ACIT,CIR-8,, Nagpur v. SHRI JAIPRAKASH NARAYANDAS KAPADIA,, Amaravati

ITA 9/NAG/2014 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 923914 RSA 2014
Assessee PAN ABQPK2927B
Bench Nagpur
Appeal Number ITA 9/NAG/2014
Duration Of Justice 1 year(s) 6 month(s) 23 day(s)
Appellant ACIT,CIR-8,, Nagpur
Respondent SHRI JAIPRAKASH NARAYANDAS KAPADIA,, Amaravati
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 31-07-2015
Assessment Year 2009-2010
Appeal Filed On 07-01-2014
Judgment Text
1 ITA NOS. 09 & 10/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH NAGPUR BEFORE SHRI MUKUL K. SHRAWAT JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER. I.T. A. NOS . 09 & 10/NAG/2014. ASSESSMENT YEARS :2009 - 10 & 2010 - 11. ASSTT. COMMISSIONER OF INCOME - TAX JAIPRAKASH NARAYANDAS KAPADIA CIRCLE - 8 NAGPUR V/S. GLORY 40 NEW KRISHNARPAN COLONY AMRAVATI. PAN ABQPK2927B (APPELLANT) RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI MANOJ MO RYANI. DATE OF HEARING : 13 - 07 - 2015 DATE OF PRONOUNCEMENT : 31 ST JULY 2015. O R D E R PER SHRI MUKUL K. SHRAWAT J.M. THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE ARISING FROM THE TWO SEPARATE ORDERS OF LEARNED CIT(APPEALS) FOR ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 DATED 10 - 10 - 2013. 2. THE REVENUE HAS CHALLENGED THE DELETION OF PENALTY LEVIED UNDER SECTION 271(1)(C) RESPEC TIVELY OF ` .6 58 450/ - AND ` .8 55 000/ - . THE REVENUE HAS ALSO RAISED AN OBJECTION THAT THE LEARNED CIT(APPEALS) HAS IGNORED THE FACT THAT THE BOOKS OF 2 ITA NOS. 09 & 10/NAG/2014 ACCOUNTS WERE INCOMPLETE AND THE SUPPORTING VOUCHERS WERE NOT AVAILABLE ON THE DATE OF SURVEY. HENCE THE CONCEALMENT WAS DETECTED BY THE REVENUE DEPARTMENT. 3. THE FACTS OF THE CASE IN BRIEF AS EMERGED FROM THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009 - 10 PASSED UNDER SECTION 143(3) DATED 31 ST MARCH 2011 AND THE PENALTY ORDER UNDER SECTION 271(1)(C) DATED 27 TH APRIL 2012 WERE THAT A SURVEY UNDER SECTION 133A WAS CARRIED OUT ON 29 TH JULY 2011. THE ASSESSING OFFICER HAS CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT FOR ASSESSMENT YEAR 2009 - 10 A RETURN WAS FILED DECLARING AN INCOME OF ` .20 89 220/ - ON 9 TH OF MARCH 2010. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS CONSIDERED THE STATEMENT RECORDED AT THE TIME OF SURVEY AND THE AMOUNT OFFERED AND THEREAFTER TAXED THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE IN THE FOLLOWING MANNER : 4. IN THE RESULT ASSESSEE OFFERED ` .19 37 190/ - AND THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FIRM. REGARDING THIS OFFER OF ` .19 37 190/ - ASSESSEE REQUESTED THAT THE TURNOVER OF THE ASSESSEE FOR THE A.Y. 2009 - 10 WERE AT ` .6 58 48 433/ - . THE SAID TURNOVER INCLUDE WCT CONTRACT AT ` .2 44 66 212/ - AND OTHER SALES ` .4 13 82 221/ - . THE ASSESSEE HAS NO OBJECTION IF THE WCT CONTRACT RECEIPTS WILL BE ADOPTED @ 8% OF ` .2 44 66 212/ - I.E. ` .19 57 296/ - AND OTHER RECEIPT WILL BE ADOPTED @ 5% OF ` .4 13 82 221/ - I.E. ` .20 69 111/ - (I.E. 19 57 296 AND ` .20 69 111) TOTAL ` . 40 26 407/ - (LESS) ` .20 89 220/ - SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME THE ADDITIONAL INCOME OFFERED FOR TAXATION COMES TO ` .19 37 190/ - . IN VIEW OF THE ABOVE FACTS THE ASSESSEE HAS CONCEALED INCOME TO THE EXTENT OF ` .19 37 190/ - . INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) SEPARATELY. 5. AFTER DISCUSSION & VERIFICATION OF THE DETAILS FILED AND SUBJECT TO THE ABOVE REMARKS THE INCOME OF T HE ASSESSEE IS COMPUTED AS UNDER : 3 ITA NOS. 09 & 10/NAG/2014 RETURNED INCOME ` . 20 89 220/ - ADD: AS DISCUSSED IN PARA 2 ABOVE ` . 19 37 190/ - REVISED TOTAL INCOME ` . 40 26 410/ - 4. DURING PENALTY PROCEEDINGS THE ASSESSING OF FICER HAS OPINED THAT THE AMOUNT WAS OFFERED WHEN THE CONCEALMENT WAS DETECTED AT THE TIME OF SURVEY. THE ASSESSEE WAS NOT ABLE TO PRODUCE THE VOUCHERS IN RESPECT OF THE JOB WORK PAYMENT AND LABOUR CHARGES ETC. WHEN THE ASSESSEE WAS NOT ABLE TO SUBSTANTIAT E THE CLAIM OF EXPENDITURE THEREFORE HE HAD OFFERED THE SAID AMOUNT WHICH WAS UNEARTHED CONSEQUENT UPON THE SEARCH. AFTER ASSIGNING THESE REASONS THE ASSESSING OFFICER HAS LEVIED THE IMPUGNED PENALTY. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELL ATE AUTHORITY THE LEARNED CIT(APPEALS) HAS DISCUSSED THE ENTIRE ISSUE AT LENGTH AND THEREAFTER ARRIVED AT THE CONCLUSION AS UNDER : 11. AS HAS BEEN HELD IN VARIOUS JUDGMENTS QUOTED ABOVE A PLAIN READING OF SECTION 271(1)(C) MAKES IT CLEAR THAT SO FAR AS THE SCHEME OF PENALTY FOR CONCEALMENT OF INCOME IS CONCERNED IT IS SINE QUA NON FOR IMPOSITION OF PENALTY THAT DURING THAT THE ASSESSING OFFICER SHOULD BE SATISFIED THAT THE ASSESSEE HAS (1) CONCEALED HIS INCOME OR (II ) FURNISHED INACCURATE PARTICULARS OF INCOME. TO THIS EXTENT THE ONUS IS ON THE ASSESSING OFFICER TO DEMONSTRATE THAT THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED THE INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE HOWEVER THERE IS N OTHING MORE THAN ASSESSEES SURRENDER OF INCOME TO SHOW THAT THE ASSESSEE CONCEALED ANY INCOME. THERE IS NO DOUBT THAT THE SAID EXPENSES FOR WHICH THE VOUCHERS WERE NOT PRODUCED HAVE BEEN INCURRED BY THE APPELLANT. THIS IS EVIDENCED BY THE BOOKS OF A CCOUNTS WHICH ARE DULY AUDITED. MERELY BECAUSE THE APPELLANT COULD NOT PRODUCE VOUCHERS DOES NOT ESTABLISH BEYOND DOUBT THAT THE CORRESPONDING INCOME HAD BEEN CONCEALED. THE ASSESSING OFFICER HAS PROCEEDED ON THE BASIS THAT SINCE THE ASSESSEE HAS NOT B EEN ABLE TO PROVE THAT THE AMOUNT SURRENDERED WAS IN FACT ASSESSEES CONCEALED INCOME. THE AUDITED BOOKS OF ACCOUNT EVIDENCE THAT THE APPELLANT DULY INCURRED 4 ITA NOS. 09 & 10/NAG/2014 THE SAID EXPENSES AND THE ONLY FALLING ON THE PART OF THE APPELLANT WAS TO PRODUCE PROPE R VOUCHERS FOR THE EXPENSES INCURRED AND THESE WOULD NOT AMOUNT CONCEALMENT OF INCOME. IT IS IMPORTANT TO NOTE THAT AT NO POINT DID THE APPELLANT ADMIT THAT BOGUS EXPENSES HAD BEEN DEBITED TO ITS BOOKS OF ACCOUNT. THE STATEMENTS OF THE APPELLANT WE RE RECORDED TWICE AND NOT EVIDENCE HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT A BOGUS CLAIM HAS BEEN MADE. THERE IS NOTHING MORE THAN THE APPELLANTS OFFER LETTER AND NO FINDINGS IN THE ASSESSMENT OR PENALTY PROCEEDINGS TO HOLD THAT THE ESTIMATED AMOUNTS DISALLOWED CONSTITUTED ASSESSEES CONCEALED INCOME. 11.1 IT IS ALSO CLEAR FACT THAT THE APPELLANT EVENTUALLY OFFERED THE SAID AMOUNT FOR TAX ON ESTIMATED BASIS. AS STATED IN THE JUDGMENT OF CIT V/S. MAHENDRASINGH KH EDLA (SUPRA) PENALTY CANNOT BE IMPOSED WHERE ADDITIONS ARE MADE ON ESTIMATION BASIS AS A FACT OR ALLEGATION BASED ON ESTIMATION COULD NOT BE SAID TO BE CORRECT ONLY AS IT CAN BE INCORRECT ALSO. 12. IN VIEW OF THE ABOVE FACTS AND THE LEGAL PRONOUNCEMEN TS RELIED AND REPRODUCED ABOVE IT IS HELD THAT PENALTY U/S 271(1)(C) IS NOT IMPOSABLE IN THE CASE OF THE APPELLANT AND THE SAME IS HEREBY DELETED. IN THE RESULT THE APPEAL FILED BY THE APPELLANT IS ALLOWED. 6. FROM THE SIDE OF THE REVENUE LEARNED D. R. MR. NARENDRA KANE HAS VEHEMENTLY STATED THAT IT WAS A CASE WHERE THE ASSESSEE HAD OFFERED THE AMOUNT WHEN THE DEFECTS IN THE BOOKS OF ACCOUNTS HAVE BEEN DETECTED BY THE SURVEY PARTY. ONLY AFTER THE SURVEY PARTY GOT HOLD THE EVIDENCES THE ASSESSEE HAD MADE THE DISCLOSURE. ACCORDING TO THE LEARNED D.R. IT WAS A WRONG OBSERVATION OF LEARNED CIT(APPEALS) THAT MERELY BECAUSE THE APPELLANT COULD NOT PRODUCE THE VOUCHERS DID NOT ESTABLISH THE CONCEALMENT OF INCOME. THE ESTABLISHED POSITION WAS THAT THE AMOUN T SURRENDERED WAS NOTHING BUT THE CONCEALED INCOME OF THE ASSESSEE. HE HAS THEREFORE PLEADED THAT THE PENALTY SHOULD BE CONFIRMED. 7. FROM THE SIDE OF THE ASSESSEE LEARNED A.R. MR. MANOJ MORYANI APPEARED AND ARGUED THAT THERE WAS NO INCRIMINATING MATE RIAL WHICH WAS DETECTED AT THE TIME OF SURVEY. THE ASSESSING OFFICER HAS SIMPLY MADE THE ADDITION ON ESTIMATE BASIS. 5 ITA NOS. 09 & 10/NAG/2014 THE ASSESSEE HAS COOPERATED WITH THE DEPARTMENT AND SURRENDERED THE AMOUNT TO BUY PEACE OF MIND AS ALSO TO AVOID LITIGATION. THE BOOKS OF A CCOUNTS WERE AVAILABLE BUT CERTAIN VOUCHERS WERE MISSING HENCE THE ASSESSEE HAS OFFERED THE AMOUNT SIMPLY TO AVOID LITIGATION. LEARNED A.R. HAS ALSO INFORMED THAT ALTHOUGH THE ADDITIONS WERE MERELY ON ESTIMATION BUT STILL THE ASSESSEE HAS NOT FILED ANY AP PEAL AGAINST THE IMPUGNED ADDITION BECAUSE HE HAD OFFERED THE AMOUNT AT THE TIME OF SURVEY PROCEEDINGS. IN SUPPORT OF THE CONTENTIONS HE HAS PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1. CIT V/S. MAHENDRA SINGH KHEDLA (2012) 252 CTR 453 (RAJ.) 2. CIT V /S. V.B.S. BADVE & ANR. (1982) 138 ITR 682 (BOM.). 3. NARENDRA KUMAR V/S. ITO (2005) 94 TTJ 156 (ITAT JODHPUR). 4. ODHARAM BULCHAND CLEARING AND FORWARDING P.LTD. V/S. ITO ITA NO. 5355/MUM/2009. 5. CIT V/S. V. CAFCO SYNDICATE SHIPPING CO. (2007) 294 ITR 134 (MAD.) 8. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES IN THE LIGHT OF THE CASE LAWS CITED WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE TO LEVY A PENALT Y OF CONCEALMENT. THERE WAS AN ABSENCE OF A PARTICULAR DETECTION OF AN INCOME FOUND TO BE CONCEALED DURING THE COURSE OF SURVEY OPERATION. THE ONLY DETECTION OF THE SURVEY PARTY WAS THE ABSENCE OF VOUCHERS IN RESPECT OF JOB WORK PAYMENT LABOR CHARGES ETC . TO COVER UP THAT DEFICIENCY THE ASSESSEE HAD OFFERED THE IMPUGNED AMOUNT. THEREFORE THE ASSESSING OFFICER HAS ALSO TAXED THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE WHICH WAS NOT CHALLENGED BY THE ASSESSEE. WE HAVE BEEN INTIMATED DURING THE COURSE OF H EARING BEFORE US THAT AS FAR AS THE TURNOVER FROM WCT CONTRACT AND THE TURNOVER OF OTHER CONTRACT WAS CONCERNED THE SAME WAS FOUND TO BE CORRECT. THE TOTAL RECEIPTS/TURNOVER AS RECORDED IN THE BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED BY 6 ITA NOS. 09 & 10/NAG/2014 THE ASSESSING OFFICER AS SUCH. THE ASSESSING OFFICER HAS SIMPLY ADOPTED A CERTAIN PERCENTAGE OF PROFIT OF THE SAID TOTAL RECEIPTS WHICH HAD TALLIED WITH THE AMOUNT OFFERED BY THE ASSESSEE. CONSIDERING THESE FACTS WE HEREBY HOLD THAT IN THE LIGHT OF THE CASE LAWS CITED THE PEN ALTY WAS RIGHTLY DELETED BY THE FIRST APPELLATE AUTHORITY. THE FACTS IN RESPECT OF THE OTHER APPEAL FOR ASSESSMENT YEAR 2010 - 11 ARE IDENTICAL HENCE THE RELIEF GRANTED BY LEARNED CIT(APPEALS) IS ALSO APPROVED IN IDENTICAL MANNER. 9. IN THE RESULT THE APPEALS OF THE REVENUE FOR BOTH THE YEARS ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR DATED: 31 ST JULY 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT NAGPUR. 5. THE D.R. ITAT NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WA KODE ASSISTANT REGISTRAR ITAT NAGPUR 7 ITA NOS. 09 & 10/NAG/2014