D.C.I.T CC - V,kolkata, Kolkata V. Salasar Stock Broking Ltd., Kolkata

ITA 2220/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4949 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 08-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 07-08-2013
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAN SOM
• Assessee Lawyers: K K CHHAPARIA
• Section: 143(3); 153A; 14A; 115JB

Judgement Text

I.T.A. NO. 2220/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER I.T.A. NO. 2220 /KOL/ 2013 ASSESSMENT YEAR: 2005-2006 DEPUTY COMMISSIONER OF INCOME TAX,................. ...................APPELLANT CENTRAL CIRCLE-V, KOLKATA, AAYAKAR BHAWAN POORVA, 3 RD FLOOR, 110, SHANTIPALLY, KOLKATA-700 107 -VS.- SALASAR STOCK BROKING LIMITED,..................... ........................RESPONDENT MUKTI CHAMBER, 4A, CLIVE ROW, KOLKATA-700 001 [PAN :AADCS 8020 Q] APPEARANCES BY: SHRI NILOY BARAN SOM, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI K.K. CHHAPARIA, FCA, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 08, 2016 DATE OF PRONOUNCING THE ORDER : APRIL 19, 2016 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(APPEALS), CENTRAL-1, KOL KATA DATED 19.06.2013, WHEREBY HE CANCELLED THE PENALTY OF RS. 10,52,065/- IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C). 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF SHARE BROKING AS A MEMBER OF NSE AN D CSE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 05.10.2005 DECLARING TOTAL INCOME OF RS.2,49,57,000/-. IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 20.12.2007 , ADDITIONS, INTER ALIA, AMOUNTING TO RS.19,95,000/- AND RS.8,80,084/- WERE MADE BY THE I.T.A. NO. 2220/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 4 ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE UNDER SECTION 94(7) AND SECTION 14A OF THE ACT RESPECTIVELY. HOWEVER, S INCE THE TAX DETERMINED UNDER SECTION 115JB WAS MORE THAN THE TA X PAYABLE BY THE ASSESESE UNDER THE NORMAL PROVISIONS OF THE ACT, FI NAL TAX LIABILITY WAS WORKED OUT BY THE ASSESSING OFFICER ON THE BASIS OF MAT UNDER SECTION 115JB OF THE ACT. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IN RESPECT OF THE ADDITIONS MADE UNDER SECTION 94(7) AND SECTI ON 14A WERE ALSO INITIATED BY THE ASSESSING OFFICER AND IN RESPONSE TO THE SHOW-CAUSE NOTICE ISSUED DURING THE COURSE OF THE SAID PROCEED INGS, IT WAS SUBMITTED BY THE ASSESSEE THAT SINCE THE FINAL TAX LIABILITY IN ITS CASE WAS DETERMINED ON THE BASIS OF MAT UNDER SECTION 115JB, THE ADDITI ONS MADE UNDER SECTION 94(7) AND SECTION 14A DID NOT RESULT INTO A NY ADDITIONAL TAX LIABILITY AND THERE WAS NO CASE FOR IMPOSITION OF P ENALTY UNDER SECTION 271(1)(C). IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED BY THE ASSESSEE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- NALWA SONS INVESTMENTS LIMITED REPORTED IN 32 7 ITR 543, WHEREIN IT WAS HELD THAT ALTHOUGH CONCEALMENT WAS DETECTED IN THE COMPUTATION OF TAX AS PER THE NORMAL PROVISIONS OF THE ACT, CONCEA LMENT PENALTY COULD NOT BE IMPOSED SINCE ULTIMATE TAX LIABILITY WAS DET ERMINED ON THE BASIS OF MAT UNDER SECTION 115JB. THE ASSESSING OFFICER DID NOT FIND MERIT IN THE CONTENTION OF THE ASSESSEE. ACCORDING TO HIM, A FRE SH ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143(3) WAS MADE IN T HE CASE OF THE ASSESSEE AS A RESULT OF SEARCH FOR THE YEAR UNDER C ONSIDERATION AND SINCE THE ORIGINAL ASSESSMENT MADE UNDER SECTION 143(3) H AD MERGED WITH THE SAID ASSESSMENT AND THE INCOME OF THE ASSESSEE WAS FINALLY ASSESSED AS PER THE NORMAL PROVISIONS OF THE ACT AND NOT ON THE BASIS OF BOOK PROFIT UNDER SECTION 115JB, THE RATIO OF THE DECISION OF T HE HONBLE DELHI HIGH COURT IN THE CASE OF NALWA SONS INVESTMENTS LIMITED (SUPRA) WAS NOT APPLICABLE. HE, THEREFORE, PROCEEDED TO IMPOSE PENA LTY OF RS.10,52,065/- UNDER SECTION 271(1)(C) IN RESPECT OF THE ADDITIONS MADE UNDER SECTION 94(7) AND SECTION 14A TO THE TOTAL INCOME OF THE AS SESSEE. I.T.A. NO. 2220/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 4 3. THE PENALTY IMPOSED UNDER SECTION 271(1)(C) WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APP EALS). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS ), IT WAS POINTED OUT BY THE ASSESSEE THAT THE ADDITIONS MADE TO ITS TOTA L INCOME BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 153A WERE ALREADY DELETED BY THE LD. C IT(APPEALS) AND SINCE ITS INCOME WAS EVENTUALLY DETERMINED ON THE BASIS O F BOOK PROFIT UNDER SECTION 115JB, THE DECISION OF THE HONBLE DELHI HI GH COURT IN THE CASE OF NALWA SONS INVESTMENTS LIMITED (SUPRA) WAS SQUARELY APPLICABLE. THIS CONTENTION OF THE ASSESSEE WAS FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) AND HE CANCELLED THE PENALTY IMPOSED BY THE ASSESSI NG OFFICER UNDER SECTION 271(1)(C) BY RELYING ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NALWA SONS INVESTMENTS LIMITED (SUPRA). AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE H AS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND REITERATED BEFORE US, THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HA S FINALLY BEEN ASSESSED ON THE BASIS OF BOOK PROFIT UNDER SECTION 115JB AND THE LD. D.R. HAS NOT DISPUTED THIS POSITION. IN THE CASE OF NALWA SONS I NVESTMENTS LIMITED (SUPRA) RELIED UPON BY THE ASSESSEE, HONBLE DELHI HIGH COURT HAS HELD THAT EVEN THOUGH CONCEALMENT IS DETECTED IN THE COM PUTATION OF INCOME AS PER THE NORMAL PROVISIONS OF THE ACT, CONCEALMENT P ENALTY CANNOT BE IMPOSED WHEN THE ULTIMATE TAX LIABILITY OF THE ASSE SSEE IS DETERMINED ON THE BASIS OF BOOK PROFIT UNDER SECTION 115JB. THE R ATIO OF THIS DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NALWA S ONS INVESTMENTS LIMITED THUS IS SQUARELY APPLICABLE TO THE FACTS IN VOLVED IN THE CASE OF THE ASSESSEE AND WE FIND NO INFIRMITY IN THE IMPUGNED O RDER OF THE LD. CIT(APPEALS) CANCELLING THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) BY RELYING ON THE SAID DECI SION OF THE HONBLE I.T.A. NO. 2220/KOL./2013 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 4 DELHI HIGH COURT. AT THE TIME OF HEARING BEFORE US, THE LD. D.R. HAS NOT BEEN ABLE TO BRING TO OUR NOTICE ANY DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT OR HONBLE SUPREME COURT TAKING A DIFFER ENT VIEW THAN ONE TAKEN BY THE HONBLE DELHI HIGH COURT IN THE CASE O F NALWA SONS INVESTMENT LIMITED (SUPRA). WE, THEREFORE, UPHOLD T HE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CANCELLING THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) AND DISMISS THIS AP PEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 19, 201 6. SD/- SD/- (N.V. VASUDEVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBE R KOLKATA, THE 19 TH DAY OF APRIL, 2016 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-V, KOLKATA, AAYAKAR BHAWAN POORVA, 3 RD FLOOR, 110, SHANTIPALLY, KOLKATA-700 107 (2) SALASAR STOCK BROKING LIMITED, MUKTI CHAMBER, 4A, CLIVE ROW, KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL- 1, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.