ASIAN PETROPRODUCTS & EXPORTS LTD.,BARODA vs. THE DY.CIT., CIRCLE-1(1), BARODA

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ITA 573/AHD/2015Status: DisposedITAT Ahmedabad27 June 2018AY 2005-062 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's failure to provide details during assessment and penalty proceedings, even while suffering a loss, amounted to negligence. The income was estimated due to compelling circumstances and the assessee's lack of explanation.

What were the facts?

The assessee declared a loss for the assessment year 2005-06. The AO made additions for unexplained cash credit and estimated net profit at 1% of turnover. The AO imposed a penalty under Section 271(1)(c) on the addition of estimated net profit.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the assessee fails to provide details and income is estimated due to compelling circumstances.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘D’

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

For Appellant: Shri V.K. Singh, Sr.DR
Hearing: 25/06/2018Pronounced: 27/06/2018

आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH ‘D’ BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER

आयकर अपील सं./ ITA No.573/Ahd/2015 �नधा�रण वष�/Asstt. Year: 2005-2006

Asian Petroproducts & Exports Vs. DCIT, Cir.1(1) 204/205, Sterling Centre Baroda. R.C. Dutt Road Alkapuri, Baroda 390 007. PAN : AACCCA 8443 J

अपीलाथ�/ (Appellant) �त् यथ�/ (Respondent)

: Shri M.K. Patel, AR Assessee by : Shri V.K. Singh, Sr.DR Revenue by

सुनवाई क� तार�ख/Date of Hearing : 25/06/2018 घोषणा क� तार�ख /Date of Pronouncement: 27/06/2018 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:

Assessee is in appeal before the Tribunal against order of the ld.CIT(A)- I, Baroda dated 16.12.2014 passed for the assessment year 2005-06.

2.

Grievance of the assessee is that the ld.CIT9A) has erred in confirming penalty of Rs.2,45,000/- which was imposed by the AO under section 271(1)(c) of the Income Tax Act.

3.

Brief facts of the case are that the assessee has filed its return of income on 27.10.2005 declaring loss of Rs.47,36,330/-. An assessment order was passed under section 143(3) r.w.s. 144 of the Act on 16.11.2007 whereby the income of the assessee was assessed at (-)34,85,184/-. The ld.AO has made two additions viz. Rs.6,36,675/- unexplained cash credit, and Rs.6,14,472/- being net profit worked at 1% of the turnover. The AO initiated

ITA No.573/Ahd/2015

penalty proceedings and ultimately imposed a penalty of Rs.2,45,000/- qua addition of Rs.6,14,472/-. Appeal to the ld.CIT(A) did not bring any relief to the assessee.

4.

With the assistance of the ld.representatives, we have gone through the record. The assessee did not participate in the assessment proceedings simply for the reason that it has a loss and nothing will happen. It did not submit any details. Even in the penalty proceedings, the assessee failed to offer any explanation as to why it should not be visited with penalty. Before us, the ld.counsel for the assessee submitted that since the assessee was suffering huge loss, it was not having complete details, and therefore it did not produce them before the AO. We are of the view that by accepting these contentions would be giving a premium to a negligent person. The income of the assessee was estimated under compelling circumstances i.e. mode of quantification of income. It has not been estimated simply by disbelieving any details submitted by the assessee. Say for example, if an assessee has claimed certain expenditure, but failed to substantiate it, then on an adhoc basis ld.AO partly disallowed, that expenditure would be considered as a disallowance on estimation basis. But here the assessee failed to give any explanation. The income has been estimated on compulsion basis in order to quantify. Thus, we are of the view that the ld.CIT(A) has rightly confirmed the levy of penalty. We do not find any merit in this appeal of the assessee. It is dismissed.

5.

In the result, appeal of the assessee is dismissed.

Order pronounced in the Court on 27th June, 2018 at Ahmedabad.

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

Ahmedabad; Dated 27/06/2018

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