M/s. Kolkatta Hotels Ltd., New Delhi V. ACIT, New Delhi

ITA 1271/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3138 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences

Judgement Text

PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - D NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 1271/DEL/20 14 ASSESSMENT YEAR : 2005-06 KOLKATTA HOTELS LTD. C/O M/S. RRA TAXINDIA , D-28. SOUTH EXTENSION, PART-1, NEW DELHI 110 049 PAN AACCK0653J VS. ACIT CENTRAL CIRCLE-4, NEW DELHI (APPELLANT) (RESPONDENT) PER BHAVNESH SAINI, JUDICIAL MEMBER ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(A) XXXIII, NEW DELHI DATED 29.11.2012 FOR A SSESSMENT. YEAR 2005-06 CHALLENGING THE LEVY OF PENALTY U/S 271(1)( C) OF I.T. ACT. 2. BRIEFLY FACTS OF THE CASE ARE THAT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED TO GIVE THE DETAILS OF SCRAP SALES IF ANY IN THE YEAR UNDER CONSIDERATION. IN RESPONSE THERET O ASSESSEE STATED THAT NO SALE OF SCRAP HAS MADE DURING THE YEAR. TH E BOOKS OF ACCOUNT ALSO DO NOT CONTAIN ANY SUCH SALES OF SCRAP. HOWEVE R AS PER PAGE 78 ATTACHED TO THE AUDIT REPORT THERE WAS A SPECIFIC M ENTION OF SCRAP SALE ASSESSEE BY : SHRI SOMIL AGARWAL, SHRI ABHISHEK ANAND, ADVOCATE DEPARTMENT B Y: SHRI SHAILESH THAKUR, SR. DR DATE OF HEARING 08/05/2017 DATE OF PRONOUNCEMENT 11/05/2017 ITA NO. 1271/DEL/2014 M/S KOLKATTA HOTELS LTD. VS ACIT PAGE 2 OF 5 UNDER THE HEAD SALES TAX WHICH IS REPRODUCED IN T HE ASSESSMENT ORDER TO SHOW THAT SALES TAX NOT PAID AGAINST SCRAP SELLI NG WORTH RS. 87,84,212/-(PB 54). ASSESSING OFFICER THEREFORE NOT ED THAT ASSESSEE HAS UNACCOUNTED SALE OF SCRAP WORTH RS, 87,84,212/-. TH EREFORE IT IS CONCEALED INCOME OF ASSESSEE. PENALTY PROCEEDINGS U /S 271(1) WERE ACCORDINGLY INITIATED. THE ASSESSING OFFICER VIDE S EPARATE ORDER U/S 271(1) OF THE ACT LEVIED THE PENALTY ON THIS ADDIT ION HOLDING THAT INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS H AVE BEEN FILED FOR A SUM OF RS. 87,84,212/- . LD. CIT(A) CONFIRMED THE L EVY OF PENALTY AND DISMISSED THE APPEAL OF ASSESSEE. HE HAS OBSERVED T IN THE APPELLATE ORDER THAT PRESENT CASE IS OF CONCEALMENT OF ENTIRE SCRAP SALE THEREFORE IT IS CLEAR CASE OF CONCEALMENT OF INCOME BY NOT FURNI SHING PARTICULARS OF SCRAP SALE INCOME. 3. LD. COUNSEL FOR ASSESSEE FILED COPY OF THE NOTIC E U/S 274 READ WITH SECTION 271 OF THE ACT WHICH WAS ISSUED BEFORE LEVY OF PENALTY IN WHICH THE ASSESSING OFFICER HAS PUT A MARK OF RIGH T ON THE FOLLOWING NARRATION HAVE CONCEALED THE PARTICULARS OF INCOM E OR . FURNISHED INACCURATE PARTICULARS OF SUC H INCOME. HE HAS STATED THAT IN THE CASE OF CIT VS. SSAS EMERA LD MEADOWS IN ITA NO. 389/2015 VIDE JUDGMENT DATED 23 RD NOVEMBER, 2015 HON'BLE KARNATAKA HIGH COURT DISMISSED THE DEPARTMENTAL APP EAL CONFIRMING THE VIEW OF THE TRIBUNAL IN WHICH THE TRIBUNAL HAS ALLO WED THE APPEAL FILED BY ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSES SING OFFICER U/S 274 RWS 271(1)(C) OF THE I.T. ACT TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH ITA NO. 1271/DEL/2014 M/S KOLKATTA HOTELS LTD. VS ACIT PAGE 3 OF 5 LIMB OF SECTION 271(1) OF THE ACT, PENALTY HAD BEE N INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL WHIL E ALLOWING THE APPEAL OF ASSESSEE HAS RELIED UPON DECISION OF DIVISION BE NCH OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & G INNING FACTORY 359 ITR 565. HE HAS SUBMITTED THAT THE ABOVE DECISION O F THE HON'BLE HIGH COURT HAVE BEEN CONFIRMED BY HON'BLE SUPREME COURT BY DISMISSING THE SLP VIDE ORDER DATED 5 TH AUGUST, 2016. COPY OF THE SAME IS PLACED ON RECORD. LD. COUNSEL FOR ASSESSEE FURTHER SUBMITTED THAT COPY OF THE ANNEXURE FILED WITH THE RETURN IS FILED ON PAGE 54 WHICH IS UNSIGNED, UNDATED AND DO NOT SHOW DETAIL OF THE SCRAP SALE. H E HAS SUBMITTED THAT ASSESSEE HAS NOT SOLD ANY SCRAP IN THE YEAR UNDER C ONSIDERATION. HE HAS SUBMITTED THAT THE LD. CIT(A) CONFIRMED THE ADDITIO N VIDE ORDER DATED 17 TH AUGUST, 2010 COPY OF WHICH IS FILED AT PAGE 33 OF THE PAPER BOOK AGAINST WHICH ASSESSEE HAS NOT FILED ANY APPEAL. HE HAS FURTHER SUBMITTED THAT IN THE SAME ORDER LD. CIT(A) DELETE D THE ADDITION OF SALES TAX OF RS. 6,21,244/- WHICH IS ALSO MENTIONED IN THE SAME PAPER FILED WITH THE RETURN OF INCOME. HE HAS, THEREFORE , SUBMITTED THAT IT IS NOT A FIT CASE OF LEVY OF THE PENALTY. HE HAS SUBMI TTED THAT AUTHORITIES BELOW HAVE BEEN CHANGING THEIR STAND AT EVERY STAGE , WHETHER IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FUR NISHING INACCURATE PARTICULARS OF INCOME. HE HAS FURTHER SUBMITTED TH AT EVEN IF QUANTUM ADDITION IS CONFIRMED, PENALTY NEED NOT BE IMPOSED IN THIS CASE. ON THE OTHER HAND LD. DR RELIED UPON ORDERS OF THE AUTHORI TIES BELOW. ITA NO. 1271/DEL/2014 M/S KOLKATTA HOTELS LTD. VS ACIT PAGE 4 OF 5 4. AFTER CONSIDERING RIVAL SUBMISSIONS WE ARE OF TH E VIEW PENALTY NEED NOT BE IMPOSED IN THE FACTS AND CIRCUMSTANCE O F THIS CASE. IT IS WELL SETTLED LAW QUANTUM AND PENALTY PROCEEDINGS ARE DIS TINCT AND INDEPENDENT PROCEEDINGS. EVEN IF QUANTUM ADDITION I S CONFIRMED, IS BY ITSELF NOT NECESSARY TO LEVY THE PENALTY U/S 271 ( 1)(C) OF THE I.T. ACT. THE COPY OF THE ANNEXURE WITH THE RETURN OF INCOME IS FILED AT PAGE 54 OF THE PAPER BOOK WHICH IS NOT SIGNED BY THE ASSESS EE AND DID NOT LEAD TO ANYWHERE. IT MERELY MENTION SALES TAX OF RS. 6,2 1,244/- IS NOT YET PAID AGAINST SCRAP SALE WORTH OF RS. 87,84,212/-. L D. CIT(A) HOWEVER DELETED THE ADDITION OF RS. 621,244/-. THEREFORE TH ERE SHOULD BE SOME POSITIVE MATERIAL AVAILABLE ON RECORD TO PROVE THA T ASSESSEE MADE SCRAP SALE IN ASSESSMENT YEAR UNDER APPEAL. HOWEVER THERE IS NO SUPPORTING EVIDENCE AVAILABLE ON RECORD TO PROVE IF ANY SCRAP SALE IS MADE BY ASSESSEE IN THE ASSESSMENT YEAR UNDER APPEAL. PART OF THE ADDITION AS PER THIS PAGE IS NOT APPROVED BY THE LD. CIT(A). TH EREFORE, IT CREATES SUSPICION IN THE CASE SET UP BY THE ASSESSING OFFIC ER. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER STATED THAT ASSESSE E HAS CONCEALED INCOME BY MAKING SCRAP SALE BUT IN THE PENALTY ORDE R, PENALTY IS LEVIED FOR FURNISHING INACCURATE PARTICULARS. LD. CIT(A) IN BODY OF THE ORDER FOUND IT IS A CASE OF CONCEALMENT OF SCRAP SALE BU T CONFIRMED THE LEVY OF PENALTY FOR FURNISHING INACCURATE PARTICULARS OF I NCOME. NOTICE ISSUED BEFORE LEVY OF PENALTY IS VAGE AS A RIGHT MARK HA S BEEN PUT ON BOTH THE LIMB OF SECTION 271(1)(C) NOTED ABOVE. THEREFORE IN THE ABSENCE OF ANY SPECIFIC CHARGE ON RECORD FOR CONCEALMENT OF INCOME OR FILING INACCURATE ITA NO. 1271/DEL/2014 M/S KOLKATTA HOTELS LTD. VS ACIT PAGE 5 OF 5 PARTICULARS FOR MAKING UNACCOUNTED SALES, WE HOLD T HAT THE NOTICE DID NOT INDICATE AS TO FOR WHICH OFFENCE PENALTY IS IMPOSE D. WE ARE OF THE VIEW ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY JUDGM ENT IN CASE OF M/S. SSAS EMERALD MEADOWS (SUPRA). 5. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE V IEW PENALTY NEED NOT BE IMPOSED IN THE FACTS AND CIRCUMSTANCES OF TH IS CASE. WE ACCORDINGLY SET ASIDE THE ORDERS OF AUTHORITIES BEL OW AND CANCEL THE PENALTY. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.P. JAIN) ( BHAVNESH SAINI ) ACCOUNTANT MEMEBR JUDICIAL MEMBER DATED: 11/05/2017 *VEENA* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR