M/s. K.L. Concast Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1567/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7341 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 18-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPIL
• Assessee Lawyers: ASHWANI KUMAR SH ADITYA KUIMAR; RAHUL CHAURASIA CAS
• Keywords: Depreciation; Additional depreciation
• Section: 271(1)(c); 143(3)

Judgement Text

1 ITA NO. 1567/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 1567/DEL/20 15 (A.Y 2009-10) K.L. CONCAST PVT. LTD. Z-18, NARAINA, LOHA MANDI NEW DELHI AAACK0329 B (APPELLANT) VS ACIT CIRCLE-5(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. ASHWANI KUMAR, SH. ADITYA KUIMAR & SH. RAHUL CHAURASIA, CAS RESPONDENT BY SMT. NAINA SOIN KAPIL, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 06/02/2015 PASSED BY CIT(A)-V, NEW DELHI FOR ASSESSMENT YEAR 2009-10. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- THAT THE ORDER DATED 06-02-2015 PASSED U/S 250 OF T HE INCOME- TAX ACT, 1961 BY THE LD COMMISSIONER OF INCOME-TAX (APPEALS) VIII, NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE AS MUCH AS HE WAS NOT JUSTIFIED TO PARTLY UPHOLD THE ACTION OF THE LD ASS ESSING OFFICER BY DIRECTING HIM TO COMPUTE THE PENALTY WITH REFERENCE TO THE ALLEGED CONCEALED INCOME OF RS. 15,76,767/- (COMPRISING OF RS 15,76,038/- DATE OF HEARING 07.01.2019 DATE OF PRONOUNCEMENT 15.01.2019 2 ITA NO. 1567/DEL/2015 BEING DISALLOWANCE U/S 40(A)(2)(B) OF THE INCOME-TA X ACT, 1961 AND RS 729/- ON ACCOUNT OF INTEREST PAID ON LATE DEPOSIT O F TDS WHICH DISALLOWANCES ARE NOT OF A NATURE AS TO SUGGEST EIT HER CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME AND AS NO SUCH PENALTY IS EXIGIBLE IN THE FACTS & CIRCUMSTANCES OF THE CASE. 3. ASSESSMENT IN THIS CASE WAS COMPLETED ON 26.12.2 011 U/S 143(3) AT TOTAL INCOME OF RS.5,03,13,520/- AS AGAINST THE RETURN IN COME OF RS 3,50,26,621/-. ADDITION WAS MADE OF RS. L,44,22,903/-ON VARIOUS HE ADS. FOLLOWING ADDITIONS WERE MADE AS UNDER. (1) ADDITION ON A/C OF COMMISSION PAID TO DIRECTOR S RS. 60,00,000/- (2) ADDITION ON A/C INTEREST DISALLOWED BEING EXCE SSIVE AND UNREASONABLE AS PER THE PROVISION OF SECTION 40A(2)(B) RS. 63,04,151/- (3) ADDITION ON A/C OF DISALLOWANCE OF DEPRECIATIO N RS.1,99,324/- (4) ADDITION ON A/C OF DISALLOWANCE OF ADDITIONAL DEPRECIATION RS.19,18,699/- (5) ADDITION ON A/C OF INTEREST PAID ON LATE DEPOS IT OF TDS RS. 729/- PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED BY ISSUE OF NOTICE U/S 271(1)(C) READ WITH SECTION 274 DATED 26.12.2011 FI XING THE CASE OF HEARING ON 31.01.2012. THE ASSESSEE FILED REPLY THAT PENALTY P ROCEEDINGS SHOULD BE KEPT IN ABEYANCE TILL THE DISPOSAL OF APPEAL FILED BY TH E ASSESSEE COMPANY. AS 3 ITA NO. 1567/DEL/2015 REGARDS THE ADDITIONS/DISALLOWANCES MADE BY THE ASS ESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO VIDE ORDER DATED 08.02.2013 DELETED THE ADDITION OF RS.8,64,000/- ON A/C OF SALARY AND BONUS AND CONFIRMED THE ADDITIONS OF RS. 1,44,22,903/-. A SHOW CAUSE NOTICE U/S 271(1)(C) DATED 24.02.2014 WAS ISSUED TO THE ASSESS EE. THE ASSESSING OFFICER PASSED PENALTY ORDER BY IMPOSING THE PENALTY OF RS. 49,03,000/- BY HOLING THAT THE ASSESSEE FURNISHED CONCEALED INCOME OR INA CCURATE PARTICULARS OF INCOME ON ACCOUNT OF COMMISSION PAID TO DIRECTORS, INTEREST DISALLOWANCE AS PER THE PROVISIONS OF SECTION 40A(2)(B), DISALLOWAN CE OF DEPRECIATION, DISALLOWANCE OF ADDITIONAL DEPRECIATION AND ON ACCO UNT OF INTEREST PAID ON LATE DEPOSIT TO TDS. 5. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. THE ASSESSEE FILED THE PRESENT APPEAL IN RESPECT OF THE PENALTY OF RS. 15,76,767/- COMPRISING DISALLOWANCE U/S 40A(2)(B) AND RS. 729/- ON ACCOUNT OF INTEREST PAID ON LATE DEPOSIT OF TDS. 6. THE LD. AR SUBMITTED THAT IN RESPECT OF COMMISSI ON PAID TO DIRECTORS, INTEREST DISALLOWANCE AS PER THE PROVISIONS OF SECT ION 40A(2)(B) AND ON ACCOUNT OF INTEREST PAID ON LATE DEPOSIT OF TDS, THE ADDITI ONS MADE IN THE ASSESSMENT ORDER DATED 26/11/2012 WERE NOT OF A NATURE WHICH C AN LEAD TO A CONCLUSION AS TO THE FURNISHING OF INACCURATE PARTICULARS OF I NCOME OR THAT OF CONCEALMENT OF INCOME SO AS TO INVITE PENAL ACTION U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961. THE CIT(A) WHILE DELETING THE PENALTY PARTLY , CONFIRMED THE PENALTY FOR DISALLOWANCE U/S 40A(2)(B) AND ON ACCOUNT FOR INTER EST PAID OF LATE DEPOSIT OF TDS WHICH IS NOT CONCEALMENT OR INACCURATE FURNISHI NG OF PARTICULARS OF INCOME. 7. THE LD. DR RELIED UPON THE PENALTY ORDER AND ORD ER OF THE CIT (A). 4 ITA NO. 1567/DEL/2015 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSING OFFICER HAS NOT MADE OUT ANY CASE AS TO WHICH LIMB OF THE SECTION 271(1)(C) HAS NOT BEEN COMPILED BY THE ASSESSEE. THERE IS NO SPECIFIC PROVISION AS TO CON CEALMENT OF INCOME OR INACCURATE FURNISHING OF PARTICULARS OF INCOME HAS BEEN SET OUT IN THE PENALTY ORDER. MERELY, ADDITION HAS BEEN MADE DOES NOT ATT RACT PENALTY. THEREFORE, IT WILL BE APPROPRIATE TO SET ASIDE THE ORDER OF THE C IT(A) IN RESPECT OF THE PENALTY CONFIRMED REGARDING DISALLOWANCE 40A (2)(B) AND LAT E PAYMENT OF INTEREST DEPOSITS ON TDS. THEREFORE, THE APPEAL OF THE ASSE SSEE IS ALLOWED. 9. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY, 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 15/01/2019 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 1567/DEL/2015 DATE OF DICTATION 14.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15 .01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 5 .01.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 5 .01.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 5 .01.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK