ACIT, CHENNAI V. M/s. Shangkalpam Industries Pvt. Ltd., CHENNAI

ITA 2492/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4468 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: N DEVANATHAN
• Section: 260A; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2492/MDS/2016 & C.O. NO.162/MDS/2016 (IN ITA NO.2492/MDS/2016) * +* / ASSESSMENT YEAR : 2009-10 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 15, CHENNAI - 600 034. V. M/S SHANGKALPAM INDUSTRIES PVT. LTD., NO.92, G.N. CHETTY ROAD, T. NAGAR, CHENNAI - 600 034. PAN : AAGCS 0650 R (-./ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) -. / 0 / APPELLANT BY : SH. P. RADHAKRISHNAN, JCIT 12-. / 0 / RESPONDENT BY : SH. N. DEVANATHAN, ADVOCATE ' / 3& / DATE OF HEARING : 20.04.2016 45+ / 3& / DATE OF PRONOUNCEMENT : 31.05.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -15, CHENN AI, DATED 25.05.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-10, DELETING THE 2 I.T.A. NO.2492/MDS/16 C.O. NO.162/MDS/16 PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SH. P. RADHAKRISHNAN, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THE ASSESSING OFFICER LEVIED PENALTY OF ` 2,93,28,304/- UNDER SECTION 271(1)(C) OF THE ACT. REFERRING TO T HE ASSESSMENT ORDER, THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS SHOWN THE SUNDRY CREDITORS TO THE EXTENT OF ` 9,00,26,078/-. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT IT RECEIV ED ADVANCE FOR EXPORT OF IRON ORE. ON INVESTIGATION, ACCORDING TO THE LD. D.R., IT WAS FOUND THAT THE ASSESSEE-COMPANY HAS NO EXPERIEN CE OF EXPORT OF IRON ORE AND IN FACT, NO IRON ORE WAS EXPORTED E VEN AFTER TWO YEARS FROM THE DATE OF RECEIPT OF ADVANCE. THE ASS ESSING OFFICER HAS ALSO FOUND THAT THE ENTIRE PURCHASE MONEY WAS R ECEIVED IN ADVANCE. EVEN THOUGH IT WAS CLAIMED TO HAVE BEEN R ECEIVED ADVANCE FOR EXPORT OF IRON ORE, ACCORDING TO THE LD . D.R., THE ASSESSEE IN FACT UTILISED THE ADVANCE IN PURCHASING OF PROPERTY AT ANNA SALAI, CHENNAI. SINCE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF RECEIPTS, THE ASSESSING OFFICER MADE ADDI TION UNDER SECTION 68 OF THE ACT. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE AMOUNT SAID TO BE RECEIVED BY THE 3 I.T.A. NO.2492/MDS/16 C.O. NO.162/MDS/16 ASSESSEE FOR SO-CALLED EXPORT OF IRON ORE IS NOTHIN G BUT UNEXPLAINED INCOME OF THE ASSESSEE. 3. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBM ITTED THAT THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL AGAI NST THE ASSESSMENT ORDER IN WHICH THE ADDITION WAS MADE. T HIS TRIBUNAL, IN FACT, DELETED THE ADDITION MADE BY THE ASSESSING OF FICER UNDER SECTION 68 OF THE ACT. ACCORDING TO THE LD. D.R., AN APPEAL IS FILED BEFORE THE HIGH COURT UNDER SECTION 260A OF THE ACT AND THE SAME IS PENDING FOR FINAL DISPOSAL. ACCORDING TO THE LD . D.R., IT IS A CLEAR CASE OF SUPPRESSION OF INCOME OR FURNISHING OF INAC CURATE PARTICULARS, THEREFORE, THE ASSESSING OFFICER HAS R IGHTLY LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. ON THE CONTRARY, SH. N. DEVANATHAN, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF ` 8,62,85,097/- UNDER SECTION 68 OF THE ACT ON THE GR OUND THAT NO EXPORT WAS MADE BY THE ASSESSEE FOR THE SO-CALLED A DVANCE RECEIVED. ACCORDING TO THE LD. COUNSEL, THE FACT T HAT THE ADVANCE RECEIVED IS NOT IN DISPUTE. MERELY BECAUSE THERE W AS A BREACH OF CONTRACT BETWEEN THE ASSESSEE AND THE PERSONS WHO P LACED ORDER FOR PURCHASE OF IRON ORE, THAT CANNOT BE A REASON F OR THE ADDITION 4 I.T.A. NO.2492/MDS/16 C.O. NO.162/MDS/16 MADE UNDER SECTION 68 OF THE ACT. IT IS NOT THE CO NCERN OF INCOME- TAX DEPARTMENT TO SEE WHETHER ANY EXPORT WAS MADE B Y THE ASSESSEE OR NOT. ACCORDING TO THE LD. COUNSEL, THE CONCERN OF THE DEPARTMENT WOULD ONLY BE WHETHER THE ASSESSEE HAS R ECEIVED MONEY AS ADVANCE FOR EXPORT OF IRON ORE. SINCE THE ASSESSEE HAS ESTABLISHED THAT THE ADVANCE WAS RECEIVED FOR EXPOR T OF IRON ORE, THIS TRIBUNAL HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT, THEREFORE, THERE IS NO QUESTION OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THEREFORE, ACCORDING TO THE LD. COUNSEL, T HE CIT(APPEALS) HAS RIGHTLY DELETED THE PENALTY. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF T HE ACT IN RESPECT OF ADVANCE RECEIVED FOR EXPORT OF IRON ORE TO THE EXTENT OF ` 8,62,85,097/- WAS ADMITTEDLY DELETED BY THIS TRIBUN AL. ONCE THE ADDITION WAS DELETED, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THERE IS NO QUESTION OF ANY LEVY OF PENALTY UNDER S ECTION 271(1)(C) OF THE ACT. IN OTHER WORDS, IT CANNOT BE SAID WHET HER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED A NY PART OF ITS 5 I.T.A. NO.2492/MDS/16 C.O. NO.162/MDS/16 INCOME. NOW THE REVENUE CLAIMS THAT AN APPEAL IS P ENDING BEFORE THE HIGH COURT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERE PENDING OF APPEAL CANNOT BE A REASON FOR LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVER, IT IS OPEN TO THE REVENUE TO REINITIATE THE PROCEEDING IF SO ADVISED AFTER THE J UDGMENT OF MADRAS HIGH COURT IN THE APPEAL SAID TO BE PENDING. 6. IN VIEW OF THE ABOVE OBSERVATION OF THIS TRIBUNA L IN THE APPEAL, THE CROSS-OBJECTION FILED BY THE ASSESSEE B ECOMES INFRUCTUOUS AND THUS STANDS DISMISSED. 7. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS- OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 31 ST MAY, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 31 ST MAY, 2017. KRI. 6 I.T.A. NO.2492/MDS/16 C.O. NO.162/MDS/16 / 13#8 98+3 /COPY TO: 1. -. /APPELLANT 2. 12-. /RESPONDENT 3. ' :3 () /CIT(A)-15, CHENNAI-34 4. ' :3 /CIT-6, CHENNAI-34 5. 8; 13 /DR 6. * < /GF.