Sahaj Residency P.Ltd., Ahmedabad V. Income Tax Officer, Ward-8(1), Ahmedabad

ITA 2606/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6155 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 23-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 2606/AHD/2014 (ASSESSMENT YEAR:2010-11) SAHAJ RESIDENCY PVT. LTD., DHARAMDEV HOUSE, SHYAMAL CROSS ROAD, SATELLITE, AHMEDABAD 380015 APPELLA NT VS. THE ITO, WARD-8(1), PRATYAKSHKAR BHAVAN, AMBAWADI, AHMEDABAD RESPONDENT PAN: AAMCS0451J /BY ASSESSEE : SHRI S. N. DIVATIA, A.R. /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /DATE OF HEARING : 20.04.2017 /DATE OF PRONOUNCEMENT : 26.04.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES AGAINST THE CIT(A)-XIV, AHMEDABADS ORDER DATED 22.02.2014 IN C ASE NO. CIT(A)- XIV/ITO/WARD-8(1)/232/13-14, AFFIRMING ASSESSING OF FICERS ACTION ITA NO. 2606/AHD/2014 (SAHAJ RESIDENCY PVT. LTD. V S. ITO) A.Y. 2010-11 - 2 - IMPOSING PENALTY OF RS.10,65,300/- IN ORDER DATED 1 5.05.2013, IN PROCEEDINGS U/S.143271(1)(C) R.W.S. 147 OF THE INCOME TAX ACT, 1961, IN SHORT THE ACT. 2. WE COME TO RELEVANT FACTS. THE ASSESSEE COMPANY IS ENGAGED IN REAL ESTATE AND DEVELOPMENT BUSINESS. IT CLAIMED TO HAV E PAID RS.10.5LACS EACH TO SHRI DINESHBHAI AND BHARATBHAI DESAI AND RS.13LACS TO AMBALAL DESAI IN LIEU OF GETTING VACANT PROPERTY IN THEIR POSSESSION. TH E ASSESSING OFFICER NOTICED THAT THESE WERE CASH PAYMENTS WHEREIN THE ASSESSEE HAD FAILED TO FILE ALL NECESSARY EVIDENCE. HE THEREFORE DISALLOWED THE IM PUGNED EXPENDITURE CLAIM OF RS.34LACS IN ASSESSMENT ORDER DATED 11.01. 2013. THIS FOLLOWED YET ANOTHER DISALLOWANCE OF FENCING CHARGES OF RS.47,50 0/- BEING MADE ON ACCOUNT OF LACK OF DETAILS. THE ASSESSING OFFICER FURTHER INITIATED THE IMPUGNED PENALTY PROCEEDINGS ALLEGING CONCEALMENT A ND FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S.271(1)(C) OF T HE ACT. THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE SAME. QUANTUM PR OCEEDINGS ACCORDINGLY ATTAINED FINALITY. 3. WE NOW ADVERT TO THE IMPUGNED PENALTY PROCEEDING S. THE ASSESSEE FILED AFFIDAVIT CUM POSSESSION LETTERS DATED 20 .05.2009 SUPPORTING ITS CASE OF HAVING RECEIVED THE IMPUGNED SUMS IN LIEU OF VAC ATING THE PROPERTY IN QUESTION. THE ASSESSING OFFICER HOWEVER QUOTED THE ABOVE QUANTUM DEVELOPMENTS TO TREAT ASSESSEES EXPENDITURE CLAIM (SUPRA) AS BOGUS IN NATURE INVITING THE IMPUGNED PENALTY U/S. 271(1)(C) OF THE ACT FOR FURNISHING OF ITA NO. 2606/AHD/2014 (SAHAJ RESIDENCY PVT. LTD. V S. ITO) A.Y. 2010-11 - 3 - INACCURATE PARTICULARS AS WELL AS CONCEALMENT OF IN COME. ALL THIS RESULTED IN THE IMPUGNED PENALTY OF RS.10,65,300/- BEING LEVIED . THE CIT(A) CONFIRMS THE SAME IN THE LOWER APPELLATE ORDER UNDER CHALLEN GE. 4. WE HAVE HEARD RIVAL SUBMISSIONS. CASE FILE PERU SED. THERE CAN BE HARDLY ANY DISPUTE ABOUT HONBLE APEX COURTS DECIS ION IN CIT VS. RELIANCE PETRO PRODUCTS 322 ITR 158 (SC) HOLDING THAT QUANTU M AND PENALTY ARE SEPARATE PROCEEDINGS WHEREIN EACH AND EVERY DISALLO WANCE / ADDITION MADE IN THE FORMER DOES NOT IPSO FACTO ATTRACT THE LATTER P ENAL PROVISION. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTS BOTH THE LOWER AUTHORITIES CONCLUSION THAT THE ASSESSEE HAD RAISED BOGUS CLAIM OF EXPENDITURE PARTICULARLY THAT PERTAINING TO THE FORMER DISALLOW ANCE SUM OF RS.34LACS PAID TO THE THREE PERSONS HEREINABOVE. WE NOTICE FROM T HE CASE FILE THAT THE SAID PAYEES HAVE FILED THEIR AFFIDAVITS OF HAVING VACATE D THE PREMISES IN LIEU OF GETTING THE MONEY IN QUESTION. LEARNED DEPARTMENTAL REPRESENTATIVE CONTESTS THE SAME AS SELF SERVING DOCUMENTS WITHOUT ANY DOCU MENTARY EVIDENCE. WE HOWEVER NOTICE THAT THE SAID PAYEES TO HAVE OBTAINE D POWER CONNECTIONS AND ALSO PAID MUNICIPAL CORPORATION TAX BILLS ISSUED IN THEIR NAMES PERTAINING TO THE PROPERTY IN QUESTION. THERE CAN HARDLY BE ANY QUARREL THAT THE LATTER PAYMENTS ARE IN LIEU OF BILLS ISSUED BY THE LOCAL M UNICIPAL AUTHORITY INCORPORATED UNDER THE RELEVANT MUNICIPAL LAW HAVIN G STATUTORY FORCE. WE OBSERVE IN THIS FACTUAL BACKDROP THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED ITA NO. 2606/AHD/2014 (SAHAJ RESIDENCY PVT. LTD. V S. ITO) A.Y. 2010-11 - 4 - ITS ONUS IN PROVING THE ABOVE THREE PAYEES TO BE I N POSSESSION OF THE PROPERTY IN QUESTION AS VACATED IN LIEU OF PAYMENT IN QUESTI ON OF RS.34LACS IN CASH. COMING TO LATTER AMOUNT OF RS.47,500/- (SUPRA), WE FIND THAT THE ASSESSEE HAD FURNISHED NECESSARY VOUCHERS. THE ASSESSING OFFICE R DID NOT EVEN CONDUCT A FACTUAL INQUIRY BY WAY OF ON THE SPOT VERIFICATION TO CONFIRM THE FENCING OF LAND IN QUESTION. WE THEREFORE CONCLUDE IN VIEW OF ALL THESE FACTS AND ABOVESTATED CASE LAW THAT THE ASSESSEE HAD NOT RAIS ED A BOGUS CLAIM OF EXPENDITURE SO AS TO BE PENALIZED U/S.271(1)(C) OF THE ACT. THE IMPUGNED PENALTY IS ACCORDINGLY DELETED. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 26 TH DAY OF APRIL, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 26/04/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0