IN THE INCOME TAX APPELLATE TRIBUNAL
BANGALORE BENCH ‘A’
BEFORE SHRI. GOPAL CHOWDHURY, JM AND
SHRI. N.L. KALRA, AM
I.T.A. No. 149/Bang/2004
(Assessment Year 2001-02)
Shri. M.K. Ramalinge Gowda,
S/o. Sri. K. Kempegowda, PWD Contractor,
1 Cross, Subash Nagar, Mandya Appellant
Deputy Commissioner of Income-tax
Circle-2(1), Mandya Respondent
Appellant by: Shri. Nataraj
Respondent by: Smt. Nagarathna
O R D E R
MR. GOPAL CHOWDHERY, JM
- This is an appeal by the assessee against the order of the Commissioner of Income-Tax(A), Mysore, dt.17.11.03, for the assessment year 2001-02, on the ground that the learned Commissioner of Income-tax(A) was not justified in confirming penalty u/s. 271A of the Act, of Rs.25,000/-.
- The assessee is engaged in construction business. The assessee declared total receipt of Rs.46,31,504/-. However, no books of account were maintained by the assessee. The explanation of the assessee was that out of the aforesaid receipt. Rs.19,61,019/- relates to a sub-lease. The assessee had given sub-contract to another party and if the aforesaid amount is reduced from gross receipt, the balance amount will not exceed Rs.40 lakhs. Therefore, there was no violation for imposing penalty u/s.271A of the Act. The explanation of the assessee was not accepted and penalty was levied which was confirmed by the Commissioner of Income-tax (A).
- We have heard both the sides. It is not to dispute that the assessee had deducted a sum of Rs.19,61,019/- from the total contract receipt and offered to tax the balance amount of Rs.26,70,485/- at the rate of 8%. Since books of accounts were not maintained by the assessee. The amount of Sub-lease cannot be treated as turnover of the Assessee. Therefore, in our opinion, the explanation of the assessee appears to be correct and that turnover of the assessee did not exceed Rs.40 lakhs. Hence, there was no compulsory requirement for maintaining books of accounts. The assessee placed reliance on the decision of the Madhya Pradesh High Court in this regard in ITO Vs. Nanak singh Guliani (2002) 257 ITR 677. Since the issue is covered by the decision of the Madhya Pradesh High Court (supra) in favour of the assessee, we direct the Assessing Officer to cancel the order of penalty.
- In the result, the appeal is allowed.
DATED 29TH DECEMBER 2005