RPK Bricks Manufactures Vs ITO (ITAT Amritsar)
In a case titled RPK Bricks Manufactures Vs ITO, the Income Tax Appellate Tribunal (ITAT) in Amritsar deleted a penalty of ₹96,010 imposed on the assessee, RPK Bricks, by the Income Tax Officer (ITO). The dispute centered on a payment of ₹1,87,786 received by the assessee from the Lining division of a government department in Faridkot. The ITO initially considered this as a bogus liability, arguing that a government entity would not make an advance payment for bricks without receiving them first. The penalty was levied under Section 271(1)(c) of the Income Tax Act for concealment of income.
The case had a history of judicial scrutiny. The Tribunal had previously sent the matter back to the ITO, instructing the assessee to provide evidence that the bricks corresponding to the payment were supplied in subsequent years. Despite the department’s records being old and difficult to access, the assessee successfully submitted a certificate from the concerned government department. This certificate confirmed that no bricks were pending against the payment received in the financial year 1981-82. The assessee also provided ledger extracts supporting the fact that the supplies were made later. The ITAT concluded that there was no adverse material to justify the penalty and found that the assessee had sufficiently proven that the payment was a legitimate advance and not a bogus liability.
