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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Mahavir Singh, JM & Shri M. Balaganesh, AM]
M/s. Sinha Construction Pvt. Ltd. Vs. Deputy Commissioner of Income-tax, (PAN: AADCS6522R) Circle-11, Kolkata (Appellant) (Respondent) Date of hearing: 09.10.2015 Date of pronouncement: 15.10.2015 For the Appellant: N o n e For the Respondent: Shri D. Lahiri, JCIT ORDER Per Shri Mahavir Singh, JM:
This appeal by assessee is arising out of order of CIT(A)-XII, Kolkata in Appeal No. 543/XII/Cir-11/09-10 dated 29.11.2012. Assessment was framed by DCIT, Cir-11, Kolkata u/s. 144 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2001-02 vide its order dated 29.03.2004. Penalty was imposed by DCIT, Circle-11, Kolkata u/s. 271(1)(c) of the Act vide his order dated 30.03.2007.
The only issue in this appeal of assessee is against the order of CIT(A) confirming the levy of penalty by AO u/s. 271(1)(c) of the Act.
Briefly stated facts of the case are that the assessee company is engaged in the business of civil construction. The assessee claimed that it has maintained proper books of account and other records. But the AO noted in his assessment order that the assessee is unable to furnish books of account and other details during the course of assessment proceedings due to the reason that the same were seized by Sales Tax Authorities u/s. 66 of the West Bengal Sales Tax Act, 1994. Accordingly, AO completed assessment u/s. 144 of the Act and estimated the income by applying the provisions of section 44AD of the Act by applying net profit @ 8%. Aggrieved against the order of AO, assessee preferred appeal before CIT(A), who restricted the addition at Rs. 1 lac on the basis of estimation of addition for the reason that there may be some unaccounted purchases. For this, he recorded the following findings: “I have considered the assessee’s explanation in the matter. It is a fact that in the construction business some purchases have to be made from local influential people of the area in order to ensure smooth working at the site. It is also a fact that stone ships and sand have been used by the assessee for its construction work. The bills have been paid by cheque. However, having said this it cannot be denied that the assessee could not furnish the current address or produce the party. I am of the opinion that the issue calls for an estimated addition and Rs.1,00,000/- is added on this account to the returned income.“
Sinha Construction Pvt. Ltd. AY 2001-02 Aggrieved against levy of penalty u/s. 271(1)(c) of the Act, assessee preferred appeal before CIT(A), who confirmed the penalty only on the basis that the CIT(A) has restricted the addition at Rs. 1 lac and later on the same was confirmed by ITAT. Against confirmation of penalty on this estimated addition of Rs.1 lac, now assessee is in appeal before Tribunal.
This addition was confirmed by Tribunal being an estimated addition. The AO started penalty proceedings and levied penalty u/s. 271(1)(c) of the Act on estimated addition of Rs. 1 lac.
5. We have heard Ld. Sr. DR and gone through facts and circumstances of the case. We have gone through the penalty order and noticed that the AO has no where proved that the assessee has concealed the particulars of income or furnished inaccurate particulars of income only charge was that the assessee could not furnish the address of the parties or produced the parties with whom the assessee has made purchase transactions. We find that even the CIT(A) has restricted the addition just on estimate basis and on doubts. The AO or the CIT(A) has never tried to requisite the books of account from Sales Tax Authorities whereby admitted position is that the assessee has maintained books of account, which were seized by Sales Tax Authorities. This is purely an estimation of income and moreover, the AO has no where brought out on record that the assessee has concealed the particulars of income or furnished inaccurate particulars of income. In such a situation, we delete the penalty and reverse the orders of the lower authorities. The appeal of assessee is allowed.
In the result, the appeal of assessee is allowed.
Order is pronounced in the open court on 15.10.2015.