M/s Viscus oils Pvt. Ltd, Indore V. The ACIT, Indore

ITA 282/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2867 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-05-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 22-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: ANIL K KHANDELWAL
• Keywords: Gift; Difference of opinion; Change of opinion
• Section: 271(1)(c)

Judgement Text

PAGE 1 OF 4 -. I.T.A.NO. 282/IND/2009 VISCUS OILS PRIVATE LIMITED, INDORE. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAACV6554D I.T.A.NO. 282/IND/2009 A.Y. : 2002-03 M/S.VISCUS OILS PRIVATE LIMITED, ACIT, 55/1/2-C, NEW PALASIA, INDORE. VS 3(1), INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI ANIL K.KHANDELWAL, C. A. RESPONDENT BY : SMT.APARNA KARAN, SR. DR DATE OF HEARING : 10.05.2010 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-I, INDORE, DATED 27.02.2009, FOR THE ASSESSM ENT YEAR 2002-03. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL REA DS AS UNDER :- PAGE 2 OF 4 -. I.T.A.NO. 282/IND/2009 VISCUS OILS PRIVATE LIMITED, INDORE. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 65,00 0/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF T HE ACT. 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE WAS VALU ING STOCK NET OF EXCISE DUTY. HENCE, THE AO BY INVOKING THE PROVISIO NS OF SECTION 145A ADDED A SUM OF RS. 1,75,860/- TO THE VALUE OF CLOSI NG STOCK, WHICH WAS ACCEPTED BY THE ASSESSEE ALSO. THE AO ALSO MADE DIS ALLOWANCE OF RS. 35,000/- OUT OF SALES PROMOTION EXPENSES FOR WANT O F SPECIFIC DETAILS OF GIFTS GIVEN BY THE ASSESSEE. THEREAFTER, THE AO LEV IED PENALTY U/S 271(1)(C) AT RS. 65,000/- RELYING ON THE OBSERVATI ONS OF THE LD. CIT(A) IN THE APPELLATE PROCEEDINGS IN RESPECT OF QUANTUM APP EAL. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT(A), WHO ALSO CONFIRMED THE ACTION OF THE AO BY HOLDING THAT MENS REA WAS NOT REQUIRED TO ATTRACT THE PENALTY U/S 271(1)(C) OF THE ACT. AG GRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE WAS MAINTAINING REGULAR BOOKS OF ACCOUNT, TAX AUDIT REPORT HAD ALSO BEEN FILED ALONGWITH RETURN OF INCOME, HENCE, INSPITE OF ADDITION SO MADE, IT COULD NOT BE SAID THAT THE ASSESSEE CONCEA LED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IT WAS ALSO CONTENDED THAT THERE WAS NO IMPACT ON THE PROFIT OF THE ASSESSEE A S A WHOLE, BECAUSE THE PAGE 3 OF 4 -. I.T.A.NO. 282/IND/2009 VISCUS OILS PRIVATE LIMITED, INDORE. CLOSING STOCK IN THIS YEAR HAD TO BE ALLOWED AS A D EDUCTION BY WAY OF OPENING STOCK OF NEXT YEAR. AS REGARD TO OTHER DISA LLOWANCE MADE BY THE ASSESSING OFFICER, THE LEARNED COUNSEL CONTENDED T HAT IT WAS A CASE OF CHANGE OF OPINION AND NO SPECIFIC DEFECTS HAD BEEN POINTED OUT. HENCE, NO PENALTY COULD BE LEVIED THEREON. 6. THE LD. SR. DR, ,ON THE OTHER HAND, PREFERRED TO RE LY ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS NOTED THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT REGULARLY. ITS ACCOUNTS ARE ALSO AUDITED. THE ASSES SEE IS VALUING HIS CLOSING STOCK, NET OF EXCISE DUTY OVER THE YEARS AN D THIS FACT IS DULY DISCLOSED IN THE BOOKS OF ACCOUNT AS WELL AS IN THE TAX AUDIT REPORT ENCLOSED WITH THE RETURN OF INCOME. THE APPLICATION OF SECTION 145A CANNOT BE DISPUTED HENCE, REQUIRED MODIFICATION IN VALUE OF STOCK HAS RIGHTLY BEEN CARRIED OUT. HOWEVER, WHEN THE FACTS O F METHOD OF VALUATION ARE DULY DISCLOSED, HENCE, IT CANNOT BE A CASE OF F URNISHING OF INACCURATE PARTICULARS OF THE INCOME OF THE ASSESSEE. THEREFOR E, THE PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE LEVIED. WE ARE FURTH ER OF THE VIEW THAT IT IS ALSO NOT A CASE OF CONCEALMENT OF INCOME AS WELL IN VIEW OF THE ABOVE FACTS. AS REGARD TO OTHER DISALLOWANCE, WE FIND THA T IT IS A CASE OF REJECTION PAGE 4 OF 4 -. I.T.A.NO. 282/IND/2009 VISCUS OILS PRIVATE LIMITED, INDORE. OF THE ASSESSEES CLAIM AND IN THE PENALTY PROCEEDI NGS, IT HAS NOT BEEN ESTABLISHED THAT IT WAS, IN FACT, THE REAL INCOME O F THE ASSESSEE, HENCE, FOR THIS REASON, THE PENALTY ON THIS ADDITION ALSO CANN OT BE LEVIED. WE FURTHER FIND THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PRIVATE LIMITED AS REPORTED IN 322 ITR 158, DULY SUPPORTS THE VIEW TAKEN BY US. ACCORDINGLY, WE CAN CEL THE PENALTY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 24 TH MAY, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24 TH MAY, 2010. CPU*