M/s. J.K.Sales Agency, Bharuch V. The Income Tax Officer Ward -2, Bharuch

ITA 1425/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9852 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-08-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 14-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: P M MEHTA WITH GULAB THAKAR

Judgement Text

I.T.A. N O. 1425 /AHD/201 3 ASSESSMENT YEAR: 200 1 - 02 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR , AM AND MAHAVIR PRASAD , JM ] I.T.A. NO. 1425 /AHD/201 3 ASSESSMENT YEAR: 200 1 - 02 J.K. SALES AGENCY, ..... ...... . ... . . APPELLANT PROP. LATE JYOTIKABEN K . MODI E - 1357/1, KAKABALIA MANDIR, MOHAMADPURA, BHARUCH 392 001. [ PAN: A DEPM 4427 E ] VS. INCOME TAX OFFICER , WARD 2, BHARUCH. ............... . RESPONDENT APPEARANCES BY: P.M. MEHTA WITH GULAB THAKAR FOR THE A PPELLANT RAJESH MEENA FOR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : 2 6 .0 8 .2016 DATE OF PRONOUNC ING THE ORDER : 22 . 1 1 .2016 O R D E R PER PRAMOD KUMAR , AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF TH E ORDER DATED 25.02. 2013 , PASSED BY THE LEARNED CIT (A) , UPHOLDING THE PENALTY OF RS. 52,965 / - IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 200 1 - 02 . 2. GRIEVANCE S RAISED BY THE APPELLANT ARE AS FOLLOWS : - 1. ON THE FACTS A S WELL AS IN THE CIRCUMSTANCES OF THE C A SE OF THE APPELLANT, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW WHICH REQUIRE S TO BE QUASHED. I.T.A. N O. 1425 /AHD/201 3 ASSESSMENT YEAR: 200 1 - 02 PAGE 2 OF 3 2. W ITHOUT PREJUDICE, ON THE FACTS AS WELL AS IN THE CIRCUMST ANCES OF THE CASE OF THE APPELLANT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN HOLDING THAT IN CLAIMING INTEREST EXPENSES APPELLANT HAD FURNISHED INACCURATE PARTICULARS, WHEN IN THE FACTS AND IN THE CIRCUMSTANCES, DISALLOWANCE OF THE CLAIM CANNOT BE EQUATED TO THE APPELLANT HAVING EITHER CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 3. WITHOUT PREJUDICE, ON THE FACTS AS WELL AS IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT, THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE PENALTY OF RS.52,965/ - LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1) (C) OF THE ACT, WHEN HE OUGHT TO HAVE DELETED THE IMPUGNED PENALTY SO LEVIED. THE ORDERS OF THE DEPARTMENTAL AUTHOR ITIES BELOW MAY BE SET ASIDE. 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER DISALLOWED INTEREST EXPENSES, AMOUNTI NG TO RS.1,76,050/ - , OUT OF TOT AL INTEREST EXPENSES OF RS. 6,82,923/ - . THE DISALLOWANCE WAS MADE ON THE GROUND THAT THE BORROWINGS WERE STATED TO BE USED FOR INVESTMENT IN RESIDENTIAL PROPERTY. THIS DISALLOWANCE HAS BEEN CONFIRMED IN APPEAL AS WELL. IT IS IN THIS BACKDROP THAT A PENALTY OF RS.52,965/ - UNDER SECTION 271(1)(C) HAS BEEN IMPOSED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CON TENTIONS , PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT THE DISALLOWANCE HAS BEEN WORKED OUT ON ESTIMATE BASIS, AND IT CENTERS AROUND INCORRECTNESS OF A CLAIM RATHER TH AN FURNISHING OF INACCURATE PARTICULARS. ALL THE DETAILS WERE DULY FURNISHED, AND THE ASSESSE E HAD ALSO CLAIMED THAT RELATABLE INTEREST BEING LESS THAN RS.1 LAKH, THE ADMISSIBLE DEDUCTION UNDER SECTION 24(1)(VI) OF THE ACT WAS ADMISSIBLE. THE MERE FACT T HAT THIS CLAIM HAS BEEN REJECTED, BY ITSELF, DOES I.T.A. N O. 1425 /AHD/201 3 ASSESSMENT YEAR: 200 1 - 02 PAGE 3 OF 3 NOT MAKE IT A FIT CASE FOR PENALTY. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO DELETE THE IMPUGNED PENALTY OF RS.52,965/ - . THE ASSESSEE GETS T HE RELIEF ACCORDINGLY . 6. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 22 ND DAY OF NOVEMBER , 2016. SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 22 ND DAY OF NOVEMBER , 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, A HMEDABAD