REQUIREMENT PRESCRIBED BY SECTION 44AB WHICH ATTRACTS PENALTY U/S 271B OF THE ACT. CONCLUSIVELY IN THE PENALTY PROCEEDINGS THE AO OBSERVED THAT IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271B OF THE ACT. THE PENALTY U/S 271B IS LEVIABLE @ OF % OF TOTAL TURNOVER / SALES OF RS. ONE LAKH WHICHEVER IS LESS . IN THIS CASE % OF THE TOTAL SALES CAME TO RS. 8 40 238/-. THUS A SUM OF RS. 1 00 000/- (RS. ONE LAKH ONLY) BEING THE LESSER AMOUNT WAS LEVIED AS PE NALTY U/S 271B OF THE ACT FOR ITS FAILURE TO GET THE BOOKS OF ACCOUNT AUD ITED AND FURNISH A REPORT AS REQUIRED U/S 44AB WHICH HAS BEEN CONFIRMED BY TH E LD. CIT(A). ITA NO. 121/JP/2016 SHRI KUMUD CHAND JAIN HUF VS. ITO WARD- 3 (2) JA IPUR . 5 3.2 THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF PENALTY CONFIRMED BY THE LD. CIT(A) U/S 271B OF THE ACT. 3.3 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 3.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORD TH AT THE LD. CIT(A) HAD ESTIMATED THE INCOME FROM COMMISSION AT RS. 7 05 21 5/-. AS PER SECTION 44AB THE ASSESSEE IS REQUIRED TO GET HIS ACCOUNTS AUDITED ONLY WHEN GROSS RECEIPTS EXCEEDS RS. 40 LACS. IN THE PRESENT CASE THE LD. CIT(A) HAD FOUND THAT THE ASSESSEE HUF IS ENGAGED IN COMMISSIO N BUSINESS ONLY AND ESTIMATED ITS RECEIPTS AT RS. 7 05 215/- WHICH IS M UCH LOWER THAN THE LIMIT OF AUDIT PRESCRIBED U/S 44AB OF THE ACT. IT IS ALSO NOTED THAT LD. CIT(A) ERRED IN HOLDING THAT FOR THE PURPOSE OF AUDIT OF A CCOUNTS IT IS TO BE CONSIDERED AS TURNOVER BUT FOR THE PURPOSE OF ASSE SSING THE INCOME THIS IS TO BE IGNORED AND ONLY COMMISSION INCOME IS TO B E ESTIMATED. HENCE THE PENALTY LEVIED BY THE AND CONFIRMED BY THE LD. CIT(A) IS UNCALLED FOR AND DIRECTED TO BE DELETED. THUS THE APPEAL OF THE ASSESSEE ON THE GROUND OF MERIT OF THE CASE IS ALLOWED. ITA NO. 121/JP/2016 SHRI KUMUD CHAND JAIN HUF VS. ITO WARD- 3 (2) JA IPUR . 6 4.0 IN THE RESULT THE ABOVE APPEALS OF THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /10/20 16 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26 /10/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. KUMUD CHAND JAIN HUF JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD- 3 (2) JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR ITAT JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 121/JP/2016) VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ @ ASSISTANT. REGISTRAR