DCIT, Chandigarh V. M/s Punjab State Cooperative Supply & Marketing Federation, Chandigarh

ITA 1023/CHANDI/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6146 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: YASH PAUL GOYAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1023/CHD/2013 ASSESSMENT YEARS : 2007-08 D.C.I.T. CIRCLE 4(1) VS. M/S PUNJAB STATE COOPERAT IVE CHANDIGARH SUPPLY & MKTG FED, PLOT NO. 4 SECTOR 35, CHANDIGARH AAAAT 3454 G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MANJIT SINGH RESPONDENT BY: SHRI YASH PAUL GOYAL DATE OF HEARING 19.5.2014 DATE OF PRONOUNCEMENT 09.06.2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 13. 8.2013 OF THE LD CIT(A), CHANDIGARH. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 1 ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE L D. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOU T APPRECIATING THE FACTS OF THE CASE. 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) LEVIED ON DISALLOWANCE OF INTEREST U/S 36(1)(III) M ADE BY APPLYING THE RATIO OF DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF ABHISHEK INDUSTRIES LTD, 286 ITR 1 PENALTY LEVIED AFTER CONFIRMATION OF THE DISALLOWANCE BY THE ITAT. 3 IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE S ET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS DISALLOWANCE WAS MADE AMOUNT ING TO RS. 17.01 CRORES ON ACCOUNT OF INTEREST BECAUSE INT EREST BEARING FUNDS WERE LENT TO M/S SUGAR-FED WHICH WAS SISTER CONCERN IN VIEW OF THE DECISION OF HON'BLE PUNJAB A ND HARYANA 2 HIGH COURT IN CASE OF CIT VS. ABHISHEK INDUSTRIES, 286 ITR 1. ON THIS PENALTY PROCEEDINGS U/S 271(1)(C) WERE INIT IATED. IN RESPONSE TO SHOW CAUSE NOTICE IT WAS SUBMITTED THAT ADDITION HAS ALREADY BEEN RESTRICTED BY THE TRIBUNAL AT RS. 7.01 CRORES AND FURTHER THE ASSESSEE HAS ALREADY MADE PROPER DI SCLOSURE AND THERE IS NO REASON FOR LEVY OF PENALTY. IN THIS REGARD RELIANCE WAS PLACED ON VARIOUS DECISIONS. THE ASSE SSING OFFICER DID NOT AGREE WITH THE SAME AND LEVIED PENA LTY U/S 271(1)(C). 4 THE LD. CIT(A) DELETED THE PENALTY BY OBSERVING T HAT THE ADDITIONS WERE MADE ON THE BASIS OF ESTIMATE AND FO LLOWING THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF HARIGOPAL SINGH VS. CIT, 258 ITR 85 (PH). 5 BEFORE US. THE LD. D.R. FOR THE REVENUE STRONGLY RELIED ON THE ORDER OF ASSESSING OFFICER. 6 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT( A). HE ALSO SUBMITTED THAT THE PENALTY CAN NOT BE LEVIED M ERELY IN A CASE OF DISALLOWANCE OF EXPENDITURE. HE ALSO CONTE NDED THAT THE ASSESSEE HAS MADE FULL DISCLOSURE AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ITS INCOME AND IN THIS REGARD HE RELIED ON THE DECISION OF HON'BLE APEX CO URT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT LTD. 322 ITR 158 (S.C). 7 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FO R THE ASSESSEE. SINCE THE ASSESSEE HAS DISCLOSED ALL THE INTEREST CLAIMED IN THE PROFIT AND LOSS ACCOUNT AND DISALLOW ANCE WAS MADE MERELY BECAUSE SOME FUNDS WERE DIVERTED TO SIS TER CONCERN, THEREFORE IT IS SIMPLY A CASE OF DISALLOW ANCE OF 3 EXPENDITURE WHICH WAS ALREADY DISCLOSED, THEREFORE IT CANNOT BE SAID THAT IT IS A CASE OF CONCEALED PARTICULARS OF INCOME. THE HON'BLE SUPREME COURT IN CASE OF CIT VS. RELIAN CE PETROPRODUCTS PVT LTD (SUPRA) HAS OBSERVED AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BED COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS IF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO IN FORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STR ETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS T HE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. IN VIEW OF ABOVE, WE ARE OF THE OPINION THAT THE PE NALTY HAS BEEN RIGHTLY DELETED BY THE LD. CIT(A) AND WE CONFI RM HIS ORDER. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 09.6.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 TH JUNE 2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR