M/s. Viney Auto Private Limited, New Delhi V. ACIT, New Delhi

ITA 2933/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3579 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI S.V. MEHROTRA, VICE PRESIDENT AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.2933/DEL/2014 ASSESSMENT YEAR : 2008-09 VINEY AUTO PRIVATE LIMITED, ( NOW KNOWN AS VINEY CORPORATION PVT. LTD. ), G-975, DSIDC NARELA INDUSTRIAL COMPLEX, BHORGARH, NEW DELHI. VS. ACIT, CIRCLE- 17(1), NEW DELHI. PAN : AAACV 0446 L (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSIONS RESPONDENT BY : SHRI UMESH CHAND DUBEY, SR.DR DATE OF HEARING : 16-03-2017 DATE OF PRONOUNCEMENT : 12-04-2017 O R D E R PER S.V. MEHROTRA, V.P. : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 12.03.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 19, NEW DELHI, U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT), RELATING TO ASSESSMENT YEAR 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN OF INCOME OF RS.1,52,08,500/-. THE ASSESSING OFFICER NOTICED TH AT THE ASSESSEE HAD SHOWN EXEMPT INCOME U/S 10(34) IN RESPECT OF DIVIDEND INC OME AMOUNTING TO 2 ITA NO.2933/DEL/2014 RS.2,12,335/- AND RS.11,21,277/- AS LTCG (UNDER SEC URITY TRANSACTION TAX) EXEMPT U/S 10(38). HE NOTICED THAT NO EXPENSES ATT RIBUTABLE TO EARNING OF SUCH INCOME HAD BEEN TAKEN INTO CONSIDERATION BY THE ASS ESSEE AS REQUIRED U/S 14A. THE ASSESSEE IN ITS REPLY DATED 04.10.2010 STATED A S UNDER :- IN CLAUSE 17(I) OF TAX AUDIT REPORT, IT HAS BEEN S PECIFIED AS UNDER : THE COMPANY IS HAVING COMPOSITE BOOKS OF ACCOUNTS W ITH RESPECT OF TAXABLE INCOME AND EXEMPTED INCOME AND AS SUCH, IT IS NOT POSSIBLE TO QUANTIFY THE AMOUNT OF DEDUCTION INADMISSIBLE IN TERMS OF SECTION 14A IN R ESPECT OF THE EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF T HE TOTAL INCOME. WITHOUT PREJUDICE AS STATED HEREINABOVE, WE ARE ENCLOSING HEREWITH A COMPUTATION OF DISALLOWANCE AMOUNTING TO RS.1,13,505/- AS ANNEXURE D COMPUTED AS PER RULE 8D OF THE I.T. RULES. 3. ACCORDINGLY, A SUM OF RS.1,13,505/- WAS ADDED BY THE ASSESSING OFFICER AND PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATE D. SINCE THE ASSESSEE DID NOT FILE ANY REPLY, PENALTY OF RS.34,050/- WAS LEVIED. LD. CIT(A) DISMISSED THE ASSESSEES APPEAL. BEING AGGRIEVED, THE ASSESSEE I S IN APPEAL BEFORE US AND HAS TAKEN FOLLOWING GROUND OF APPEAL :- ON FACTS AND IN CIRCUMSTANCES OF THE CASE, LEARNED C.I.T.(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.34050/- UNDER SECTION 271(1)(C) OF THE ACT ON ADDITION OF RS.113505/- UNDER SECTION 14A OF THE AC T. 4. IN THE WRITTEN SUBMISSIONS, THE ASSESSEE HAS, INTER-ALIA, RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (2010) 189 TAXMAN 322, WHERE IN, THE HONBLE SUPREME COURT HAS HELD THAT IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIONS, THE PENALTY PROVISION CANNOT BE INVOKED. IT 3 ITA NO.2933/DEL/2014 WAS FURTHER HELD THAT BY ANY STRETCH OF IMAGINATION , MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT OF FURNISHING INACCURATE PART ICULARS. 5. WE HAVE CONSIDERED THE WRITTEN SUBMISSIONS OF AS SESSEE AND HEARD LD. DR. WE HAVE PERUSED THE RECORD OF THE CASE. ADMIT TEDLY, IN THE TAX AUDIT REPORT IN CLAUSE 17(1) IT HAD BEEN STATED THAT SINCE THE C OMPANY WAS HAVING COMPOSITE BOOKS OF ACCOUNT WITH RESPECT TO THE TAXABLE AND EX EMPTED INCOME, THEREFORE, IT WAS NOT POSSIBLE TO QUANTIFY THE AMOUNT OF DEDUCTIO N, INADMISSIBLE IN TERMS OF SECTION 14A IN RESPECT OF THE EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. HOWEVER, W ITHOUT PREJUDICE TO THESE OBSERVATIONS OF TAX AUDITOR, THE ASSESSEE HAD OFFER ED DISALLOWANCE OF RS.1,13,505/- AS PER RULE 8D OF THE INCOME TAX RULE S, 1962. THEREFORE, IT CANNOT BE SAID THAT THERE WAS ANY CONSCIOUS ATTEMPT FOR CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE, WHICH COULD EXPOSE IT TO PENALTY PROCEEDINGS U/S 271(1)(C). FOLLOWING THE RATIO LAID DOWN BY HONBL E SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA), THE ASS ESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF APRIL, 2017. SD/- SD/- (BEENA A. PILLAI) (S. V. MEHROTRA) JUDICIAL MEMBER VICE PRESIDENT DATED: 12-04-2017. SUJEET 4 ITA NO.2933/DEL/2014 COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI