ACIT, Range-I, V. Kraft Foil Printers,

ITA 1538/DEL/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2243 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-12-2009
• Assessment Year: 1994-1995
• Appeal Filed On: 02-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: VIRENDRA TALWAR
• Keywords: Gift

Judgement Text

I.T.A. NO. 1538/DEL/2006 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH G BEFORE SHRI DEEPAK R. SHAH, ACCOUTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO.1538 /DEL/2006 (ASSESSMENT YEAR 1994-95) ACIT, RANGE I, VS. M/S. KRAFT FOIL PRINTERS, FARIDABAD 20/6, MATHURA ROAD, FARIDABAD-121006 (APPELLANTS) (RESPONDENTS) APPELLANT BY: SHRI KISHORE B, SR. DR RESPONDENT BY: SHRI VIRENDRA TALWAR, CA PAN / GIR NO. N.A. ORDER PER GEORGE MATHAN, JM: 1. THIS APPEAL BY THE REVENUE HAS BEEN PREFERRED AG AINST THE ORDER OF LD. CIT(A) FARIDABAD IN APPEAL NO.74/2005-06 DATED 16.02.2006 FOR THE ASSESSMENT YEAR 1994-95. SHRI KISHROE B SR. DR REPRESENTED FO R THE REVENUE AND SHRI VIRENDRA TALWAR, CA REPRESENTE D FOR THE ASSESSEE. 2. IT WAS THE SUBMISSION BY THE LD. D.R. THAT THE A SSESSEE IS A PARTNERSHIP FIRM, WHICH HAD FILED ITS RETURN O F I.T.A. NO. 1538/DEL/2006 2/5 INCOME DECLARING AN INCOME OF RS.24,000/-. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD RECEIVED AN INCOME OF RS.7,67,305/- AND HAD CLAIMED EXPENSES OF RS.6,24,239/-. IT WAS THE SUBMISSIONS THAT THE A.O . HAD NOT ALLOWED THE EXPENSES AS CLAIMED. IT WAS THE SUBMISSION THAT IN APPEAL, THE CIT(A) HAD CONFIRMED THE ADDITION ALSO. HERE, IT WAS THE SUBMISSION BY THE LD. A.R. ON BEHALF OF THE ASSESSEE THAT IN APPEAL B EFORE THE TRIBUNAL, ITAT HAD VIDE ITS ORDER IN I.T.A. NO. 5007/DEL/2003 DATED 16.07.2009 HAD GRANTED THE ASSESSEE RELIEF OF 50% OF THE ADDITION. IT WAS THE FURTHER SUBMISSION THAT NO FURTHER APPEAL HAS BEEN PREFERRE D BY THE ASSESSEE AND THE REVENUE. IT WAS THE FURTHER SUBMISSION BY THE LD. D.R. THAT THE A.O. HAD LEVIED PENALTY IN RESPECT OF DISALLOWANCE OF THE EXPENDITU RE. IT WAS THE SUBMISSION THAT THE CIT(A) HAD DELETED THE PENALTY ON THE GROUND THAT FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, UNDER IDENTICAL CIRCUMSTANCES, THE PENALTY HAD BEEN DELETED. ON BE ING QUERIED BY THE BENCH AS TO WHAT HAD HAPPENED TO THE ORDER OF CIT(A) DELETING THE PENALTY FOR THE ASSESS MENT YEAR 1993-94 IT WAS SUBMITTED BY THE LD. A.R. THAT THE REVENUE HAD NOT FILED ANY FURTHER APPEAL AGAINST TH E ORDER OF LD. CIT(A) FOR THE ASSESSMENT YEAR 1993-94 . I.T.A. NO. 1538/DEL/2006 3/5 IT WAS THE FURTHER SUBMISSION BY THE LD. A.R. THAT THE PENALTY HAVING BEEN DELETED FOR THE ASSESSMENT YEAR 1993-94 AND NO APPEAL HAVING BEEN FILED AGAINST THI S ORDER BY THE REVENUE AND THE FACT FOR THE CURRENT ASSESSMENT YEAR BEING IDENTICAL, THE PENALTY AS CANCELLED BY THE CIT(A) WAS LIABLE TO BE UPHELD. I T WAS FURTHER SUBMISSION THAT EVEN ON MERITS, THE DISALLO WANCE AS MADE BY THE A.O. HAD BEEN REDUCED BY 50% AND THE DISALLOWANCE WAS AN ESTIMATE DISALLOWANCE AND NO PENALTY WAS LEVIABLE ON THIS COUNT ALSO. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE PERUSED THE ORDER OF THIS TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 1994-95 IN I.T.A. NO. 5007/DEL/2003 DATED 16.07.2009. IT IS NOTICED THAT AS THE ASSESSEE WAS UNABLE TO PRODUCE EVIDENCE TO SUBSTANTIATE THE INCURRING OF EXPENDITURE, THE TRIB UNAL HAD BY FOLLOWING THE DECISION IN THE CASE OF RAKKA LABORATORIES, WHICH IS A SISTER CONCERN OF THE ASSE SSEE, ESTIMATED THE DISALLOWANCE @ 50% BY APPLYING THE BE ST JUDGEMENT. IT IS FURTHER NOTICED THAT THE DETAILS OF EXPENDITURE CLAIMED BY THE ASSESSEE IS IN THE NATUR E OF CONVEYANCE, PRINTING & STATIONERY AND GIFTS TO DEPOSITORS AS HAS BEEN EXTRACTED IN THE ORDER OF LD . CIT(A). IT IS ALSO NOTICED THAT THE ASSESSEE WAS I N THE I.T.A. NO. 1538/DEL/2006 4/5 BUSINESS OF CANVASSING FIXED DEPOSITS FOR M/S. NUCE M LTD. AND M/S. NUFARM CHEMICAL AND CONSEQUENTLY HAD RECEIVED COMMISSION TO AN EXTENT OF RS.7,67,305/-. OBVIOUSLY, WHEN FDRS ARE BEING SOLICITED ON BEHALF OF THE COMPANY, GIFTS ARE GIVEN AND ALSO FOR HE PURPOS E OF CANVASSING OF FDRS, CONVEYANCE EXPENSES WOULD BE INCURRED, PRINTING AND STATIONERY IS A NORMAL EXPENDITURE. IN THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT THERE HAS BEEN CONCEALMENT OF ANY INCOME BY TH E ASSESSEE. EVEN OTHERWISE IT IS NOTICED THAT THE CI T(A) HAD FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR DELETED THE PENALTY AS LEVIED AND THAT ORDER OF CIT (A) HAS BECOME FINAL IN SO FAR AS THE REVENUE HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF LD. CIT(A ) FOR THE ASSESSMENT YEAR 1993-94. AS IT IS NOTICED THAT THE FACT ON THE BASIS OF WHICH THE PENALTY HAS BEEN CANCELLED BY THE CIT(A) FOR THE ASSESSMENT YEAR 199 3- 94, IS IDENTICAL TO THE FACTS AS ARE FOR THE RELEVA NT ASSESSMENT YEAR AND AS IT IS NOTICED THAT THE ORDER OF LD. CIT(A) FOR THE ASSESSMENT YEAR 1993-94 HAS BEEN ACCEPTED BY THE REVENUE, WE ARE OF THE VIEW THAT TH E PENALTY AS CANCELLED BY THE CIT(A) ON THE BASIS OF IDENTICAL FACTS IS LIABLE TO BE UPHELD AND WE DO SO . IN THESE CIRCUMSTANCES, AS NO PERVERSITY IN THE ORDER OF LD. I.T.A. NO. 1538/DEL/2006 5/5 CIT(A) HAS BEEN POINTED OUT AND AS IT IS NOTICED TH AT THE FINDINGS OF LD. CIT(A) IS ON THE RIGHT FOOTING, WE ARE OF THE VIEW THAT THE FINDINGS OF LD. CIT(A) ON THE ISS UE IS LIABLE TO BE UPHELD AND WE DO SO. IN THESE CIRCUMSTANCES, APPEAL OF THE REVENUE IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 5. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 03 RD DEC., 2009. SD./- SD./- (DEEPAK R. SHAH) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:04 TH DEC., 2009 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI