SHRI RAGHAVENDRA BUILDERS,CHENNAI vs. DCIT, NON CORPORATE CIRCLE-22, , CHENNAI

No.2200/Chny/2017 is the penalty appeal filed by the assessee against the order of the CIT(Appeals)-10, Chennai in 13/CIT(A)-10 dated 29.06.2017 for the assessment year 2009-10 confirming the levy of penalty u/s.271(1)(c) of the Act made by ld. Assessing Officer. Since the quantum appeal and the penalty appeal are interlinked, they are disposed of by this common order for the sake of convenience.

Shri Y.Sridhar represented on behalf of the Assessee, and Shri AR.V.Sreenivasan represented on behalf of the Revenue.

In respect of it was submitted by ld.A.R that the assessee is a firm, which is doing the business of manufacturing and civil works contract & construction of Flats in the name and style of M/s.Raghavendra Builders. It was a submission that originally the assessment was completed u/s.143(3) of the Act on 28.12.2011 wherein the income of assessee was assessed at `41,98,540/- as against the returned income at `32,89,895/-. It was a submission that the assessment came to be reopened by issuance of notice u/s.148 of the Act on 27.02.2014 for the purpose of disallowing all the cash payments on purchase of property by applying the provisions of the section 40A(3) of the Act. It was a submission that ,2200/Chny/2017 :- 3 -:

In reply, ld.D.R submitted that the issue had not been considered in the course of original assessment, and even in the Audit Report submitted by the assessee in clause-17(h) in respect of issue of cash payments u/s.40A(3) of the Act, the auditors had marked the same as Nil. It was a submission that the order of ld. Assessing Officer and the order of the CIT(Appeals) are liable to be upheld.

We have considered the rival submissions. A perusal of the notice u/s.142(1) of the Act, most specifically clause-6, which has been referred to by the assessee, shows that the issue of Section 40A(3) has not been considered by the ld. Assessing Officer in course of original assessment. Further, the persons referred to in the assessment order u/s.143(3) r.w.s.147 of the Act are not the persons referred to the notice u/s.142(1) of the Act. Even otherwise, a perusal of provisions of Explanation 2(c) to Section 147 of the Act gives liberty to the ld. Assessing Officer to re-open the assessment in such eventualities. In the circumstances, the re-opening of assessment as done by the ld. Assessing Officer, and issuance of notice u/s.148 of the Act stand upheld. In regard to the merits, the assessee had been specifically asked as to the dates on which the payments were made and the properties in respect of which payments have been made. The ld.A.R submitted that he was not in a position to give the details ,2200/Chny/2017 :- 5 -:

It must be mentioned herein that when the order of the appeal had been pronounced in the open court, ld.A.R submitted that he has filed various paper books, which is to be relied upon. It was then informed to him that in course of the appeal hearing, no paper in the paper books has been referred to and only after the Pronouncement of the Order, he is referring to the paper books. The order having been pronounced, unless the assessee is able to point out any specific evidences, which are available in the paper books, stating that there are case laws, which needs to be considered, would not be considered at all. Ld.A.R has also not been able to point out any evidences filed in the paper books to substantiate its case. In the absence of any factual evidences, mere reliance on case laws or precedences would be of no help to the assessee in so far as the facts in each case are different.

In the result, the quantum appeal in ITA No.2199/chny./2017 stands dismissed. ,2200/Chny/2017 :- 7 -:

In respect of , it was submitted by ld.A.R that in the course of original assessment u/s.143(3) of the Act, the ld. Assessing Officer had made an addition on account of difference between the Closing Work In Progress as on 31.03.2008 and Opening Work In Progress as on 01.04.2008 to an extent of `9,08,644/- and the same had been added to the returned income.

In reply, ld.D.R submitted that he had no objection, if the issues were restored to the file of the AO to verify as to whether the assessee has adjusted the closing stock for the year ending 31.03.2008, when assessee be re-adjusting the opening stock as on 01.04.2009, or whether the amount of `9,08,644/- has been adjusted in the sale consideration.

We have considered the rival submissions. As the assessee-firm has submitted that it has not re-worked the opening stock as on 01.04.2008, or subsequently in respect of adjusted amount of `9,08,644/-, then the issue is restored to the file of ld. Assessing ,2200/Chny/2017 :- 8 -:

In the result, the appeal on penalty in ITA No.2200/Chny./2017 stands partly allowed for statistical purposes.

To summarize the result, the quantum appeal filed by the assessee is dismissed and the appeal on penalty filed by the assessee is partly allowed for statistical purposes.