DCIT, New Delhi V. M/s. C.J. International Hotels Ltd., New Delhi

ITA 3626/DEL/2013

• Counselvise Citation: 362620114 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-10-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARWINDER KAUR
• Keywords: Depreciation; Difference of opinion; Onus to prove; Change of opinion
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER & SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3626/DEL/2013 ASSESSMENT YEAR: 2000-01 DCIT, VS. C.J. INTERNATIONAL HOTELS LTD., CIRCLE 3(1), HOTEL LE-MERIDIAN, WINDSOR PLACE, NEW DELHI. NEW DELHI. AAACC0174E (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. TARWINDER KAUR, SR. DR RESPONDENT BY : SH. TARANDEEP SINGH, CA ORDER PER H.S. SIDHU, J.M. THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 22.03.2013 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS)-VI, NEW DELHI FOR A.Y. 2000-01. 2. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U /S 147/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) ON 22/11/2007 ASSESSING THE INCOME OF THE ASSESSEE COMPANY AT RS. 182388380/- AS AGAINST THE RETURNED INCOME OF RS. NIL UNDER NORMAL PROVISIONS AND DECLARED BOOK PROFIT OF RS. 143876187/- U/S 115JB O F THE INCOME TAX ACT. WHILE COMPLETING THE ASSESSMENT, THE AO MADE ADDITI ON AMOUNTING TO RS. 1654740/- ON ACCOUNT OF DISALLOWANCES OF DEPREC IATION CLAIMED ON BUILDING NAMELY WEST TOWER. THE LD. CIT(A) VIDE HE R ORDER DATED ITA NO. 3626/D/2013 M/S C.J. INTERNATIONAL HOTELS LTD. 2 04/03/2009 CONFIRMED THE ADDITION MADE BY THE AO ON THE APPEAL FILED BY THE ASSESSEE. 3. THE AO ISSUED PENALTY NOTICE TO THE ASSESSEE U/S 271(1)(C) OF THE INCOME TAX ACT FIXING THE CASE FOR HEARING ON 30/08 /2010 IN RESPONSE TO THE SAME ASSESSEE FILED ITS WRITTEN SUBMISSIONS MAI NLY CONTESTED THAT ON BOTH THE ISSUE THE DEPARTMENT IS BEING DIFFERENT VI EW SINCE THE EARLY YEARS I.E. PRIOR TO A.Y. 2001-02 THE DEPARTMENT ACCEPTED THESE ISSUES. BUT THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE TO THE AO BECAUSE IN HIS VIEW EACH ASSESSMENT YEAR IS AN INDEPENDENT YEAR AN D PRINCIPLE OF RES- JUDICATA IS NOT APPLICABLE IN INCOME TAX PROCEEDINGS. 3.1 HE ALSO HELD THAT AS PER EXPLANATION 1, THERE I S A PRESUMPTION THAT THE AMOUNT ADDED, OR DISALLOWED IN COMPUTATION IN T HE TOTAL INCOME, SHALL DEEM TO BE THE INCOME IN RESPECT OF WHICH PARTICULA RS HAVE BEEN CONCEALED. THE ONUS IS PLACED ON THE ASSESSEE TO P ROVE THAT THERE WAS NO CONCEALMENT OF INCOME. THE ASSESSEE HAS FAILED TO DISCHARGE ITS BURDEN OF PROOF. THE EXPLANATION OFFERED BY THE AS SESSEE IS UNSATISFACTORY AND IS UNACCEPTABLE. THEREFORE, HE IS OF THE VIEW THAT ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS O F ITS INCOME HENCE HE IS SATISFIED THAT THIS IS A FIT CASE FOR IMPOSING P ENALTY FOR FURNISHING INACCURATE PARTICULARS IN RESPECT OF ITS INCOME AS PER THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT AND HE IMPO SED THE PENALTY OF RS. 637074/- U/S 271(1)(C) OF THE INCOME TAX ACT FO R FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME VIDE ORDER DAT ED 07/09/2010 PASSED U/S 271(1)(C) OF THE INCOME TAX ACT. 4. AGGRIEVED BY THE ORDER DATED 07/09/2010 THE ASSE SSEE FILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE IMPUGNED ORDER DATED 22/03/2013 DELETED THE PENALTY IN DISPUTE BY ACCEPTING APPEAL FILED BY THE ASSESSEE ON THE GROUND THAT SIMILAR PENALTY HAS BEEN DELETED BY ITA NO. 3626/D/2013 M/S C.J. INTERNATIONAL HOTELS LTD. 3 HIS PREDECESSOR IN THE CASE OF ASSESSEE FOR THE A.Y . 2001-02 ON 25/07/2007. NOW THE REVENUE IS AGGRIEVED BY THE IM PUGNED ORDER DATED 22/03/2013 FIELD THE APPEAL. 5. AT THE TIME OF HEARING LD. DEPARTMENTAL REPRESEN TATIVE RELIED ON THE ORDER DATED 07/09/2010 PASSED BY THE AO U/S 271 (1)(C) OF THE INCOME TAX ACT. 6. LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE IMP UGNED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY DATED 2 2/03/2013 AND STATED THAT THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE PENALTY IS IN DISPUTE BY RESPECTFULLY FOLLOWING THE ORDER OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR THE A.Y. 2001-02 DATED 25/0 7/2007. HE FURTHER STATED THAT ISSUES OF WHICH THE PENALTY HAS BEEN IM POSED BY THE AO HAS ALSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE HIGH COURT BY UPHOLDING THE ORDER OF ITAT, DELHI BENCH. HE ALSO DRAW OUR ATTENTION TOWARDS A SMALL PAPER BOOK FILED BY HIM CONTAINING PAGE 1 TO 59 IN WHICH HE HAS ATTACHED COPY OF THE ORDER DATED 12 TH SEPTEMBER, 2012 IN THE CASE OF C.J. INTERNATIONAL HOTELS A.Y. 2001-02, COPY OF THE ORDER DATED 4 TH MARCH, 2009 BY CIT(A) A.Y. 2000-01, COPY OF CROSS O BJECTION NO. 349/DEL/2009 IN ITA NO. 2701/DEL/2009, COPY OF THE ORDER DATED 17 TH NOVEMBER, 2009 PASSED BY HONBLE DELHI ITAT IN THE CASE OF C.J. INTERNATIONAL HOTELS, COPY OF THE ORDER DATED 24 TH JULY, 2007, PASSED BY HONBLE DELHI ITAT REPORTED IN 2008-TIOL-367-ITAT-D EL, COPY OF JUDGMENT DATED 18 TH NOVEMBER, 2010 REPORTED IN 197 TAXMAN 230.(DEL). 6.1 HE REQUESTED THAT THE APPEAL FILED BY THE DEPAR TMENT MAY BE DISMISSED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS PASSED BY THE REVENUE AUTHORITIES ALONG WITH DOCUMENTARY EVID ENCE FILED BY THE LD. COUNSEL FOR THE ASSESSEE AND WE ARE OF THE CONSIDER ED VIEW THAT THE LD. FIRST ITA NO. 3626/D/2013 M/S C.J. INTERNATIONAL HOTELS LTD. 4 APPELLATE AUTHORITY HAS PASSED THE WELL REASONED OR DER AFTER DISCUSSING THE RELEVANT PROVISIONS OF LAW AS WELL AS THE CASE LAW RELATING TO THE ISSUE IN DISPUTE. 8. THE MAIN CONCLUDING PARAGRAPH I.E. 5.5 AT PAGE 1 2 & 13 OF THE IMPUGNED ORDER IS REPRODUCED AS UNDER: 5.5 IT IS ALSO SEEN THAT SIMILAR GROUNDS PENALTY HAS BEEN DELETED BY MY PREDECESSOR IN THE OF APPELLANT FOR T HE A.Y. 2001-02 (APPEAL NO. 27/06/07 VIDE ORDER DATED 25.07 .2007) WITH THE FOLLOWING OBSERVATION: 3. I HAVE CONSIDERED THE ARGUMENTS OF LD. AR AND GONE THROUGH THE OBSERVATIONS OF THE AO. MY OBSERVATIONS ON THIS ISSUE ARE AS UNDER: I. I FIND THAT MAIN ADDITION WAS BY WAY OF PROPERTY INCOME FROM WASTE TOWER AMOUNTING TO RS. 2,01,18,507/- WAS MADE IN CONNECTION WITH SUCH PROPERTY. FURTHER THROUGH THE FACT, I FOUND THAT THESE ISSUES WERE INVOLVED IN APPELLANTS CASE EVEN IN EARLIER YEARS AND UPTO A.Y. 2000-01 AND NO ADDITIONS/DISALLOWANCES WERE MADE. EVEN THE DEPRECIATION ON WASTER TOWER WAS ALLOWED TO THE APPELLANT UPTO A.Y. 2000-01. THUS, THE ADDITION BY OF NOTIONAL INCOME FROM HOUSE PROPERTY AMOUNTING TO RS. 2,01,18,507/- AND DISALLOWANCE OF DEPRECIATION AGAINST WASTE TOWER AMOUNTING TO RS. 10,59,034/- WERE BASED ON DIFFERENCE OF OPINION. HENCE, THESE ADDITIONS/DISALLOWANCES MAY BE JUSTIFIED FOR THE ASSESSMENT OF INCOME BUT THESE ARE NOT FIT FOR LEVYING THE PENALTY U/S 271(1)(C). II. IN RESPECT OF REDUCTION OF CLAIM OF DEDUCTION U/S 80HHD, I FIND THAT IT WAS ALSO BASED ON DIFFERENCE OF OPINION ABOUT INTERPRETATION OF LEGAL PROVISION. HENCE, REDUCTION IN CLAIM OF DEDUCTION U/S 80HHD IS ALSO NOT FIT FOR LEVYING THE PENALTY U/S 271(1))(C). III. LAST DISALLOWANCE WAS RELATING TO INTEREST AMOUNTING TO RS. 4,40,000/- I FIND THAT THE AO HAS DISALLOWED THE INTEREST TO THE EXTENT OF RS. 44,00,000/- WHILE THE CIT(A) HAS UPHELD THE ITA NO. 3626/D/2013 M/S C.J. INTERNATIONAL HOTELS LTD. 5 DISALLOWANCE OF RS. 4,40,000/- ONLY ON GOING THROUGH THE FACT, I FIND THAT THE ASSESSEE HAS CHARGED INTEREST (AT @ 8% AGAINST THE LOAN GIVEN TO FAMILY MEMBERS WHILE THE AO HAS ESTIMATED THE INTEREST CHARGEABLE @ 16%. THUS, THE DISALLOWANCE OF INTEREST WAS BASED ON DIFFERENCE OF OPINION AND INTERPRETATION OF LEGAL PROVISION WHICH IS NOT FIT FOR LEVYING THE PENALTY U/S 271(1)(C). IV. IN THE LIGHT OF FACTS AND CIRCUMSTANCES MENTIONED ABOVE, I REACH TO THE CONCLUSION THAT THE AFORESAID ADDITIONS/DISALLOWANCES WERE BASED ON CHANGE OF OPINION AND THERE WAS NO ELEMENT OF POSITIVE CONCEALMENT. HENCE, THE APPELLANT CANNOT BE HELD LIABLE FOR FURNISHING THE INACCURATE PARTICULARS. IN THIS SITUATION, PENALTY LEVIED RS. 1,02,98,2707/- IS CANCELLED. SINCE THERE IS NO CHANGE IN FACTS OF THE CASE, I HA VE NO REASON TO DEVIATE FROM THE FINDINGS OF MY PREDECESS OR AND RESPECTFULLY FOLLOWING THE SAME THE IMPUGNED PENALT Y IS DIRECTED TO BE DELETED. 9. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES E XPLAINED ABOVE, WE ARE OF THE VIEW THAT LD. FIRST APPELLATE AUTHORI TY HAS RIGHTLY DELETED THE PENALTY IN DISPUTE BY FOLLOWING THE ORDER OF HIS PR EDECESSOR PASSED IN ASSESSEES OWN CASE FOR THE A.Y. 2001-02 REPRODUCED ABOVE. NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORD ER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. THEREFORE, WE UPHOLD THE IMPU GNED ORDER BY DISMISSING THE APPEAL FILED BY THE REVENUE. 10. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08/10/2014 SD/- SD/- (S.V. MEHROTRA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/10/2014 *KAVITA, P.S. ITA NO. 3626/D/2013 M/S C.J. INTERNATIONAL HOTELS LTD. 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR