ACIT, New Delhi v. Sh. ManoharLal Dureja, New Delhi

ITA 2551/DEL/2010 | 2004-2005
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 255120114 RSA 2010
Assessee PAN AANPD3365L
Bench Delhi
Appeal Number ITA 2551/DEL/2010
Duration Of Justice 8 month(s)
Appellant ACIT, New Delhi
Respondent Sh. ManoharLal Dureja, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 28-01-2011
Date Of Final Hearing 24-01-2011
Next Hearing Date 24-01-2011
Assessment Year 2004-2005
Appeal Filed On 28-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI C.L.SETHI JM AND SHRI K.D.RANJAN AM C.L.SETHI JM AND SHRI K.D.RANJAN AM C.L.SETHI JM AND SHRI K.D.RANJAN AM C.L.SETHI JM AND SHRI K.D.RANJAN AM ITA NO. ITA NO. ITA NO. ITA NO. 2551/DEL/2010 2551/DEL/2010 2551/DEL/2010 2551/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2004 2004 2004 2004 - -- - 05 0505 05 ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF INCOME TAX INCOME TAX INCOME TAX INCOME TAX CIRCLE CIRCLE CIRCLE CIRCLE- -- -38(1) 38(1) 38(1) 38(1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI MANOHAR LAL DUREJA SHRI MANOHAR LAL DUREJA SHRI MANOHAR LAL DUREJA SHRI MANOHAR LAL DUREJA 412 ARUNACHAL BUILDING 412 ARUNACHAL BUILDING 412 ARUNACHAL BUILDING 412 ARUNACHAL BUILDING BARAKHAMBA ROAD BARAKHAMBA ROAD BARAKHAMBA ROAD BARAKHAMBA ROAD NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN NO. PAN NO. PAN NO. PAN NO.AANPD3365L. AANPD3365L. AANPD3365L. AANPD3365L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMRENDRA KUMAR SR.DR. RESPONDENT BY : SHRI SUNIL ARORA CA. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI J J J JM : M : M : M : THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 2 6.2.2010 OF LEARNED CIT(A) DELETING THE PENALTY LEVIED BY THE A O U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 FOR THE AY 2004-05. 2. IN THIS CASE THE ASSESSEE FILED HIS RETURN OF I NCOME DECLARING TOTAL INCOME AT `24 80 580/- ON 31.10.2004. THE RE TURN WAS ACCOMPANIED BY THE AUDIT REPORT IN FORM 3CB & 3CD A LONGWITH AUDITED COPY OF TRADING ACCOUNT PROFIT & LOSS ACCOUNT AND BALANCE SHEET. THE ASSESSEE HAS BEEN EXECUTING CIVIL CONSTRUCTION WORK . TOTAL RECEIPTS FROM CIVIL CONSTRUCTION WORK HAD BEEN DECLARED AT ` 4 77 25 891/-. NET PROFIT FROM CONTRACT WORK HAS BEEN SHOWN BY THE ASS ESSEE AT `24 54 608/- IN THE RETURN OF INCOME. THE AO COMPL ETED THE ASSESSMENT U/S 144 ON THE BASIS OF MATERIAL AVAILAB LE ON RECORD. WHILE DETERMINING THE NET PROFIT FROM CONTRACT WORKS THE AO APPLIED THE RATE OF NET PROFIT OF 8% AND CONSEQUENTLY AN ADDITION O F `13 63 463/- WAS MADE TO THE RETURNED PROFIT. THE ASSESSEE THEN PRE FERRED APPEAL BEFORE THE CIT(A). IN THE QUANTUM APPEAL CIT(A) H AD OBSERVED THAT THE PROPER BASIS OF DETERMINING THE NET PROFIT WOUL D BE THE PAST HISTORY ITA-2551/DEL/2010 2 OF THE ASSESSEE. THE LEARNED CIT(A) FOUND THAT THE NET PROFIT RATE SHOWN BY THE ASSESSEE WAS 1.74% AND 5.20% IN THE AY 2003-04 & 2005-06 RESPECTIVELY. HE THEREFORE DIRECTED THE AO TO APPLY THE RATE OF NET PROFIT OF 6% ON TOTAL CONTRACT RECEIPTS DECL ARED BY THE ASSESSEE. ON A FURTHER APPEAL BY THE REVENUE BEFORE THE TRIBU NAL THE TRIBUNAL CONFIRMED THE CIT(A)S ORDER IN APPLYING THE RATE O F NET PROFIT OF 6%. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT BY OBS ERVING THAT THE ASSESSEE HAS NOT FURNISHED TRUE PARTICULARS OF HIS INCOME AND ASSESSEE HAS NOT COMPLIED WITH THE NOTICES OF HEARING. THE AO THEN PASSED THE PENALTY ORDER U/S 271(1)(C) READ WITH SECTION 274 A FTER GIVING SEVERAL OPPORTUNITIES TO THE ASSESSEE. WHILE IMPOSING THE PENALTY THE AO HAS OBSERVED THAT NO EXPLANATION HAS BEEN OFFERED BY TH E ASSESSEE IN RESPONSE TO PENALTY NOTICE INSPITE OF SEVERAL OPPOR TUNITIES. HE THEREFORE HAD TAKEN A VIEW THAT THE ASSESSEE HAS C ONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS. ON AN APPEAL BEFORE THE CIT(A) AGAINST THE PENALTY ORDER LEARNED CIT(A) DELETED THE PENALTY BY OBSERVING THAT IN THE PRESE NT CASE IT HAS NOT BEEN ESTABLISHED THAT THE ASSESSEE HAS CONCEALED TH E PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF. THE CIT(A) FURTHER OBSERVED THAT AO HAS FAILED TO BRING ANY MATERIAL O N RECORD TO SHOW THAT THE CONDITIONS U/S 271(1)(C) ARE FULFILLED. H E FURTHER HELD THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THAT HIS EXPLANATIO N WAS BONA-FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF INCOME HAVE BEEN DISCLOSED BY HIM AS SO PROVIDED UNDER EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT. H E THEREFORE DELETED THE PENALTY LEVIED BY THE AO. 4. HENCE THE DEPARTMENT IS IN APPEAL BEFORE US. ITA-2551/DEL/2010 3 5. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THE PRESENT CASE THE AD DITION TO THE NET PROFIT HAS BEEN MADE BY THE AO PURELY ON ESTIMATED BASIS. THE AO APPLIED THE RATE OF 8% WHICH HAS BEEN REDUCED TO 6% . THE ASSESSEE DECLARED NET PROFIT OF `24 54 608/- ON TOTAL RECEIP TS OF `4 77 25 891/-. THE PROFIT DISCLOSED BY THE ASSESSEE COMES TO APPRO XIMATELY JUST ABOVE 5%. THE NET PROFIT SHOWN IN THE IMMEDIATE PR ECEDING AY WAS ONLY 1.74% AND IN THE IMMEDIATE SUCCEEDING AY IS 5. 20%. THEREFORE THE NET PROFIT DECLARED BY THE ASSESSEE CANNOT BE S AID TO BE ABNORMALLY LOW SO AS TO SAY THAT ASSESSEE HAS CONCE ALED PARTICULARS OF HIS INCOME. THE ASSESSMENT HAS BEEN PURELY MADE ON ESTIMATED BASIS ON WHICH IN OUR CONSIDERED OPINION NO PENALTY U/S 271(1)(C) IS ATTRACTED. WE THEREFORE UPHOLD THE ORDER OF CIT( A) IN DELETING THE PENALTY. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 2011. SD/- SD/- (K.D.RANJAN (K.D.RANJAN (K.D.RANJAN (K.D.RANJAN ) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI ) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 28.01.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR ITA-2551/DEL/2010 4