M/s. Astha Infrastructure, Mehsana V. The Income Tax Officer, Ward-1, Mehsana

ITA 2555/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94760 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Income from undisclosed sources
• Section: 143(3); 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2556/AHD/2015 / ASSESSMENT YEAR: 2011-12 M/S. ASTHA CORPORATION, ASTHA NIVAS, NR. TIRUPATI SHAHI BAG, MEHSANA .. APPELLANT PAN : AARFA 1819 Q VS INCOME TAX OFFICER WARD-1, MEHSANA .. RESPONDENT ./ ITA NO. 2554/AHD/2015 / ASSESSMENT YEAR: 2011-12 M/S. ASTHA DEVELOPORS ASTHA NIVAS, NR. TIRUPATI SHAHI BAG, MEHSANA .. APPELLANT PAN : AAQFA 2860 C VS INCOME TAX OFFICER WARD-1, MEHSANA .. RESPONDENT ./ ITA NO. 2555/AHD/2015 / ASSESSMENT YEAR: 2011-12 M/S. ASTHA INFRASTRUCTURE ASTHA NIVAS, NR. TIRUPATI SHAHI BAG, MEHSANA .. APPELLANT PAN : AARFA 1818 R VS INCOME TAX OFFICER WARD-1, MEHSANA .. RESPONDENT ASSESSEE(S) BY : SHRI ANIL KSHATRIYA, AR REVENUE BY : SHRI ANIL KUMAR BHARDWAJ, SR- DR ITA NOS. 2554 TO 2556 AHD 2015 ASTHA DEVELOPERS VS. ITO +2 AY 2011-12 - 2 - / DATE OF HEARING 24/11/2015 /DATE OF PRONOUNCEMENT 30/11/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THESE APPEALS HAVE BEEN FILED BY THREE DIFFERENT A SSESSEES AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCO ME TAX (APPEALS), GANDHINAGAR, AHMEDABAD, ALL DATED 09.06. 2015 FOR ASSESSMENT YEAR 2011-12. SINCE ALL THE APPEALS FILE D BY ASSESSEES PERTAIN TO SIMILAR ISSUE, SO THESE ARE BE ING DISPOSED OF BY THIS COMMON ORDER FOR SAKE OF CONVENIENCE. ITA NO. 2556/AHD/2015 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWIN G GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELL ANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN IGNORING AND NOT DECIDING GROUND NO.1 INDEPENDENTLY/SEPARATELY CHALLENGING THE LEGALITY AND VALIDITY OF THE PENALT Y ORDER. THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) BEING B AD IN LAW, THE SAME MAY BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELL ANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING LEVY OF PENALTY U/S 271(1)(C) OF THE ACT OF RS.94,168/- FOR ALLEGED CONCEALMENT OF INCOME. THE SAME MAY BE DELETED. ITA NOS. 2554 TO 2556 AHD 2015 ASTHA DEVELOPERS VS. ITO +2 AY 2011-12 - 3 - 3. THE ASSESSING OFFICER IMPOSED THE PENALTY OF RS. 94,168/- U/S 271(1)(C), BY OBSERVING AS UNDER:- 'THE SUBMISSION OF THE ASSESSEE IS CAREFULLY CONSID ERED BUT NOT ACCEPTABLE BECAUSE IN THIS CASE A SURVEY PROCEEDINGS U/S. 133A WAS CARRIED OUT ON 17.09.2010 . LATER SHRI ARVINDBHAI NARANBHAI PATEL, PARTNER OF T HE ASSESSEE FIRM IN HIS STATEMENT ON OATH RECORDED ON 22/11/2010 IN ANSWER TO QUESTION NO. 14, SHRI ARVINDNHAI NARANBHAI PATEL OFFERED AN UNACCOUNTED INCOME OF RS. 70,00,000/- IN THEIR PARTNERSHIP FIRM M/S ASTHA CORPORATION WHICH IS CARRYING ON THE CONSTRUC TION ACTIVITIES IN ITS SCHEME AT ASTHA VIHAR. HOWEVER, T HE ASSESSES FILED ITS RETURN OF INCOME ON 14.02.2012 S HOWING TOTAL INCOME AT RS.66,95,250/-. THEREFORE, THE ASSE SSEE HAS RETURNED THE INCOME IN THE AFORESAID SCHEME LES S BY RS.3,04,750/-, IF CONSIDER THE AFORESAID STATEMENT OF THE PARTNER SHRI ARVINDHHAI NARANBHAI PATEL. DURING THE COURSE OF ASSESSMENT THE ASSESSEE WAS SHOW CAUSED A S TO WHY AN AMOUNT OF RS.3,04,750/- BEING DIFFERENCE OF UNACCOUNTED INCOME OFFERED IN THE STATEMENT ON OATH AND NOT SHOWN IN THE RETURN OF INCOME FILED. SINCE, THE ASSESSEE HAS NOT GIVEN ANY SATISFACTORY REPLY ON AD DITION OF RS.3,04,750/- MADE TO THE TOTAL INCOME OF THE AS SESSEE. 5. COMING TO THE IMPOSITION OF PENALTY, THE PENALTY U/S. 271(L)(C) FOR CONCEALMENT IS CIVIL LIABILITY AND WI LLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING THE CIVIL LIABILITY. THE HON'BLE SUPREME COURT M TH E CASE OF UNION OF INDIA VS DHARMENDRA TEXTILE PROCESSORS (SC) 306 ITR 277 HELD THAT THE EXPLANATIONS ADDED TO SEC TION 271(1) IN ENTIRETY ALSO INDICATE THE ELEMENT OF ST RICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GI VING INACCURATE PARTICULARS WHILE FILING RETURN. IN A RE CENT DECISION IN THE CASE OF CIT VS. ATUL MOHAN BINDAL ( SC) 317 ITR 1, THE HON'BLE APEX COURT HELD THAT MENS R EA IS NOT NECESSARY FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT, SINCE IT IS A CIVIL LIABILITY. THE PROVISION I S IMPOSING STRICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OF INCOME. IT HAS FURTHER BEEN DIRECTED THAT, IF THE ASSESSING OFFICER IS SATISFIED THAT THE PERSON HAS CONCEALED THE PART ICULARS ITA NOS. 2554 TO 2556 AHD 2015 ASTHA DEVELOPERS VS. ITO +2 AY 2011-12 - 4 - OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SU CH INCOME, SUCH PERSON MAY BE DIRECTED TO PAY PENALTY. WHILE DECIDING IN THE CASE OF CIT VS. RELIANCE PETR O PRODUCTS P. LTD. REPORTED IN (2010) 189 TAXMAN 322 (SC) THE HON'BLE SUPREME COURT HAS REFERRED TO THE DECIS ION IN THE ABOVE MENTIONED CASES ALSO. THE FACT OF THE PRE SENT CASE IS TOTALLY DIFFERENT THAN THAT IN THE CASE OF RELIANCE PETRO PRODUCTS P LTD., HENCE THE AFORESAID DECISION IS NOT APPLICABLE IN THIS CASE. I AM THEREFORE, SATISFIED THAT THE ASSESSEE HAS COM MITTED THE DEFAULT OF CONCEALING IT TO THE EXTENT OF RS 3, 04,750/- WHICH WAS NOT DISCLOSED IN THE RETURN OF ITS INCOME . THE ASSESSEE HAS THUS COMMITTED THE DEFAULT OF CONCEALM ENT OF ITS INCOME AND ALSO FURNISHED INACCURATE PARTICU LARS OF INCOME AND HAS THUS RENDERED ITSELF LIABLE TO PENAL TY U/S 271(1)(C) OF THE IT ACT, 1961. 4 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUT HORITY WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F THE ASSESSEE AND AFTER REJECTING THE SAME, THE CIT(A) C ONFIRMED THE PENALTY IN QUESTION AND THE SAME HAS BEEN OPPOSED B EFORE US BY THE LD. AUTHORIZED REPRESENTATIVE ON BEHALF OF T HE ASSESSEE- COMPANY WHO INTER ALIA SUBMITTED THAT DISALLOWANCE OF BONAFIDE CLAIM OF CERTAIN EXPENSES IS NOT VALID GRO UND OF PENALTY. SAME SHOULD BE ACCORDINGLY DELETED. ON T HE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE PENALTY ORDER. 5. WE FIND THAT THE ASSESSEE IS A PARTNERSHIP CONC ERN, CAME INTO EXISTENCE WITH EFFECT FROM 09.12.2009 AND IS E NGAGED IN ITA NOS. 2554 TO 2556 AHD 2015 ASTHA DEVELOPERS VS. ITO +2 AY 2011-12 - 5 - BUSINESS OF LAND DEVELOPMENT AND CIVIL CONSTRUCTION . FOR THE ASSESSMENT YEAR 2011-12, THE ASSESSEE FILED ITS RET URN OF INCOME ON 14.02.2012, SHOWING TOTAL INCOME OF RS.66 ,95,250/. THE ASSESSING OFFICER COMPLETED THE REGULAR ASSESSM ENT U/S 143(3) OF THE ACT DETERMINING TOTAL INCOME AT RS.70 ,00,000/- AS PER HIS ORDER DATED 24.01.2014 AND MADE ADDITION OF MADE ADDITION OF RS.3,04,750/-, BY OBSERVING AS UNDER:- THE SUBMISSION OF THE ASSESSEE IS CONSIDERED CAREF ULLY. SINCE, THE ASSESSEE HAS NOT OBJECTED FOR THE ADDITI ON OF RS.3,04,750, THE SAME IS ACCORDINGLY ADDED TO THE I NCOME OF THE ASSESSEE. THE ASSESSING OFFICER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, DISALLOWED THE FOLLOWING EXPENSES:- AMOUNT (RS) NAME OF EXPENSES 28,080 DEPRECIATION 60,000 ACCOUNTANTS FEES 2,340 BANK CHARGES 65,800 OFFICE EXPENSES 1,05,000 SALARY EXPENSES 38,150 TRAVELLING EXPENSES 250 INTEREST TO PARTNERS 5,131 STATIONERY EXPENSES --------------- 3,04,753 THE ASSESSING OFFICER FURTHER LEVIED PENALTY OF RS.94,188/- AS PER HIS ORDER U/S 271(1)(C) WHICH WA S CONFIRMED BY THE CIT(A). ITA NOS. 2554 TO 2556 AHD 2015 ASTHA DEVELOPERS VS. ITO +2 AY 2011-12 - 6 - 6. THE PENALTY WAS MADE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE STAND OF THE ASSESSEE H AS BEEN THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING T HE PENALTY. 7. THE ABOVE MENTIONED SAID EXPENSES OF RS.3,04,753 , WHICH IS BASIS OF PENALTY, WAS DISALLOWED BY THE ASSESSIN G OFFICER AND THE PENALTY HAS BEEN IMPOSED ON THE SAID AMOUNT. S O THE PENALTY HAS NOT BEEN IMPOSED ON ACCOUNT OF RS.70 LA KHS WHICH WAS ORIGINAL DISCLOSURE. THE ASSESSEE HAS MADE CER TAIN CLAIM OF EXPENSES WHICH WAS BONAFIDE CLAIM BUT WAS NOT AL LOWED BY THE AUTHORITIES BELOW. SIMPLY DISALLOWANCE ON ACCO UNT OF CERTAIN EXPENSES IS NOT SUFFICIENT FOR LEVYING PENA LTY. IT IS SETTLED LEGAL POSITION THAT QUANTUM ADDITION AND PE NALTY THEREON IS INDEPENDENT OF EACH OTHER. THEREFORE, T HE PENALTY IN QUESTION IS NOT JUSTIFIED ON ACCOUNT OF DISALLOWANC E OF EXPENSES WHICH WAS CLAIMED BONAFIDELY BY THE ASSESSEE. ACCO RDINGLY, THE PENALTY IMPOSED BY THE ASSESSING OFFICER IS DEL ETED. 8. SIMILAR ISSUES AROSE IN ITA NOS.2554 & 2555/AHD/ 2015 WHEREIN ALSO SIMILAR PENALTY HAS BEEN IMPOSED ON TH E DISALLOWANCE OF CERTAIN EXPENDITURE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE HEREBY DELETE THE PENA LTIES OF RS.52,326/- IN CASE OF ASTHA DEVELOPERS IN ITA ITA NOS. 2554 TO 2556 AHD 2015 ASTHA DEVELOPERS VS. ITO +2 AY 2011-12 - 7 - NO.2554/AHD/2015 AND RS.74,951/- IN CASE OF ASTHA INTERNATIONAL IN ITA NO.2555/AHD/2015. 9. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30TH OF NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 30/11/2015 *BT / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD