Francis WA(Ziarg), V. ACIT Cir-32(1),

ITA 1495/DEL/2003

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52970 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-09-2011
• Assessment Year: 1994-1995
• Appeal Filed On: 02-04-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH DELHI BENCH DELHI BENCH DELHI BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI R.P.TOLANI, JM AND SHRI BEFORE SHRI R.P.TOLANI, JM AND SHRI BEFORE SHRI R.P.TOLANI, JM AND SHRI BEFORE SHRI R.P.TOLANI, JM AND SHRI SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA, AM , AM , AM , AM ITA NO. ITA NO. ITA NO. ITA NO.1495/DEL/2003 1495/DEL/2003 1495/DEL/2003 1495/DEL/2003 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 1994 1994 1994 1994- -- -95 9595 95 FRANCIS WACZIARG, FRANCIS WACZIARG, FRANCIS WACZIARG, FRANCIS WACZIARG, A AA A- -- -58, NIZAMUDDIN EAST, 58, NIZAMUDDIN EAST, 58, NIZAMUDDIN EAST, 58, NIZAMUDDIN EAST, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 013. 110 013. 110 013. 110 013. VS. VS. VS. VS. ASSTT.COMMISSIONER ASSTT.COMMISSIONER ASSTT.COMMISSIONER ASSTT.COMMISSIONER OF INCOME OF INCOME OF INCOME OF INCOME TAX, TAX, TAX, TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -32(1), 32(1), 32(1), 32(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANAT KAPOOR, ADVOCATE. RESPONDENT BY : SHRI R.S.NEGI, SR.DR ORDER ORDER ORDER ORDER PER PER PER PER R.P.TOLANI, JM R.P.TOLANI, JM R.P.TOLANI, JM R.P.TOLANI, JM : : : : THIS IS ASSESSEES APPEAL CHALLENGING IMPOSITION OF PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE IT ACT, 1961 . 2. THIS APPEAL WAS EARLIER DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY HOLDING THAT PROPER SATISFACTION WA S NOT RECORDED FOR INITIATING PENALTY PROCEEDINGS. ON REVENUES A PPEAL, HON'BLE DELHI HIGH COURT, VIDE ORDER DATED 4.12.2008, REVER SED THE ITAT ORDER AND SET ASIDE THE APPEAL TO BE DECIDED ON MER ITS. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE ASSESSEE HAD CLAIMED DEDUCTION U/S 80-O ON GROSS REC EIPTS FROM EARNINGS OF FOREIGN COMMISSION CHARGES OF THE CONSU LTANTS. ITAT HELD THAT THE DEDUCTION WAS ALLOWABLE ON NET FOREIG N RECEIPTS WHICH GAVE RISE TO DIFFERENCE IN THE ASSESSED INCOM E. THE AO ITA-1495/DEL/2003 2 LEVIED PENALTY UNDER SECTION 271(1)(C) WHICH WAS CO NFIRMED BY THE LEARNED CIT(A). 4. LEARNED COUNSEL CONTENDS THAT ON THE SAME ISSUE IN ASSESSEES OWN CASE FOR SUBSEQUENT ASSESSMENT YEAR, I.E., AY 1995-96, IN ITA NO.304/DEL/2005 VIDE ORDER DATED 29. 7.2005, THE ITAT DELETED THE PENALTY ON MERITS BY FOLLOWING OBS ERVATIONS:- 4.1 ON MERIT ALSO, IN OUR VIEW, REVENUE HAS NO CAS E. THE ISSUE RELATING TO THE ADDITION WAS TECHNICAL AN D DEBATABLE. THE ASSESSEE HAD MADE THE CLAIM BASED ON THE JUDGEMENT OF HONBLE HIGH COURT OF MADRAS IN CASE OF CSTHMIAN INDIA MARITIME (P) LTD. (SUPRA). THIS VIEW WAS FOLLOWED BY HONBLE HIGH COURT OF BOMBAY I N CASE OF ASIAN CABLES CORPORATION (SUPRA) IN 2002 WHICH WAS LATER REVERSED. THOUGH THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT WAS IN FAVOUR OF THE REVENUE, THE POSSIBILITY OF SUCH JUDGEMENT BEING REVERSED ON A FUTURE DATE COULD NOT BE TOTALLY RULE D OUT. THE ASSESSEE MAY HAVE MADE A CLAIM BASED ON FAVOURABLE VIEW IN ORDER TO KEEP THE MATTER ALIVE. THERE IS NO CASE THAT THE ASSESSEE HAD CONCEALED TH E PARTICULARS RELATING TO COMPUTATION OF DEDUCTION U/ S 80-O. THE CLAIM THAT THE ASSESSEE HAD GIVEN COMPLET E DETAILS AND FACTS RELATING TO COMPUTATION OF INCOME HAS NOT BEEN CONTROVERTED. THE CLAIM U/S 80 IS APPARENT FROM THE RETURN, WHICH COULD ALWAYS BE DISALLOWED BY THE DEPARTMENT. IN OUR VIEW, PENALTY FOR CONCEALMENT WILL NOT BE JUSTIFIED IN SUCH CASES. W E, THEREFORE, REVERSE THE ORDER OF CIT(A) AND CANCEL T HE PENALTY. 5. AGGRIEVED, REVENUE PREFERRED APPEAL BEFORE THE H ON'BLE DELHI HIGH COURT WHICH DISMISSED THE SAME BY ITS OR DER DATED 17.8.2009 BY FOLLOWING OBSERVATIONS:- ITA-1495/DEL/2003 3 NO DOUBT THE ASSESSEE HAD SOUGHT DEDUCTION UNDER SECTION 80-O OF THE INCOME TAX ACT EVEN WHEN THE JUDGMENT OF THIS COURT IN CASE OF MARKETING RESEARC H CORPORATION 61 CTR 204 AGAINST THE ASSESSEE. HOWEVER, WE ARE STILL OF THE VIEW THAT ON THAT BASI S THE ASSESSEE COULD NOT HAVE BEEN FASTENED WITH PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT. IT IS BECAUSE OF THE REASON THAT JUDGMENT OF MADRAS HIGH COURT IN CSTHMIAN INDIA MARITIME (P) LTD. 113 ITR 570 WAS IN FAVOUR OF ASSESSEE AS PER WHICH DEDUCTION UNDER SECTION 80-O OF THE ACT WAS ALLOWED. IT IS ALSO A MATTER OF REC ORD THAT VIEW OF THE MADRAS HIGH COURT WAS LATER ON ACCEPTED BY THE BOMBAY HIGH COURT IN CASE OF ASIAN CABLES CORPORATION 262 ITR 535. IN SUCH A SITUATIO N, OBSERVATION OF THE INCOME TAX APPELLATE TRIBUNAL TH AT THE ASSESSEE MADE A CLAIM WITH POSSIBILITY OF JUDGMENT OF THIS COURT BEING REVERSED ON A FUTURE D ATE COULD NOT BE RULED OUT. THE ASSESSEE MAY HAVE MADE A CLAIM IN ORDER TO KEEP THE MATTER ALIVE, HOWEVER, IT CANNOT BE TREATED AS A CASE OF CONCEALMENT OF PARTICULARS RELATING TO COMPUTATION OF DEDUCTION UN DER SECTION 80-O OF THE ACT AS LIKELY POINTED OUT BY THE TRIBUNAL. WE ARE, THEREFORE, OF THE OPINION THAT N O SUBSTANTIAL QUESTION OF LAW ARISES. 6. IT IS PLEADED THAT THE IMPOSITION OF PENALTY STA NDS CONCLUDED BY THE HON'BLE DELHI HIGH COURT IN ASSESSEES OWN C ASE JUST FOR THE PENALTY LEVIED HAS BEEN DELETED. 7. LEARNED DR, ON THE OTHER HAND, RELIED ON HON'BLE DELHI HIGH COURT JUDGMENT IN THE CASE OF CIT VS. ECS LIMITED 2010-TIOL- 287-HC-DEL-IT WHICH CONFIRMED THE PENALTY LEVIED UNDE R SECTION 271(1)(C) ON THE SAME FACTS OF CLAIMING DEDUCTION U /S 80-O ON GROSS AMOUNT OF FOREIGN EARNINGS. ITA-1495/DEL/2003 4 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE MATERIAL ON RECORD. HON'BLE DELHI HIGH COURT I N ASSESSEES OWN CASE IN SUBSEQUENT ASSESSMENT YEAR HAS DELETED THE PENALTY ON THE SAME FACTS AND CIRCUMSTANCES ON MERITS HOLDI NG THAT THE ADDITION WAS TECHNICAL AND DEBATABLE IN NATURE AND ASSESSEE HAS FURNISHED ALL THE DETAILS MATERIAL TO THE COMPUTATI ON. THIS BEING A BINDING PRECEDENT IN ASSESSEES OWN CASE, WE HAVE TO RESPECTFULLY FOLLOW THE SAME. IN VIEW THEREOF, WE DELETE THE PENALTY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2011. SD/- SD/- ( (( (SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA) )) ) (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 30.09.2011 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR