M/s. Orient Texfabs Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 3342/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6664 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 06-02-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 30-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S K GUPTA
• Keywords: Depreciation
• Section: 143(3); 147; 148; 154

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI. H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 3342 &3343/DEL/2014 (ASSESSMENT YEAR: 2004 - 05 ) ORIENT TAXFABS PVT. LTD., E - 45/14, OKHLA INDUSTRIAL AREA, PHASE - II, NEW DELHI PAN:AAACI4248B VS. ACIT, CIRCLE - 13(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SK GUPTA, CA REVENUE BY: SH. RAJESH KUMAR, SR. DR DATE OF HEARING 06/02/2017 DATE OF PRONOUNCEMENT 27 / 02 / 2017 O R D E R PER PRASHANT MAHARISHI , A . M . ITA NO. 3342/DEL/2014 AY. 2004 - 05 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL) XVI , NEW DELHI DATED 25/03/2014 WHEREIN THE APPEAL AGAINST THE ORDER OF THE LD. AO WAS PREFERRED BEFORE HIM AGAINST REJECTION OF APPLICATION UNDER SECTION 154 OF THE INCOME TAX ACT BY THE ASSESSING OFFICER AND THE LD. CIT(A) HAS ALSO REJECTED THE APPEAL OF THE ASSESSEE. THEREFORE, ASSESSEE IS IN APPEAL BEFORE US EFFECTIVELY RA ISING TWO GROUNDS OF APPEAL: - 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS WRONGLY, ARBITRARILY AND AGAINST THE LAW AND FACTS OF THE CASE, CONFIRMED THE ORDER OF REJECTION OF APPLICATION MADE UNDER SECTION 154 OF THE ACT BY THE LD. ASSESSING OFFICER AND CONFIRMED ADDITION OF RS. 1462785/BASH ON ACCOUNT OF ADJUSTMENT OF VALUATION OF STOCK UNDER SECTION 145A OF THE ACT. EVEN THOUGH THE ASSESSEE HAD ALREADY OFFERED FOR TAXATION AMOUNT OF RS. 1358721/ INSTEAD OF RS. 1462785/ WHILE FILING THE ORI GINAL RETURN MAINLY BECAUSE OF THE TYPOGRAPHICAL, CLERICAL ERROR AND THEREAFTER, THE ASSESSEE HAD REVISED ITS INCOME TAX RETURN UNDER SECTION 148 OF THE ACT AND OFFERED FOR TAXATION CORRECT AMOUNT OF RS. 1462785/ - UNDER THE HEAD OF ADJUSTMENT UNDER SECTION 145A OF THE ACT. 2) THAT THE LD. COMMISSIONER OF INCOME TAX APPEALS HAS WRONGLY ARBITRARILY AND AGAINST THE LAW AND FACTS OF THE CASE, CONFIRMED THE ORDER OF REJECTION OF APPLICATION MADE UNDER SECTION 154 OF THE ACT BY THE LD. ASSESSING OFFICER AND CONFI RMED ADDITION OF RS. 394604/ - ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION UNDER THE INCOME TAX ACT, 1961, EVEN THOUGH THE ASSESSEE HAD ALREADY OFFERED THE SAME FOR TAXATION, WHILE FILING THE INCOME TAX RETURN UNDER SECTION 148 OF THE ACT PAGE 2 OF 4 2. BRIEFLY STATED, TH E FACTS OF THE CASES THAT ASSESSEE IS A PRIVATE LIMITED COMPANY WHO WAS ASSESSED UNDER SECTION 143 (3) READ WITH SECTION 147 OF THE INCOME TAX ACT ON 17/10/2006 IN WHICH INCOME OF THE ASSESSEE WAS ASSESSED AT A LOSS OF RS. 11481327/ . SUBSEQUENTLY, ASSESSE E PREFERRED AN APPLICATION UNDER SECTION 154 OF THE INCOME TAX ACT ON 06/03/2012 STATING THAT A SUM OF RS. 1462785/ - WHICH HAS BEEN ADDED ON ACCOUNT OF VALUATION OF THE STOCK WHEREIN THE ASSESSEE HAS ALREADY DISALLOWED A SUM OF RS. 1232323/ - . THE SECOND RE ASON WAS THAT THE LD ASSESSING OFFICER HAS MADE THE ADDITION, WHICH WAS ALREADY BY THE ASSESSEE WHILE FILING ITS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THE LD ASSESSING OFFICER STATING THAT ISSUES RAISED BY THE ASSESSEE HAVE ALREADY BEE N DEALT WITH IN ASSESSMENT ORDER ITSELF REJECTED THE APPLICATION OF THE ASSESSEE . THE LD ASSESSING OFFICER ALSO REPRODUCED THE RELEVANT PARAGRAPH OF THE ASSESSMENT ORDER. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD CIT(A), WHO IN TURN CONFIRMED THE ACTION OF THE ASSESSING OFFICER THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD AR SUBMITTED THAT THE ABOVE DISALLOWANCE OF RS. 1462785/ - ON ACCOUNT OF VALUATION OF CLOSING STOCK AND EXCESS CLAIM OF DEPRECATION OF RS. 394604/ - HAS ALREADY BEEN CONSIDERED BY THE ASSESSEE WHILE FILING RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THEREFORE, THE ADDITION IS WRONGLY MADE. 4. THE LD DR RELIED UPON THE ORDERS OF LOWER AUTHORITIES. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDER OF THE LOWER AUTHORITIES. ON EXAMINATION OF ORDER DATED 30.08.2011 U/S 147 READ WITH SECTION 143(3) OF THE ACT WE HAVE NOTED THAT THE LD ASSESSING OFFICER HAS COMPUTED THE INCOME FROM INCOME ASSESSED U/S 143(3) DATED 31.03.2008 AND THEREAFTER MADE ADJUSTMENT OF ABOVE TWO SUM. THE RESULTANT INCOME WAS ASSESSED AT RS. 9483301/ - . AS THE INCOME ASSESSED U/S 154 READ WITH SECTION 143(3) OF THE INCOME TAX ACT VIDE ORDER DATED 31.03.2008 THE TOTAL ASSESSED LOSS WAS RS. 11340690/ - . THE L D ASSESSING OFFICER WHILE EFFECT TO THE ORDER U/S 147 HAS STARTED COMPUTATION FROM THAT LOSS. AS THE ORDER DATED 31.03.2008 ASSESSING THE LOSS OF THE ASSESSEE AT RS. 11340690/ - REMAINS UNCHALLENGED, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AU THORITIES, AND THEREFORE, WE ARE OF THE OPINION THAT THERE IS NO ERROR MORE SO PAGE 3 OF 4 APPARENT IN THE ORDER OF THE LD ASSESSING OFFICER. THEREFORE, APPEAL OF THE ASSESSEE IS DISMISSED. IN THE RESULT ITA NO. 3343/DEL/2014 FOR ASSESSMENT YEAR 2004 - 05 IS DISMISSED. 6. NOW WE COME TO THE APPEAL NO. 3343./DEL/2014 WHICH IS AGAINST THE ORDER OF THE LD CIT(A) DATED 25.03.2014, WHO HAS CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT OF RS. 666398/ - . THE ASSESSEE HAS RAISED TWO GROUN DS OF APPEAL CONTESTING THAT DISALLOWANCE OF DEPRECATION OF RS. 394604/ - AND RS. 1462785/ - ON ACCOUNT OF VALUATION OF CLOSING STOCK THOUGH OFFERED IN RETURN FILED U/S 148 OF THE ACT CANNOT BURDENED THE ASSESSEE WITH PENALTY U/S 271(1)(C) OF THE ACT. 7. THE B RIEF FACTS OF THE CASE IS THAT NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE WHEN ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT AND ASSESSEE WAS FOUND TO HAVE CLAIMED EXCESS DEPRECATION OF RS. 394604/ - AND UNDER VALUATION OF CLO SING STOCK OF RS. 1462785/ - . ON RECEIPT OF THE NOTICE, ASSESSEE OFFERED BOTH THESE INCOME IN RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. ASSESSEE IS PLEADING THAT ON THIS ADDITION/ DISALLOWANCE PENALTY U/S 271(1)(C) CANNOT BE LEVIED. 8. THE LD AR SUBMITTED BEFORE US THE SAME ARGUMENT, WHICH WAS STATED BEFORE THE LOWER AUTHORITIES. 9. THE LD DR SUBMITTED THAT WHEN IN RESPONSE TO NOTICE U/S 148 OF THE ACT ASSESSEE ITSELF HAS OFFERED THE INCOME WHICH HAS ESCAPED THE ASSESSMENT AND THEREFORE THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND ACCORDING TO SECTION 271(1)(C) OF THE ACT THERE IS NO EXPLANATION OFFERED BY THE ASSESSEE. HENCE, ACCORDING TO EXPLANATION 1 IT IS A DEEMED CONCEALMENT OF INCOME AND THEREFORE PENALTY IS RIGHTLY LEVIED. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE LD AO HAS MADE ADDITION OF RS. 1462785/ - ON ACCOUNT OF VALUATION OF CLOSING STOCK AND RS. 394604/ - BEING EXCESS DEPRECATION CLAIMED ON ELECTRIC I NSTALLATION. BOTH THESE INCOME ESCAPED THE ASSESSMENT AND THEREFORE, NOTICE U/S 148 WAS ISSUED. THE LD CIT(A) HAS CONFIRMED THE PENALTY AS HE DID NOT FIND ANY MERIT IN THE ARGUMENTS OF THE ASSESSEE AS APPELLANT HAS FAILED TO PROVE THAT THE EXPLANATION FURN ISHED BY THE ASSESSEE IS BONAFIDE THEREFORE THE PENALTY LEVIED BY THE ASSESSING OFFICER WAS CONFIRMED. THE LD CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BLE DELHI PAGE 4 OF 4 HIGH COURT IN CASE OF CIT VS. ZOOM COMMUNICATIONS PVT. LTD. 191 TAXMANN 179. IT WAS FURTHE R HELD THAT THE EXPLANATION OF THE APPELLANT IS NEITHER BONAFIDE NOR IT IS ABLE TO SUBSTANTIATE THE CLAIM. THE LD AR BEFORE US COULD NOT EXPLAIN THAT HOW THE ORDER OF THE LD CIT(A) IS NOT SUSTAINABLE. ACCORDING TO US WHEN THE ASSESSEE HAS HIMSELF OFFERED THE INCOME AND ACCEPTED THAT THE ABOVE TWO DISALLOWANCE ESCAPED THE ASSESSMENT AND FURTHER THERE IS NO REASON FOR NOT OFFERING THIS INCOME IN ORIGINAL RETURN OF INCOME WE DO NOT FIND ANY REASON TO NOT T O UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. IN VIEW OF THIS WE CONFIRM THE FINDING OF THE LD CIT(A) IN CONFIRMING THE LEVY OF PENALTY OF RS. 666338/ - U/S 271(1)(C) OF THE ACT. IN THE RESULT BOTH THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 11. IN THE RESULT A PPEAL, NO. 3343/DEL/2014 FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 / 02 / 2017 . - SD/ - - SD/ - (H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 / 02 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI