M/s. Acquire Services Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1022/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8354 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: H R RAO; SHESHAN SHARMA ADVS
• Keywords: Opportunity of being heard; Additional evidence
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH , JM ITA NO. 1022/DEL/2014 : ASSTT. YEAR : 2009 - 10 ACQUIRE SERVICES PVT. LTD. , (FORMERLY KNOWN AS M/S GALILEO INDIA PVT. LTD.) GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, 124, JANPATH, NEW DELHI VS INCOME TAX OFFICER, WARD NO. 12(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAA CG 3351 K CO NO. 94/DEL/2014 : ASSTT. YEAR : 2009 - 1 0 INCOME TAX OFFICER, WARD NO. 12(1), NEW DELHI VS ACQUIRE SERVICES PVT. LTD., (FORMERLY KNOWN AS M/S GALILEO INDIA PVT. LTD.) GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, 124, JANPATH, NEW DELHI (APPELLANT) (RESPO NDENT) PAN NO. AAA CG 3351 K ASSESSEE BY : SH. H. R. RAO & SHESHAN SHARMA, ADVS. REVENUE BY : SH. RAVI JAIN, CIT DR DATE OF HEARING : 11 .0 4 .201 6 DATE OF PRONOUNCE MENT : 11 .04 .201 6 ORDER PER N. K. SAINI, AM : THE APPEAL BY THE ASSESSEE AND THE CROSS OBJECTION BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER DATED 31.12.2013 OF THE LD. CIT(A) - XV, NEW DELHI. ITA NO . 1022 & CO 94 /DE L/2014 ACQUIRE SERVICES PVT. LTD. 2 2. IN THE ASSESSEE S APPEAL FOLLOWING GROUNDS HAVE BEEN RAISED: 1. THAT ON THE FAC TS AND IN THE CIRCUMSTANC ES OF THE CASE, THE LEARNED C1T( A) ERRED ON FACTS AND IN LAW IN NOT DELETING THE P ENALTY LEVIED UNDER SECTION 271( L)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT') IN ENTIRETY. 1.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONCLUDING THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.62,03,379/ - . 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONCLUDING THAT THE AO WAS JUSTIFIED IN LEVYING PENALTY WITH REFERENCE TO THE EXPENDITURE OF RS. 36,65,077/ - INCURRED TOWARDS SUPPLY OF WATER AND ELECTRICITY AT THE PREMISES LET OUT BY THE APPELLANT. 2.1 THAT ON THE FACTS AND IN THE CIRCUMS TANC ES OF THE CASE, THE LEARNED CIT( A) ERRED ON FACTS AND IN LAW IN NOT ADMITTING THE ADDITIONAL EVIDENCE SUBMITTED BY THE APPELLANT TO SUPPORT THE ARGUMENT THAT ITS VOLUNTARY OFFER FOR DISALLOWANCE OF THIS EXPENDITURE MAY NOT HAVE BEEN CORRECT AT ALL. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONCLUDING THAT THE APPELLANT HAD FILED INACCURATE PARTICULARS TO THE EXTENT OF RS. ITA NO . 1022 & CO 94 /DE L/2014 ACQUIRE SERVICES PVT. LTD. 3 25,38,302/ - OUT OF THE TOTAL ADVANCES WRITTEN OFF AMOUNTING TO RS . 37,93,002. 3.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN OBSERVING THAT TRADE ADVANCES GIVEN TO TRAVEL AGENTS, WHICH ARE RECOVERABLE FROM THE PAYMENTS TO BE MADE TO THEM, WAS NOT FOR PURPOSES OF THE APPELLANT'S BUSINESS. 3.2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE AO HAD RECORDED SATISFACTION IN THE ASSESSMENT ORDER ABOUT CONCEALMENT/FURNISHING INACCURAT E PARTICULARS OF INCOME ONLY WITH REFERENCE TO THE ELECTRICITY AND WATER EXPENSES, AND HENCE LEVY OF PENALTY WITH REFERENCE TO OTHER ADDITION/DISALLOWANCES IN THE ASSESSMENT WAS NOT LEGALLY TENABLE. 3. THE GROUND RAISED IN THE CROSS OBJECTION OF THE DEPA RTMENT READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY UNDER SECTION 271(1)(C), IMPOSED BY THE AO ON THE DISALLOWANCE MADE U/S 14A BY INVOKING THE PROVISIONS OF RULE 8D WHICH IMPLI ES CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO REDUCE THE QUANTUM OF PENALTY UNDER SECTION 271(1)(C) BY REDUCING THE QUANTUM OF ITA NO . 1022 & CO 94 /DE L/2014 ACQUIRE SERVICES PVT. LTD. 4 ADDI TION BY RS.762000/ - ON ACCOUNT ADVANCE WRITTEN OFF . 4. FROM THE ABOVE GROUNDS, IT IS CLEAR THAT GRIEV ANCE OF BOTH THE PARTIES RELATES TO THE SUSTENANCE/ DELETION OF THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFER RED TO AS THE ACT). 5. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE QUANTUM ADDITION S ON THE BASIS OF WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED BY THE AO HAVE BEEN SET ASIDE BY THE ITAT VIDE ORD ER DATED 04.03.2016 IN ITA NO. 1789/DEL/2013 TO THE FILE OF THE LD. CIT(A) TO BE ADJUDICATED AFRESH . IT WAS FURTHER STATED THAT THE PENALTY U/S 271(1)(C) OF THE ACT IS DIRECT LY CO - RELATED WITH THE ADDITIONS, T HEREFORE, THIS ISSUE MAY BE SENT BACK TO THE FI LE OF THE LD. CIT(A) TO BE DECIDED ALONGWITH THE APPEAL ON QUANTUM. HE ALSO FURNISHED COPY OF THE AFORESAID REFERRED TO ORDER DATED 04.03.2016 PASSED BY THE ITAT IN ASSESSEE S APPEAL IN ITA NO. 1789/DEL/2013. THE LD. CIT DR COULD NOT CONTROVERT THE AFORESA ID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE ITA NO . 1022 & CO 94 /DE L/2014 ACQUIRE SERVICES PVT. LTD. 5 PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ADDITIONS ON THE BASIS OF WHICH THE PENALTY WAS LEVIED BY THE AO U/S 271(1)(C) OF THE ACT HAVE BEEN SET ASIDE BY THE ITAT IN ITA NO. 1789/DEL/2013 VIDE ORDER DATED 04.03.2016 TO THE FILE OF THE LD. CIT(A). THEREFORE, THE ISSUE RELATING TO THE LEVY OF PENALTY ON THE BASIS OF AFORESAID ADDITION ALSO DESERVES TO BE SET ASIDE TO THE FILE OF THE LD. CIT(A) TO BE ADJUDICATED BY KEEPING IN VIEW THE OUTCOME OF THE APPEAL OF THE ASSESSEE ON QUANTUM ADDITIONS, IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE , WE ORDER ACCORDINGLY. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE AND CROSS OBJECTION OF THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 11 /04 / 2016 ) SD/ - SD/ - ( KULDIP SINGH ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 /04 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ,