DCIT, Mohali V. M/s Greater Mohali Area Development Authority, Mohali

ITA 194/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90148 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Assessee Lawyers: RAMESH TREHAN
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 193 & 194/CHD/2015 ASSESSMENT YEAR: 2008-09, 2009-10 DCIT, VS. GREATER MOHALI AREA CIRCLE 6(1) DEVELOPMENT AUTHORITY MOHALI PUDA BHAWAN SECTOR- 82 MOHALI PAN NO. AAALG0872G (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. JYOTI KUMARI RESPONDENT BY : SH. RAMESH TREHAN DATE OF HEARING : 18/05/2015 DATE OF PRONOUNCEMENT : 21/05/2015 ORDER PER T.R.SOOD, A.M. THE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER DATED 14/12/2014 PASSED BY THE CIT(A)-2, CHANDIGARH . ITA NO. 193/CHD/2015 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS WHICH ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOU T APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE PENALTY AMOUNTING TO RS. 6,95 ,25,000/- WHICH WAS LEVIED BY THE A.O. BY HOLDING THAT THE ISSUE INVOLVED IS DEBA TABLE WHEREAS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS CLEAR THAT THERE AR E AND COULD BE NO TWO POSSIBLE VIEWS/OPINIONS REGARDING THE ADMISSIBILITY OF RS. 1 5,00,00,000/- AND ACCORDINGLY IT WAS A CRYSTAL CLEAR CASE OF FURNISHING INACCURATE P ARTICULARS BY THE ASSESSEE IN ORDER TO CONCEAL ITS INCOME AND EVADE TAXES. 2 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG THE ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE SUM OF RS. 15 C RORES HAS BEEN CONTRIBUTED BY THE ASSESSEE TOWARDS COST OF LAND ACQUISITION TO BE CONTRIBUTED FOR DEVELOPMENT OF INTERNATIONAL AIRPORT AT MOHALI. AO NOTICED THAT THIS EXPENDITURE IS NOT FOR THE PURPOSE OF BUSINESS AND THEREFORE DISALLOWED THIS AMOUNT. HE ALSO INITIATED PENALTY UNDER SECTION 271 (1)(C). THIS DISALLOWANCE HAS BEEN CONFIRMED BY THE TRIBUNAL. 4. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY DETAILED WRITTEN SUBMISSIONS WERE FILED WHICH HAS BEEN EXTRACTED BY THE AO AT PARA 8 OF HIS PENALTY ORDER. THE AO WAS NOT SATISFIED AND ULTIMAT ELY LEVIED THE PENALTY UNDER SECTION 271(1)(C) @ 150% AMOUNTING TO RS. 6,95,25,0 00/-. 5. ON APPEAL IT WAS SUBMITTED THAT TRIBUNAL IN CASE OF M/S PUNJAB URBAN PLANNING & DEVELOPMENT AUTHORITY, MOHALI VS. THE AC IT, MOHALI IN ITA NO. 149/CHD/2013 HAS DELETED THE PENALTY ON SIMILAR FAC TS. THEREFORE LD. CIT FOLLOWED THAT ORDER AND DELETED THE PENALTY. 6. BOTH PARTIES WERE HEARD. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFULL Y WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE LD. CIT VIDE PARA 5 WHICH IS AS UNDER: 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. COU NSEL. HONBLE ITAT, CHANDIGARH HAS CANCELLED THE PENALTY LEVIED ON IDEN TICAL ISSUE IN THE CASE OF PUDA IN A.Y. 2008-09 (SUPRA). HONBLE ITAT, CHANDIG ARH HAS HELD IN PARA 55 AND 56 OF THIS ORDER AS UNDER: 55. THE ASSESSEE IN PRESENT CASE HAVING PAID FOR T HE ESTABLISHMENT OF INTERNATIONAL AIRPORT AT MOHALI WAS UNDER THE BONAF IDE BELIEF THAT THE EXPENDITURE IS DULY ALLOWABLE AS REVENUE EXPENDITUR E AND SAME WAS SO CLAIMED IN THE PROFIT & LOSS ACCOUNT. THE SAID EXPE NDITURE HAS BEEN HELD BY THE TRIBUNAL NOT TO HAVE BEEN INCURRED FOR THE P URPOSE OF BUSINESS. IT HAS ALSO BEEN HELD BY THE TRIBUNAL THAT THE EXPENDI TURE IS IN NATURE OF CAPITAL EXPENDITURE AND THEREFORE, THE SAME IS NOT ALLOWABLE. MERE DISALLOWANCE OF EXPENDITURE IN THE HANDS OF ASSESSE E DOES NOT ESTABLISH THE CHARGE OF CONCEALMENT IN THE HANDS OF ASSESSE. VARIOUS COURTS HAVE TIME AND AGAIN LAID DOWN THE PRINCIPLE THAT WHERE I TS ASSESSEE HAS BONAFIDE EXPLANATION OF NON-EXCLUSION OF RECEIPTS A S ITS INCOME OR FOR CLAIMING PARTICULAR ITEM OF EXPENDITURE AS DEDUCTIO N, EVEN WHERE CLAIM OF ASSESSEE IS REJECTED, NO PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME COUL D BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE HAVING D ECLARED COMPLETE FACTS WITH REGARD TO EXPENDITURE OF RS. 225 CR AND THE CLAIM OF THE ASSESSEE BEING BENAFIDE, THOUGH NOT ALLOWED AS EXPE NDITURE IN THE HANDS OF ASSESSEE, DOES NOT JUSTIFY LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, MUCH LESS PENALTY @150% OF THE TAX SOUGHT TO B E EVADED. 3 56. FURTHER, IN THE TOTALITY OF THE FACTS AND FOLLO WING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT AND THE VARIOUS OTHER HIGH COURTS IN SERIES OF THE DECISIONS, WE HOLD THAT IN VIEW OF THE FINDI NGS OF THE TRIBUNAL IN ASSESSEES OWN CASE, WHEREIN THE ADDITION IN THE HA NDS OF THE ASSESSEE HAS BEEN MADE ON TWO ACCOUNTS I.E., THE EXPENDITURE HAVING BEEN INCURRED FOR THE PURPOSE OF BUSINESS BEING NOT ALLO WABLE. FURTHER FUNDING OF THE TRIBUNAL IN ASSESSEES CASE IS THAT THE EXPE NDITURE IN ANY CASE IS IN THE NATURE OF CAPITAL EXPENDITURE AND THEREFORE, TH E SAME WAS NOT ALLOWABLE. THE ISSUE BEING DEBATABLE DOES NOT WARRA NT LEVY OF PENALTY FOR CONCEALMENT UNDER SECTION 271(1)(C) OF THE ACT. 5.1 BY RESPECTFULLY FOLLOWING THE DECISION OF HONB LE ITAT, CHANDIGARH (SUPRA), THE PENALTY LEVIED IS CANCELLED IN THE CASE OF THE APPELLANT. GROUNDS OF APPEAL TAKEN BY THE APPELLANT ARE ALLOWED. IN OUR OPINION LD. CIT HAS CORRECTLY DELETED THE PE NALTY BY FOLLOWING ORDER OF TRIBUNAL IN CASE OF M/S PUNJAB URBAN PLANNING & DEV ELOPMENT AUTHORITY, MOHALI VS. THE ACIT, MOHALI (SUPRA) THEREFORE WE UPHOLD TH E ORDER OF LD. CIT(A). 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ITA NO. 194/CHD/2015 9. THE FACTS AND ISSUES RAISED IN THIS APPEAL ARE I DENTICAL TO THE REVENUE APPEAL FOR ASSESSMENT YEAR 2008-09 IN ITA NO. 193/C HD/2015 WHICH WE HAVE ADJUDICATED IN ABOVE NOTED PARA, FOLLOWING THAT ORD ER WE DECIDE ISSUES RAISED IN THIS APPEAL ALSO AGAINST THE REVENUE. 10. IN THE RESULT BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/05/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21/05/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR