ITO, New Delhi V. M/s. NSR Farms Private Ltd., Delhi

ITA 1737/DEL/2014

• Counselvise Citation: 173720114 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 05-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ANJULA JAIN
• Keywords: Depreciation
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-1 NEW DELHI) BEFORE SHRI I.C. SUDHIR: HONBLE JUDICIAL MEMBER ITA NO. 1737/DEL/2014 ASSESSMENT YEAR: 2009-10 INCOME-TAX OFFICER, VS. NSR FARMS PVT. LTD., WARD-13(1), THE PRINCIPAL OFFICER, NEW DELHI. 606-CHIRANJIV TOWER, 61-NEHRU PLACE, DELHI. (PAN: AAACN3068J) (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SHRI GAUTAM JAIN & PIYUSH KUMAR KAMAL, ADV. DEPARTMENT BY: DR. ANJULA JAIN, SR. DR DATE OF HEARING : 05.08.2015 DATE OF PRONOUNCEMENT: 02:11.2015 ORDER THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER O N THE SOLE GROUND THAT THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE PENALTY OF RS.4,16,372 BY NOT APPRECIATING THE FACT THAT THE A SSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. 2 3. IN SUPPORT OF THE GROUND, THE LEARNED SENIOR DR HAS BASICALLY PLACED RELIANCE ON THE PENALTY ORDER. THE LEARNED AR ON TH E OTHER HAND TRIED TO JUSTIFY THE FIRST APPELLATE ORDER WITH THE SUBMISSI ON THAT THE ACTION OF THE LEARNED CIT(APPEALS) IN DELETING THE PENALTY IS FUL LY SUPPORTED BY SEVERAL DECISIONS INCLUDING THE FOLLOWING: I) CIT VS. RELIANCE PETRO-PRODUCT (P) LTD. 322 I TR 158 (S.C); II) CIT VS. HONEYWELL DAC INDIA LTD. 292 ITR 168 (DEL.); III) CIT VS. BRAHAMPUTRA CONSORTIUM LTD. 348 ITR 339; IV) CIT VS. KRISHNA MARUTI LTD. 330 ITR 547 (DEL .) & V ) PRICE WATER HOUSE COOPERS (P) LTD. VS. CIT 3 48 ITR 306 (S.C). 4. I FIND THAT AGAINST THE RETURNED INCOME OF RS.68 ,270, THE ASSESSMENT UNDER SEC. 143(3) WAS FRAMED AT RS.14,15,759. THE A SSESSEE FIRM IS ENGAGED IN THE BUSINESS OF SALE, PURCHASE AND DEVELOPMENT O F REAL ESTATE PROPERTIES, INVESTMENT AND AGRICULTURAL PRODUCE. DURING THE ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE WAS HAV ING INCOME FROM SALE OF AGRICULTURAL PRODUCE, INTEREST RECEIVED FROM THE BA NKS AND OTHERS TOTALING TO RS.16,86,435. AGAINST THIS INCOME, THE ASSESSEE CLA IMED EXPENDITURE OF RS.14,79,260 UNDER THE HEAD ADMINISTRATIVE EXPENSE S, PERSONNEL, FINANCIAL EXPENSES AND DEPRECIATION. THE ASSESSING OFFICER C ONSIDERED THE ABOVE INCOME AS PASSIVE INCOME AND ON THE GROUND OF EARLI ER YEARS ASSESSMENTS, HE 3 ALLOWED ONLY RS.85,475 TOWARDS EXPENSES ON AN ESTIM ATE BASIS. THE ASSESSING OFFICER HAS IMPOSED PENALTY UNDER SEC. 27 1(1)(C) OF THE ACT AT RS.4,16,372. THE LEARNED CIT(APPEALS) HAS DELETED T HE SAME ON THE BASIS THAT THERE WAS CLAIM OF VARIOUS EXPENSES IN THE PRO FIT AND LOSS ACCOUNT OF WHICH THE ASSESSING OFFICER HAS ALLOWED RS.1 LAC ON ESTIMATE BASIS, HENCE, PENALTY CANNOT BE LEVIED. I FIND THAT THE ASSESSEE HAD CLAIMED CERTAIN EXPENSES IN THE PROFIT AND LOSS ACCOUNT WHICH WERE ALLOWED BY THE ASSESSING OFFICER ONLY TO THE EXTENT OF RS.1 LAC FOLLOWING ID ENTICAL DISALLOWANCE MADE IN THE ASSESSMENT YEAR 2005-06, 2006-07, 2007-08 AN D 2008-09 FOR THE REASON THAT THE ASSESSING OFFICER WAS OF THE VIEW T HAT SINCE THE ASSESSEE HAS EARNED ONLY PASSIVE INCOME LIKE INTEREST AND DIVIDE ND DURING THE YEAR, NOT MUCH EXPENDITURE WOULD HAVE BEEN INVOLVED FOR EARNI NG OF SUCH INCOME. THUS, IT IS VERY MUCH CLEAR THAT THE DISALLOWANCE W AS MADE ON THE BASIS OF ESTIMATION AND PENALTY HAS BEEN LEVIED WITHOUT SPEC IFIC FINDING BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE A SSESSEE LEADING TO THE SAID DISALLOWANCE. BEING PENAL IN NATURE, THE PROVISIONS OF SEC. 271(1)(C) OF THE ACT CANNOT BE INVOKED IN ABSENCE OF POSITIVE EVIDEN CE AND FINDING BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE A SSESSEE. THE DECISIONS 4 RELIED UPON BY THE LEARNED AR SUPPORT THIS VIEW. I THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER AS THE LEA RNED CIT(APPEALS) HAS RIGHTLY DELETED THE PENALTY IN ABSENCE OF THE CLEAR FINDING BY THE ASSESSING OFFICER THAT THERE WAS CONCEALMENT OF PARTICULARS O F INCOME FOR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE A SSESSEE TOWARDS THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THE SAM E IS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 5. IN RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.11.2015 SD/- ( I.C. SUD HIR ) JUDICIAL MEMBER DATED: 02 /11/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 5 DATE DRAFT DICTATED ON COMPUTER 02.11.2015 DRAFT PLACED BEFORE AUTHOR 02.11.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 02 .11.201 5 KEPT FOR PRONOUNCEMENT ON 02.11.2015 FILE SENT TO THE BENCH CLERK 02.11.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.