Karpara Project Engg.Pvt.Ltd., Surat vs Department Of Income Tax
- CitationITA No. 984/Ahd/2011
Ratio decidendi
The rule this decision rests on
Where the Assessing Officer's additions underlying a penalty under section 271(1)(c) have been deleted by a co-ordinate Bench in the assessee's own case for the same assessment year, the penalty founded on those additions cannot survive and must be deleted.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Deputy Commissioner of M/s. Karpara Project Engg. Income Tax, Room No. Pvt. Ltd, J-1,2, Jay Jalaram 108, Aayakar Bhavan, Vs Society, B/h. Lake View Majura Gate, Surat Garden, Piplod, Surat (Appellant) PAN: AABCK 8206 A (Respondent)
Revenue by: Shri B.L. Yadav, D.R. Assessee by: Written Submission
Date of hearing : 27-02-2015 Date of pronouncement : 13-03-2015
आदे श/ORDER
PER : MUKUL KR. SHRAWAT, JUDICIAL MEMBER:-
This is an appeal filed by the revenue arising from the order of CIT(A)-I, Surat dated 21-01-2011. Following main ground has been raised:-
"1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty levied u/s. 271(1)(c) inspite I.T.A No. 984/Ahd/2011 A.Y. 2005-06 Page No 2 DCIT vs. M/s. Karpara Project Engg. Pvt. Ltd
of the fact that neither did the assessee had shown the closing stock of WIP nor did it produce books of accounts and supporting evidences to substantiate its claim in respect of wages and unverifiable expenses."
2. At the outset, it is hereby noted that on the date of hearing no-one has appeared from the side of the respondent but a written submission along with an order of the Tribunal has been filed with a request to decide this appeal of the revenue accordingly. On the other hand, from the side of the revenue Ld. D.R., Shri B.L. Yadav, appeared and placed reliance on the penalty order.
3. We have perused the penalty order u/s. 271(1)(c) dated 19th March, 2010. The impugned penalty was levied in respect of the following additions:-
(i) Addition on account of closing stock of work-
-in-progress: Rs. 13,77,737/- (ii) Disallowance out of wages: Rs. 22,79,637/- (iii) Disallowance out of unverifiable expenses Rs. 17,13,042/-
4. The present factual position is that ITAT "C" Bench, Ahmedabad in ITA No. 2261 and 2341/Ahd2008 A.Y. 2005-06 order dated 10-02-2012 in asssessee's own case has deleted all the three additions.
4.1 In respect of the addition pertaining to "an estimated work-in- progress" the respected Co-ordinate Bench has mentioned an another order for A.Y. 2004-05 pronounced in assessee's own group case bearing ITA No. 1080/Ahd/2008 and thereupon held that no amount of contract receipt would remain without tax because the work in progress was shown as receipts in the subsequent years and that the same treatment of the I.T.A No. 984/Ahd/2011 A.Y. 2005-06 Page No 3 DCIT vs. M/s. Karpara Project Engg. Pvt. Ltd
work-in-progress was given in the preceding years and that the profit declared was comparable with the profits of the assessee in the past hence the impugned addition pertaining to work-in-progress was held as not sustainable in the eyes of law.
4.2 About adhoc disallowance of 5% pertaining to wages, it was noted that the AO had repeated the additions following A.Y. 2004-05, however for that year the Tribunal has held the matter in favour of the assessee as per the reference made hereinabove. Hence, for the year under consideration as well, the impugned addition on account of wages disallowance was deleted.
4.3 Likewise the addition pertaining to unverifiable expenses, it was noted by the Tribunal that merely an adhoc disallowance was made although most of the expenses were verifiable from the bank statement hence the impugned adhoc addition was directed to be deleted.
4.4 Since all the additions were deleted by the respected Co-ordinate Bench, therefore, the impugned concealment penalty does not survive. The view taken by Ld. CIT(A) is hereby confirmed and the ground raised by the revenue is dismissed.
Order pronounced in open court on the date mentioned hereinabove at caption page
Sd/- Sd/-
(N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 13/03/2015 a.k. I.T.A No. 984/Ahd/2011 A.Y. 2005-06 Page No 4
DCIT vs. M/s. Karpara Project Engg. Pvt. Ltd
आदे श क ूितिल प अमे षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
By order/आदे श से,
उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद
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