DCIT, New Delhi V. M/s. Dusk Valley Technologies Ltd., New Delhi

ITA 3719/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4765 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 24-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Difference of opinion; Corroborative evidences
• Section: 43B; 143(3)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3719/DEL/2014 (ASSESSMENT YEAR: 2008 - 09 ) DCIT, CIRCLE - 10(1), NEW DELHI VS. DUSK VALLEY TECHNOLOGIES LTD, OFFICE NO. 303, 3 RD FLOOR, DLF CENTRE YARD, SAKET, NEW DELHI PAN:AABCD5471A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANSHU PRAKASH, SR. DR ASSESSEE BY: SHRI MANU GIRI, ADV DATE OF HEARING 06/09 / 2017 DATE OF PRONOUNCEMENT 13 / 09 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XIII, NEW DELHI DATED 24.04.2014 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DELETING THE PENALTY U/S 271(C) OF THE INCOME TAX ACT, 1961 OF RS. 3473902/ - IMPOSED BY THE ASSESSING OFFICER. 3. ASSESSEE IS A COMPANY WHO FILED ITS RETURN OF INCOME ON 30/09/2008 SHOWIN G BUSINESS INCOME OF RS. 79,42, 065/ - AND ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 WAS PASSED ON 01/09/2010, WHEREAS THE INCOME OF THE ASSE SSEE WAS ALSO DETERMINED AT RS. 794 2065/ - . IN THE ASSESSMENT PROCEEDINGS ONLY ADJUSTMENT WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE WAS THAT INTEREST INCOME RECEIVED ON FIXED DEPOSIT RECEIPTS AND THE COMPANY DEPOSITS, WHICH WERE SHOWN BY THE ASSESSEE AS BUSINESS INCOME OF RS. 10220365/ - WAS TAKEN BY THE ASSESSING OFFICER UNDER THE HEAD INCOME F ROM OTHER SOURCES. THEREFORE, THE INCOME OF INTEREST SHOWN BY THE ASSESSEE AS BUSINESS INCOME WAS CONSIDERED BY THE LD. ASSESSING OFFICER AS INCOME FROM OTHER SOURCES. FOR THIS LD. ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS FOR FURNISHING THE INAC CURATE PARTICULARS OF THE INCOME UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT . PAGE 2 OF 4 4. LD. ASSESSING OFFICER LEVIED THE PENALTY ON THE ISSUE WIDE ORDER DATED 14/03/2013 HOLDING THAT ASSESSEE HAS FAILED TO FURNISH ANY SUPPORTING EVIDENCE FOR THE CLAIM OF THE INCOM E FROM BUSINESS. THEREFORE , HE HELD THAT THE ASSESSEE IS DELIBERATELY FURNISHED INACCURATE PARTICULARS WITHIN INTENTION TO EVADE THE INCOME TAX PROVING THE MENS R EA. HENCE, THE PENALTY OF RS. 3 473902/ WAS LEVIED BY THE LD. ASSESSING OFFICER. 5. ASSESSEE PREF ERRED AN APPEAL BEFORE THE LD. CIT (A) , WHO DELETED THE PENALTY WIDE ORDER DATED 24/4/ 2014 HOLDING THAT THE ASSESSEE IS FURNISHED ALL THE DETAILS AS WELL AS INCOME IN THE RETURN OF INCOME, WHICH IN THEMSELVES WERE NOT FOUND TO BE INACCURATE AND NORWOOD COUL D BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. HE FURTHER HELD THAT MERELY BECAUSE THE ASSESSEE IS NOT SHOWN THE INCOME FROM INTEREST UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH WAS NOT ACCEPTED BY THE LD. ASSESSING OFFICER THAT BY ITSELF WOULD N OT ATTRAC T THE PENALTY UNDER SECTION 271(1) ( C ) OF THE INCOME TAX ACT. THEREFORE, REVENUE AGGRIEVED WITH THE ORDER OF THE LD. CIT (A) , HAS PREFERRED AN APPEAL BEFORE US. 6. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTESTED THAT THE ASSESSEE HAS SHOWN THE INT EREST ON FIXED DEPOSIT RECEIPTS AS WELL AS COMPANY DEPOSITS AS INCOME FROM FROM BUSINESS BUT SAME WERE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. HE FURTHER SUBMITTED THAT THOUGH THERE IS ONLY THE CHANGE OF HEAD OF THE INCOME BUT ASSESSEE IS FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND THEREFORE THE PENALTY HAS BEEN CORRECTLY LEVIED BY THE LD. ASSESSING OFFICER. 7. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT IDENTICAL ISSUE AROSE IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 W HEREIN THE INTEREST INCOME WAS SHOWN AS BUSINESS INCOME AND PENALTY WAS LEVIED BY THE LD. ASSESSING OFFICER HOLDING THAT IT SHOULD HAVE BEEN SHOWN AS INCOME FROM OTHER SOURCES, SUCH PENALTY LEVIED WAS DELETED BY THE CONQUERED AUTHORITIES UP TO THE LEVEL OF THE COORDINATE BENCH. HE FURTHER SUBMITTED A COPY OF THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007 - 08 DATED 08/05/2015 WHEREIN ON IDENTICAL FACTS AND CIRCU MSTANCES THE PENALTY OF RS. 338 1821/ WAS DELETED. 8. WE HAVE CA REFULLY CONSIDERED THE RIVAL CONTENTION AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE H AVE ALSO CONSIDERED THE REASONS GIVEN BY THE LD. ASSESSING OFFICER FOR LEVY OF THE PENALTY AND THE REASONS GIVEN BY THE LD. CIT(A) , FOR DELETION OF THE PENALT Y. WE HAVE ALSO PERUSED THE ORDER OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 - 08 WHEREIN ON THE IDENTICAL FACTS AND CIRCUMSTANCES THE PENALTY HAS BEEN DELETED. THE COORDINATE BENCH WIDE PAGE 3 OF 4 PARA NO. 10. IN THE ORDER DATED 08/05 /2015. IN CASE OF THE ASSESSEE IN ITA NO. 4432/DEL/2013 FOR ASSESSMENT YEAR 2007 - 08 HAS HELD AS UNDER: - 10. IN VIEW OF ABOVE, WE ARE IN AGREEMENT WITH THE CONCLUSION OF CIT (A) THAT THE APPELLANT - ASSESSEE HAD GIVEN ALL THE PARTICULARS OF ITS INCOME IN THE RETURN OF INCOME AND ASSESSEE DID NOT CONCEAL OR SUPPRESS ANY FACT RELATING TO THE INCOME EARNED DURING THE RELEVANT FINANCIAL YEAR. THE AO HAVE NOT BROUGHT OUT ANY FACT OR ALLEGATION ON RECORD THAT THE INFORMATION GIVEN BY THE ASSESSEE IN ITS RETURN O F INCOME WAS EITHER BOGUS OR INCORRECT AND HAS THE SAME IS PRESCRIBED IS CORRECT WHICH WAS NOT DISPUTED BY THE AO. THE CIT (A) , ALSO OBSERVED THAT THE INTEREST INCOME RECEIVED FROM FIXED DEPOSIT WAS SHOWN AS BUSINESS INCOME ON THE BASIS OF EARLIER YEARS ASS ESSMENT ORDERS UNDER THE BONAFIDES BELIEVE THAT SUCH INCOME IS ASSESSABLE AS BUSINESS INCOME, WHICH WAS TREATED BY THE AO AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME. DURING THE QUANTUM PROCEEDINGS. IN THIS SITUATION, THE ADDITION WAS BASED ON DIFFERENCE OF OPINION AND WHEN 2 VIEWS ARE POSSIBLE , THE PENALTY UNDER SECTION 271(1) (C) OF THE ACT CANNOT BE LEVIED. 9. WE ARE ALSO OF THE OPINION THAT NOT ALL ADDITIONS WOULD LEAD TO PENALTY. THERE IS NO LAW THAT AN INCORRECT CLAIM NOT SUSTAINABLE IN LAW SHOULD NECESSARILY BE TANTAMOUNT TO FURNISHING OF INCORRECT PARTICULARS. HOWEVER, WE ARE ALSO AWARE ABOUT THE DECISION OF HONBLE DELHI HIGH COURT ITA NO. 71/2013 DATED 12TH SEPTEMBER, 2013. IN COMMISSIONER OF INCOME TAX - III VS. ARCOTECH LTD (FORMERLY SKS LTD.) WHEREIN IT HAS BEEN HELD AS UNDER: - 10. IN PARAGRAPH 5.1 OF THE IMPUGNED ORDER, THE TRIBUNAL HAS REFERRED AND STATED THAT DETAILS WERE FURNISHED BY THE RESPONDENT ALONG WITH THE RETURN OF INCOME AND OBSERVED CHANGE OF HEAD OF INCOME CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SAID STATEMENT AS A RATIO IS BROAD AND WIDE TO BE TREATED AS UNIVERSALLY TRUE . IT DEPENDS UPON FACTS OF A PARTICULAR CASE AND WHETHER THE QUESTION WAS DEBATABLE OR CAPABLE OF ONLY A SINGULAR VIEW. WE, THEREFORE, CANNOT AGREE WITH THE VIEW EXPRESSED BY THE TRIBUNAL THAT CHANGE OF HEAD UNDER WHICH INCOME IS TO BE ASSESSED PER SE WOULD JUSTIFY CANCELLATION OF PENALTY FOR CONCEALMENT FOR THE REASON THAT IT IS NOT A C ASE OF FURNISHING OF INACCURATE PARTICULARS. FURNISHING OF INACCURATE PARTICULARS OF INCOME CAN HAVE DIFFERENT CONNOTATIONS AND MAY ARISE WHEN INCOME IS ENHANCED, DEDUCTION DENIED OR WHEN HEAD OF INCOME, IS CHANGED RESULTING IN A HIGHER RATE OF TAX OR INC REASE IN INCOME. THE REAL QUESTION IS APPLICATION OF EXPLANATION 1. PARAGRAPHS 5.2 AND 5.3 REFER TO THE DISALLOWANCE UNDER SECTION 43B AND OBSERVE THAT ESI AND PF DEDUCTIONS AS CLAIMED WERE A MISTAKE AND A CASE OF NOT GIVING PROPER EFFECT TO PROFIT AND L OSS ACCOUNT. HOWEVER, THIS CANNOT BE READ IN ISOLATION AS THE ASSESSEE HAD NOT MADE DISALLOWANCE UNDER SECTION 43B EVEN IN RESPECT OF INTEREST PAYABLE BUT NOT PAID, TO THE FINANCIAL INSTITUTIONS. PAGE 4 OF 4 10. THEREFORE , IT IS IMPERATIVE TO SEE WHETHER IN THE PRESENT CASE IS THERE ANY ACCESS RELIEF FOR DEDUCTION CLAIMED BY THE ASSESSEE OR NOT OR THERE IS ANY FURTHER TAX IMPACT. IN THIS CASE. WE HAVE NOTED THAT THE TOTAL INCOME OF THE ASSESSEE AS PER COMPUT ATION OF TOTAL INCOME WAS RS. 7 942065, WHEREAS, AS PER THE ASSE SSMENT ORDER , THE TOTAL INCOME WAS ASSESSED AT RS. 7942065/ . THEREFORE , ACCORDING TO US THE ASSESSEE IS NEITHER CARRIED ANY EXCESS RELIEF NOR GRANTED ANY EXCESS DEDUCTION. FURTHER, THERE IS NO CHANGE IN THE STATUS OF THE ASSESSEE FROM THE RESIDENT COMPANY BECAUSE OF THIS ADJUSTMENT. THEREFORE , THERE IS NO CHANGE IN THE TAX RATE ALSO. IN VIEW OF THIS RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT AND ALSO THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR EARLIER YEARS WHERE THESE FACTS AN D TO NOT BEEN EXAMINED, WE CONFIRMING THE ORDER OF THE LD. CIT (A) , DIRECT THE LD. ASSESSING OFFICER TO DELETE TH E PENALTY UNDER SECTION 271(1)(C) OF RS. 3 473902/ - . 11. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 3 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI