Tej Singh Thakur, Shimla V. ACIT, Shimla

ITA 153/CHANDI/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3838 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 153 & 154/CHD/2012 ASSESSMENT YEAR : 2006-07 SHRI TEJ SINGH THAKUR, VS THE ACIT, LITTLE COTTAGE, SHIMLA VIEW ESTATE, CIRCLE, NEAR HIMACHAL PRINTING PRESS, SHIMLA. LOWER CHAKKER, SHIMLA 5. PAN: ABKPT0127G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY VAIDYA RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 09.12.2016 DATE OF PRONOUNCEMENT : 15.12.2016 O R D E R PER BHAVNESH SAINI,JM THIS ORDER SHALL DISPOSE OFF BOTH THE APPEALS BY TH E SAME ASSESSEE ON QUANTUM AND PENALTY MATTER. EARLI ER, BOTH THE APPEALS WERE DISMISSED FOR DEFAULT. THE ASSESSEE FILED MISCELLANEOUS APPLICATIONS EXPLAININ G THE REASONS FOR NON APPEARANCE. THE MISCELLANEOUS APPLICATIONS OF THE ASSESSEE WERE ALLOWED, EARLIER ORDERS WERE RECALLED AND APPEALS WERE FIXED FOR HEARING ON MERITS. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE FINDINGS OF AUTHORITIES BEL OW. THE APPEALS ARE DECIDED AS UNDER. ITA 153/2012 3. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS), SHIMLA DATED 14.11.2 011 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE ADDITIO N OF RS. 4,83,761/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICE R THAT AS PER TDS CERTIFICATE ATTACHED BY THE ASSESSEE WIT H THE RETURN OF INCOME, THE TOTAL RECEIPTS WERE TO THE TU NE OF RS. 1,51,43,725/- WHEREAS THE ASSESSEE HAD SHOWN GROSS RECEIPTS OF RS. 1,46,59,964/- ONLY. THUS, TH ERE WAS A DIFFERENCE OF RS. 4,83,761/- WHICH THE ASSESS EE WAS ASKED TO RECONCILE. IT WAS EXPLAINED BY THE ASSESSEE THAT THE DIFFERENCE WAS BECAUSE OF THE FAC T THAT ASSESSEE HAD NOT RECEIVED THE SAID PAYMENT DUE TO S OME DISPUTE WITH THE CONCERNED DEPARTMENT. HOWEVER, TH E ASSESSING OFFICER WAS NOT SATISFIED WITH THE SAID EXPLANATION AS THE ASSESSEE WAS FOUND TO BE MAINTAI NING HIS ACCOUNTS ON MERCANTILE SYSTEM OF ACCOUNTING AND HAD ALSO CLAIMED THE BENEFIT OF TDS ON THE TOTAL PAYMENTS AS PER TDS CERTIFICATE AND ACCORDINGLY, MA DE THE ABOVE ADDITION. 4. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT ASSESSEE IS A CIVIL CONTRACTOR AND THE ABOVE 3 AMOUNT WAS NOT SHOWN BECAUSE IT WAS NOT RECEIVED BY THE ASSESSEE. THE LD. CIT(APPEALS), HOWEVER, DISMI SSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 3 .3 OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER : 3.3 THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED WITH REFERENCE TO THE FACTS OF THE CASE. IT IS SEEN THAT THE APPELLANT WAS UNDISPUTEDLY FOLLOWING THE MERCANTILE SY STEM OF ACCOUNTING. HENCE HE WAS UNDER AN OBLIGATION TO SHO W HIS INCOME ON ACCRUAL BASIS. MOREOVER, HE HAS CLAIMED T HE BENEFIT OF TAX DEDUCTED AT SOURCE AS PER THE TDS CERTIFICATE I SSUED BY THE CONCERNED DEPARTMENT AND HAD NOT RESTRICTED HIS CLA IM OF TDS TO THE EXTENT OF PAYMENTS ACTUALLY RECEIVED BY HIM. THE A PPELLANT HAS FAILED DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS TO ESTABLISH AS TO HOW THE SAID PAYMENTS WERE DISPUTED AND HOW HE WAS JUSTIFIED IN NOT OFFER ING THE SAME FOR THE PURPOSES OF LEVY OF INCOME-TAX. EVEN IF THE SAID PAYMENTS WERE ARGUABLY UNDER DISPUTE, THE CORRECT C OURSE WOULD HAVE BEEN TO OFFER THE ENTIRE PAYMENTS MENTIO NED IN THE TDS CERTIFICATE FOR TAXATION AND TO WRITE OFF THE B AD DEBTS, IF ANY, IN THE SUBSEQUENT YEAR. THE APPELLANT SHOULD N OT POSSIBLY HAVE WITHHELD A CERTAIN PORTION OF HIS RECEIPTS FRO M TAXABLE INCOME AT HIS OWN SWEET WILL. THEREFORE, THE ID. A. O. IS FULLY JUSTIFIED IN BRINGING THE BALANCE PAYMENT OF RS.4,83 ,761/- AS PER THE TDS CERTIFICATE TO TAX IN THE YEAR UNDER CO NSIDERATION. THERE IS NO GROUND FOR INTERFERING WITH THE SAID AC TION OF THE ID. A.O. IN RESULT, THE APPEAL IS DISMISSED. 5. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE FACTS AS NOTED ABOVE ARE NOT IN DISPUTE THAT ASSESSEE FAILED TO RECONCILE THE DIFFERENCE BETWEEN THE AMOUNT MENTION ED IN THE TDS CERTIFICATE AND SHOWN IN THE BOOKS OF 4 ACCOUNT. THE ASSESSEE HAS UNDER-STATED THE GROSS RECEIPTS WITHOUT ANY JUSTIFICATION. ADMITTEDLY, TH E ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG, THEREFORE, INCOME SHOULD BE CORRECTLY SHOWN ON ACCR UAL BASIS AND HAD ALSO CLAIMED THE BENEFIT OF TDS ON TH E TOTAL PAYMENTS AS PER TDS CERTIFICATE. THEREFORE, ASSESSEE DELIBERATELY WITHHELD THE CORRECT INFORMAT ION OF TOTAL RECEIPTS FROM THE REVENUE DEPARTMENT BY DISCLOSING LESSER RECEIPTS IN THE BOOKS OF ACCOUNT. MERELY BECAUSE ASSESSEE HAS NOT RECEIVED THE AMOUNT IN QUESTION IS NO GROUND TO SHOW LESSER RECEIPTS. THE ASSESSEE HAS FAILED TO ESTABLISH AS TO HOW THE SAID PAYMENTS WERE DISPUTED EVEN BEFORE THE AUTHORITIES BELOW. IN THE ABSENCE OF ANY EVIDENCE ON RECORD, AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE ABOV E ADDITION. THE APPEAL OF THE ASSESSEE HAS, THUS, NO MERIT. SAME IS, ACCORDINGLY, DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ITA 154/2012 7. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS) SHIMLA DATED 24.11.20 11 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT. THE FACTS ARE SAME AS HAVE BEEN CONSIDERED IN ITA 153/2012. THE ASSESSING OFFICER LEVIED THE PENALTY ON 5 THE ADDITION MADE OF RS. 4,83,761/- ON WHICH WE HAV E DISMISSED THE QUANTUM APPEAL. 7(I) THE ASSESSEE DID NOT MAKE ANY COMPLIANCE TO TH E SHOW CAUSE NOTICE ON THE PENALTY MATTER AND MERELY CONTENDED BEFORE THE ASSESSING OFFICER THAT HIS APP EAL IS PENDING BEFORE LD. CIT(APPEALS) ON QUANTUM. SIN CE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE AND NO EXPLANATION WAS FILED EVEN AT THE PENALTY PROCEEDINGS, THEREFORE, ASSESSING OFFICER CONCLUDED THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME TO THE TUNE OF RS. 4,83,761/- AND LEVIED THE PENALT Y UNDER SECTION 271(1)(C) OF THE ACT. 8. THE ASSESSEE MERELY CONTENDED BEFORE LD. CIT(APPEALS) THAT HE HAD FURNISHED ALL THE PARTICUL ARS OF INCOME THEREFORE, HE CANNOT BE LIABLE FOR PENALTY. HE HAS RELIED UPON DECISION OF HON'BLE SUPREME COURT I N THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. 322 IT R 158. THE LD. CIT(APPEALS) HOWEVER, CONFIRMED THE L EVY OF THE PENALTY. THE LD. CIT(APPEALS) NOTED THAT HA D THE ASSESSMENT NOT BEEN COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, THE ABOVE INCOME MIGHT HAVE ESCAPED ASSESSMENT TO THIS EXTENT. THEREFORE, ASSE SSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. TH E LD. CIT(APPEALS) FOUND THAT THE FACTS IN THE CASE OF RE LIANCE PETROPRODUCTS PVT. LTD. (SUPRA) ARE DISTINGUISHABLE BECAUSE IN THE CASE OF ASSESSEE, THERE IS CLEAR AND STRAIGHT AWAY FILING OF INACCURATE PARTICULARS OF I NCOME. 6 THE PENALTY WAS UPHELD AND APPEAL OF THE ASSESSEE W AS DISMISSED. 9. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THIS APPEAL OF THE ASSESSEE AS WELL. THE LD. COUNSEL FOR THE ASSESSEE MERELY CONTENDED THAT ASSE SSEE FURNISHED COMPLETE PARTICULARS OF INCOME IN THE RET URN OF INCOME AND HAD ALSO FILED THE TDS CERTIFICATE ALONGWITH THE RETURN OF INCOME. HE HAS RELIED UPON DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA). THE LD. DR, HOWEVER, RELIED UPON DECISION OF HON'BLE DELHI HIGH COURT IN THE CIT VS ZOOM COMMUNICATION PVT. LTD. 32 7 ITR 510 IN WHICH IT WAS HELD AS UNDER : HELD, THAT ADMITTEDLY, IN VIEW OF THE PROVISIONS CONTAINED IN SECTION 40(A)(II) OF THE ACT, THE AMOU NT OF INCOME-TAX COULD NOT HAVE BEEN CLAIMED AS A DEDUCTI ON WHILE COMPUTING INCOME OF THE ASSESSEE. AS REGARDS THE AMOUNT CLAIMED ON ACCOUNT OF UNUSABLE AND DISCARDED ASSETS, THE TRIBUNAL, WAS ENTIRELY INCORRECT IN TAK ING THE VIEW THAT THE DEDUCTION CLAIMED BY THE ASSESSEE WAS ADMISSIBLE TO IT UNDER SECTION 32(L)(III). CLAUSE ( I) OF SUB- SECTION (1) OF SECTION 32 RELATES TO ASSETS OF AN UNDERTAKING ENGAGED IN GENERATION AND/OR DISTRIBUTI ON OF POWER. ADMITTEDLY, THE ASSESSEE-COMPANY WAS NOT ENGAGED IN GENERATION AND FOR DISTRIBUTION OF POWER , DURING THE RELEVANT YEAR. THUS, THE PROVISIONS OF C LAUSE (I) OF SUB-SECTION (1) OF SECTION 32 WOULD NOT APPL Y IN RESPECT OF THE ASSETS CLAIMED TO HAVE BECOME UNUSABL E AND WRITTEN OFF. THEREFORE, THE ASSESSEE HAD NO JUSTIFICA TION TO CLAIM THIS AMOUNT OF RS. 13,24,539/- AS A REVENUE EXPENDITURE. IN FACT, THE ASSESSEE DID NOT CLAIM, EIT HER BEFORE THE ASSESSING OFFICER OR BEFORE THE COMMISSI ONER (APPEALS) THAT SUCH A DEDUCTION WAS PERMISSIBLE UNDER SECTION 32(L)(III). IT WAS ALSO NOT THE CASE OF THE AS SESSEE THAT IT WAS UNDER A BONA FIDE BELIEF THAT THESE TWO AMOUNTS COULD BE CLAIMED AS REVENUE EXPENDITURE. THE ASSESSEE WAS A COMPANY WHICH MUST BE HAVING PROFESSIONAL ASSISTANCE IN COMPUTATION OF ITS INCOME , AND ITS ACCOUNTS WERE COMPULSORILY SUBJECTED TO AUDIT. THE TRIBUNAL ERRED IN LAW IN DELETING THE PENALTY IN RESPEC T OF 7 THE AMOUNT OF RS. 1 LAKH CLAIMED AS DEDUCTION ON ACC OUNT OF PAYMENT OF INCOME-TAX AND THE AMOUNT OF RS. 13,24,539 DEBITED UNDER THE HEAD 'EQUIPMENT WRITTEN OFF', IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. 10. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES, IT IS CLEAR THAT THE AS SESSEE DELIBERATELY FURNISHED INACCURATE PARTICULARS OF IN COME TO THE EXTENT OF RS. 4,83,761/-. THE ASSESSEE FAIL ED TO RECONCILE THE DIFFERENCE OF THE ABOVE AMOUNT AS PER TDS CERTIFICATE AND THE AMOUNT MENTIONED IN THE BOOKS O F ACCOUNT. THE ASSESSEE IS MAINTAINING BOOKS OF ACCO UNT ON MERCANTILE BASIS OF ACCOUNTING AND HAD ALSO CLAI MED BENEFIT OF TDS ON THE TOTAL PAYMENT AS PER TDS CERTIFICATE. THEREFORE, HAD THE ASSESSMENT NOT BEE N COMPLETED UNDER SECTION 143(3), THE ABOVE AMOUNT WOULD HAVE ESCAPED THE ASSESSMENT FOR THE PURPOSE O F TAXATION. THE ASSESSEE WOULD NOT HAVE DISCLOSED TH E ABOVE AMOUNT FOR THE PURPOSE OF TAXATION WITHOUT AN Y JUST CAUSE. MERELY BECAUSE THE AMOUNT IS NOT RECEI VED BY THE ASSESSEE WHEN FOLLOWING MERCANTILE SYSTEM OF ACCOUNT, IS NO GROUND TO DISCLOSE LESSER RECEIPTS I N THE BOOKS OF ACCOUNT. SINCE THE CASE OF THE ASSESSEE WA S SELECTED FOR SCRUTINY ASSESSMENT, HENCE, ONLY ON TH IS REASON THE FACTS HAVE COME TO THE KNOWLEDGE OF THE REVENUE AUTHORITIES THAT ASSESSEE HAS WITHHELD THE AMOUNT IN QUESTION FOR THE PURPOSE OF TAXATION. THEREFORE, DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ZOOM COMMUNICATION PVT. LTD. (SUPRA) 8 SQUARELY APPLIES TO THE FACTS OF THE CASE. IN THIS JUDGEMENT, HON'BLE DELHI HIGH COURT HAS CONSIDERED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA). THE ASSE SSEE HAS, THUS, FAILED TO EXPLAIN ANY REASON FOR SHOWING LESSER RECEIPTS AND NO EXPLANATION HAVE BEEN FILED BEFORE AUTHORITIES BELOW AS TO WHY THE PENALTY BE NOT IMPO SED IN THE MATTER. THIS ITSELF IS SUFFICIENT TO LEVY P ENALTY AGAINST THE ASSESSEE. IT IS, THEREFORE, A CLEAR CA SE OF FILING OF INACCURATE PARTICULARS OF INCOME, THEREFO RE, PENALTY WAS RIGHTLY IMPOSED BY THE AUTHORITIES BELO W. THERE IS NO MERIT IN THIS APPEAL OF THE ASSESSEE AS WELL. THE APPEAL OF THE ASSESSEE IS, ACCORDINGLY, DISMISS ED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. 12. AS A RESULT, BOTH THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH DECEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD