M/s Mayur Dhaba, Karnal v. ITO, Karnal

ITA 25/DEL/2009 | 2000-2001
Pronouncement Date: 22-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 2520114 RSA 2009
Bench Delhi
Appeal Number ITA 25/DEL/2009
Duration Of Justice 1 year(s) 15 day(s)
Appellant M/s Mayur Dhaba, Karnal
Respondent ITO, Karnal
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 22-01-2010
Date Of Final Hearing 20-01-2010
Next Hearing Date 20-01-2010
Assessment Year 2000-2001
Appeal Filed On 06-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E : NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI B.P. JAIN ACCOUNTANT MEMBER I.T.A. NO.25/DEL/2009 ASSESSMENT YEAR : 2000-01 M/S. MAYUR DHABA INCOME-TAX OFFICER G.T. ROAD KARNAL. VS. WARD-1 KARNAL. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARVESH KUMAR SHARMA ADVOC ATE RESPONDENT BY : SHRI R.K. RAINA SR. DR. O R D E R PER B.P. JAIN ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) KARNAL DATED 04.11.2008 IN AN APPEAL AGAINST THE ORDER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 (THE ACT). 2. GROUND NO.1 IS GENERAL IN NATURE AND IT DOES NOT REQUIRE ANY ADJUDICATION. 3. GROUND NO.2 READS AS UNDER:- THAT THE LD CIT(APPEALS) ERRED IN LAW IN CONFIRMIN G THE IMPOSITION OF PENALTY U/S 271(1)(C ) OF THE ACT WHE N THERE IS NO CONCEALMENT OF INCOME. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS RUNNING A DHABA BUSINESS AT G.T. ROAD KARNAL IN THE NAME AND STYLE OF M/S. MAYUR DHABA. A SURVEY U/S 133A WAS CARRIED OUT ON THE ASSESSEE ON 2.2.200 0 DURING WHICH CERTAIN DOCUMENTS/PAPERS WERE FOUND. ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.1 40 670/- ON 3.11.2000 WHEREAS ASSE SSMENT WAS COMPLETED ON 20.11.2002 AT AN INCOME OF RS.15 47 200/- WHICH WAS SUBSEQUENTLY SET ASIDE BY ORDER U/S 263 DATED 2.9.2003 CONSEQUENT T O WHICH ASSESSMENT WAS COMPLETED IN THE STATUS OF AOP AT AN INCOME OF RS.2 0 32 073/- ON 18.3.2005 U/S 144 OF INCOME-TAX ACT BY MAKING ADDITIONS OF RS .18 91 403/-. ADDITION OF RS.16 75 403/- WAS MADE ON ACCOUNT OF CONCEALED INCOME BY SUPPRESSING THE TURNOVER AND RS.2 16 000/- WERE ADDED ON ACCOUN T OF RENTAL INCOME FROM M/S. TOP SHOP. THE CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.13 13 416/- ON ACCOUNT OF PROFIT FROM THE DHABA AND ADDITION ON ACCOUNT OF RS.2 16 000/- FROM RENTAL INCOME WAS ALSO CONFIR MED. THE HONBLE ITAT HAS CONFIRMED THE TAXABLE INCOME OF THE ASSESSEE AT RS.14 66 020/- WHICH INCLUDED ADDITION OF RS.10 43 350/- ON ACCOUNT OF D HABA INCOME AND RS.2 16 000/- ON ACCOUNT OF RENTAL INCOME. AFTER CO NFIRMING THE ASSESSMENT ORDER BY CIT(A) THE AO LEVIED THE PENALTY ON CONCE ALMENT OF INCOME FROM DHABA AND ON CONCEALMENT OF INCOME FROM RENT WHERE AS ASSESSEE HAS CLAIMED THAT A SURRENDER OF INCOME OF RS.4 LAC WAS MADE SUBJECT TO NO 3 PENALTY WHEREAS FINALLY THE PENALTY HAS BEEN LEVI ED. THE ASSESSEE HAS CLAIMED THAT ADDITION IS MERELY ON THE BASIS OF EST IMATED SALES AND FULL EXPENSES HAVE NOT BEEN ALLOWED WHEREAS THE EXPENS ES ARE ALLOWABLE OUT OF THE GP IF GP IS ESTIMATED ON THE TURNOVER. ON RENT AL INCOME ASSESSEE HAS CLAIMED THAT THE SHOP DOES NOT BELONG TO THE ASSESS EE FIRM AND NO RENT WAS RECEIVED. IT IS ALSO CLAIMED THAT NO EXPENDITURE ON ACCOUNT OF RENT HAS BEEN CLAIMED OR ALLOWED IN THE CASE OF M/S. TOP SHOP. TH E ASSESSEE WAS REQUIRED TO PRODUCE THE RECORDS OF M/S TOP SHOP BUT THE SAME WERE REPORTED TO BE NOT TRACEABLE DESPITE BEST EFFORTS. THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE A.O. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE F ACTS OF THE CASE. THE ASSESSMENT IN THE PRESENT CASE HAS BEEN MADE UNDER SECTION 144 OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT TH E ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT. THE ITAT ON THE BAS IS OF LOOSE PAPERS FOUND DURING SURVEY HAS CONFIRMED THE ADDITION OF INCOME FROM DHABA AT RS.10 43 350/- AND RS.2 16 000/- ON ACCOUNT OF RENT AL INCOME. AS REGARDS INCOME FROM DHABA THE LEARNED COUNSEL FOR THE ASSES SEE POINTED OUT THE ASSESSMENT MADE UNDER SECTION 143(3) IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1999-2000 I.E. IMMEDIATE PRECEDING YEAR WHERE THE ASSESSMENT HAS BEEN MADE TAKING INTO ACCOUNT THE SA ME LOOSE PAPERS AND THE 4 AO HAS ALLOWED FROM THE GROSS PROFIT VARIOUS EXPENS ES I.E. ELECTRICITY EXPENSES DIESEL EXPENSES WAGES RENT FUEL AND CO AL MISCELLANEOUS EXPENSES AND DEPRECIATION OUT OF THE GROSS PROFIT E STIMATED WHEREAS DURING THE IMPUGNED YEAR THE AO HAS ALLOWED ONLY THE ELEC TRICITY EXPENSES OUT OF GROSS PROFIT ESTIMATED AND NOT THE OTHER EXPENSES. THOUGH THE ADDITIONS HAVE BEEN CONFIRMED BY THE ITAT IN QUANTUM BUT PENA LTY PROCEEDINGS AND THE ASSESSMENT PROCEEDINGS ARE SEPARATE PROCEEDINGS AND THE EXPLANATION IN THE PENALTY PROCEEDINGS HAS BEEN SUBMITTED BY THE A SSESSEE THAT THESE EXPENSES ON ACCOUNT OF DIESEL WAGES RENT FUEL AN D COAL MISCELLANEOUS EXPENSES AND DEPRECIATION SHOULD HAVE BEEN ALLOWED APART FROM ELECTRICITY EXPENSES FROM THE GROSS PROFIT. THE EXPLANATION AP PEARS TO BE A POSSIBLE AND PLAUSIBLE EXPLANATION. THEREFORE THE AO IS DIRECT ED TO ALLOW PROPORTIONATE EXPENSES AS IN THE LAST YEAR FOR THE PURPOSE OF COM PUTING THE PENALTY ONLY AND COMPUTE THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT ACCORDINGLY. 5. AS REGARDS PENALTY ON ACCOUNT OF RENTAL INCOME T HE EXPLANATION SUBMITTED DOES NOT APPEAR TO BE SATISFACTORY EVEN I N THE PENALTY PROCEEDINGS. THERE IS NO DISPUTE TO THE FACT AS STATED BY THE LE ARNED AR THAT THE SURVEY AT THE PREMISES OF THE TENANT M/S. TOP SHOP WAS ALSO C ARRIED OUT. IT CANNOT BE BELIEVED THAT THE PREMISES HAVE BEEN GIVEN TO A COM MERCIAL CONCERN WITHOUT ANY RENT AND THEREFORE THE EXPLANATION SUBMITTED H AS RIGHTLY BEEN REJECTED 5 AND THE LEARNED CIT(A) HAS RIGHTLY CONFIRMED THE PE NALTY UNDER SECTION 271(1)(C) ON THE SAID ACCOUNT. THE ASSESSEE GETS P ART RELIEF AND THE A.O. IS DIRECTED TO ACT ACCORDINGLY. GROUND NO.2 IS PARTLY ALLOWED. 6. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY 2010. SD/- SD/- (C.L. SETHI) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND JANUARY 2010. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.