Income Tax Appellate Tribunal - Cochin
Acit, Calicut vs M/S.Chandragiri Constructions Co.,, ... on 25 April, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH, COCHIN
BEFORE S/SHRI CHANDRA POOJARI, AM & GEORGE GEORGE K., JM
M.P. Nos. 07-10/Coch/2015
(Arsg. out of I.T.A. Nos. 260 to 262/Coch/2012 & 569/Coch/2015)
Assessment Years : 2002-03-2005-06
M/s. Chandragiri Construction Vs. The Dy. Commissioner of Income-
Co., tax, Central Circle-1, Calicut.
PO Thekkil,
Kasaragode.
PAN: AABFC 7523K]
(Assessee-Appellant) (Revenue-Respondent)
Assessee by Shri C.B.M. Warrier, CA
Revenue by Shri A. Dhanaraj, Sr. DR
Date of hearing 06/04/2018
Date of pronouncement 25/04/2018
ORDER
Per CHANDRA POOJARI, ACCOUNTANT MEMBER:
These Miscellaneous Petitions are filed by the assessee seeking recall/rectification of order of the Tribunal in ITA Nos. 260 to 262/Coch/2012 and 569/Coch/2015 dated 19/09/2014.
2. The Ld. AR submitted that for the assessment year 2002-03 while the original assessment order was passed u/s. 143 (3) of the Act, the Assessing M.A. Nos. 07-10//C/2015 Officer determined the income at Rs.1,65,69,800/-vide order dated 30/03/2005. Later in the assessment order passed u/s. 143(3) r.w.s. 263 of the Act, the Assessing Officer further added income at Rs.4,91,26,096/- vide order dated 30.11.2007. Consequent to the relief given by the CIT(A) vide order dated 12/04/2008, the income of the assessee was determined at Rs.1,76,09,820/- in place of Rs.4,91,26,096/- as per the consequential assessment order passed u/s. 143(3) r.w.s. 263 r.w.s. 250 of the Act dated 30//11/2007. According to him the difference between original assessment order and this assessment order is a small amount, therefore, levy of penalty is not warranted. This addition of Rs.9,31,795/- was finally sustained by the CIT(A) on account of difference in work-in-progress on estimated basis after reducing the gross profit at 15% on the bills receivable. This aspect was not at all considered by the Tribunal. 2.1 For the assessment year 2003-04, it was submitted that the assessment was completed u/s. 143(3) vide order dated 23/03/2006 and the income was determined at Rs.2,68,55,660/-. Pursuant to the assessment order passed u/s. 143(3) r.w.s. 263 of the Act, it was determined at Rs. 7,77,00,310/- and agricultural income at Rs.15 lakhs. On further appeal to the CIT(A), it was determined by the Assessing Officer at Rs.2,77,40,40,946 /- vide assessment order passed u/s. 143(3) r.w.s. 263 dated 30/06/2008. According to the Ld. AR, the difference in the income was only Rs.8,85,286/- therefore, levy of penalty is not warranted.
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M.A. Nos. 07-10//C/2015 2.3 For the assessment year 2004-05, the assessment was completed u/s. 143(3) vide order dated 29/12/2006 and the income was determined at Rs.7,71,72,800/- as against the returned income of Rs.2,59,25,080/- and agricultural Income of Rs.40,53,371/- The CIT(A) gave relief to the assessee and as per the final order giving effect to the order of CIT(A), the Assessing Officer vide order dated 11/06/2013 determined the income at Rs.1,03,41,196/-. The Ld. AR submitted that the assessee's income finally determined is less than the returned income filed by the assessee, therefore levy of penalty is not warranted. 2.4 For the assessment year 2005-06, the income was determined at Rs. 15,51,72,050/- vide order passed u/s. 143(3) of the Act dated 19/12/2007 as against the returned income of Rs. 3,17,45,820/- and agricultural income of Rs.22,31,760/- . The CIT(A) vide order dated 22/05/2008 gave relief to the assessee at Rs.10,37,38,526/-.
2.5 It was submitted that the Assessing Officer vide order dated 26/06/2008 determined the income at Rs.5,14,33,521/- as against the assessee's return of Rs.3,17,45,818/- for the assessment year 2005-06. The Ld. AR submitted that the difference between income returned and income assessed was Rs.1,96,87,703, therefore penalty was not warranted. According to the Ld. AR, the penalty u/s. 271(1)(c) was calculated on an income of Rs.3,36,14,376/-, the amount of minimum penalty was Rs.1,23,00,341/- and the CIT(A) fixed the 3 M.A. Nos. 07-10//C/2015 penalty at Rs.1,23,00,341/- after adopting the minimum penalty at 100%. The Assessing Officer imposed the penalty at 200% Rs.2,46,00,682/-. It was submitted that the difference in income returned and the income assessed is only Rs.1,96,87,703/- and the Assessing Officer had computed the penalty on a higher amount of Rs.3,36,14,376/- which is wrong. According to the Ld. AR the difference in WIP and bills receivables as per assessment order was on account of bills receivable of Karapuzha Dam and the amount of this bill was Rs.8,57,16,674/-. The Ld. AR submitted that the bills amount in respect of Karapuzha Project at Rs.7,32,88,617/- was taken as bills receivables in the assessment order but as per the information obtained under Right to Information Act all the bills were passed only subsequent to 31.03.2005. Hence, it was submitted that they cannot be taken as bills receivable but corresponding WIP was to be included.
2.6 The Ld. AR further submitted that the gross profit fixed by the CIT(A) was 24.05% and after reducing the gross profit, the balance amount is to be taken as WIP. So, it was submitted that the total value of bills receivable will be reduced by gross profit included in the bills Rs.2,80,09,861/- (116465120 x 24.05%). According to the Ld. AR, if the above effect is given for this reduction in the value of bills receivable to the extent of gross profit, the total income will be Rs.2,34,23,662/- (Rs.5,14,33,523/- less Rs.2,80,09,861/-). Since the assessable income was less than the returned income of Rs.3,17,45,818/-, it was submitted 4 M.A. Nos. 07-10//C/2015 that the levy of penalty u/s. 271(1)(c) was not justified. It was submitted in respect of the WIP regarding Karapuzha Project that the date of measurement was shown upto April, May, June, 2005 and in case the date of measurement is in June, 2006, these bills are also considered as bills receivable as on 31/03/2005. According to the Ld. AR, WIP at Rs.1,59,99,385/- was added for various items of contract as completed to the extent of 50%, 25%, 10% etc. on an estimated basis without any supporting evidences, hence, the addition to the WIP was only on estimated basis. Hence, it was submitted that the mistake may be rectified and the levy of penalty may be cancelled.
2.7 It was further submitted that the finding of the Tribunal in para 7 at pg. 19 which reads as follows is opposed to the facts of the case and the penalty was levied only on the basis of the estimated value of work in progress by the Assessing Officer:
"7. In this case, the main contention of the ld AR of the assessee was that the addition made was only an estimation basis and there is no material brought on record during the penalty proceedings so as to levy penalty. According to the ld AR, there was a difference of opinion regarding the estimation of work-in-progress and bills receivables thereby estimated the income of the assessee; since the AO and the CIT(A) has considered the different estimation of income of the assessee. According to the ld AO, it was concealment of income by furnishing inaccurate particulars of income so as to levy penalty u/s. 271(1)(c) of the Act because there was difference between the returned income and the assessed income due to difference of opinion about the estimation of work-in-progress and bills receivable or determination of agricultural income, which was disclosed by the assessee that cannot be the reason to levy of penalty u/s. 271(1)(c) of the act. But in the present case, the assessee has not maintained any true and correct account. There was no disclosure of correct turnover or work-in-progress as material brought on record suggests that though the 5 M.A. Nos. 07-10//C/2015 assessee submitted the bills to the PWD office for claiming the payments that was not included in the turnover. Even otherwise, the assessee has not shown that part of work as work-in-progress. Either the assessee has to treat the same as sale/turnover as soon as the bills are submitted to the PWD or if the bills are got pending with PWD for approval; this should shown as work-in-progress. The assessee tactfully avoided this and further there is no evidence to suggest that the assessee is having agricultural income to the extent disclosed by the assessee. It is clearly shown that the assessee not only furnished inaccurate particulars of income but also concealed the particulars of income. Even the explanation offered by the assessee is not bonafide so as not to levy penalty. The argument of the ID Counsel is totally misconceived and having no merit and it is a baseless contention. The assessee, in this case has not disclosed true turnover or true profit, which clearly shown that it is a clear case for levy of penalty as the assessee concealed particulars of income and furnished inaccurate particulars of income to avoid tax and therefore, the plea of the assessee should be rejected."
3. The Ld. DR relied on the orders of the Tribunal..
4. We have heard the rival contentions and perused the record. The main contention of the Ld. AR in these assessment years is that the penalty was levied on account of additions made due to estimated understatement of work-in- progress. According to the Ld. AR, the estimated disallowance cannot be a reason for levy of penalty u/s. 271(1)(c) Of the Act. This fact was not at all considered by the Tribunal while disposing of the appeals in this case. The Ld. AR submitted that the finding of the Tribunal in para 7, pg. 19 was opposed to the facts of the case as there was no suppression of turnover or omission in bills to account or omission in recording the work-in-progress. In our opinion, the Tribunal while disposing of the appeals, considered the entire facts and 6 M.A. Nos. 07-10//C/2015 circumstances of the case and confirmed the levy of penalty u/s. 271(1)(c) of the Act.
5. Now, the consideration of the argument of the Ld. Counsel would amount to review of earlier order of the Tribunal for which the Tribunal has no power. The scope u/s. 254(2) of the Act is very limited. It is restricted to rectification of mistakes apparent from record. Review of the order is not permitted u/s. 254(2) of the Act which necessitates re-hearing of the entire issue before the Tribunal. However, the provision to recall the order of the Tribunal is provided under Rule 24 and 25 of ITAT Rules, 1963, that too, in cases where the appellant/respondent shows reasonable cause for being absent at the time when the appeal was taken up and decided exparte. In view of this, we are of the opinion that there is no mistake apparent on record in the orders of the Tribunal which warrants recall of the earlier orders. Accordingly, we do not find any merit in the argument of the Ld. AR. Hence, the grounds taken by the assessee in all the Miscellaneous Petitions are dismissed.
6. In the result, the Miscellaneous Petitions filed by the assessee are dismissed.
Order pronounced in the open Court on this 25th April, 2018.
sd/- sd/-
(GEORGE GEORGE K.) (CHANDRA POOJARI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
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M.A. Nos. 07-10//C/2015
Place:
Dated: 25th April, 2018
GJ
Copy to:
1. M/s. Chandragiri Construction Co., PO Thekkil, Kasaragode.
2. The Deputy Commissioner of Income-tax, Central Circle-1, Calicut.
3. The Commissioner of Income-tax(Appeals), Kozhikode.
4. The Pr. Commissioner of Income-tax Central, Kochi
5. D.R., I.T.A.T., Cochin Bench, Cochin.
6. Guard File.
By Order (ASSISTANT REGISTRAR) I.T.A.T., Cochin 8