Deputy Commissioner of Income-tax, V. L K Jain (HUF), Pune

ITA 239/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0497 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR CHAWARE
• Keywords: Difference of opinion
• Section: 143(3); 14A; 28

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , ! , # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURV EDI, AM ITA NO.239/PN/2014 ASSESSMENT YEAR : 2007-08 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-4, PUNE. . APPELLANT VS. L K JAIN (HUF), 2 ND FLOOR, KUMAR CAPITAL 2413, EAST STREET, CAMP, PUNE 411 001. PAN : AABHJ0041H . RESPONDENT ITA NO.2089/PN/2014 ASSESSMENT YEAR : 2007-08 LALITKUMAR KESARIMAL JAIN (HUF), 10 TH FLOOR, KUMAR BUSINESS CENTER (KBC), OPP. BUND GARDEN ROAD, PUNE 411 001. PAN : AABHJ0041H . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-4, PUNE. . RESPONDENT DEPARTMENT BY : SHRI ANIL KUMAR CHAWARE ASSESSEE BY : SHRI NIKHIL PATHAK / DATE OF HEARING : 18.10.2016 / DATE OF PRONOUNCEMENT: 09.11.2016 % / ORDER PER ANIL CHATURVEDI, AM : THE AFORESAID CAPTIONED CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSI ONER OF INCOME TAX 2 ITA NO.239/PN/2014 ITA NO.2089/PN/2014 (APPEALS)-II, PUNE DATED 28.10.2013 AND 14.08.2014 FOR THE ASSESSMENT YEAR 2007-08. 2. THE CROSS APPEALS FILED BY THE REVENUE AND THE A SSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER :- 3.1 ASSESSEE IS AN HUF STATED TO BE ENGAGED IN PROV IDING AND MAINTENANCE OF ASSETS. THE ASSESSEE FILED ITS RETURN OF INCOME FO R ASSESSMENT YEAR 2007-08 ON 31.10.2007 DECLARING TOTAL LOSS OF RS.1,85,15,844/- . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDE R DATED 29.12.2009 AND THE TOTAL LOSS WAS DETERMINED AT RS.64,86,901/- BY INTER-ALIA DISALLOWING RS.1,18,73,385/- UNDER SECTION 14A OF THE ACT. ON THE AFORESAID DIS ALLOWANCE MADE UNDER SECTION 14A OF THE ACT, THE ASSESSING OFFICER VIDE ORDER DA TED 30.06.2010 HELD THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME AN D THEREFORE LIABLE FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HE ACCORDINGLY LEVIED PENALTY OF RS.40,00,000/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESS EE CARRIED THE MATTER BEFORE THE CIT(A), WHO VIDE ORDER DATED 28.10.2013 (IN APPEAL NO.PN/CIT(A)-II/ACIT,CIR- 4,PN/85/2010-11/63) DELETED THE PENALTY. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED T HE FOLLOWING GROUND :- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN DELETING THE PENALTY U/S 271(1)(C) WITHOUT EXAMINING THE FACTS & EVIDENCES AVAILABLE ON RECORDS AND BROUGHT OUT BY THE ASSESSING OFFICER IN THE PENALTY ORDER IN SUPPORT OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT . (2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN NOT APPRECIATING THAT THE DISALLOWANCE MADE BY THE ASSE SSEE OF RS.1,02,13,856/- U/S.28 TO 44DA HAD NOTHING TO DO WITH THE DISALLOWANCE U/S .14A OF THE ACT OF RS.1,18,73,385/- MADE BY THE ASSESSING OFFICER AND AS SUCH THERE WAS NO 3 ITA NO.239/PN/2014 ITA NO.2089/PN/2014 DIFFERENCE OF OPINION WITH RESPECT TO EXTENT OF INC OME WITH RESPECT TO WHICH INACCURATE PARTICULARS WERE FILED BY THE ASSESSEE. (3) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY OR ALL THE GROUNDS OF APPEAL. 4. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO.2089/PN/2014 :- BASED ON THE FACTS AND THE CIRCUMSTANCES OF THE CA SE, THE APPELLANT RESPECTFULLY SUBMITS THAT THE LEARNED CIT(A)-II ERRED IN DISPOSI NG THE APPEAL OF THE APPELLANT ON THE FOLLOWING GROUNDS 1. THE ID COMMISSIONER OF INCOME TAX (APPEALS) GROS SLY ERRED IN REJECTING THE APPELLANT'S APPLICATION U/S 154. 2. THE ID COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN MAINTAINING DISALLOWANCE U/S 14A OF RS.1,18,73,385/- IN ADDITIO N TO THE DISALLOWANCE OF RS.1,02,13,856/- ALREADY CONSIDERED AND MADE BY THE APPELLANT ON ITS OWN. 3. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS) MAY BE VACATED AND THE APPELLANT'S CLAIM MAY BE ALLOWED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OR ALL GROUNDS OF APPEAL AND TO ADDUCE ADDITIONAL EVID ENCE AT THE TIME OF HEARING. 5. WE FIRST TAKE UP REVENUES APPEAL IN ITA NO.239/ PN/2014. 5.1 BEFORE US, LD. DR TOOK US THROUGH THE PENALTY O RDER OF ASSESSING OFFICER AND SUBMITTED THAT ASSESSEE HAD FURNISHED INACCURATE PA RTICULARS OF INCOME BY NOT INCORPORATING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT IN THE RETURN OF INCOME. HE FURTHER SUBMITTED THAT HAD THE CASE OF THE ASSESSEE NOT BEING TAKEN UP THE SCRUTINY, THE ASSESSEES ACTION OF FURNISHING O F INACCURATE PARTICULARS OF INCOME WOULD HAVE GONE UNNOTICED. HE ALSO SUBMITTED THAT ASSESSEE WAS WELL AWARE OF THE LEGAL PROVISION OF THE ACT AND STILL IT CHOSE N OT TO FURNISH THE ACCURATE PARTICULARS IN THE RETURN OF INCOME AND IN SUCH THE SITUATION, THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN LEVYING PENALTY. HE THUS SUPPORTED TH E ORDER OF ASSESSING OFFICER. THE LD. AR, ON THE OTHER HAND, REITERATED THE SUBMISSIO NS MADE BEFORE ASSESSING OFFICER AND CIT(A) AND FURTHER SUBMITTED THAT ASSES SEE HAD CONSIDERED THE 4 ITA NO.239/PN/2014 ITA NO.2089/PN/2014 DISALLOWANCE OF INTEREST PAID AND HAD SUO MOTU DISALLOWED THE INTEREST BY FILING THE RETURN OF INCOME. THE DISALLOWANCE OF INTEREST WAS WRONGLY REFLECTED UNDER ANY OTHER ITEMS OR ITEM FOR UNDER SECTION 28 TO 44DA I N SCHEDULE BP IN THE RETURN OF INCOME AND THAT ASSESSEE DURING THE PENALTY PROCEED INGS HAS EXPLAINED THE ERROR AND STATED THAT THE DISALLOWANCE OF INTEREST WAS IN FACT UNDER SECTION 14A AND NOT UNDER ANY OTHER PROVISIONS OF THE ACT. HE THEREFOR E SUBMITTED THAT ASSESSEE HAD NOT CONCEALED ANY INFORMATION AND HAD SUBMITTED ALL THE REQUIRED INFORMATION AND DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS . HE THEREFORE SUPPORTED THE ORDER OF THE CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL. THE ISSUE IN PRESENT CASE IS LEVY OF PENALTY ON THE DISALLOWANCE MADE UNDER SECTION 14A, WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS GI VEN A FINDING THAT THERE WAS A GENUINE DIFFERENCE OF OPINION BETWEEN THE CONTENTIO NS RAISED BY THE ASSESSEE AND OF THE ASSESSING OFFICER AND NO FACTS RELATING TO T HE TRANSACTIONS WERE CONCEALED BY THE ASSESSEE. HE HAS FURTHER GIVEN A FINDING THAT THE EXPLANATION FILED BY THE ASSESSEE CANNOT BE SAID TO BE UNTRUE OR NOT BONA FIDE AND THAT EXPLANATION OF THE ASSESSEE WAS NOT WITHOUT ANY BASIS OR FOUNDATION. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE FIN DINGS OF THE CIT(A). IN VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH TH E ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 8. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO.2089 /PN/2014. 5 ITA NO.239/PN/2014 ITA NO.2089/PN/2014 8.1 BEFORE US, LD. AR SUBMITTED THAT HE DID NOT WIS H TO PRESS THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL. IN VIEW OF THE AFOR ESAID SUBMISSIONS OF LD. AR, THE APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALS O DISMISSED. 10. RESULTANTLY, THE APPEAL OF THE ASSESSEE AND THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 9 TH DAY OF NOVEMBER, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 9 TH NOVEMBER, 2016. / GCVSR % & ' () *) / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. % / BY ORDER , //TRUE COPY// ! '# / SR. PRIVATE SECRETARY $ %& %'' , / ITAT, PUNE