Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
CGST - Acts + GST Rates GST Ntf. GST Forms GST - Manual GST - FAQ State GST Acts SGST Ntf. I. Tax Manual
Extracts
Home List
← Previous Next →

ACIT Circle Hisar Hisar Versus Prakash Industries Ltd.

Penalty imposed u/s 271(1)(c) - addition on account of unexplained investment in cost of construction cannot be made on the basis of DVO’s report - Held that:- While dealing with the assessee’s objections on the DVO’s report, the AO has relied only on the comments of the DVO in response to the assessee’s objections but has failed to give a final finding on the issue. Thus he has not dealt with the assessee’s objections properly. This might have served the Revenue’s purpose in the quantum proceed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

11)2 - MADRAS High Court ) has held that, “Penalty cannot be levied on the basis, merely of an estimate of cost of construction of a building built by an assessee with his funds. Thus the penalty imposed by the Assessing Officer under section 271(1)(c) was not sustainable - Decided in favour of assessee - ITA No. 6230/Del/2013 - Dated:- 19-2-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri Atiq Ahmad, Sr. DR For The Respondent : Shr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome from undisclosed sources. The case of the assessee company for valuation of factory building in respect of (i) Sponge Iron Division, Champa, (ii) Induction Furnace Division, Champa, (iii) Rolling Mill Division was referred to the District Valuation Officer (DVO), Income tax Department, Bhopal, (Land & Building). During the year the assessee company had shown the amounts of additions as under:- i) Sponge Iron Division, Champa ₹ 12,95,399/- ii) Induction furnace Division, Champa &# .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ii) Rolling Mill Division 74,34,201/- 1,13,25,800/- 38,91,599/- 1,36,07,846/- 2,04,80,900/- 68,73,054/- Total difference between cost of construction as shown by the assessee and as assessed by the DVO, was worked out at ₹ 68,73,0543/-. The Assessing Officer was of the opinion that the assessee company had understated its cost of construction of SI Division, IF Division and RM Division to the extent of ₹ 68,73,054/-. The Assessing Officer made the addition of ₹ 68,73,054/- on a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the following observations:- The issue involved and the submissions made by the appellant have been considered. The Assessing Officer has referred the objections raised by the appellant on the valuation report, to the Valuation Officer who has considered the same and has not found the same as acceptable. The aforesaid facts have been noted by the Assessing Officer in para 16B of the assessment order. However, the appellant has raised an alternative plea also before the undersigned that it be all .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ected to be allowed on the same. The Assessing Officer has allowed depreciation in the assessment year under consideration, he is directed to allow depreciation in the succeeding assessment year also. 5. In the penalty proceedings u/s 271(1)(c) of the Act, the assessee raised similar objections about the validity of the DVO s report as in the quantum proceedings. However, the Assessing Officer was of the view that all the objections raised by the assessee were an afterthought and that the accoun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he propositions that in absence of other independent/corroborative evidence, addition on account of unexplained investment in cost of construction cannot be made on the basis of DVO s report and that the addition to the income of the assessee based on the report of the Valuer was insufficient for recording a finding of concealment of income/furnishing inaccurate particulars of income. The Ld. CIT (A) deleted the entire penalty and now the Department is in appeal before us. 7. The Ld. DR relied o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mpa and Picture Tube Plant, Pithampur. He submitted that mere fact that the addition was sustained in appeal was not sufficient to draw adverse inference against the assessee in the penalty proceedings. He further submitted that it was the primary duty of the then Assessing Officer to prove, prior to referring to the DVO that there was understatement/ concealment of income and only after this burden was discharged, addition could have been made on the basis of DVO s report. In the present case, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arat) CIT v. Bajrang Lai Bansal 355 ITR 572 (Delhi) CIT v. Lahsa Construction (P.) Ltd 357 ITR 671 (Delhi) CIT v. Puneet Sabharwal 338 ITR 485 (Delhi) CIT vs. Smt Suraj Devi 328 ITR 604 (Del) CIT vs. Naveen Gera 328 ITR 516 (Del) K.P. Varghese v. ITO (1981) 7 TAXMAN 13 (SC) 9. The Ld. AR further submitted that there were bona fide reasons regarding why the estimate made by DVO should not have been adopted. He submitted that the DVO applied the CPWD rates, which were on the higher side and were g .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hhattisgarh is the hub of steel and cement industries and the assessee has purchased the cement and steel directly from the manufacturers in bulk quantities at very competitive rates. Further, the assessee having purchased the material directly from the manufacturer carried out number of jobs on labour rate under the direct supervision of its civil engineers and thereby, saved contractors margin. Further, for certain items such as car shed, second quality pipe and steel of lower value were used .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t is merely an opinion and hence no penalty was imposable on the difference in values. He submitted that where the addition is made only on the basis of such report with no other material on record, no addition and penalty thereon u/s 271(1)(c) of the Act is warranted. He placed reliance on the following judgments: (a) DCIT v. JMD Advisors (P.) Ltd. [2010] 124 ITD 223 (Delhi Trib.) (b) T.P.K. Ramalingam v. CIT [1995] 211 ITR 520 (MAD.) The Ld. AR submitted that on the facts and circumstances of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

counter the figures from the assessee s books of account. It is also seen that while dealing with the assessee s objections on the DVO s report, the AO has relied only on the comments of the DVO in response to the assessee s objections but has failed to give a final finding on the issue. Thus he has not dealt with the assessee s objections properly. This might have served the Revenue s purpose in the quantum proceedings but when it comes to imposition of penalty for furnishing of inaccurate par .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version