M/s. Shree Ram Distributors, New Delhi v. ITO, New Delhi

ITA 5695/DEL/2011 | 2007-2008
Pronouncement Date: 29-02-2012 | Result: Allowed

Appeal Details

RSA Number 569520114 RSA 2011
Assessee PAN AACFS6374F
Bench Delhi
Appeal Number ITA 5695/DEL/2011
Duration Of Justice 2 month(s) 9 day(s)
Appellant M/s. Shree Ram Distributors, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-02-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 29-02-2012
Date Of Final Hearing 22-02-2012
Next Hearing Date 22-02-2012
Assessment Year 2007-2008
Appeal Filed On 20-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.5695/DEL/2011 ASSESSMENT YEAR : 2007-08 SHREE RAM DISTRIBUTORS 5056/220 2 ND FLOOR PIPE CHAMBER SIRKIWALAN HAUZ QUAZI NEW DELHI. PAN : AACFS6374F VS. ITO WARD 28(1) NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. JAIN ADVOCATE REVENUE BY : MS S. MOHANTHY DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 25 TH OCTOBER 2011 FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) IS AGAINST FACTS & IS BAD IN LAW. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN CONFIRMING THE ORDER OF THE INCOME TAX OFFICER IMPOSI NG A PENALTY OF ` 1 31 313/- U/S 271(1)(C) WITHOUT ANY CO GENT REASON & JUSTIFICATION. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD DELETE AMEND OR ALTER ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HE ARING. 2. THE ASSESSEE IS A TRADER IN PIPE BEING AUTHORIZED AGE NT OF M/S JINDAL INDUSTRIES HISAR. THE TURNOVER OF THE ASSESSEE FO R THE PRESENT ITA NO.5695/DEL/2011 2 YEAR IS ` 25 43 90 139/- AGAINST THE TURNOVER OF IMME DIATE PRECEDING YEAR OF ` 17 08 92 278/-. THE GROSS PROFIT OF THE ASSE SSEE FOR THE PRESENT YEAR IS ` 31 77 513/- AS AGAINST GROSS PROFIT OF ` 22 30 251/- OF THE IMMEDIATE PRECEDING YEAR. THE RETURN OF INCOME WAS FILED AT AN INCOME OF ` 52 108/- WHICH HAS BEEN ASSESSED BY THE ASSESSIN G OFFICER AT ` 4 42 230/- VIDE ASSESSMENT ORDER DATED 18 TH DECEMBER 2009. TWO ADDITIONS WERE MADE TO THE RETURNED INCOME; THE FIRST ADDITION RELATES TO SALARY EXPENSES WHICH WERE FOUND TO BE DEBIT ED BY THE ASSESSEE TO THE EXTENT OF ` 16 81 800/-. IT IS FOUND B Y THE ASSESSING OFFICER THAT THE ASSESSEE DID NOT MAINTAIN PROPER REGIST ER OF SALARY PAID TO ITS EMPLOYEES AND THE SALARY WAS PAID BY VOUCHE RS. THEREFORE THE ASSESSING OFFICER OBSERVED THAT THE WHOLE AMOUNT OF SALARY COULD NOT BE TREATED AS GENUINE AND HE MADE 20% ESTIMATED D ISALLOWANCE WHICH HAS BEEN COMPUTED AT ` 3 36 360/-. SIMILARLY THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD DEBITED CARTAGE OF ` 2 15 066/- AND DID NOT MAINTAIN PROPER VOUCHERS AND PAYMENTS WERE AL SO MADE IN CASH AND BASED ON THE REASONS STATED FOR DISALLOWANCE OF SALARY HE COMPUTED 25% DISALLOWANCE IN THIS REGARD ALSO AND ANOT HER AMOUNT OF ` 53 766/- WAS ADDED TO THE INCOME OF THE ASSESSEE. TH ESE ADDITIONS WERE NOT CONTESTED BY THE ASSESSEE IN FURTHER APPEAL. I T IS ON THESE DISALLOWANCES THE IMPUGNED PENALTY HAS BEEN IMPOSED BY THE ASSESSING OFFICER AND THE PENALTY HAS BEEN CONFIRMED BY THE LEARNED CIT (A). THE ASSESSEE IS AGGRIEVED HENCE IN APPEAL. 3. THE LEARNED AR OF THE ASSESSEE HAS FILED BEFORE US WRI TTEN SUBMISSIONS IN WHICH THE AFOREMENTIONED FACTS ARE MENTIO NED. IT IS SUBMITTED THAT THE ACCOUNTS OF THE ASSESSEE ARE COMPLETE IN ALL RESPECTS AS THE PURCHASE AND SALES ARE SUPPORTED BY THE VO UCHERS THE ACCOUNTS ARE DULY AUDITED THE DISALLOWANCE ON ACCOUN T OF SALARY IS MADE ONLY FOR THE REASON THAT SALARY HAS BEEN PAID THR OUGH VOUCHERS AND SALARY REGISTER HAS NOT BEEN MAINTAINED. NO DEFEC T HAS BEEN ITA NO.5695/DEL/2011 3 POINTED OUT IN THE BOOKS OF ACCOUNT MAINTAINED BY TH E ASSESSEE WHICH WERE DULY PRODUCED BEFORE THE ASSESSING OFFICER. MERE PAYMENT OF SALARY THROUGH VOUCHERS DOES NOT MEAN THAT THE ASSESSEE DI D NOT PAY SUCH SALARY AND SIMILAR IS THE POSITION WITH THE CARTAGE ACCOUNT. IT IS SUBMITTED THAT THE ASSESSEE HAD AGREED FOR THE ADDITION FOR THE VARIOUS REASONS AND NOT FOR THE FACT THAT IT WAS CONCEALED INC OME AND THUS IT IS THE SUBMISSION OF THE LEARNED AR THAT THE DISALLOWED AMOUNT DID NOT REPRESENT CONCEALED INCOME OF THE ASSESSEE HENCE PENAL TY COULD NOT BE IMPOSED AND RELIANCE HAS BEEN PLACED ON VARIOUS DEC ISIONS INTER ALIA THE DECISIONS OF HONBLE SUPREME COURT IN THE CA SE OF CIT VS. RELIANCE PETROPRODUCTS PVT. 322 ITR 158 (SC); CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 (SC); CIT VS. ASHOK TAKER (20 08) 170 TAXMAN 471 (DEL). 4. IN THE CASE OF CIT VS. ASHOK TAKER IT WAS HELD THAT MERE SURRENDER OF CERTAIN AMOUNT DURING THE COURSE OF ASSESSME NT PROCEEDINGS WHICH WAS DONE IN ORDER TO BUY PEACE WILL NOT ITSELF LEAD TO LEVY OF CONCEALMENT PENALTY. 5. THUS IT WAS THE CONTENTION OF THE LEARNED AR THAT THE PENALTY SUSTAINED BY LEARNED CIT (A) SHOULD BE DELETED. 6. ON THE OTHER HAND RELYING UPON THE PENALTY ORDE R AS WELL AS THE ORDER OF THE CIT (A) IT IS THE CONTENTION OF THE LE ARNED DR THAT PENALTY HAS RIGHTLY BEEN SUSTAINED AND THE ORDER OF CIT (A) SHO ULD BE UPHELD. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE PENALTY IN THE P RESENT CASE HAS BEEN LEVIED ON ESTIMATED DISALLOWANCES. THE EXPENSES RE LATING TO SALARY ARE FOUND TO BE SUPPORTED BY VOUCHERS. THE DISA LLOWANCE HAS BEEN MADE ONLY ON ACCOUNT OF NON-MAINTENANCE OF SALA RY REGISTER. THE ITA NO.5695/DEL/2011 4 ASSESSEE HAS ACCEPTED THE ADDITION BUT THAT DOES NOT ME AN THAT THE DISALLOWED AMOUNT REPRESENT THE CONCEALED INCOME OF T HE ASSESSEE. SIMILARLY THE DISALLOWANCE MADE FOR CARTAGE IS ON EST IMATE BASIS WITHOUT BRINGING ANY MATERIAL ON RECORD TO SHOW THAT THE CARTAGE WAS NOT ACTUALLY PAID BY THE ASSESSEE. THEREFORE THE DISAL LOWANCE ON ACCOUNT OF CARTAGE ALSO DOES NOT REPRESENT THE CONCEAL ED INCOME OF THE ASSESSEE. MOREOVER THE ASSESSING OFFICER HAS ASSESSED THE ASSESSEE ON THE BASIS OF BOOKS OF ACCOUNT AND IT HAS NOT BE EN POINTED OUT THAT BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WER E NOT RELIABLE. LOOKING INTO ALL THESE FACTS AND THE AFORE MENTIONED CASE LAW WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE WHERE LEVY OF PENALTY CAN BE HELD JUSTIFIED. THEREFORE WE DELETE THE PENALTY AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.02.20 12. SD/- SD/ [B.C. MEENA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 29.02.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITAT DELHI BENCHES