M/s. Samrat Rice Mills (P) Ltd., New Delhi V. ACIT, Muzaffarnagar

ITA 2107/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2211 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S RAJPUROHIT
• Assessee Lawyers: K L ANEJA
• Keywords: Proportionate interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.2107/DEL/2015 ASSESSMENT YEAR : 2008-09 SAMRAT RICE MILLS (P) LTD., THROUGH SH. K.L. ANEJA, ADVOCATE, FLAT NO.92-C, BLOCK- B, PKT W, SHALIMAR BAGH, NEW DELHI. VS. ACIT, CIRCLE- 1, MUZAFFARNAGAR. PAN : AABCS0948M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. L. ANEJA, ADV. DEPARTMENT BY : SHRI B. S. RAJPUROHIT, SR. DR DATE OF HEARING : 06-09-2018 DATE OF PRONOUNCEMENT : 06-09-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.09.2014 OF THE CIT(A), MUZAFFARNAGAR RELATING TO ASSESSMENT YEAR 2008-09. 2. LEVY OF PENALTY OF RS.33,000/- U/S 271(1)(C) OF THE I.T. ACT, 1961 BY THE ASSESSING OFFICER WHICH HAS BEEN CONFIRMED BY THE L D. CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY AND DERIVES INCOME FROM RUNNING OF RICE MILLS. IT FILED ITS RE TURN OF INCOME ON 30.09.2008 2 ITA NO.2107/DEL/2015 DECLARING NIL INCOME. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DE BITED A SUM OF RS.10,18,745/- UNDER THE HEAD INTEREST TO BANK. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER OB SERVED THAT THE ASSESSEE HAS GIVEN INTEREST FREE LOANS TO THREE PARTIES TOTALING TO RS.45,15,960/- ON WHICH NO INTEREST HAS BEEN CHARGED. HE, THEREFORE, CONFRONT ED THE SAME TO THE ASSESSEE AS TO WHY PROPORTIONATE INTEREST SHOULD NOT BE DISALLO WED. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE, THE ASSESSING O FFICER MADE ADDITION OF RS.5,41,915/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. IN APPEAL, THE LD. CIT(A) RESTRICTED SUCH DISALL OWANCE TO RS.1,95,898/- AND DELETED THE BALANCE ADDITION MADE BY THE ASSESS ING OFFICER. THE ABOVE ACTION OF THE LD. CIT(A) WAS UPHELD BY THE TRIBUNAL . SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASS ESSEE, THE ASSESSING OFFICER LEVIED PENALTY OF RS.33,000/- U/S 271(1)(C) OF THE I.T. ACT ON THE GROUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IT S INCOME AND ALSO CONCEALED THE PARTICULARS OF SUCH INCOME. ON APPEAL BY THE A SSESSEE, THE LD. CIT(A) CONFIRMED THE PENALTY SO LEVIED BY THE ASSESSING OF FICER. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 ITA NO.2107/DEL/2015 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE I NSTANT CASE, WE FIND THE PENALTY OF RS.33,000/- HAS BEEN LEVIED ON ACCOUNT OF PART D ISALLOWANCE OF PROPORTIONATE INTEREST ON INTEREST FREE LOANS GIVEN TO OTHERS. A S MENTIONED EARLIER, THE ASSESSING OFFICER HAD MADE DISALLOWANCE OF RS.5,41, 915/- WHICH WAS REDUCED TO RS.1,95,898/- BY THE LD. CIT(A) AND CONFIRMED BY THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, WE HAVE TO SEE AS TO WHETHER THE PEN ALTY IS LEVIABLE U/S 271(1)(C) OR NOT. IT IS AN ADMITTED FACT THAT THE ASSESSEE H AD GIVEN FULL DETAILS OF LOANS GIVEN TO THE PERSONS WITHOUT CHARGING ANY INTEREST. THESE LOANS ARE ALREADY SHOWN IN THE BALANCE SHEET OF THE PRECEDING YEARS A ND THERE WAS NO DISALLOWANCE OF INTEREST ON ACCOUNT OF SUCH INTERES T FREE LOANS ADVANCED. ALTHOUGH, PRINCIPLE OF RES-JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS, HOWEVER, IT IS AN UNDISPUTED FACT THAT THE LOANS ARE CONTINUING IN THE BALANCE SHEET FROM THE PRECEDING YEARS AND THES E ARE NOT NEW LOANS AND DETAILS WERE AVAILABLE WITH THE DEPARTMENT. 7. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. REPORTED IN 322 ITR 158 HAS HELD THAT A MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, W ILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURAT E PARTICULARS. IN VIEW OF THE 4 ITA NO.2107/DEL/2015 ABOVE DISCUSSION AND CONSIDERING THE FACT THAT OUT OF THE TOTAL DISALLOWANCE OF RS.5,41,915/- AN AMOUNT OF RS.1,95,898/- ONLY HAS B EEN SUSTAINED AND BALANCE AMOUNT HAS BEEN DELETED, THEREFORE, WE ARE OF THE C ONSIDERED OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. ACT. WE, THEREFORE, SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT TH E ASSESSING OFFICER TO CANCEL THE PENALTY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON THIS 06 TH SEPTEMBER, 2018. SD/- SD/- (SUCHITRA KAMBLE) (R. K. P ANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 06-09-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI