M/s. Om Shivam Contractors Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1363/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5545 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Revised return

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH E, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1363/DEL./2015 ASSESSMENT YEAR: 2008-09 OM SHIVAM CONTRACTORS PVT. LTD., H-54, 3 RD FLOOR, DDA FLATS, ASHOK VIHAR, PHASE-I, NEW DELHI. PAN- AAACO7993F (APPELLANT) VS. INCOME - TAX OFFICER, WARD 13(4), NEW DELHI. (RESPONDENT) ASSESSEE BY SHRI RAJEEV SAXENA, ADVOCATE AND SHRI SHYAM SUNDER, AR REVENUE BY SHRI S.R. SENAPATI, SR. DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-VII, NEW DELHI DATED 19.12.2014 FOR THE ASSE SSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS : 1. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY LD. CIT(A) IS BAD IN LAW AND NATURE AND THEREFORE, IT IS LIABLE TO BE QUASHED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) GROSSLY ERRED IN CONFIRMING THE PENALTY OF RS.1,26,180/- LE VIED U/S. 271(1)(C) OF THE ACT WHICH WAS LEVIED ON THE ESTIMATED ADDITIONS MADE IN THE QUANTUM ORDER FRAMED BY THE A.O. DATE OF HEARING 15.03.2018 DATE OF PRONOUNCEMENT 02 .04.2018 ITA NO. 1363/DEL./2015 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PRIVATE LIMITED COMPANY AND FILED RETURN DECLARING NIL INCO ME. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S. 143( 3) ON TOTAL INCOME OF RS.18,29,206/-. THE ADDITION OF RS.18,29,206/- WAS MADE WHICH COMPRISED ADDITION OF RS.6,13,092/- ON ACCOUNT OF TDS AMOUNT CLAIMED FROM M/S. PACL INDIA LTD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SHOWED CONTRACTUAL PAYMENTS RECEIVED OF RS.1,82,30,000/- F ROM M/S. PACL INDIA LTD., ON WHICH TOTAL EXPENDITURE INCURRED WAS OF RS.1,82, 14,000/- TOWARDS LAND DEVELOPMENT. TDS OF RS.4,13,092/- WAS MADE ON THIS RECEIPT WHICH WAS CLAIMED AS REFUND IN THE INCOME-TAX RETURN. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER TREATED IT AS A SHAM TRANSACT ION AND ENTIRE TDS WAS ADDED AS INCOME OF THE ASSESSEE. PENALTY OF RS.1,26 ,180/- WAS IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) ON THE ABOVE ADDIT ION. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. THE LD. AR OF THE ASSESSEE REITERATED THE SUBMIS SIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THAT THERE WAS NO C ONCEALMENT OF INCOME BECAUSE WHATEVER TDS WAS DEDUCTED BY THE CONTRACTEE , WAS SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HE RELIED ON VARI OUS DECISIONS, INCLUDING THE ITA NO. 1363/DEL./2015 3 DECISION OF CO-ORDINATE BENCH IN THE CASE OF OMEGA NIRMAN PVT. LTD. VS. ITO (ITA NO. 1362/DEL/2015 DATED 09.03.2018), WHERE IN THE IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL HAS DELETED THE PENALTY. THEREFORE, THE CASE IS COVERED BY THE ABOVE ORDER OF THE CO-ORDINA TE BENCH OF TRIBUNAL. 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES. 5. AFTER HEARING THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE OBSERVE THAT THE HONBLE CO-ORDINATE BENCH OF TRIBUNAL IN THE ABOVE CASE, IN THE SIMILAR SET O F FACTS AND CIRCUMSTANCES, HAS ALLOWED THE APPEAL OF THE ASSESSEE. THE FINDINGS RE ACHED BY THE TRIBUNAL ARE AS UNDER : 10. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREF ULLY CONSIDERED MATERIALS AVAILABLE ON RECORD. IT IS UNDISPUTED FACT THAT THE IMPUGNED PENALTY IS BASED ONLY ON ESTIMATED ADDITIONS, HI OUR CONSIDERED VIEW THE ADD ITION BASED ON ESTIMATION CANNOT NOT BE THE BASIS FOR THE IMPOSITION OF PENAL TY UNDER SECTION 271(1)(C) OF THE ACT. THE LEGAL POSITION IN THIS REGARD HAS BEEN SUC CINCTLY GIVEN IN THE DECISION HI THE CASE OF DR. HAKEEM S.A. SAJED SATTARV. ASSTT., CIT [2009] 120 ITD 1 (CHENNAI). IT HAS BEEN OBSERVED THAT THE PENALTY UNDER SECTION 271(1) (C) OF THE ACT ON ESTIMATED ADDITION CANNOT BE IMPOSED. IT IS DUE TO THE FACT T HAT THERE CAN NEITHER BE CONCEALMENT OF INCOME, NOR IT CAN BE HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THE ESTIMATION OF INCOME IS BASED ON OPINION WHICH CAN BE SUBJECT TO DISPUTES. THUS IN OUR CONSIDERED VIEW TH E BASIS OF ADDITION CAN VARY DEPENDING UPON THE OPINION. THEREFORE SUCH ADDITION CANNOT GIVE RISE TO THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 11. IN HOLDING SO WE RELY ON THE JUDGMENT OF SHIV L AL TAK V. CIT [2001 ] 251 ITR 373 WHERE THE HONBLE RAJASTHAN HIGH COURT HAS HELD AS UNDER : ITA NO. 1363/DEL./2015 4 'IN THIS CONNECTION, THE LANGUAGE OF THE STATUTE SU GGESTS THAT RECOURSE TO EXPLANATION CAN BE HAD ON SPECIFIC ADDITION OF INCOM E OF ANY PARTICULAR SUM OR DISALLOWANCE OF ANY PARTICULAR DEDUCTION ON ACCOUNT OF EXPENSES CLAIMED AGAINST GROSS INCOME. THE LANGUAGE OF EXPLANATION U SES TWO EXPRESSIONS AS INDEPENDENT ANY AMOUNT 'ADDED' OR 'DISALLOWED'. IT POSTULATES A DDITION OF SPECIFIC AMOUNT IN THE INCOME AS INCOME NOT DISCLOS ED OR A SPECIFIC AMOUNT CLAIMED AS DEDUCTIONS HAS BEEN DISALLOWED. IN MAKING COMPUTATION OF TOTAL INCOME WHERE INCOME RETURNED HAS BEEN REJECTED BY RE JECTING THE TRADING RESULTS, FINDING SOME DISCREPANCY IN THE BOOKS OF A CCOUNT AND SUBSTITUTING THE SAME BY ESTIMATED FIGURE, IN STRICT SENSE, CAN NEIT HER BE SAID TO BE ADDITION OF ANY AMOUNT IN THE RETURNED INCOME OR DISALLOWANCE O F ANY AMOUNT AS DEDUCTIONS CLAIMED. THE WORD 'AMOUNT' OF WHICH ADDI TIONS MADE OR DEDUCTIONS DISALLOWED ALSO DENOTES REFERENCE TO SPECIFIC ITEM OF AMOUNT ADDED OR DISALLOWED AS DEDUCTION IN CONTRAST TO SUBSTITUTION OF ALTOGETHER A NEW ESTIMATED SUM IN PLACE OF INCOME RETURNED. IT IS A CASE NEITHER OF ADDITION OR DISALLOWANCE BUT A CASE OF SUBSTITUTION. FOR THE AFO RESAID REASONS, WE ARE OF THE OPINION THAT THE QUESTION. 12. WE ALSO NOTE THAT THE CASE LAWS RELIED UPON BY THE ID. DR ARE NOT APPLICABLE TO THE INSTANT FACTS OF THE CASE AS THOSE RELATES TO T HE CLAIM MADE WITHOUT FILING THE REVISED RETURN OF INCOME. 13. IN VIEW OF ABOVE THERE REMAINS NO DOUBT THAT AS THE ADDITION MADE BY THE AO IS BASED ON ESTIMATION OF INCOME. ACCORDINGLY, BY RESP ECTFULLY FOLLOWING THE ABOVE JUDGMENTS WE ARE INCLINED TO DELETE THE PENALTY IMP OSED BY THE LOWER AUTHORITIES. 6. RESPECTFULLY FOLLOWING THE JUDGMENT OF CO-ORDINATE BENCH, WE ARE NOT INCLINED TO SUPPORT THE ORDER OF THE LD. CIT(A) TO SUSTAIN THE IMPUGNED PENALTY. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS FOUND TO HAVE MERITS AND DESERVES TO BE ALLOWED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND APRIL, 2018. SD/- SD/- (BHAVNESH SAINI) ( L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 ND APRIL, 2018 *AKS*