DCIT, Circle - 2, Kolkata, Kolkata V. M/s. Zigma Software Ltd., Kolkata

ITA 1570/KOL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5568 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 06-08-2010
• Court: TRIBUNAL
• Department Lawyers: O P AGARWAL
• Assessee Lawyers: J L RAMPURIA
• Keywords: Set aside
• Section: 271(1)(c); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA (BEFORE HONBLE SRI D.K.TYAGI, J.M . AND HONBLE SRI C.D.RAO, A.M) I.T.A. NO. 1570/KOL/2010 ASSESSMENT YEAR 2006-07 DCIT, CIRCLE-2, KOLKATA -VS- M/S ZIGMA SOFTWARE LTD. (PAN AAACZ 1503 A) (APPELLANT) (RESPONDENT) APPELLANT BY : SR I O.P.AGARWAL. RESPONDENT BY : SRI J.L.RAMPURIA. O R D E R PER SHRI C.D.RAO, A.M. THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT AGAIN ST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), KOLKATA DATE D 07.05.2010 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS A PPEAL IS REGARDING THE DELETION OF PENALTY LEVIED BY THE AO U /S 271(1)(C) OF THE INCOME TA X ACT. BRIEF FACTS OF THE CASE ARE THAT THE AO LEVIED PENALTY OF RS.14,09,006 BY OBSERVING THAT T HE AO BROUGHT ON RECORD GROSS SALE PROCEEDS OF DIFFERENT PRODUCES PER ACRE, REALIZATION AND VI SITED SEVERAL AGRO WEBSITES TO DETERMINE THE OPTIMUM YIELD OF PRODUCES PER UNIT AREA OF LAND. HE COULD SUCCESSFULLY ESTABLISH THAT THE ASSESSEE HAD DISCLOSED SALES REALIZATION IN EXCESS OF SUCH OPTIMUM YIELD AND CONSEQUENT SALE. THIS WAS A CLEAR ATTEMPT ON PART OF THE ASSESSEE TO INTRODUCE UNACCOUNTED MONEYS IN THE GARB OF AGRICULTURAL INCOME OR AS PART THEREOF. 3. REFERRING BACK TO THE CONTENTION OF THE A/R THAT THERE WAS ADHOCISM ON THE PART OF THE AO , IT IS DEFINITELY NOT DISPUTED THAT AN ELEMENT OF ESTIMATE WAS IMPERATIVE IN SUCH CIRCUMSTANCES. THE ISSUE BROUGHT ON RECORD BY THE AO CAN NOT BY WAY OF CLINICAL PRECISION AND YET FINDINGS WERE NOT BASED ON REMOTE PROBABILI TIES AS OPINED BY THE COMPANY A/R. ADMITTEDLY THERE HAS BEEN NO APPEAL IN THE CASE G IVING RISE TO THE MEANING THAT THE ASSESSEE IS NOT AGGRIEVED WITH THE FINDINGS OF THE AO. 4. WITH ABOVE FACTS ON RECORD, THERE IS NO SCOPE F OR FURTHER ARGUMENTS AND COUNTER AGREEMENTS, AS REQUESTED BY THE A/R. THE AO WA S SATISFIED WITH THE FINDINGS THAT THE ASSESSEE HAS CONCEALED A SUM OF RS.20,92,995 BY WAY OF IN TRODUCING UNDISCLOSED INCOME, AS DISCUSSED AND IMPOSED PENALTY @ 200% OF THE TAX SOUGHT TO BE EVADED. 5. ON APPEAL THE LEARNED C.I.T(A) AFTER TAKING INTO CONSIDERATION THE VARIOUS SUBMISSIONS BY PLACING RELIANCE ON VARIOUS DECISIONS DELETED TH E PENALTY BY OBSERVING AS UNDER : 2 REGARDING THE LD. DCITS OBSERVATION, ADMITTEDLY THERE HAS BEEN NO APPEAL IN THE CASE GIVING RISE TO THE MEANING THAT THE ASSESS EE IS NOT AGGRIEVED WITH TH4E FINDINGS OF THE AO, THE LD. A/R SUBMITTED THAT THE INCOME AS FINALLY ASSESSED AFTER RECTIFICATION WAS A NEGATIVE FIGURE AND SINCE THERE WAS NO TAX LIAB ILITY,THE APPELLANT DID NOT FIND IT WORTHWHILE TO LOSE HIS PEACE OF MIND IN & INCUR EX PENDITURE ON LITIGATION. HE FILED A COPY OF ORDER U /S 154 DATED 08.06.2009 WHICH SH OWS THE FINAL COMPUTATION AT A LOSS OF RS.19,29,527. I HAVE HEARD THE LD. A/R AND HAVE ALSO CONSIDERED HIS WRITTEN SUBMISSIONS. I HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER & I FIND THAT THE D.C.I.T HAS BASED HIS ACTION ON THE APPELLANT NOT GOING ON APPEAL IN THE QUANTUM CASE. HE HAS NOT PINPOINTED ANY INSTANCE OF MALAFIDES WHICH CAN PROVE THE CHARGE OF CONCEALMENT AGAINST THE APPELLANT. I, THEREFORE, FIND THE ARGUMENT IN THE CONTENTIONS OF THE LD. A/R THAT AN ADDITION MADE SIMPLY BY DISBELIEVING THE ASSESSEE CANNOT BY ITSE LF JUSTIFY IMPOSITION OF PENALTY U /S 271(1)( C) . ACCORDINGLY THE PENALTY OF RS.14,09 ,006/- IS DELETED. 6. AGGRIEVED BY THIS , NOW THE REVENUE IS IN APPEA L BEFORE US. AT THE TIME OF HEARING BEFORE US THE LEARNED D.R. ON BEHALF OF THE REVENU E HAS SUBMITTED THAT THE ACTION OF THE LEARNED CIT (APPEALS) IS NOT JUSTIFIED IN THE FACTS AND CI RCUMSTANCES OF THE CASE. IN SUPPORT OF THESE SUBMISSIONS HE RELIED ON THE CASE OF CIT VS RAMA NUJAM THAMPI AND ORS. 233 ITR 521 (KERALA). THEREFORE, HE REQUESTED TO SET ASIDE TH E ORDER OF THE C.I.T(A) AND RESTORE THAT OF THE AO. 7. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASS ESSEE APPEARING ON BEHALF OF THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE REVE NUE AUTHORITIES AND HE FURTHER CONTENDED THAT SINCE FINAL COMPUTATION AFTER PASSING THE ORDER U /S 154 DATED 8.6.2009 COMES TO A LOSS OF RS.19,29,527. THAT IS WHY THE ASSESSEE HAS NOT PREFERRED APPEAL BEFORE THE HIGHER AUTHORITIES. HE FURTHER RELIED ON THE ORDER OF THE LEARNED C.I. T(A) AND REQUESTED TO CONFIRM THE SAME. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAR EFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD , IT IS OBSERVED THAT THE ASSESSEES CONTEN TIONS FOR NOT PREFERRING THE APPEAL SEEMS TO BE CORRECT SINCE WHILE PASSING THE ORDER U /S 154 DATED 08.06.09 , THE AO ASSESSED THE INCOME AT LOSS OF RS.19,29,527 EVEN AFTER TAKING INTO CONSID ERATION OF THE AMOUNT OF RS.20,92,995 CONSIDERED AS INCOME FROM OTHER SOURCES. IT IS FU RTHER OBSERVED THAT THE INCOME OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR HAS BEEN CALCULATE D U /S 155 JB. THE CASE LAW RELIED ON BY THE LEARNED D.R. IS DISTINGUISHABLE ON THE FACTS APPLI CABLE TO THE PRESENT CASE. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED C.I.T.(A) W HO DELETED THE PENALTY BASED ON THE VARIOUS JUDICIAL PRONOUNCEMENTS. 9. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. 3 O RDER PRONOUNCED IN OPEN COURT ON 22.10.2010 SD/- SD/- (D.K.TYAGI) (C.D.RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22.10.2010 COPY TO :- 1. DCIT, CIRCLE-2, KOLKATA. 2. M/S ZIGMA SOFTWARE LTD., 21, HEMANT BASU SARANI, 4 TH FLOOR, R. NO. 408, KOLKATA. 3. C.I.T.(A), KOLKATA. 4. C.I.T., KOLKATA. 5. D.R., ITAT, KOLKATA. TRUE COPY BY ORDER BCD DY REGISTRAR I.T.AT., KOLKA TA