V.G.P.Housing Pvt. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2615/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8725 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-06-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Section: 143(3); 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2615 TO 2620/MDS/ 2014 ( / ASSESSMENT YEARS: 2003-04 TO 2007-08 & 2009-10) M/S. V.G.P. HOUSING PVT.LTD., 6, VGP SQUARE, DHARMARAJA KOIL STREET, SAIDAPET, CHENNAI-600 015. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-IV(3), CHENNAI. PAN: AAACV2568B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 14 TH JUNE, 2016 /DATE OF PRONOUNCEMENT : 22 ND AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THESE APPEALS ARE FILED BY THE ASSESSEE AGGRIEV ED BY THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS,(CENTRAL)-I, CHENNAI DATED 25.0 7.2014 IN ITA NO.130, 129, 128, 127, 126 & 124/13-14 PAS SED UNDER SECTION 271(1)(C) / 271AAA R.W.S 250(6) OF TH E ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEALS, HOWEVER, THE CRUX OF THE COMMON ISSUE IS T HAT:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE LEVY OF 2 ITA NOS. 2615 TO 2620/MDS/2014 PENALTY UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEARS 2003-04, 2004-05 , 2005-06, 2006-07, 2007-08 AND UNDER SECTION 271AAA OF THE ACT FOR THE ASSESSMENT YEAR 2009-10 TOWARDS CONCEALMENT OF INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN BUSINESS. A SEARCH UNDE R SECTION 132 OF THE ACT WAS CONDUCTED IN THE GROUP CONCERNS OF THE ASSESSEE ON 03.03.2009. THEREAFTER THE ASSESSMENTS WERE FRAMED UNDER SECTION 153A R.W.S. 143(3) OF THE AT O N 31.12.2012 FOR THE ASSESSMENT YEAR 2003-04 ,ON 31. 12.2010 FOR THE ASSESSMENT YEARS 2004-05 , 2005-06, & 2009 -10 AND ON 30/12/2010 FOR THE ASSESSMENT YEARS 2006-07 & 2 007-08 WHEREIN THE LEARNED ASSESSING OFFICER DISALLOWED TH E CLAIM OF EXPENDITURE INCURRED TOWARDS BROKERAGE, COMMISSION ETC., DUE TO LACK OF EVIDENCE AND MADE ADDITIONS AS FOLL OWS:- ASSESSME NT YEAR ADDITION MADE BY DISALLOWING BROKERAGE /COMMISSION EXPENDITURE ADDITION MADE TOWARDS DISALLOWANCE OF DONATION ADDITION MADE BY DISALLOWING PROFESSIONAL SERVICE CHARGE ADDITION U/S.40(A)(IA) OF THE ACT 2003-04 `65440 `71,260 `80,767 2004-05 - `3,81,077 - 2005-06 7,01,751 `5,96,138 `8,18,785 `15,20,536 2006-07 - `2,42,065 - 2007-08 `6,72,804 `37,58,198` 1,29,162 3 ITA NOS. 2615 TO 2620/MDS/2014 THEREAFTER THE LEARNED ASSESSING OFFICER LEVIED MIN IMUM PENALTY UNDER SECTION 271(1)(C) / 271AAA OF THE ACT AS FOLLOWS:-. ASSESSMENT YEAR PENALTY U/S.271(1)(C) / 271AAA CONCEALED INCOME PERCENTAGE OF TAX EVADED UNDER SECTION 271(1)(C) OF THE ACT 2003-04 `79,920/- `2,17,467 100% 2004-05 `1,36,711/- `3,81,077 100% 2005-06 `7,74,544/- `21,16,674 100% 2006-07 `81,480/- `2,42,065 100% 2007-08 `15,35,073/- `45,60,524 100% 2009-10 `2,71,841 `27,18,414 10% OF UNDISCLOSED INCOME UNDER SECTION 271AAA OF THE ACT FOR THE ASSESSMENT YEAR 2009-10, THE LEARNED ASSESSING OFFICER HAD MADE ADDITION TOWARDS INFLATED LAND DEV ELOPMENT EXPENSES @ 10% AMOUNTING TO RS.27,18,414/- AND LEVI ED MINIMUM PENALTY @ 10% AMOUNTING TO RS.2,71,841/-. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDERS OF THE LEARNED ASSES SING OFFICER FOR ALL THE RELEVANT ASSESSMENT YEARS BECAU SE THE ASSESSEE COULD NOT SUBSTANTIATE THE EXPENSES INCURR ED BY IT AND DONATION PAID. THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) CONFIRMED THE ORDER OF THE LD.A.O AND ALSO UPHELD THE VIEW OF THE LEARNED ASSESSING OFFICER WI TH REGARD 4 ITA NOS. 2615 TO 2620/MDS/2014 TO LEVY OF PENALTY AGAINST THE ADDITION MADE UNDER SECTION 40(A)(IA) OF THE ACT BECAUSE THE ASSESSEE DID NOT D ISALLOW THE SAME IN ITS COMPUTATION OF INCOME AS PER THE PROVIS IONS OF THE ACT. 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD DISCLOSED ALL THE E XPENDITURE INCURRED BY IT IN ITS BOOKS OF ACCOUNT AND ALSO THE DONATIONS PAID. IT WAS THEREFORE SUBMITTED THAT THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INCORRECT PA RTICULARS. THE ENTIRE ADDITION IS MADE BECAUSE THE ASSESSEE CO ULD NOT PRODUCE THE REQUISITE EVIDENCE FOR HAVING EXPENDED SUCH EXPENDITURE AND THE DONATION PAID BUT IN FACT, THE ASSESSEE HAD GENUINELY MADE ALL SUCH PAYMENTS AND ACCORDINGL Y RECORDED IN ITS BOOKS OF ACCOUNTS. HE FURTHER SUBMI TTED THAT THE PAYMENT TOWARDS BROKERAGE, COMMISSION ETC., WER E MADE BELOW THE LIMIT PRESCRIBED UNDER THE PROVISIONS OF TAX DEDUCTED AT SOURCE HOWEVER, AT THE TIME OF ASSESSM ENT THE ASSESSEE COULD NOT FURNISH SUFFICIENT DETAILS TO ES TABLISH THE SAME. FURTHER, IT WAS SUBMITTED THAT THE LEARNED AS SESSING OFFICER HAS ALSO NOT EXAMINE THE ISSUE IN DETAIL BU T SIMPLY 5 ITA NOS. 2615 TO 2620/MDS/2014 INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WHICH THE ASSESSEE HAS NOT CONTESTED IN ORDER TO AVOID PR OTRACTED LITIGATION. HENCE, IT WAS PLEADED THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C) & 271AAA OF THE ACT & MAY BE DELE TED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE AND REQUESTED FOR SUSTAINING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE, IT IS APPARENT THAT THE ASSESSEE HAS DISCLOSED ALL THE EXPENDITURE AND PAYMENTS IN ITS BOOKS OF ACCOUNT. I T IS ONLY DUE TO WANT OF CERTAIN DOCUMENTARY EVIDENCE, THE RE VENUE HAD MADE THE DISALLOWANCE. FURTHER, IT APPEARS THAT THE ASSESSEE HAS NOT CONTESTED THE APPEAL IN ORDER TO A VOID PROLONGED LITIGATION. THE REVENUE HAS ALSO NOT ESTA BLISHED THAT THE PAYMENT MADE BY THE ASSESSEE TOWARDS THE EXPENDITURE AND DONATION ARE NOT GENUINE AND VIOLAT ED THE PROVISIONS OF TAX DEDUCTED AT SOURCE BY MAKING PAYM ENT 6 ITA NOS. 2615 TO 2620/MDS/2014 BEYOND THE LIMIT PRESCRIBED UNDER THE ACT. IN THIS SITUATION, WE ARE OF THE CONSIDERED VIEW THAT THE RIGOR OF THE PROVISIONS OF SECTION 271(1)(C) AND 271AAA OF THE ACT WILL NOT BE ATTRACTED BECAUSE ALL THE FACTS AND FIGURES WERE DI SCLOSED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THOUGH THE A DDITION MADE BY THE ASSESSEE IS SUSTAINABLE. ACCORDINGLY, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELE TE THE PENALTY LEVIED IN THE CASE OF THE ASSESSEE FOR ALL THE ABOVE RELEVANT ASSESSMENT YEARS. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 22 ND AUGUST, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) ' $ / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER ' /CHENNAI, ' /DATED 22 ND AUGUST, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .