ITO, New Delhi V. M/s. Solomon Exports India, New Delhi

ITA 1200/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86891 (ITAT-DELHI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-02-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: RAJESH ARORA
• Keywords: Business income; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI T.S. KAPOOR , ACCOUNTANT MEMBER I.T.A.NO S.1199 & 1200/DEL/2013 ASSESSMENT YEAR S : 1999 - 2000 & 2001 - 02 ITO, VS. SOLOMON EXPORTS INDIA , WARD - 24(3), ROOM NO. 1309, 501/A - 8, PRATYKSHYA KAR BHAWAN, SAINIK FARMS, SHAYAMA PRASAD MUKHERJEE NEW DELHI. CIVIC CENTRE, JAWAHAR LAL NEHRU MARG, MINTO ROAD, NEW DELHI. AAOFS9045B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. B.R.R. KUMAR, SR. DR RESPONDENT BY : SH. RAJESH ARORA, CA DATE OF HEARING: 23.02.2015 DATE OF PRONOUNCEMENT: 04.03.2015 O R D E R PER SH. G.C. GUPTA, VICE PRESIDENT THESE TWO APPEALS BY THE REVENUE F OR THE ASSESSMENT YEARS 1999 - 2000 AND 2001 - 02 ARE DIRECTED AGAINST THE ORDER OF THE CIT(A). 2. THE IDENTICAL GROUND OF APPEAL IN BOTH THESE APPEALS OF THE REVENUE IS AS UNDER: ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN D ELETING PENALTY WITHOUT APPRECIATING THE PECULIARITY OF THE FACTS IN THE CASE WHEN INTEREST ON F.D.R WAS TREATED AS INCOME FROM 2 BUSINESS WITHOUT ESTABLISHING THAT IT WAS INTEGRAL PART OF ITS BUSINESS OF EXPORTS THUS FURNISHING INACCURATE PARTICULARS OF INC OME. 3. THE LD. D R HAS RELIED ON THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE IN BO TH THESE APPEALS OF THE REVENUE I S REGARDING VALIDITY OF PENALTY IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT. THE ASSESSEE HAS RECEI VED INTEREST ON FDRS WHICH WAS CLAIMED AS BUSINESS INCOME OF THE ASSESSEE AND WAS CHANGED TO INCOME FROM OTHER SOURCES BY THE DEPARTMENT. HE SUBMITTED THAT ALL THE MATERIAL FACTS WERE DISCLOSED BY THE ASSESSEE BEFORE THE AO. THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE ISSUE IN THE PRESENT APPEALS OF THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF DELHI TRIBUNAL IN ASSESSEE S OWN CASE FOR THE A.Y. 2000 - 01 IN ITA NO. 5975/DEL/2010 DATED 11/03/2011, WHEREIN IN IDENTICAL FACTS IT WAS HELD THAT THE PROVISION OF SECTION 271(1)(C) COULD NOT BE APPLIED TO THE FACTS OF THE CASE OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY AND HAVE PERUSED THE ORDER OF THE AO IN THE CIT(A) AND ALSO THE ORDER OF THE DELHI TRIB UNAL IN ASSESSEE S OWN CASE FOR THE A.Y. 200 0 - 01 DATED 11/03/2011 (SUPRA). W E FIND THAT ALL THE MATERIAL FACTS IN THIS CASE RELEVANT FOR THE ASSESSMENT OF THE ASSESSEE WERE DISCLOSED BY THE ASSESSEE AT THE TIME OF FILING OF RETURN OF INCOME BY THE ASSESSE E. IT IS A CASE OF HONEST DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE REVENUE REGARDING TAXABILITY OF CERTAIN AMOUNT. ONLY 3 THE HEAD OF INCOME OF INTEREST FROM FDRS WERE CHANGED BY THE REVENUE. WE FIND THAT IN IDEN TICAL FACTS IN THE A.Y. 2000 - 01 T HE DELHI TRIBUNAL IN ASSESSEE S OWN CASE, VIDE ORDER DATED 11/03/2011 HAS DECIDED THE ISSUE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT IN FAVOUR OF THE ASSESSEE AND THE ORDER OF THE CIT(A) CANCELLING THE PENALTY LEVIED WAS CONFIRMED BY THE TRIBUNAL AND TH E REVENUE S APPEAL WAS DISMISSED. THE FACTS OF THE CASE OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS 1999 - 2000 AND 2001 - 02 BEFORE US BEING SIMILAR TO THE FACTS OF THE CASE OF THE ASSESSEE IN THE INTERVENING ASSESSMENT YEAR 2000 - 01 AND THE ISSUE BEING COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE A.Y. 2000 - 01 ( SUPRA), W E DECIDE THE ISSUE OF LEVY OF PENALTY IN FAVOUR OF THE ASSESSEE AND HOLD THAT PENALTY U/S 271(1)(C) OF THE ACT WAS NOT IMPOSSIBLE FOR THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS AND ACCORDINGLY, THE ORDER OF THE CIT(A) ON THE ISSUE FOR BOTH THE ASSESSMENT YEARS IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH MARCH, 2015. SD/ - SD/ - ( T.S. KAPOOR ) ( G.C. GUPTA ) ACCOUNTANT MEMBER VICE PRESIDENT DATED: * KAVITA, P.S 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 5 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 23.02.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 23.02.2015 3. DRAFT PLACED BEFO RE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER