Srikrishna Arjun Trading & Investment Co.(P) Ltd., Kolkata V. DCIT, Circle - 5, Kolkata, Kolkata

ITA 1438/KOL/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 5333 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 14-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: P J BHIDE
• Keywords: Business income; Reasonable cause; Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1438/KOL/2017 ( [ [ / ASSESSMENT YEAR: 2007-08) SRIKRISHNA ARJUN TRADING & INVESTMENT CO. (P) LTD. MCLEOD HOUSE, 3 RD FLOOR, 3 N.S. ROAD, KOLKATA 1. VS. DCIT, CIRCLE-5, KOLKATA 8 TH FLOOR, AAYAKAR BHAWAN, KOLKATA 700 069. ./ ./PAN/GIR NO.: AACCS 7693 N (ASSESSEE) .. (RESPONDENT) ASSESSEE BY :SHRI P. J. BHIDE RESPONDENT BY : SHRI A. BHATTACHARJEE, ADDL. CIT / DATE OF HEARING : 12/07/2018 /DATE OF PRONOUNCEMENT : 03/10/2018 / O R D E R PER DR. A. L. SAINI: BY WAY OF THIS APPEAL, THE ASSESSEE HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 12.04.2017 PASSED BY THE LEARNED CIT(A)-2 KOLKATA IN THE MATTER OF CONFIRMING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE FACTS OF THE CASE WHICH CAN BE STATED QUITE SHORTLY ARE AS FOLLOWS:THE ASSESSEE IS A COMPANY. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF RS.70,54,270/-, COMPRISING BUSINESS INCOME OFRS. NIL AFTER SETTING OFF PAST LOSSES, LOSS OF INCOME FROM HOUSE PROPERTY OF RS.3,98,934/- AND LONG TERM AND SHORT CAPITAL GAIN OF RS.74,53,204/-. THE ASSESSEE CLAIMED BROKERAGE OF RS.1,35,000/- IN COMPUTING LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER ADDED BACK THE BROKERAGE CHARGES OF RS.1,35,000/- TO THE TOTAL INCOME, AS THE ASSESSEE HAS CLAIMED DOUBLE DEDUCTION OF THIS EXPENDITURE, ONCE WHILE COMPUTING SRIKRISHNA ARJUN TRADING & INVESTMENT CO. (P) LTD. ITA NO.1438/KOL/2017 ASSESSMENT YEAR: 2007-08 PAGE | 2 LONG TERM CAPITAL GAINS AND AGAIN AS AN EXPENDITURE IN PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS NOT DISCLOSED PARTICULARS OF INCOME CORRECTLY AND CLAIMED DOUBLE DEDUCTION THEREFORE,IT WAS AN ENOUGH GROUND FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY OF RS.30,294/- (TAX @20% OF RS.1,35,000/- AND S.C &E.CESS) BEING THE AMOUNT OF TAX SOUGHT TO BE EVADED VIDE ORDER DATED 29.04.2010. 3. AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER OBSERVING AS FOLLOWS: I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AS WELL AS THE ASSESSMENT ORDER FRAMED IN THE LIGHT OF THE MATERIALS AVAILABLE ON RECORD BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE A.O HAS ALREADY DISCUSSED THE ISSUE IN DETAIL WHILE PASSING THE PENALTY ORDER IN THE MATTER. I AGREE WITH THE A.O AND ACCORDINGLY, THE ORDER OF THE A.O IS UPHELD. THIS GROUND OF THE APPEAL IS DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF THE LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE ASSESSEE CLAIMED BROKERAGE OF RS.1,35,000/- IN COMPUTING LONG TERM CAPITAL GAINS. HOWEVER, IT FAILED TO ADD BACK IN COMPUTING THE BUSINESS INCOME OF THE YEAR. DURING THE PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THE FOLLOWINGS: WRONG LEGAL ADVICE GIVEN OR OTHER MISTAKE MADE BY THE ASSESSEES LAWYER OR CHARTERED ACCOUNTANT MAY CONSTITUTE GOOD REASON OR SUFFICIENT CAUSE FOR CONDONING DELAY IN FILING AN APPEAL OR AN APPLICATION OR A WRIT OR FOR NOT IMPOSING PENALTY. THEREFORE, THE LD COUNSEL SUBMITTED THAT ASSESSEE`S CHARTERED ACCOUNTANT HAD, BY MISTAKE, CLAIMED BROKERAGE OF RS.1,35,000/- IN COMPUTING LONG TERM CAPITAL GAINS AND AGAIN CLAIMED, SAME AMOUNT, AS AN EXPENDITURE IN PROFIT & LOSS ACCOUNT. THE ASSESSEE SHOULD NOT SUFFER BECAUSE OF THE MISTAKE MADE BY HIS CHARTERED ACCOUNTANT. HENCE, THE PENALTY U/S 271(1) (C ) SHOULD BE DELETED. SRIKRISHNA ARJUN TRADING & INVESTMENT CO. (P) LTD. ITA NO.1438/KOL/2017 ASSESSMENT YEAR: 2007-08 PAGE | 3 6. PER CONTRA, THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR SAKE OF BREVITY. 7. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE NOTE THAT DOUBLE DEDUCTION HAS CLAIMED BY THE ASSESSEE DUE TO THE WRONG LEGAL ADVICE GIVEN BY THE COUNSEL OF THE ASSESSEE. THE ASSESSEEDOES NOT HAVE ANY KNOWLEDGE ABOUT THE INCOME TAX PROCEEDINGS AND HE SOLELY DEPENDS ON THE ADVICE OF THE COUNSEL AND THEREFORE, THE DOUBLE DEDUCTION WAS WRONGLY CLAIMED DUE TO WRONG LEGAL ADVICE OF THE ASSESSEE`S CHARTERED ACCOUNTANT ( COUNSEL). WE NOTE THAT IF THE PARTICULARS ARE FURNISHED AND THERE IS A MISTAKE IN CALCULATION AND WRONG CLAIM DUE TO MISTAKE, DOES NOT AMOUNT TO CONCEALMENT OF INCOME. BESIDES THIS, THE PENALTY AMOUNT OF RS.30,294/- IS VERY SMALLAND THE MISTAKE MADE BY THE ASSESSEES LAWYER/CA MAY CONSTITUTE SUFFICIENT AND REASONABLE CAUSE FOR NOT IMPOSING PENALTY. WE NOTE THAT THE ASSESSEE CLAIMED BROKERAGE OF RS.1,35,000/- IN COMPUTING LONG TERM CAPITAL GAINS AND FAILED TO ADD BACK IN COMPUTING THE BUSINESS INCOME OF THE YEAR, THEREFORE, THE PENALTY U/S 271(1)(C) WAS IMPOSED ON THE ASSESSEE. WE NOTE THAT THE ASSESSEE SHOULD NOT SUFFER BECAUSE OF THE MISTAKE MADE BY HIS CHARTERED ACCOUNTANT. WE ALSO NOTE THAT SAID MISTAKE IS UNINTENTIONAL AND THEREFORE, THE PENALTY SHOULD NOT BE LEVIED, FOR THAT WE RELY OF THE JUDGMENT OF THE HON`BLE SUPREME COURT IN THE CASE OF M/S PRICE WATERHOUSE COPERS ( P) LTD VS COMMISSIONER OF INCOME TAX [2012] 25 TAXRNANN.CORN 400 (SC) WHERE IN A SIMILAR SET OF CIRCUMSTANCES, IT WAS HELD BY THE HON'BLE APEX COURT THAT WHERE IN TAX AUDIT REPORT FILED BY ASSESSEE, IT WAS INDICATED THAT PROVISION TOWARDS PAYMENT OF GRATUITY WAS NOT ALLOWABLE BUT ASSESSEE FAILED TO ADD SAID PROVISION TO TOTAL INCOME, NO PENALTY COULD BE IMPOSED FOR SUCH MISTAKE, AS IT WAS A BONA FIDE AND INADVERTENT ERROR. THEREFORE, CONSIDERING THE FACTS AND CASE LAWS AS EXPLAINED ABOVE, WE DELETE THE PENALTY U/S 271(1)(C) OF THE ACT. SRIKRISHNA ARJUN TRADING & INVESTMENT CO. (P) LTD. ITA NO.1438/KOL/2017 ASSESSMENT YEAR: 2007-08 PAGE | 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.10.2018. SD/- ( S. S. GODARA ) SD/- (A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 03/10/2018 (RS, SR.PS) / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. /THE ASSESSEE- SRIKRISHNA ARJUN TRADING & INVESTMENT CO. (P) LTD. 2. / THE RESPONDENT- DCIT, CIRCLE-5, KOLKATA 3. ( ) / THE CIT(A) 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE.