Sh. Arvind Kakkar, Kaithal v. ITO, Kaithal

ITA 1444/CHANDI/2010 | 2004-2005
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 144421514 RSA 2010
Assessee PAN AISPK0558R
Bench Chandigarh
Appeal Number ITA 1444/CHANDI/2010
Duration Of Justice 1 month(s) 8 day(s)
Appellant Sh. Arvind Kakkar, Kaithal
Respondent ITO, Kaithal
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 31-01-2011
Date Of Final Hearing 25-01-2011
Next Hearing Date 25-01-2011
Assessment Year 2004-2005
Appeal Filed On 23-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE HONBLE SHRI D K SRIVASTAVA AM AND HONBLE MS. SUSHMA CHOWLA JM ITA NO.1444/CHANDI/2010 ASSESSMENT YEAR: 2004-05 ARVIND KAKKAR V. I.T.O. WARD (3) CONTRACTOR S/O SH. SAT PAL KAKKAR KAITHAL 127/4 MAHADEV COLONY SIWAN GATE KAITHAL PAN: AISPK 0558 R (APPELLANT-ASSESSEE) (RESPONDENT) APPELLANT BY: SHRI ASHWANI KUMAR FCA RESPONDENT BY: SHRI NK SAINI DR ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 4.10.2010 ON THE FOLLOWING GROUND: THAT ORDER PASSED U/S 250(6) OF INCOME-TAX ACT PAS SED BY THE LD. CIT(A) KARNAL IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD THE ACTION OF T HE AO IN LEVYING A PENALTY OF RS.1 76 882/- U/S 271(1)(C) WHEREAS NO SUCH PENALTY WAS EXIGIBLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE . 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE A CIVIL CONTRACTOR FILED HIS RETURN OF INCOME ON 5.10.2004 RETURNING HIS TOTAL INCOME AT RS. 80 550/-. NOTICE U/S 148 WAS SUBSEQUENTLY ISSUE D PURSUANT TO WHICH ASSESSMENT U/S 143(3)/148 OF THE INCOME-TAX ACT WAS COMPLETED ON 27.11.2006. PERUSAL OF THE ASSESSMENT ORDER SHOWS T HAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE NOT SUPPORTED BY VE RIFIABLE VOUCHERS. THE AO THEREFORE INVOKED SECTION 145(3) AND ASSESSED THE OPERATIONAL INCOME OF THE ASSESSEE BY APPLYING NET PROFIT RATE OF 10%. SE COND ADDITION MADE BY THE AO WAS OF RS.2 23428/-. THE SAID SUM WAS REFLECTED ON THE ASSETS SIDE OF THE BALANCE SHEET AS DUE FROM THE MUNICIPAL COMMITTEE. THE AO HOWEVER ADDED THE SAID SUM AS UNDISCLOSED CONTRACTUAL RECEIPTS. T HIRD ADDITION THAT WAS MADE WAS OF RS.2 96 571/- WHICH WAS TREATED BY THE AO A S UNEXPLAINED CASH CREDITS. THESE ADDITIONS WERE SUBJECT MATTER OF APP EAL FIRSTLY BEFORE THE LD. CIT(A) AND THEREAFTER BEFORE THIS TRIBUNAL. HOWEVER THEY WERE ULTIMATELY ARVIND KAKKAR KAITHAL 1444/CHANDI/2010 2 2 CONFIRMED BY THIS TRIBUNAL. IT IS WITH REFERENCE TO THE AFORESAID ADDITIONS THAT THE AO HAS LEVIED THE IMPUGNED PENALTY. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO IN LEVYING THE IMPUG NED PENALTY. 3. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A) CONFIRMING LEVY OF THE IMPUGNED PENALTY THE ASSESSEE IS NOW IN APPEAL BEF ORE THIS TRIBUNAL. IT IS SUBMITTED THAT THE ASSESSEE WAS A CONTRACTOR. THE A O APPLIED NET PROFIT RATE OF 10% WHICH ON APPEAL WAS REDUCED BY THIS TRIBUNAL TO 8%. ACCORDING TO HIM THE AFORESAID ADDITIONS WERE PURELY ON ACCOUNT OF E STIMATES. AS REGARDS THE PENALTY LEVIED WITH REFERENCE TO THE ADDITION MADE BY THE AO ON ACCOUNT OF TAXATION OF AMOUNT DUE FROM THE MUNICIPAL COMMITTEE THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT SO DUE FROM THE MUNICIPAL COMMITTEE WAS SHOWN ON THE ASSET ASIDE OF THE BALANCE SHEET AS THE IMPUGNED SUM WAS YET TO BE RECEIVED AT THE CLOSE OF THE ACCOUNTING PERIOD. HE FURTHER SUBMITTED THAT THE SAID SUM WAS HOWEVER INCLUDED BY THE ASSESSEE IN CONTRACT RECEIPTS AND WAS ALSO INCLUDED IN THE T DS CERTIFICATE AND OFFERED FOR TAXATION AND THEREFORE LEVY OF PENALTY WITH REFEREN CE TO AFORESAID AMOUNT WAS BAD IN LAW. AS REGARDS THIRD ADDITION I.E. THE AD DITION ON ACCOUNT OF UNEXPLAINED CASH CREDITS THE LD. AUTHORIZED REPRES ENTATIVE FOR THE ASSESSEE SUBMITTED THAT IT WAS A CASE OF MERE REJECTION OF E XPLANATION AND THEREFORE PENALTY WAS NOT EXIGIBLE. 4. IN REPLY THE LD. DR SUPPORTED THE ORDER PASSED B Y THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES. THE ADDITIONS MA DE BY THE AO ARE EITHER ON ACCOUNT OF ESTIMATE OF NET PROFIT RATE OR ON ACCOUNT OF REJECTION OF ASSESSEES EXPLANATION. IT IS NOT THE CASE OF THE A O THAT THE DETAILS MATERIAL TO THE COMPUTATION OF INCOME WERE NOT DISCLOSED BY THE ASSESSEE. IN OUR VIEW THE LEVY OF PENALTY ON THE FACTS OF THE CASE IS NOT JUS TIFIED. WE THEREFORE CANCEL THE IMPUGNED PENALTY AND CONSEQUENTLY ALLOW THE APP EAL FILED BY THE ASSESSEE. ORDER PRONOUNCED ON 31 JANUARY 2011 SD/- SD/- (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE 31 JANUARY 2011 SURESH ARVIND KAKKAR KAITHAL 1444/CHANDI/2010 3 3 COPY TO: 1. THE APPELLANT SHRI ARVIND KAKKAR KAITHAL 2. THE RESPONDENT ITO WARD (3) KAITHAL 3. THE CIT KARNAL 4. THE CIT(A) KARNAL 5. THE D.R INCOME-TAX DEPARTMENT CHANDIGARH TRUE COPY BY O RDER ASSISTANT REGISTRAR ITAT CHANDIGARH