Kuldeep Deepak Pawar,, Satara vs Assessee

Shri Deepak Hanmant Pawar 184, Vyankatpura Peth, Satara ... Applicant

PAN: AAYPP8419J

Vs.

The Addl. Commissioner of Income Tax, Satara Range, Satara ... Respondent

S.A. No.24/PN/2015 Arising out of ITA No.1735/PN/2014 Assessment Year: 2007-08

Shri Kuldeep Deepak Pawar 184, Vyankatpura Peth, Satara ... Applicant

PAN: ALPPP9906N

Vs.

The Addl. Commissioner of Income Tax, Satara Range, Satara ... Respondent

Applicant by : S.N. Doshi Respondent by : B.C. Malakar

Date of hearing : 20.02.2015 Date of pronouncement : 23.02.2015

ORDER

PER SUSHMA CHOWLA, JM:

The present Stay Applications have been moved by the different applicants in

ITA Nos.1734 & 1735/PN/2014, both relating to assessment year 2007-08.

2. The brief facts relating to the Stay Application in the case of Shri Kuldeep

Deepak Pawar i.e. SA No.24/PN/2015 are that the assessment in the case was 2 SA Nos.23 & 24/PN/2015 Out of ITA Nos.1734 & 1735/PN/2014

completed under section 143(3) of the Act by rejecting the books of account because

of the failure of applicant to appear on the appointed date of hearing. The plea of the

applicant against the rejection of books of account and reliance on the additional

evidence filed before the CIT(A) in the form of revised and corrected final accounts

was also not accepted by the CIT(A). The contention of the applicant before us was

that despite the non-admission of additional evidence, the CIT(A) has considered

some of the issues from corrected books of account mainly for making additions

though few reliefs have also been given by the CIT(A). In respect of the additions

made in the hands of the applicant, the learned Authorized Representative for the

applicant pointed out that the applicant was a civil contractor and was engaged in

carrying on the contract work of one concern. However, addition in the hands of the

applicant was made on account of undisclosed contract receipts of Rs.12.24 crores.

The said addition was made on account of difference in the balances in ledger

accounts of the contractee and the petitioner which were not confronted to the

applicant by the Assessing Officer. However, before the CIT(A), the applicant claims

that it had reconciled the two accounts and there was no difference in the said two

accounts.

3. Another addition made in the hands of applicant was on account of estimation

of further additional net profit of Rs.1.53 crores determined over and above the

estimation made by the Assessing Officer at Rs.15,92,056/-. In this regard also, the

contention of the learned Authorized Representative for the applicant was that when

additional evidence in the form of revised books of account fully reconciled the

differences, then no addition was warranted on this account. The learned Authorized

Representative for the applicant pointed out that prayer of the applicant was to restore

the issue back to the file of CIT(A) with a direction to admit additional evidence

furnished by the applicant and decide the issue in line with the said additional

evidence. Further, reference was made to the other disallowances made under

section 40(a)(ia) of the Act, in respect of which, it was pointed out by the learned

Authorized Representative for the applicant that payments made were mostly for the

material purchases, which do not attract the provisions of section 194C of the Act. 3

SA Nos.23 & 24/PN/2015 Out of ITA Nos.1734 & 1735/PN/2014

Further, certain payments were made to casual labourers working at interior sites

which again do not attract the provisions of section 194C of the Act. The learned

Authorized Representative for the applicant pointed out that in view of demand

created against the applicant, all the bank accounts of the applicant and the

properties of the applicant have been attached by the Department and the business of

the applicant has come to a standstill. A prayer was made for early hearing of the

matter and also for the stay of recovery of demand created in the case.

4. The learned Departmental Representative for the Revenue on the other hand

pointed out that in view of the demand created, the recovery of the same should be

made and there is no merit in the application of the applicant.

5. We have heard the rival contentions and perused the record. In the present

case, the following demand has been created, against which the applicant had

deposited sum of Rs.10,84,480/-.

Outstanding demand

i) Gross Demand raised Tax : Rs.1,77,33,254/- Interest u/s.234B : Rs.56,50,992/- Interest u/s.234D : Rs.1,935/- Interest u/s.234A : Rs.6,912/-

ii) Tax paid : Rs.10,84,480/-

iii) Disputed demand with interest : Rs.2,23,08,613/-

6. The case of the applicant before us was that certain discrepancies were found

in the accounts of the contractee on behalf of which, the applicant was executing the

civil contracts and the books of account of the applicant which are reconcilable and

the reconciliation statement was furnished before the CIT(A) by way of additional

evidence. The said additional evidence has not been admitted by the CIT(A).

However, some of the issues which are apparent from the said corrected books of

account have been accepted by the CIT(A) and on some accounts, further additions

have been made. The case of the applicant before us was that because of non-

admission of additional evidence by the CIT(A), grave injustice has occurred to the

applicant resulting in the upholding of the additions in the hands of the applicant,

which in turn have resulted in the creation of above said demand. It is the case of the 4 SA Nos.23 & 24/PN/2015 Out of ITA Nos.1734 & 1735/PN/2014

applicant that all the bank accounts and the properties of the applicant have been

attached by the Department and the applicant is not even in a position to carry on its

business properly.

7. After going through the facts of the case, we are of the view that balance of

convenience lies in favour of the assessee and consequently, there is merit in the

plea of the applicant for staying recovery of outstanding demand against the

applicant. However, we grant the stay of outstanding demand, subject to the

applicant paying Rs.15 lakhs against the outstanding demand in two equal

instalments i.e. one by the end of first week of March, 2015 and second instalment

before the month end of March, 2015. The balance demand created against the

applicant is however stayed till for a period of six months from the date of this order or

till the disposal of the appeal by the Tribunal, whichever is earlier. The appeal of the

applicant is fixed for hearing out of turn on 11.05.2015.

8. In SA No.23/PN/2015 in the case of Shri Deepak Hanmant Pawar, following

demand has been created against the applicant:-

Outstanding demand

i) Gross Demand raised Tax : Rs.3,28,79,956/-

Interest u/s.234B : Rs.99,60,284/-

Interest u/s.234D : Rs.30,446/-

Interest u/s.234A : Rs.96,432/-

ii) Tax paid : Rs.64,19,222/-

iii) Disputed demand with interest : Rs.3,65,47,896/-

9. The facts and circumstances of the case are identical to the facts and

circumstances in SA No.24/PN/2015 and following our decision in the above Stay

Application, we direct the applicant to deposit a sum of Rs.25 lakhs against the

outstanding demand, which shall be deposited in two equal instalments i.e. one by

first week of March, 2015 and second instalment before the month end of March,

2015. The balance demand created against the applicant is however stayed till for a

period of six months from the date of this order or till the disposal of the appeal by the

Tribunal, whichever is earlier. The appeal of the applicant is fixed for hearing out of

turn on 11.05.2015.

5

SA Nos.23 & 24/PN/2015 Out of ITA Nos.1734 & 1735/PN/2014

10. The issuance of formal notices to the parties is dispensed with as the date of

hearing has been announced in the open court.

11. In the result, both the Stay Applications filed by the applicants are allowed as

indicated above.

Order pronounced on this the 23rd day of February, 2015.

Sd/- Sd/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER GCVSR

Pune, dated the 23rd February, 2015

Copy to:

1. The Applicant 2. Department 3. The CIT(A)-III, Pune 4. The CIT-III, Pune 5. The DR "B" Bench, ITAT, Pune. 6. Guard File.

By Order

//True Copy// Assistant Registrar ITAT, Pune.