ACIT, New Delhi V. M/s Central Warehousing Corporation, New Delhi

ITA 3668/DEL/2011

• Counselvise Citation: 366820114 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 29-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PROF S SAMPATH
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES : 'B' : NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO. 3668 & 3669/DEL./2011 ASSESSMENT YEAR : 2001-02 & 2002-03 A.C.I.T., CIRCLE 3(1), VS. CENTRAL WAREHOUSING CORPORATION, NEW DELHI. 4/1, SIRI INST. AREA, AUGUST KRANTI MARG, HAUZ KHAS, NEW DELHI. (PAN : AAACC 1296D) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GARG, SR. DR RESPONDENT BY : PROF. S. SAMPATH, A.R. ORDER PER K.D. RANJAN, A.M.: THESE APPEALS BY THE REVENUE FOR THE ASSESSMENT YE ARS 2001-02 AND 2002-03 ARISE OUT OF SEPARATE ORDERS OF CIT(A)-VI, NEW DELHI. THE SE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, ARE DISPOSED OF BY THI S CONSOLIDATED ORDER. THE GROUNDS OF APPEALS ARE REPRODUCED AS UNDER : GROUND IN ITA NO. 3668/DEL./2011 (A.Y. 2001-02): 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING PENALTY AMOUNTING TO RS.7847741/- IMPOSED U/S.271(1 )(C) OF THE I.T. ACT IGNORING THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS PLACED ON HIS TO PROVE THAT THERE WAS INACCURATE PARTICULARS OF INCO ME WERE FURNISHED. GROUND IN ITA NO. 3669/DEL./2011 (A.Y. 2002-03): 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING PENALTY AMOUNTING TO RS.8043575/- IMPOSED U/S.271(1)(C) OF THE I.T. ACT IGNORING THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS PLAC ED ON HIS TO PROVE THAT THERE WAS INACCURATE PARTICULARS OF INCOME WERE FUR NISHED. 2. THE ONLY ISSUE FOR CONSIDERATION, WHICH IS COMMO N IN BOTH THE APPEALS, RELATES TO IMPOSITION OF PENALTY U/S. 271(1)(C) OF RS.78,47,74 1/- FOR THE ASSESSMENT YEAR 2001-02 AND RS.80,43,575/- FOR THE ASSESSMENT YEAR 2002-03. THE FACTS OF THE CASE, STATED IN BRIEF, ARE THAT IN ASSESSMENT YEAR 2001-02 AND 2002-03, TH E ASSESSEE SUFFERED LOSSES AND TAX WAS 3668, 3669/DEL./2011 2 COMPUTED U/S.115JB OF THE ACT. THE ASSESSING OFFICE R WHILE MAKING ASSESSMENT U/S. 143(3) ESTIMATED THE SHARE PROFIT OF THE ASSESSEE F ROM THE JOINT VENTURE WITH PUNJAB WAREHOUSING CORPORATION FOR BOTH THE YEARS AT RS.3, 75,00,000/- ON THE BASIS OF AVERAGE FOR THE PREVIOUS THREE YEARS. HOWEVER, THE CIT(A) I N HIS ORDER HAD DIRECTED THE ASSESSING OFFICER TO TAKE THE SHARE OF THE JOINT VENTURE AS PER THE AUDITED ACCOUNTS WHICH WAS TO BE TAKEN AT RS.1,81,57,417/- IN ASSESSMENT YEAR 2001-0 2 AND RS.1,49,68,975/- FOR THE ASSESSMENT YEAR 2001-02. THE ASSESSING OFFICER, ACC ORDINGLY, TOOK THE DIFFERENCE OF RS.1,98,42,583/- IN ASSESSMENT YEAR 2001-02 AND RS. 2,25,31,025/- IN ASSESSMENT YEAR 2002-03 AS INACCURATE PARTICULARS OF INCOME FURNISH ED BY THE ASSESSEE, WHICH ATTRACTED PENAL PROVISIONS U/S. 271(1)(C) OF THE ACT. THE ASS ESSING OFFICER, THEREFORE, IMPOSED PENALTY IN BOTH THE YEARS AT RS.78,47,741/- AND RS. 80,83,575/- RESPECTIVELY. 3. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THERE H AS BEEN NO FURNISHING OF INACCURATE PARTICULARS AND RIGHT FROM THE DAY OF FI LING OF THE RETURN, THE CORPORATION DISCLOSED THE FULL MATERIAL IN THIS REGARD AND IT W AS ONLY THE DIFFERENCE IN THE COMPUTATION BASED ON AUDITED FIGURES WHICH HAVE MADE AVAILABLE AFTER COMPLETION OF ASSESSMENT AND WERE SUBMITTED BEFORE THE APPELLATE AUTHORITY. IT W AS ALSO SUBMITTED THAT THE ASSESSEE WAS BEING ASSESSED TO TAX FINALLY ON THE BOOK PROFITS C OMPUTED U/S. 115JB OF THE ACT. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF APEX CO URT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCT PVT. LTD., 322 ITR 158, WHEREIN IT HAS BEEN HELD THAT WHERE THERE WAS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE I N ITS RETURN WERE FOUND TO BE INCORRECT, OR ERRONEOUS OR FALSE, THERE IS NO QUESTION OF INVI TING PENALTY U/S. 271(1)(C) OF THE ACT. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NALWA SONS INVESTMENT LTD., 327 ITR 543 FOR THE PROPOSITION THAT WHATEVER TAX IS PAID OR FINALITY OF THE ASSESSMENT IS ON THE BASIS OF TH E BOOK PROFIT, THE PROVISION OF SECTION 271(1)(C) HAS NO APPLICATION. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY 3668, 3669/DEL./2011 3 THE ASSESSEE, OBSERVED THAT THERE WAS NEITHER OMISS ION NOR FAILURE ON THE PART OF THE ASSESSEE IN FURNISHING MATERIAL PARTICULARS. THE CH ARGEABLE INCOME AND THE TAX LIABILITY THEREON REMAINED THE SAME U/S. 115JB AND, THEREFORE , THERE WAS NO TAX, WHICH WAS SOUGHT TO BE EVADED. MERE FACT THAT THE ASSESSEE AGREED TO SOME ADJUSTMENT WILL NOT MECHANICALLY MAKE THE PENALTY IMPOSABLE. THE LD. CIT(A) FURTHER NOTED THAT THE INCOME COMPUTED AS PER NORMAL PROCEDURE WAS LESS THAN THE INCOME DETER MINED BY LEGAL FRICTION, NAMELY, BOOK PROFIT U/S. 115JB. THE FINAL ASSESSMENT IN THI S CASE HAS BEEN COMPLETED ON THE BASIS OF BOOK PROFIT U/S. 115JB AT RS.1,93,51,670/- IN AS SESSMENT YEAR 2001-02 AND RS.3,67,67,644/- FOR THE ASSESSMENT YEAR 2002-03. T HE LD. CIT(A) PLACED RELIANCE ON THE DECISION OF ITAT IN ASSESSEES OWN CASES FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 IN ITA NOS. 588 AND 589/DEL/10 DATED 18.11.2010 WHE REIN PENALTY U/S. 271(1)(C) HAS BEEN DELETED FOLLOWING THE DECISION IN THE CASE OF CIT VS. NALWA SONS INVESTMENT LTD.(SUPRA). THE LD. CIT(A), ACCORDINGLY, DELETED T HE PENALTY FOR BOTH THE YEARS. 4. BEFORE US, THE LD. AR OF THE ASSESSEE AT THE OUT SET STATED THAT THE ASSESSEES CASE WAS SQUARELY COVERED BY THE DECISION OF ITAT, DELHI BENCH B AND, THEREFORE, PENALTY U/S. 271(1)(C) WAS NOT IMPOSABLE. ON THE OTHER HAND , THE LD. SR. D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ITAT, DELHI BENCH B IN ORDER DAT ED 18.11.2010 IN ITA NO.588 & 589/DEL./2010 FOR A.Y. 2003-04 & 2004-05 HAS DELETE D THE PENALTY BY OBSERVING AS UNDER: 5. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT HAS NOT BEE N DISPUTED THAT THE ASSESSEES TAX LIABILITY HAS BEEN DETERMINED UNDER PROVISIONS OF MAT/115JB. THERE IS NO CHANGE IN THE BOOK PROFIT RE TURNED BY THE ASSESSEE AND FINALLY AS ASSESSED. IN VIEW OF THESE FACTS, THE HONBLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF NALWA SONS INV ESTMENTS LTD. (SUPRA), 3668, 3669/DEL./2011 4 IS SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEE S CASE. RESPECTFULLY FOLLOWING THE SAME, WE DELETE THE PENALTY U/S. 271( 1)(C) IMPOSED ON THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS IN QUESTION. 6. SINCE THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE CASE FOR THE ASSESSMENT YEAR 2003-04 AND 2004-05, RESPECTFULLY FOLLOWING TH E PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) DELETING THE PENAL TY RELYING ON THE DECISION OF ITAT IN ASSESSEES OWN CASES. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.09.2011. SD/- SD/- (RAJPAL YADAV) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 30 TH SEPTEMBER, 2011 *AKS/- COPY OR ORDER FORWARDED TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. D.R., ITAT BY ORDER 6. GUARD FILE ASSISTANT REGISTRAR