Case Law Details
Prem Kumar Goutam Vs DCIT (ITAT Kolkata)
Introduction: The Income Tax Appellate Tribunal (ITAT) Kolkata recently delivered a verdict in the case of Prem Kumar Goutam vs. DCIT, addressing the imposition of a penalty under section 270A of the Income Tax Act. The dispute centered on whether the Assessing Officer (AO) could require the taxpayer to produce a Profit and Loss Account to justify expenditures not recorded in Gross Receipt under section 44AD. This article provides an analysis of the ITAT’s decision.
Detailed Analysis: The case involved the appellant, who was a brick kiln dealer and a composition dealer under the Bihar Value Added Tax Act, 2005. The appellant filed an income tax return under section 44AD for the Assessment Year 2017-18. He reported gross receipts of Rs. 49,45,000 and offered an income of Rs. 3,95,600 (8% of gross receipts) under section 44AD.
During the assessment, the AO accepted the reported gross receipts and the computation of income but made two additions under section 69C. These additions were related to payments made by the appellant to the Mining Department, VAT, and professional tax, totaling Rs. 1,03,500. The AO considered these payments as unexplained and charged taxes at a rate of 60% under section 115BBE.
The AO also initiated penalty proceedings under section 270A for underreporting income. The appellant paid the taxes and interest advised by the AO in an attempt to avoid the penalty. However, the penalty was levied by the AO.
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