The Asstt. Commissioner of Income Tax, Pathankot v. Sh. Lakhwinder Singh, Gurdaspur

ITA 526/ASR/2015 | 2011-2012
Pronouncement Date: 19-10-2016 | Result: Dismissed

Appeal Details

RSA Number 52620914 RSA 2015
Assessee PAN ACLPS4296F
Bench Amritsar
Appeal Number ITA 526/ASR/2015
Duration Of Justice 1 year(s) 6 day(s)
Appellant The Asstt. Commissioner of Income Tax, Pathankot
Respondent Sh. Lakhwinder Singh, Gurdaspur
Appeal Type Income Tax Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 19-10-2016
Assessment Year 2011-2012
Appeal Filed On 13-10-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY JUDICIAL MEMBER ITA NO.526(ASR)/2015 ASSESSMENT YEAR:2011-12 PAN : ACLPS4296F ASSTT. COMMR. OF INCOME TAX VS. SH. LAKHWINDER SIN GH CIRCLE VI 1- TUNG HOUSE PATHANKOT. VILL. TNG P.O. HAYAT NAGAR GURDASPUR. (APPELLANT) (RESPONDENT) C.O. NO.30(ASR)/2015 (ARISING OUT OF ITA NO.526(ASR)/2015) ASSESSMENT YEAR:2011-12 PAN : ACLPS4296F SH. LAKHWINDER SINGH VS. ASSTT. COMMR. OF INCOME TAX 1- TUNG HOUSE CIRCLE VI PATHANKOT VILL. TNG P.O. HAYAT NAGAR GURDASPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. RAHUL DHAWN DR ASSESSEE BY: SH. P.N. ARORA ADV. DATE OF HEARING: 21/09/2016 DATE OF PRONOUNCEMENT: 19/10/2016 ORDER PER T.S. KAPOOR AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-2 AMRITSAR DATED 15.07.2015 FOR THE ASSESS MENT YEAR 2011-12. THE REVENUE IS AGGRIEVED WITH THE ACTION OF THE LD. CIT(A) BY WHICH HE HAD DELETED THE PENALTY IMPOSED BY THE A.O. UNDER S ECTION 271(1)(C) OF ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 2 THE INCOME TAX ACT 1961 ( IN SHORT THE ACT). TH E ASSESSEE HAS ALSO FILED CROSS OBJECTIONS WHICH ARE SUPPORTIVE TO THE ORDER OF THE LD. CIT(A). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CIVIL CONTRACTOR. DURING THE YEAR UNDER CONSIDERATION T HE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED AND PROFITS OF THE ASSES SEE WERE ESTIMATED. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD CREDI TED AN AMOUNT OF RS.2 29 965/- TO HIS CAPITAL ACCOUNT WHEREAS IT SH OULD HAVE BEEN CREDITED TO THE PROFIT & LOSS ACCOUNT. IN VIEW OF T HESE FACTS THE A.O. IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT . 3. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A) AND MADE VARIOUS SUBMISSIONS. THE LD. C IT(A) DELETED THE PENALTY ON ACCOUNT OF THESE TWO FACTORS BY HOLDING AS UNDER: 6. I HAVE CONSIDERED THE PENALTY ORDER AND THE WRI TTEN SUBMISSION OF THE APPELLANT AND THE GROUNDS OF APPE AL ARE DISPOSED OFF HEREUNDER:- THE GROUND OF APPEAL NO. 1 TO 7 ARE AGAINST THE IMP OSITION OF PENALTY U/S 271(1)(C) OF RS.18 57 770/-. THE FACTS OF THE CASE ARE THAT THE RETURN WAS FILED FOR THE AY 2011- 12 AT RS.72 30 830/- AND AGRICULTURE INCOME OF RS.1 85 640/- ON 30- 09-2011. THE CASE WAS SELECTED UNDER SCRUTINY AND T HE ASSESSMENT COMPLETED U/S 143(3) ON 12-03-2014 CREATING A DEMAN D OF RS.22 35 670/- AND PENALTY PROCEEDINGS WERE INITIAT ED ALONGWITH THE ASSESSMENT ORDER. THE ASSESSEE IS A CONTRACTOR WHO HAD DECLARED NET P ROFIT OF RS.69 34 742/- ON GROSS RECEIPTS OF RS.12 58 30 195 /- INCLUDING INTEREST INCOME OF RS.1 33 944/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VARIOUS DETAILS IN RESPECT OF EXPENSES CLAIMED IN P & L ACCOUNT WERE C ALLED FOR WHICH WERE PRODUCED AND EXAMINED BY THE AO. THE ASSESSEE HAD CLAIMED MAJOR EXPENSES ON ACCOUNT OF PURCHASE AND LABOUR AT ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 3 RS.6 85 25 610/- AND RS.3 80 36 142/- RESPECTIVELY. THE ASSESSEE WAS THEREFORE ASKED TO PRODUCE BILLS OF PURCHASE AN D LABOUR BUT THE ORIGINAL BILLS VOUCHERS IN RESPECT OF PURCHASES WER E NOT PRODUCED. THE ASSESSEE PRODUCED CASH BOOK AND LEDGER BUT DID NOT PRODUCE COMPLETE VOUCHERS OF PURCHASE LABOUR AND MUSTERROL L OF LABOUR. ON THE NEXT DATE OF HEARING THE ASSESSEE PRODUCED SALA RY REGISTER AND ATTENDANCE REGISTER OF LABOUR BUT WAS NOT ABLE TO P RODUCE THE BILLS OF LABOUR BAJARI AND OTHER MATERIAL ETC. THE AO WAS N OT SATISFIED WITH THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF AC COUNT OF THE ASSESSEE AND REJECTED THE SAME U/S 145(3). HE RELIE D ON THE SEVERAL DECISION OF HONBLE HIGH COURTS AND HONBLE ITAT FO R REJECTING THE BOOKS OF ACCOUNT. AFTER REJECTING THE BOOKS OF ACCOUNT THE AO APPLIED THE NET PROFIT RATE OF 10% OF THE GROSS TURN OVER TO AR RIVE AT THE INCOME OF THE ASSESSEE BY RELYING ON THE DECISION O F HONBLE ITAT IN THE CASE OF M/S ESS ESS BUILDERS PVT LTD AN D IN THE CASE OF M/S AGARWAL CONSTRUCTION LUDHIANA AND TH E DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S SHIVAM CONSTRUCTION COMPANY. DURING THE COURSE OF EXAMINATION OF BOOKS OF ACCOUN TS THE AO OBSERVED THAT THE ASSESSEE HAD CREDITED AN A MOUNT OF 229 965/- TO HIS CAPITAL ACCOUNT WHEREAS INTEREST C REDITED TO THE P & L ACCOUNT STOOD AT RS 133 944/-. THE EXAMIN ATION OF THE INTEREST AMOUNT SHOWED THAT THE ASSESSEE HAD RE CEIVED INTEREST OF RS 363 905/- BUT THE ASSESSEE HAD SHOWN INTEREST INCOME OF RS 133 944/- ONLY TO THE PROFIT & LOSS AC COUNT. THE ASSESSEE EXPLAINED THAT HE HAD NETTED THE INTEREST INCOME AND EXPENDITURE. ACCORDINGLY THE INTEREST INCOME OF RS 229 965/- CREDITED TO THE CAPITAL ACCOUNT WAS ADDED TO THE TO TAL INCOME DECLARED IN THE RETURN. IN THE PENALTY ORDER THE AO HELD THAT THE ADDITION IN THIS CASE WAS PREDOMINANTLY MADE ON THE BASIS OF UNVERIF IABLE EXPENDITURE ON WAGES AND OTHER NON ALLOWABLE EXPENS ES THOUGH THE ADDITION WAS BY WAY OF ESTIMATION OF INC OME @ 10% OF GROSS RECEIPTS. THE AO HELD THAT THE INABILITY O F THE ASSESSEE TO FURNISH RELEVANT DETAILS SHOWS THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME IN A DELIBERATE MA NNER. THAT IN THE PRESENT CASE THERE ARE CLAIMS IN THE RETURN OF INCOME WHICH THE ASSESSEE COULD NOT SUBSTANTIATE WHEN THE AO RAISED QUERIES DURING SCRUTINY ASSESSMENT. IN THE PROCESS INACCURATE PARTICULARS WERE ESTABLISHED AND THEREFORE ASSESSEE BECOMES LIABLE FOR PENALTY. THE AO RELIED ON SEVERAL DECISI ONS TO HOLD ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 4 THAT THE PENALTY MAY BE IMPOSED ON ESTIMATED ADDITI ONS ALSO AND ACCORDINGLY IMPOSED THE PENALTY OF RS18 57 770/ - U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PART ICULARS OF INCOME. IN THE APPEAL PROCEEDINGS THE APPELLANT FILED WRITT EN SUBMISSIONS WHEREIN THE ARGUMENTS OF THE APPELLANT WERE TWO FOLD:- THAT THERE WAS NO APPLICATION MIND OF THE AO WHILE LEVYING THE PENALTY IN AS MUCH AS THE PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME/FURNISHING INACCURATE PAR TICULARS OF INCOME WHEREAS THE PENALTY WAS IMPOSED FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME. THEREFORE NO PROP ER OPPORTUNITY OF BEING HEARD WAS ALLOWED AND THE BASI S FOR INITIATION AND IMPOSITION OF PENALTY IS QUITE SEPAR ATE AND DISTINCT. AS SUCH THE APPELLANT ARGUED THAT THE PEN ALTY ORDER IS BAD IN LAW AND DESERVES TO BE CANCELED. THE ASSESSMENT ORDER WAS PERUSED AND IT REVEALED TH AT THE AO WAS SATISFIED THAT THE ASSESSEE BY NOT MAINTAINING AND PRODUCING ALL THE BILLS AND VOUCHERS HAD CLAIMED EX CESS EXPENDITURE AND THEREBY HAD FURNISHED INACCURATE PA RTICULARS OF HIS INCOME AND THEREFORE INITIATED THE PENALTY P ROCEEDINGS U/S 271(L)(C) OF THE ACT. THE AO HAD ALSO INITIATED THE PENALTY PROCEEDINGS IN RESPECT OF ADDITION OF INTEREST INCO ME OF RS 229 965/- ON ACCOUNT OF CONCEALMENT OF TRUE PARTICULARS OF INCOME AND HAD NOT INITIATED ANY PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT IN RESPECT OF ADDITION/DISALLO WANCE OF RS 118 342/-. IN THE PENALTY ORDER THE AO HAD HELD THAT THE INABI LITY OF THE ASSESSEE TO FURNISH THE RELEVANT DETAILS SHOWS THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME IN A DELIBERATE MANNER IN RESPECT OF SUM OF RS 59 32 912/- WHICH INCLUDED THE ESTIMATED ADDITION OF RS 56 48 278/- ON ACCOUNT OF ESTIMATION OF NET PROFIT RATE @ 10% OF CONTRACT RECEIPTS AND THE ADDITION OF INTERE ST INCOME OF RS 229 965/- CREDITED TO THE CAPITAL ACCO UNT OF THE ASSESSEE. THE REASONS FOR IMPOSITION OF PENALTY U/S 271 (1 )( C) OF THE ACT WAS THAT THERE WERE CLAIMS MADE IN THE RETURN OF IN COME WHICH THE ASSESSEE COULD NOT SUBSTANTIATE WHEN THE AO RAI SED QUERIES DURING SCRUTINY ASSESSMENT AND THEREFORE IN ACCURATE PARTICULARS WERE ESTABLISHED AND THE ASSESSEE BECAM E LIABLE ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 5 FOR PENALTY. THE AO ALSO OBSERVED THAT THE ASSESSEE HAD NOT PREFERRED AND APPEAL AGAINST THE QUANTUM ORDER BEF ORE THE CIT(A) AND THEREFORE THIS WAIS AN ADMISSION OF SOR TS BY THE ASSESSEE ON HIS OWN. THIS OBSERVATION OF THE AO WAS INCORRECT SINCE THE APPELLANT HAD FILED APPEAL AGAINST THE QU ANTUM ORDER U/S 143(3) DATED 12-03-2014 BEFORE THE CIT(A) AMRI TSAR ON 08.09-2014 WHEREAS THE IMPUGNED PENALTY ORDER WAS P ASSED LATER ON 24.09.2014. IT IS FURTHER OBSERVED THAT THE COUNSEL OF THE APPE LLANT HAD SUBMITTED BEFORE THE AO DURING THE PENALTY PROC EEDINGS THAT THE ASSESSEE HAD SURRENDERED THE ADDITIONAL IN COME @ 10% TO EARN PEACE OF MIND AND TO AVOID BOTHERATION. HOWEVER THE PERUSAL OF ASSESSMENT RECORD OF THE APPELLANT F OR ASSESSMENT YEAR UNDER CONSIDERATION DID NOT REVEAL ANY SURRENDER MADE BY THE APPELLANT AND THEREFORE EVEN THE STATEMENT OF THE COUNSEL OF THE APPELLANT REGARDING SURRENDER MADE BY THE APPELLANT WAS INCORRECT AND HENCE DISMI SSED. THE PENALTY WAS IMPOSED BY THE AO ON ACCOUNT OF FIL ING INACCURATE PARTICULARS OF INCOME IN RESPECT OF ADDI TION OF RS 56 48 278/- ON ACCOUNT OF ESTIMATION OF NET PROFIT RATE @ 10% OF CONTRACT RECEIPTS AND THE ADDITION OF INTEREST I NCOME OF RS 229 965/- CREDITED TO THE CAPITAL ACCOUNT OF THE AS SESSEE. THE PENALTY IMPOSED ON THESE TWO ACCOUNTS IS DISCUSSED SEPARATELY HEREUNDER:- PENALTY IMPOSED ON ADDITION OF RS 229 965/- THE AO HAD IN THE ASSESSMENT ORDER INITIATED THE PENALTY U/S 271( L)(C) OF THE ACT ON ACCOUNT OF ESTIMATED ADDITION OF RS 229 965/ - ON ACCOUNT OF CONCEALMENT OF THE TRUE PARTICULARS OF HIS INTEREST INCOME. HOWEVER THE PENALTY HAD BEEN IMPO SED BY THE AO UNDER THIS SECTION INTER-ALIA ON THE SUM OF RS 59 32 912/- (WHICH INCLUDED THAT THE SAID ADDITION OF RS 229 965/-) ON THE GROUND OF FILING INACCURATE PARTI CULARS OF INCOME. THIS INDICATES THE LACK OF APPLICATION OF MIND OF T HE AO AND LACK OF HIS SATISFACTION AS TO WHETHER THE A SSESSEE HAD CONCEALED THE PARTICULARS OF INCOME OF RS 229 965/- OR FURNISHED INACCURATE PARTICULAR OF THE SAID INCOME AT THE TIME OF PASSING THE ASSESSMENT ORDER AND INITIATING THE PENALTY U/S 271(L)(C) OF THE ACT. MOREOVER THE INTEREST INCOME OF RS 229 965/- HAD BEEN CREDITED TO THE CAPITAL ACCOUNT OF THE APP ELLANT AND THEREFORE CANNOT BE SAID THAT THE APPELLANT HAD CON CEALED THE FACTS OF EARNING THE SAID INTEREST INCOME. ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 6 THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF THE ADDITION OF RS 229 965/- WAS BAD IN LAW FOR ONE SIMPLE REASON THAT NO PROPER OPPORTUNITY OF BEING HEARD WAS ALLOW ED TO THE APPELLANT AND THE AO WAS NOT ABLE TO FRAME ANY CHAR GE OF CONCEALMENT OF INCOME OF RS 229 965/- AGAINST THE A SSESSEE WHILE LEVYING THE PENALTY. AS THE BASIS FOR INITIATION OF PENALTY PROCEEDINGS AND THE BASIS FOR LEVY OF PENALTY ARE QUITE SEPARAT E AND DISTINCT THEREFORE THE PENALTY ORDER IS BAD IN LAW IN RESPEC T OF THE PENALTY ON THE ADDITION OF RS 2 29 665/- WHICH IS ACCORDINGL Y DELETED. FURTHER AS THE PENALTY PROCEEDINGS WERE NOT INITIAT ED U/S 271(L)(C) IN RESPECT OF THE DISALLOWANCE OF INTERES T OF RS 118 342/- U/S 40A(IA) OF THE ACT THEREFORE NO PENALTY COULD BE IMPOSED IN RESPECT OF THE SAID DISALLOWANCE AND HENCE ANY PENA LTY IMPOSED THEREON IS DELETED. (B) PENALTY IMPOSED ON ADDITION OF RS 56 48 278/-ON ACCOUNT OF ESTIMATED . ADDITION OF NET PROFIT BY APPLYING N P RATE OF 10 %:- THE AO HAD IMPOSED PENALTY ON THE ADDITION OF RS 56 48 278/- ON ACCOUNT OF ESTIMATION OF NET PROFIT RATE @ 10% OF C ONTRACT RECEIPTS AS AGAINST THE DECLARED NET PROFIT @ 5.51% WHICH WAS NOT SUBSTANTIATED BY THE ASSESSEE BY FILING RELEVANT DE TAILS AND THEREBY HAD FILED INACCURATE PARTICULARS OF HIS INCOME. IT IS AN UNDISPUTED FACTS THAT THE ASSESSEE HAD MAI NTAINED BOOKS OF ACCOUNTS WHICH; WERE AUDITED AS REQUIRED U /S 44AB OF THE ACT AND THE ASSESSEE HAD PRODUCED THE CASH BOOK AND LEDGER AND THE SALARY REGISTER AND THE : ATTENDANCE REGISTER O F LABOUR BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS AS STATED IN THE A SSESSMENT ORDER U/S 143(3) FOR A Y 2011-12 BUT THE DEFAULT OF THE ASSESSEE WAS OF NOT PRODUCING COMPLETE VOUCHERS OF PURCHASES IN ORIGINAL VOUCHERS OF LABOUR AND MUSTERED ROLL OF LABOUR. THE AO HAD REJECTED THE BOOKS OF ACCOUNTS BY INVOKING THE PROVISIONS OF SECTION145(3) OF THE ACT FOR THE ABOVE DEFAULTS AND ESTIMATED THE NET PROFIT RATE OF 10% OF THE GROSS CONTRACT RECEIPTS. HOWEVER THE QU ANTUM ASSESSMENT ORDER OR THE IMPUGNED PENALTY ORDER DOES NOT SHOW ANY FINDING RECORDED BY THE AO THAT THE CONDUCT OF THE ASSESSEE WAS DISHONEST OR CONTUMACIOUS AND NON PRODUCTION OF THE RELEVANT RECORD WAS ONLY WITH A VIEW TO SUPPRESS ITS INCOME. I HE A O ESTIMATED THE INCOME BY APPLYING NET PROFIT RATE OF 10% AS AGAINS T THE NET PROFIT RATE OF . 5.51% DECLARED BY THE APPELLANT. THERE IS NOTHING ON RECORD TO SHOW MALAFIDE INTENT ON THE PART OF THE APPELLAN T. THE ISSUE WHETHER PENALTY U/S 271(L)(C) CAN BE IMPO SED IN A CASE WHERE THE ADDITION IS BASED ON MERE ESTIMATE O F INCOME THE ISSUE HAS BEEN CONSISTENTLY CONSIDERED BY THE HON'B LE PUNJAB & ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 7 HARYANA PLIGH COURT IN VARIOUS CASES WHERE IT HAS BEEN HELD THAT PENALTY U/S 271(L)(C) CANNOT BE IMPPSED IN A CASE W HERE THE ADDITION HAS BEEN MADE PURELY ON ESTIMATE BASIS NAMELY - (I) IN THE CASE OF CIT VS DHILLON RICE MILLS REPORTED IN 255 ITR 47 (I I) CIT VS SURESH KUMAR BANSAL REPORTED IN 254 ITR 130 (III) CIT VS M ETAL PRODUCTS OF INDIA REPORTED IN 150 ITR 714 (IV) CIT VS AJAIB SIN GH & CO. REPORTED IN 253 ITR 630 AND (V) HARI GOPAL SINGH VS CIT REPO RTED IN 258 ITR 185 AND THE DECISION OF HONBLE ITAT AMRITSAR IN T HE CASE OF ITO WARD 1(1) BATALA VS SHRI JARNAIL SINGH CONTRACTOR IN ITA NO. 212(ASR)/2007 DATED 16-11-2007 FOR A Y 2001-02. FOR THE PURPOSE OF LEVY OF PENALTY THE AO WAS REQU IRED TO ESTABLISH THAT THE ASSESSEE WAS GUILTY OF DISHONEST AND CONTUMACIOUS CONDUCT . THE MERE FACT THAT THE ADDIT ION WAS MADE BY REJECTING THE EXPLANATION OF THE ASSESSEE DOES N OT JUSTIFY THE LEVY OF PENALTY. IN THE CASE OF THE APPELLANT THE BOOKS OF ACCOUNTS NAMELY CASH BOOKS LEDGER SALARY REGISTER AND THE ATTENDA NCE REGISTER OF LABOUR COPIES OF SOME PURCHASE VOUCHERS WERE PRODU CED BEFORE THE AO AND THIS FACT WAS ADMITTED IN THE ASSESSMENT ORD ER. IT IS HOWEVER TRUE THE APPELLANT WAS UNABLE TO PRODUCE C OMPLETE ORIGINAL VOUCHERS OF PURCHASES AS WELL AS OF LABOUR AND THEREFORE IN THE APPEAL ORDER PASSED BY THE UNDERSIGNED AGAINST THE QUANTUM ASSESSMENT ORDER DATED 12-03-2014 THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) HAD BEEN UPHELD AND THE NET PRO FIT RATE WAS REDUCED FROM 10% TO 8%. THIS HOWEVER DOES NOT SHOW ANY MALAFIDE OR DISHONES T CONDUCT ON THE PART OF THE APPELLANT. THERE IS ALSO NO FINDING RECORDED BY THE AO TO SHOW THAT THE APPELLANT HAD S UPPRESSED THE RECEIPTS OR ANY ITEM OF EXPENDITURE WAS : FOUND TO BE BOGUS OR RECORDED IN THE BOOKS OF ACCOUNTS AT AN INFLATED FI GURE. THERE WAS NO CONCLUSIVE EVIDENCE RECORDED BY THE AO THAT THE APP ELLANT HAD CONCEALED INCOME OR FURNISHED INACCURATE PARTICULAR S OF INCOME AND THEREFORE NO PENALTY U/S 271(L)(C) CAN BE LEVIED. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE AND THE LEGAL POSITION DISCUSSED ABOVE NO PENALTY U/S 271(L)(C) OF THE ACT WAS LEVIABLE UPON THE APPELLANT AND ACCORD INGLY THE PENALTY IMPOSED U/S 271(1)(C) OF RS 18 57 770/- IS DELETED. 7. IN THE RESULT APPEAL IS ALLOWED. 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE THIS BENCH. ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 8 5. AT THE OUTSET THE LD. DR STRONGLY PLACED RELIA NCE ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE AO HAS RIGHTLY IMPOSED THE PENALTY. 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER H AND SUBMITTED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED AND THE AO ARBITRARILY ESTIMATED THE INCOME OF THE ASSESSEE AND THEREFORE THERE WAS NO CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THERE ARE NUMEROUS JUDGMENTS OF THE HONBLE HI GH COURTS FOR THE PROPOSITION THAT WHERE THE PENALTY IS IMPOSED BY ES TIMATING INCOME OF THE ASSESSEE NO PENALTY IS IMPOSABLE. THE LD. COUN SEL SUBMITTED THAT THE LD. CIT(A) HAS CITED VARIOUS JUDGMENTS IN HIS ORDER WHICH WERE RELIED UPON BY THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT AND THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE AUDITED UNDER SECTION 44AB OF THE ACT. THE ASSESSEE HAD DECLARED NET PROFIT WHICH WORKED OUT T O BE 5.51% OF GROSS RECEIPTS. THE AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME @ 10%. THERE WAS NO MATERIAL AVAILABLE WITH THE A.O . FROM WHICH HE COULD ARRIVE AT THE CONCLUSION THAT THE ASSESSEE HA D NECESSARILY CONCEALED PARTICULARS OF INCOME. THE LD. CIT(A) HA S RELIED UPON NUMBER OF CASE LAWS FOR THE PROPOSITION THAT WHERE THE ADD ITION HAS BEEN MADE PURELY ON ESTIMATED BASIS THE PENALTY U/S 271(1)(C ) CANNOT BE IMPOSED. ITA NO.526/ASR/2015 C.O. NO.30/ASR/2015 9 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SA ME IS CONFIRMED. THUS THE APPEAL OF THE REVENUE IS DISMISSED. 8. AS REGARDS THE C.O. FILED BY THE ASSESSEE THE S AME IS SUPPORTIVE TO THE ORDER OF THE LD. CIT(A). SINCE WE HAVE DISMISSE D THE APPEAL OF THE REVENUE HEREINABOVE THE C.O. FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THEREFORE THE SAME IS ALSO DISMISS ED. 9. IN NUTSHELL BOTH THE APPEAL OF THE REVENUE AS W ELL AS THE C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/10/2 016. SD/- SD/- (N.K. CHOUDHRY) (T.S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER /SKR/ DATED: 19/10/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. LAKHWINDER SINGH GURDASPUR. 2. THE ACIT CIRCLE VI PATHANKOT. 3. THE CIT(A) ASR. 4. THE CIT ASR. 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.