ITO, CHENNAI V. M/s. Arvind Health Care Pvt. Ltd., CHENNAI

ITA 1929/CHNY/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96383 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 28-10-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 29-10-2012
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1929/MDS/2012 / ASSESSMENT YEAR : 2004-05 THE INCOME TAX OFFICER COMPANY WARD I(1) CHENNAI VS. M/S ARVIND HEALTH CARE PVT. LTD NO.24, CRESCENT PARK STREET T. NAGAR, CHENNAI 600 017 [PAN AADCA 9269 M ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI A.B KOLI, JCIT /RESPONDENT BY : SHRI A.S. SRIRAMAN, ADVOCATE / DATE OF HEARING : 28 - 10 - 2015 ! / DATE OF PRONOUNCEMENT : 13 - 11 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, CHEN NAI, DATED 9.7.2012 AND PERTAINS TO ASSESSMENT YEAR 2004-05. 2. SHRI A.B KOLI, LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT THE ASSESSEE CLAIMED AN AMOUNT OF ` 19,55,552/- BEING THE INTEREST EXPENSES. IN FACT, THE ASSESSEE FILED AN APPEAL B EFORE THE CIT(A), HOWEVER, THE SAME WAS WITHDRAWN BY THE ASSESSEE. SINCE THE APPEAL ITA NO.1929/12 :- 2 -: WAS WITHDRAWN, ACCORDING TO THE LD. DR, THERE WAS C ONCEALMENT OF INCOME OF THE ASSESSEE, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY LEVIED PENALTY U/S 271(1)(C) OF THE ACT. 3. ON THE CONTRARY, SHRI A.S. SRIRAMAN, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMED INTER EST EXPENDITURE OF ` 19,55,552/-. THE ASSESSEE ALSO FILED AN APPEAL A GAINST THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN THE A SSESSMENT ORDER. HOWEVER, THE ASSESSEE HAS NOT PROSECUTED THE APPEA L BEFORE THE CIT(A) AND THE SAME WAS WITHDRAWN. THE CIT(A) DISM ISSED THE APPEAL AS WITHDRAWN. THE LD. COUNSEL FURTHER SUBMI TTED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND INDEPENDENT, THEREFORE, MERELY BECAUSE THE ASSESSE E HAS WITHDRAWN THE APPEAL BEFORE THE CIT(A), THAT CANNOT BE A REAS ON TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSING OFFICER HAS TO INDEPENDENTLY ADJUDICATE THE MATTER AND FIND OUT WHETHER THERE WA S ANY CONCEALMENT OF INCOME OR THE ASSESSEE HAS FURNISHED ANY INACCU RATE PARTICULARS OF INCOME. IN THIS CASE, THE CIT(A) FOUND THAT EVEN I F THE INTEREST WAS NOT ACTUALLY PAID, THE SAME CAN BE CLAIMED AS EXPEN DITURE WHEN THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNT ING. THE LD. COUNSEL FURTHER SUBMITTED THAT IN FACT, THE INTERES T WAS PAID THROUGH BANKING CHANNEL. THE CIT(A), AFTER VERIFYING THE B ANK STATEMENT FOUND THAT THE FAILURE OF THE ASSESSEE TO PROVE TH E ACTUAL PAYMENT OF ITA NO.1929/12 :- 3 -: INTEREST IN THE ASSESSMENT PROCEEDINGS WOULD NOT AT TRACT LEVY OF PENALTY. ACCORDINGLY, HE DELETED THE PENALTY LEVIE D BY THE ASSESSING OFFICER BY PLACING RELIANCE ON THE JUDGMENT OF THE APEX COURT IN CIT VS RELIANCE PETROPRODUCTS PVT. LTD, 322 ITR 158. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY, THE ASSESSING OFFICER DISALLOWED A SUM OF ` 19,55,552/- BEING THE INTEREST EXPENSES CLAIMED BY THE ASSESSEE FOR LACK OF ADEQU ATE EVIDENCE. THE ASSESSEE IN FACT FILED APPEAL BEFORE THE CIT(A). H OWEVER, THE CIT(A) ALLOWED THE ASSESSEE TO WITHDRAW THE APPEAL. THE CIT(A), BEING THE FIRST APPELLATE AUTHORITY UNDER THE SCHEME OF THE I NCOME-TAX ACT, 1961, HAS POWERS CO-TERMINUS WITH THAT OF THE ASSES SING OFFICER. THE CIT(A) IS ALSO EMPOWERED TO ENHANCE THE ASSESSMENT BY INCLUDING THE INCOME WHICH WAS OTHERWISE OMITTED TO BE CONSIDERED BY THE ASSESSING OFFICER. WHEN SUCH A POWER WAS CONFERRED ON THE CIT(A), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS NO POWER TO ALLOW THE ASSESSEE TO WITHDRAW THE APPEAL. IN OTHER WORDS, WHEN THE APPEAL IS FILED, THE CIT(A) IS EXPECTED TO DISP OSE OF THE APPEAL ON MERIT. THE CIT(A) IS ALSO EXPECTED TO EXAMINE WHET HER THE ASSESSING OFFICER HAS OMITTED TO CONSIDER ANY PART OF THE INC OME WHICH IS OTHERWISE LIABLE FOR TAXATION UNDER THE INCOME-TAX ACT. IN THOSE CIRCUMSTANCES, THE WITHDRAWAL OF THE APPEAL BY THE ASSESSEE MAY NOT ITA NO.1929/12 :- 4 -: BE A RELEVANT FACTOR TO BE CONSIDERED IN THE LEVY O F PENALTY. IN THE CASE BEFORE US, THE ASSESSEE CLAIMS THE INTEREST P AYMENT AS REVENUE EXPENDITURE. THE CIT(A), AFTER CONSIDERING THE REL EVANT BANK STATEMENT, FOUND THAT THE PAYMENTS WERE MADE FROM T HE ACCOUNTS MAINTAINED BY THE ASSESSEE WITH ICICI BANK. THERE FORE, MERELY BECAUSE THE ASSESSEE FAILED TO PROVE THE ACTUAL PA YMENT OF INTEREST IN THE ASSESSMENT PROCEEDINGS THAT COULD NOT ATTRACT A NY PENALTY U/S 271(1)(C) OF THE ACT. IN VIEW OF THE ABOVE FACTUAL POSITION, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF HTE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 13 TH NOVEMBER, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF