Sh. Suresh Kumar, Ludhiana V. ACIT, Ludhiana

ITA 1060/CHANDI/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5390 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 22-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1060/CHD/2012 ASSESSMENT YEAR : 2007-08 SURESH KUMAR VS. A.C.I.T. PROP M/S S.K. CONSTRUCTIONS CIRCLE VI 208-L, MODEL TOWN LUDHIANA LUDHIANA AERPK 9901 K (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SUDHIR SEHGAL RESPONDENT BY: SHRI J.S. NAGAR DATE OF HEARING 15.1.2014 DATE OF PRONOUNCEMENT 2 0.1.2014 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 6.8 .2012 OF THE LD CIT(A)-II, LUDHIANA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 1,60,190/- U/S 271(1)(C) OF INCOME -TAX ACT, 19 61. 2 THAT THE CONFIRMATION OF PENALTY BY THE LD. CIT(A ) U/S 271(1)(C) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE NOTICED THAT WHIL E TEST CHECKING OF THE BOOKS OF THE ACCOUNTS, IT WAS NOTICED THAT CERT AIN BILLS WERE NOT SUBSTITUTED. ACCORDINGLY ADDITION WAS MADE IN RESP ECT OF FOLLOWING ITEMS: PURCHASE OF CRUSHER RS. 1,48,000 PURCHASE OF SAND RS. 87,500 PURCHASE OF STONE METAL RS. 1,,75,600 PURCHASE OF SOIL RS. 64,818 2 ON THESE ITEMS PENALTY PROCEEDINGS U/S 271(1)(C) WA S ALSO INITIATED. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PE NALTY IT WAS MAINLY SUBMITTED THAT DISALLOWANCE WAS MADE MAINLY FOR PURCHASE OF SAND, CRUSHER, STONE METAL ETC. WHICH ARE PURCHASED FROM TROLLYWALAS AND PROPER EVIDENCE WAS NOT POSSIBLE. THEREFORE ME RE DISALLOWANCE OF EXPENDITURE WOULD NOT ATTRACT PENALTY PROCEEDING S. RELIANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE PUNJAB AND H ARYANA HIGH COURT IN CASE OF CIT V. RAVAIL SINGH AND CO. 254 IT R 191 AND THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT VS . RELIANCE PETRO PRODUCTS PVT LTD. 322 ITR 158. THE ASSESSING OFFIC ER DID NOT FIND FORCE IN THE SUBMISSIONS AND LEVIED PENALTY AT THE MINIMUM RATE OF 100% AMOUNTING TO RS. 1,60,190/- 4 ON APPEAL ACTION OF THE ASSESSING OFFICER WAS CON FIRMED BY THE LD. CIT(A) AND HENCE THIS APPEAL BEFORE US. 5 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE MAINL Y SUBMITTED THAT THE EXPENDITURE ITEMS WERE CLEARLY DISCLOSED I N THE PROFIT AND LOSS ACCOUNT AND THEREFORE IT IS A CASE OF FULL DIS CLOSURE AND PENAL ACTION WAS NOT ATTRACTED IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETRO PRODUCTS P VT LTD. (SUPRA). HE FURTHER SUBMITTED THAT MATERIALS LIKE SAND, STON E GRIT AND CRUSHER WAS PURCHASED FROM TROLLYWALAS AND SOMETIME PROPER VOUCHERS WERE NOT GIVEN BY THEM. THE DISALLOWANCE OF SUCH EXPEND ITURE CANNOT LEAD TO PANEL CONSEQUENCES. 6 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 7 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY AND FIND THAT IT IS A SIMPLE CASE OF DISALLOWANCE OF SOME EX PENSES WHICH WERE CLEARLY SHOWN IN THE PROFIT AND LOSS ACCOUNT. IT HAS NOT BEEN DENIED THAT EXPENDITURE RELATES TO REVENUE FIELD ON LY. THE EXPENDITURE RELATES TO PURCHASE OF STONE GRIT, STON E AND CRUSHER ETC. 3 FROM THE TROLLYWALAS NO PROPER BILLS WERE AVAILABLE . IN OUR OPINION, MERE DISALLOWANCE OF SUCH EXPENDITURE WHICH COULD N OT BE PROPERLY SUBSTANTIATED, CANNOT BE CALLED CONCEALMENT OF PART ICULARS OR FURNISHING OF INACCURATE PARTICULARS. THEREFORE PE NAL ACTION IS NOT JUSTIFIED. IN ANY CASE EXPENDITURE HAS DULY BEEN D ISCLOSED IN THE PROFIT AND LOSS ACCOUNT. IN ANY CASE HON'BLE SUPRE ME COURT IN CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT LTD. (SUPRA ) HAS HELD 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. SECONDL Y, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS IF HIS INCOME. TH E MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PE NALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROV ISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT C LAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NO T BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. THEREFORE ONCE PARTICULARS HAVE BEEN DULY SHOWN IN THE PROFIT AND LOSS ACCOUNT THEN PENAL ACTION MAY NOT BE ATTRACTED . IN OUR OPINION, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY AND ACCO RDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE PE NALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20.1.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20.1.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4