Ambawadi Swetamber Murtipujak Jain Sangh, Ahmedabad V. The DDIT.,(Exemp.), Ahmedabad

ITA 1368/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7761 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 29-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P M SHUKLADR
• Assessee Lawyers: M G PATEL
• Keywords: Charitable institution; Capital expenditure; Set aside

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, A - BENCH, AHMEDABAD . BEFORE : SHRI T.K.SHARMA, JUDICIAL MEMBER , AND SHRI D.C.AG RAWAL , ACCOU NTANT MEMBER. ITA NO. 1368/AHD/2009 (ASSESSMENT YEAR AMBAWADI SWETAMBER MURTIPUJAK JAIN SANGH, SARVAPALI DR. RADHAKRISH NA NR.TAPOREO PARK, ELLISBRIDGE, AHMEDABAD. PAN AAATA 5870 A VERSUS INCOME - TAX OFFICER (DDIT), AHMEDABAD. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI M.G.PATEL, AR FOR THE RESPONDENT SHRI P.M.SHUKLA,DR ORDER SHRI T.K.SHARMA, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DT. 7.1.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) XXI, AHMEDABAD CONFIRMING THE PENALTY OF RS.2,01,787 LEVIED U/S.271(1)(C) OF THE INCOME - TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2005 - 06. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS A CHARITABLE TRUST. T HE ASSESSEE TRUST HAS FILED ITS RETURN OF INCOME ON 18.10.2005 DECLARING TO TAL INCOME OF ( - )RS. 11,90,884 WITH AUDITED ACCOUNTS AND AUDIT REPORT U!S.12A(B) OF THE I.T.ACT,1961. T HE ASSESSEE HAS DISCLOSED GROSS RECEIPT OF RS.66,00,235 OUT OF WHICH EXPENSES OF RS.77,91,119 WHICH INCLUDES CAPITAL EXPENDITURE OF RS. 32,15,455 WERE CLAIMED. THE ASSESSMENT WAS FINALIZED U/S.143(3) ON 26.12.2007 ON TOTAL INCOME OF RS.NIL. WHILE COMPUTING THE TOTAL INCOME, THE CAPI TAL EXPENDITURE OF RS.7,46,098 WAS DISALLOWED. AS PER RECORDS, THE CLOSING BALANCE OF SILVER AS PER LAST PREVIOUS YEAR IS RS.66, 115 AND THE ASSESSEE HAS PU RCHASED SILVER OF RS.7,46,098 (CLAIMED AS CAPITAL EXPENDITURE). THUS, THER E IS SILVER OF RS.8, 11,213 WITH THE ASSESSEE. BUT THIS SILVER HAS NOT BEEN REFLECTED IN THE BALAN CE SHEET AS ON 31.03.2005. IT WAS EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT DUE TO MISTAKE OF ACCOUNTANT, PUR CHASE OF SILVER OF RS.7,46,098 W AS SHOWN. THE EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFICER HOLDING THE SAME TO BE OF GENERAL NATURE WITHOUT ANY EVIDENCE . ON THE ITA NO. 1368/AHD/2009 2 GROUND THAT THE ASSESSEE HAS WRONGLY CLAIMED THE CAPI TAL EXPENDITURE OF RS.7,46,098 BY FURNISHING INACCURATE PARTICULA RS OF INCOME, PENALTY PROCEEDING FOR LEVY OF PENALTY U/S.27 1(1 )(C) WERE INITIATED BY THE ASSESSING OFFICER. THE ASSESSEE EXPLAINED THAT IT HAS CLAIMED CAPITAL EXPENDITURE U/S.11 OF RS.68,01,084. DURING THE YEAR UNDER CONSIDERATION THE TRUST HAS PURCHASE D SILVER OF RS.7,46,098. THE PURCHASE OF SILVER WAS DEBITED TO SILVER ACCOUNT. THEREAFTER SILVER WAS GIVEN FOR PREPARING SILVER MUTHIYA WHICH IS ORNAMENT OF GOD. THE SAME AMOUNT WAS CREDITED TO SILVER PURCHASE ACCOUNT AND DEBITED TO SILVER MUTHIYA ACCOUNT. WHILE PREPARING THE FINAL AUDITED ACCOUNTS, BOTH THE ABOVE AMOUNTS WERE SHOWN AS ADDITIONS AND THE SAME WAS SHOWN AS DEDUCTIONS IN THE ACCOUNT OF SILVER PURCHASE. WHILE PREPARING THE RETURN OF INCOME, BOTH THE ABOVE DEBIT ENTRIES WERE SHOWN AS ADDITION IN FIXED ASSETS. THEREFORE, THE TOTAL CLAIM OF CAPITAL EXPENDITURE OF RS.32,15,455 WAS MADE. BEFORE THE AUTHORITIES BELOW IT WAS SUBMITTED THAT THERE WAS A BASIC MISTAKE OF ACCOUNTANT IN PASSING THE ABOVE ENTRIES AND CONSEQUENTLY THE SAID CLAIM WAS MADE I N THE RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT THERE IS NO TAX PAYABLE AS PER RETURN OF INCOME AND EVEN AFTER DELETING THE ABOVE CLAIM THERE IS NO TAX PAYABLE AS PER THE ASSESSED INCOME. THIS ITSELF ESTABLISHES BEYOND DOUBT THAT THERE CANNOT BE ANY MALAFIDE INTENTION IN MAKING SUCH CLAIM WHEN THERE IS NO TAX PAYABLE. THE CLAIM WAS MADE ONLY N ACCOUNT OF BASIC MISTAKE IN PRESENTING THE ACCOUNTS. THREE IS NEITHER ANY DELIBERATE DEFIANCE OF LAW NOR ANY CONTUMACIOUS CONDUCT ON THE PART OF THE ASSESSEE IN MAKING SUCH CLAIM. THE ASSESSING OFFICER REJECTED THIS EXPLANATION OF THE ASSESSEE AND LEVIED PENALTY OF RS.2,01,787 U/S.271(1)(C) OF THE ACT. THE LEARNED CIT(A) HAS CONFIRMED THE SAME. 3. HEARD BOTH THE PARTIES. WE FIND FROM THE FACTS RECORDED IN THE FOR EGOING PARAGRAPHS THAT DUE TO MISTAKE OF ACCOUNTANT THE CAPITAL EXPENDITURE OF RS.7,46,098 FOR PURCHASE OF SILVER WAS CLAIMED. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS DELIBERATELY SUBMITTED ANY INACCURATE PARTICULARLS OF INCOME OR CONCEALED ANY INCOME. FURTHER, WE FIND THAT EVEN AFTER MAKING ADDITION OF RS.7,46,098 THE TAX ASSESSED IS NIL. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES CASE AND ALSO CONSIDERING THE FACT THAT THE TAX ASSESSED ITA NO. 1368/AHD/2009 3 IS ADMITTEDLY NIL, IN OUR CONSIDERED VIEW, NO PENA LTY IS LEVIABLE U/S.271(1)(C) OF THE ACT. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND CANCEL THE PENALTY OF RS.2,01,787 LEVIED U/S.271(1)(C) OF THE ACT. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONO UNCED IN OPEN COURT ON DT. 24.07.09 SD/ - SD/ - ( D.C.AG RAWAL ) ACCOUNTANT MEMBER. (T.K.SHARMA) JUDICIAL MEMBER DATE: 24.07.09 (H.K.PADHEE) SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDE D TO : 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. THE DR, AHMEDABAD 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, DEPUTY.REGISTRAR.