M/s Saipem Triune Engineering Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 2113/DEL/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9988 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 07-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: GAUTAM CHOPRA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.2113/DEL/2013 ASSESSMENT YEAR : 2007-08 SAIPEM TRIUNE ENGINEERING PVT. LTD., (NOW KNOWN AS TRIUNE ENERGY SERVICES PVT. LTD.), B1/H4A, MOHAN COOPERATIVE INDL. ESTATE, MATHURA ROAD, NEW DELHI. PAN: AAKCS1045E VS. DCIT, CIRCLE 16(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GAUTAM CHOPRA, ADVOCATE DEPARTMENT BY : SHRI RAMESH CHANDRA, CIT, DR DATE OF HEARING : 07.04.2015 DATE OF PRONOUNCEMENT : 08.04.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 12.2.2013 DIRECTLY IMPOSING PENALTY U /S 271(1)(C) OF THE ITA NO.2113/DEL/2013 2 INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2007-08. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. BRIEFLY STATED, THE FACTS OF TH E CASE ARE THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE ACT. THE LD. CIT(A) MADE FOUR ENHANCEMENTS VIZ., A SUM OF RS.304 4.06 LAC ON ACCOUNT OF APPLICABILITY OF SECTION 40A(2); A SUM O F RS.16.86 LAC ON ACCOUNT OF DEPRECIATION; A SUM OF RS.51.47 LAC AGAI N ON ACCOUNT OF DEPRECIATION ON FIXED ASSETS; AND A SUM OF RS.55.79 LAC ON ACCOUNT OF RENT FOR USE OF ASSETS. PURSUANT TO SUCH ENHANCEME NTS, THE LD. CIT(A) IMPOSED PENALTY U/S 271(1)(C) OF THE ACT VIDE HIS O RDER DATED 12.2.2013 IN RESPECT OF TOTAL ENHANCEMENTS MADE BY HIM TO THE TUNE OF RS.3168.20 LAC. SUCH AMOUNT OF PENALTY WAS DETERMINED AT RS.1 0,76,87,140/-, BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED . THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL AGAINST THE OR DER PASSED BY THE LD. CIT(A) IN QUANTUM PROCEEDINGS. THE FIRST ENHANCEME NT OF RS.3,044.06 LAC CAME TO BE DELETED BY THE TRIBUNAL VIDE ITS ORD ER DATED 25.7.2014 IN ITA NO.2113/DEL/2013 3 ITA NO.5239/DEL/2012, A COPY OF WHICH IS AVAILABLE ON RECORD. RELEVANT DISCUSSION HAS BEEN MADE ON PAGE 62 OF THE TRIBUNAL ORDER. IN SO FAR AS THE REMAINING THREE ENHANCEMENTS ARE CONC ERNED, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF AO FOR FRESH AD JUDICATION. 3. THE NUTSHELL OF THE MATTER IS THAT THE TRIBUNA L HAS DELETED FIRST ENHANCEMENT MADE BY THE LD. CIT(A) AND RESTORED THE ISSUES IN RESPECT OF REMAINING THREE ENHANCEMENTS TO THE AO FOR A FRE SH CONSIDERATION. IN SUCH CIRCUMSTANCES, THERE CAN BE NO QUESTION OF SUS TAINING ANY PENALTY, AT THIS STAGE, ON THE ENHANCEMENTS SO MADE. THERE C AN BE NO PENALTY ON THE AMOUNT OF ENHANCEMENT DELETED BY THE TRIBUNAL. ON THE ENHANCEMENTS RESTORED TO THE AO, THE QUESTION OF PE NALTY CAN BE EXAMINED ONLY BY THE AO PURSUANT TO THE MAKING OF F RESH ASSESSMENT. THE IMPUGNED ORDER IS SET ASIDE AND THE INSTANT PEN ALTY ON SUCH RESTORED ISSUES IS SENT BACK TO THE AO FOR TAKING AN APPROPR IATE DECISION AFTER THE FINALIZATION OF THE FRESH ASSESSMENT PURSUANT TO TH E TRIBUNAL ORDER. OUR VIEW IN RESTORING THE PENALTY TO THE AO IS FORTIFIE D BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MOHD. MOHATRAM FAROOQUI ITA NO.2113/DEL/2013 4 VS. CIT (SC) 2010-TIOL-23-SC-IT IN WHICH IT HAS BEEN HELD THAT IF ADDITION IS RESTORED TO THE AO, THEN PENALTY SHOULD ALSO BE RESTORED. THE HONBLE JURISDICTIONAL HIGH COURT IN SANJAY GUPTA VS. CIT (2014) 366 ITR 18 (DEL) HAS ALSO HELD THAT WHERE THE QUANTUM HAS BEEN REMA NDED TO THE AO, THE QUESTION OF PENALTY ON ACCOUNT OF THE S AID AMOUNT BEING TREATED AS UNDISCLOSED INCOME, SHOULD ALSO BE REMAN DED TO THE AO. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND REMIT T HE MATTER TO THE FILE OF THE AO FOR DETERMINING THE QUESTION OF PENALTY OR O THERWISE, AFTER THE PASSING OF THE ORDER PURSUANT TO THE RESTORATION MA DE BY THE TRIBUNAL ON THE THREE ENHANCEMENTS. 4. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 08.04.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 08 TH APRIL, 2015. DK ITA NO.2113/DEL/2013 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.