Mamta Bakshi, New Delhi V. DCIT, Central circle-17, , New Delhi

ITA 1359/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6860 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.1359 & 1360/DEL/2018 ASSESSMENT YEARS : 2009-10 & 2010-11 MAMTA BAKSHI, L-107, KIRTI NAGAR, NEW DELHI 110015. PAN: AALPB6438L VS. DCIT, CENTRAL CIRCLE-17, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL CHOPRA, CA DEPARTMENT BY : SHRI ATIQ AHMAD, SR. DR DATE OF HEARING : 24.07.2018 DATE OF PRONOUNCEMENT : 25.07.2018 ORDER THESE TWO APPEALS FILED BY THE ASSESSEE UPHOLDING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT) RELATE TO THE ASSESSMENT YEARS 2009-10 AND 2010-11. SINCE BOTH THE APPEALS ARE BASED ON SIMIL AR FACTS AND COMMON GROUNDS, I AM, THEREFORE, PROCEEDING TO DISPOSE THE M OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1359 & 1360/DEL/2018 2 2. THE FACTS RELATING TO ASSESSMENT YEAR 2009-10 AR E THAT THE ASSESSEE, AT THE MATERIAL TIME, WAS CO-OWNER OF THE PROPERTY L-1 07, KIRTI NAGAR, NEW DELHI ALONG WITH SMT. NIRMAL MALHOTRA. SUCH PROPER TY WAS LET OUT TO SHRI TARUNA BAKSHI, WHO IS DIRECTOR OF M/S D-ART FURNIT URE SYSTEM PVT. LTD. FOR THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2 009-10, THE ASSESSEE DECLARED RENTAL INCOME OF RS.1,20,000/- AND SIMILAR AMOUNT WAS DECLARED FOR THE ASSESSMENT YEAR 2010-11 AS WELL. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE RENT AGREEMENT AND FAIR REN TAL VALUE. IN THE ABSENCE OF ANY SUCH RENT AGREEMENT FILED BY THE ASSESSEE, T HE ASSESSING OFFICER ESTIMATED FAIR RENT AT RS.6 LAC. AFTER REDUCING TH E AMOUNT OF RENTAL INCOME DECLARED BY THE ASSESSEE AT RS.1,20,000/-, HE MADE FURTHER ADDITIONS OF RS.3,36,000/- AFTER ALLOWING STATUTORY DEDUCTION, I N RESPECT OF BOTH THE YEARS UNDER APPEAL. PENALTY HAS BEEN IMPOSED WITH REFERE NCE TO THIS INCOME, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. 3. I HAVE HEARD BOTH THE SIDES PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS APPARENT FROM THE FACTS RECORDED ABOVE THAT THE ASS ESSEE DECLARED RENTAL INCOME AT RS.1,20,000/- WHICH WAS ENHANCED BY THE A SSESSING OFFICER TO RS.6 LAC SIMPLY ON THE BASIS OF HIS ESTIMATE. THER E IS NOTHING TO SHOW THAT HE ITA NO.1359 & 1360/DEL/2018 3 ASSESSEE, IN FACT, RECEIVED RENTAL INCOME OF RS.6 L AC, BUT, DECLARED AT RS.1,20,000/-. THUS IT IS A CASE IN WHICH ADDITION HAS BEEN MADE ON ESTIMATE BASIS. IT IS A SETTLED LEGAL POSITION THAT NO PENAL TY U/S 271(1)(C) CAN BE IMPOSED WHEN INCOME IS DETERMINED ON ESTIMATE BASIS . 4. THE HONBLE DELHI HIGH COURT IN CIT VS. AERO TRADERS PVT. LTD., (2010) 322 ITR 316 (DEL), HAS HELD THAT NO PENALTY U/S 271(1)(C) CAN BE IMPO SED WHEN INCOME IS DETERMINED ON ESTIMATE BASIS. SIMIL AR VIEW HAS BEEN TAKEN BY THE HONBLE P&H HIGH COURT IN HARIGOPAL SINGH VS. CIT (2002) 258 ITR 85 (P&H) AND THE HONBLE GUJARAT HIGH COURT IN CIT VS. SUBHASH TRADI NG COMPANY, 221 ITR 110 (GUJ) . UNDER THESE CIRCUMSTANCES, I AM OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS NOT JUST IFIED IN SUSTAINING THE PENALTY ON THE BASIS OF ESTIMATE. I, THEREFORE, OR DER TO DELETE THE PENALTY CONFIRMED FOR BOTH THE YEARS UNDER CONSIDERATION. 5. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 5 TH JULY, 2018. SD/- [R.S. SYAL] VICE PRESIDENT ITA NO.1359 & 1360/DEL/2018 4 DATED, 25 TH JULY, 2018. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.