ITO, New Delhi V. M/s NewTech Estate & Industries (P) Ltd., New Delhi

ITA 2087/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6329 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 23-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Business income; Difference of opinion; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.O.P.KANT, ACCOUNTANT MEMBER I.T.A .NO.-2087/DE L/2011 (ASSESSMENT YEAR-2005- 06) ITO, WARD-13(2), C.R. BUILDING, NEW DELHI (APPELLANT) VS NEW TECH ESTATE & INDUSTRIES (P.) LTD., F-46, BHAGAT SINGH MARKET, NEW DELHI PAN-AAACN3933A (RESPONDENT) APPELLANT BY SH.P.DAM.KANUNJNA, SR. DR RESPONDENT BY NONE ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 25.01.2011 OF CIT(A)-XVI, NEW DE LHI PERTAINING TO 2005-06 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS WHEREIN TH E REVENUE ASSAILS THE QUASHING OF THE PENALTY OF RS.6,12,588/- DIRECTED B Y THE CIT(A): 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE PENALTY IMPOSED BY THE AO AND FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS BEEN ENGAGING ITSELF IN SYSTEMATIC AND CONTINUOUS ACTIVITY OF PURCHASES AND SALE OF PROPER TIES IN FURTHERANCE OF THE OBJECT IN ITS MEMORANDUM OF ASSOCIATION. BY TR EATING THE TRANSACTION AS CAPITAL GAINS INSTEAD OF BUSINESS INCOME, THE AS SESSEE HAS CONCEALED TRUE PARTICULARS OF ITS INCOME. 2. THAT THE LD.CIT(A HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE ITSELF HAS PRACTICALLY BEEN TREATING THE PROPERTIES AS STOCK-IN-TRADE IS FURTHER EVIDENT FROM THE FACT THAT IT HAS NOT BEEN FILING RETURNS OF WEALTH TAX, DESPITE THE FACT THAT VALUE OF INVESTMENT EXCE EDS RS.15 LACS IN ALL THE THREE YEARS SINCE THE PROPERTIES WERE FIRST PUR CHASED. IT WAS ONLY THE SALE PROCEEDS OF THESE PROPERTIES WHICH WERE MI SREPRESENTED AS CAPITAL GAINS THEREBY THE ASSESSEE HAS WILLFULLY EVADED TAX. 3. THE LD.CIT(A) FAILED TO APPRECIATE THAT IT IS NOT J UST THE DIFFERENCE OF OPINION BUT THE SIMILAR FACTS HAVE BEEN DECIDED BY VARIOUS COURTS IN FAVOUR OF THE REVENUE, IN CASE OF CHOWRINGHEE SALES BUREAU (P.) LTD. VS CIT(1973) 87 ITR 542 (SC) & RAJA BAHADDUR VISHESHVA R SINGH VS CIT 41 ITR 685(SC). DATE OF HEARING 23.02.2016 DATE OF PRONOUNCEMENT 28.03.2016 I.T.A .NO.-2087/DEL/2011 PAGE 2 OF 2 4. THE APPELLANT CRAVES TO BE ALLOWED TO ADD, DELETE O R AMEND ANY OTHER GROUNDS OF APPEAL. 2. NO ONE WAS PRESENT AT THE TIME OF HEARING ON BEH ALF OF THE ASSESSEE. CONSIDERING THE AMOUNT AT STAKE FOR THE REVENUE, TH E LD. SR. DR WAS REQUIRED TO ADDRESS CIRCULAR NO.21/2015 DATED 10TH DECEMBER, 20 15 OF CBDT. CONSIDERING THE SAME IN THE FACTS ON RECORD, THE LD. SR. DR FAI RLY CONCEDED THAT THE DEPARTMENTAL APPEAL HAS BEEN FILED WHEREIN THE TAX EFFECT INVOLVED IS MUCH LESS THAN RS.10 LAKH. 3. WE HAVE HEARD THE SUBMISSIONS OF THE LD. SR. DR ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE CBDT VIDE THE AFORESAID CIRCULAR DATED 10.12.2015 HAS REVISED THE MONETARY LIMIT TO RS.10 LAKH FOR FILING THE APPEAL BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL . PARA 3 OF THE AFORESAID CIRCULAR HAS BEEN MADE APPLICABLE VIDE PARA 10 RETR OSPECTIVELY. CONSIDERING THE SETTLED LEGAL PRECEDENT THAT THE BOARDS INSTRUCTIO NS OR DIRECTIONS ISSUED TO THE INCOME TAX AUTHORITIES U/S 268A OF THE INCOME TAX A CT, 1961 ARE BINDING ON THE AUTHORITIES, WE DISMISS THE DEPARTMENTAL APPEAL CON SIDERING THE MATERIAL AVAILABLE ON RECORD. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2016. SD/- SD/- (O.P.KANT) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:28/03/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSI STANT REGISTRAR ITAT NEW DELHI