ACIT, New Delhi V. Mr. Ravinder Kumar Jain, Delhi

ITA 3723/DEL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5865 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.3723/DEL/2016 ASSESSMENT YEAR: 2012-13 ACIT, CIRCLE-35(1), NEW DELHI. V. RAVINDER KUMAR JA IN, 49, RAJPURA ROAD, CIVIL LINES, DELHI. TAN/PAN: ACYPJ 2378L (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AMIT JAIN, SR.D.R. RESPONDENT BY: NONE DATE OF HEARING: 01 03 2018 DATE OF PRONOUNCEMENT: 30 05 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 31.03.2016, PASSED BY LD. CIT (APPEALS)-XII, NEW DELHI IN RELATION TO PENALTY PROCEEDINGS U/S.271(1)(C) FOR THE ASSESSMENT YEAR 2012-13. THE REVENUE IS AGGRIEVED BY DELETION OF PENALTY OF RS.15,44,660 /- MADE ON ACCOUNT OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S.5 7. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE HAS FILED H IS RETURN OF INCOME ON 29.09.2012 DECLARING AN INCOME OF RS.1,03,64,495/- WHICH WAS DULY PROCESSED U/S.143(1 ) ON 29.03.2013. THE ASSESSEES CASE WAS SELECTED FOR SC RUTINY U/S. CASS, NOTICE U/S. 143(2) WAS ISSUED ON 06.08.2 013. THE I.T.A. NO.3723/DEL/2016 2 ASSESSING OFFICER DURING THE COURSE OF SCRUTINY PRO CEEDING NOTED THAT ASSESSEE HAS CLAIMED DEDUCTION OF INTERE ST PAID ON LOAN AGAINST PROPERTY FROM INCOME FROM OTHER SOURCE S U/S. 57(III). THE ASSESSEE IN RESPONSE TO SHOW CAUSE NOT ICE SUBMITTED THAT THE SAME HAS BEEN CLAIMED BY MISTAKE UNDER THE IMPRESSION THAT LOAN AGAINST THE PROPERTY WAS T O BE REDUCED FROM THE INCOME FROM OTHER SOURCES, WHEREAS THE LOAN AGAINST THE PROPERTY WAS SOLELY UTILIZED FOR T HE BUSINESS PURPOSES. ACCORDINGLY, THE ASSESSEE REVISED HIS INC OME ON 31.03.2014 DECLARING AN INCOME OF RS.1,55,13,375/-. THE INCOME WAS ASSESSED ON THE BASIS OF REVISED RETURN. HOWEVER, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEED INGS U/S. 271(1)(C). DURING THE COURSE OF PENALTY PROCEEDINGS , THE ASSESSEE GAVE FOLLOWING EXPLANATION. THE ASSESSEE VOLUNTARILY REVISED THE RETURN TO RS.1 ,55,13,375/- ON 31.03.2014 BEFORE IT GETS TIME BARRED BY LIMITATION . THE INTENTION OF THE ASSESSEE WAS NOT TO CHEAT THE EXCHEQUER AT ALL, IT WAS ONLY A SIMPLE MISUNDERSTANDING BY THE CLERIC AL STAFF THAT FILED THE RETURN. IF IT WAS THE INTENTION OF THE AS SESSEE BEING SOLE PROPRIETOR HE COULD HAVE DEBITED THIS AMOUNT TO THE P&L A/C AND COULD HAVE SHOWN THE BORROWING FROM THE BANK IN BAL ANCE SHEET ITSELF. THE ASSESSEE HAD NO INTENTION TO FILE WRONG RETURN OR INACCURATE PARTICULARS. IN VIEW OF THE EXPLANATION IT IS REQUESTED THAT THE PENALTY PROCEEDINGS U/S 271(1)(C) BE DROPPED. 3. HOWEVER, THE ASSESSING OFFICER REJECTED THE ASSE SSEES EXPLANATION AND HELD THAT THE ASSESSING OFFICER HAS I.T.A. NO.3723/DEL/2016 3 CONFRONTED TO THE ASSESSEE ABOUT SUCH A CLAIM PRIOR TO THE FILING OF REVISED RETURN, THEREFORE, HE HAS MADE A FALSE CLAIM AT THE TIME OF FILING OF ORIGINAL RETURN OF INCOME AND ACCORDINGLY, HE LEVIED THE PENALTY OF RS.15,44,660/- ON THE CHAR GE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. BEFORE THE LD. CIT (A), THE ASSESSEE GAVE THE EN TIRE FACTS AND BACKGROUND OF THE CASE AND ALSO THE DETAILS OF LOAN AND INTEREST PAID BY THE ASSESSEE. THE RELEVANT EXPLANA TION AND THE FACTS GIVEN BEFORE THE LD. CIT (A) IS REPRODUCE D HEREUNDER: 1. AS PER DETAILS OF INTEREST A SUM OF RS. 212569 /- HAS BEEN PAID TO SBBJ ON THE CC LIMIT OF THE BANK. 2. RS. 2994150/- HAS BEEN PAID ON THE AMOUNTS WHICH WERE ADVANCED TO JAIN MOTOR CAR COMPANY AND WHICH IN TUR N WERE ADVANCED TO RAVINDER JAIN AND COMPANY (SOLE PROPRIE TOR RAVINDER KUMAR JAIN). THE AMOUNTS SO RECEIVED FROM JAIN MOTO R CAR COMPANY HAS BEEN UTILISED FOR THE PURPOSES FOR BUSI NESS ALONE. ACCOUNT PHOTOCOPIES OF JAIN MOTOR CAR COMPANY AND R AVINDER JAIN AND COMPANY PROVED BEYOND DOUBT THAT THE AMOUNTS AD VANCED BY JAIN MOTOR CAR COMPANY HAVE ALONE BEEN UTILIZED FOR THE PURPOSES OF BUSINESS ONLY. 3. A SUM OF RS. 417624/- HAS BEEN PAID TO BAJAJ FINANC E. THE AMOUNT HAS NO DOUBT BEEN ADVANCED TO JAIN MOTOR CAR COMPANY BUT THE PAYMENT HAS BEEN DIRECTLY PAID TO RAVENDAR KUMAR JAIN AS IS EVIDENT FROM THE BANK ACCOUNT OF RAVINDER KUMAR JAIN. PHOTOCOPY OF LETTER OF BAJAJ FINANCE LIMITED IS ENC LOSED WHICH PROVES THAT THE PAYMENT OF RS. 2433138/- HAS BEEN DIRECTLY MADE TO RAVINDER KUMAR JAIN. 4. RS.1325739/- HAS BEEN PAID TO KOTAK MAHINDRA FOR AV AILING I.T.A. NO.3723/DEL/2016 4 LOANS FOR BUSINESS PURPOSES ONLY. IT IS EVIDENT FROM THE CAPITAL ACCOUNTS (COPIES ENC LOSED) FOR THE PERIOD FROM 1.4.10 - 31.3.12 THAT: A. A SUM OF RS. 2500000/- HAS BEEN RECEIVED FROM R AVINDER JAIN (SBBJ A/C) ON 26.02.2011. THIS AMOUNT IS IN RE SPECT OF RS.2433138/- DIRECTLY RECEIVED BY RAVINDER KUMAR JA IN FROM BAJAJ FINANCE. B. A SUM OF RS. 5100000/- (RS250000/- + RS. 4 700000/-+ RS. 150000/- TOTALLING TO RS.5100000/-) HAS BEEN RECEIV ED FROM RAVINDER KUMAR JAIN (SBBJ) ON 11.3.2011 AND 12.3.20 11. THIS AMOUNT HAS BEEN IN TURN RECEIVED FROM KOTAK MAHINDR A (RS.5186000/-) ON 11.3.2011 ITSELF AS IS EVIDENT FR OM THE-BANK STATEMENT OF RAVINDER KUMAR JAIN (SBBJ). RESPECTED MADAM IT STANDS PROVED BEYOND DOUBT THAT THE AMOUNT OF INTEREST PAID BY THE ASSESSEE ARE FOR LOANS TAKE N FOR BUSINESS PURPOSES BECAUSE LOANS WERE TAKEN IN INDIVIDUAL CAP ACITY BUT WERE TRANSFERRED TO RAVINDER JAIN AND CO. (RAVINDER KUMA R JAIN BEING ITS SOLE PROPRIETOR) AND UTILIZED FOR BUSINESS ONLY. ASSESESSEE HAS CONTENDED BEFORE THE LD AO WHILE REP LYING FOR PENALTY PROCEEDINGS THAT THE FAULT OF THE ASSESSEE THAT HE SHOULD HAVE DEBITED THEIR INTEREST IN THE BOOKS OF ACCOUNT S ITSELF. THE ASSESSEE HAS REMAINED UNDER WRONG IMPRESSION AND UN NECESSARILY REVISED THE RETURN AND HAS LANDED IN THE NET FOR IM POSITION OF PENALTY. 5. LD. CIT (A) AFTER TAKING NOTE OF THE AFORESAID F ACTS DELETED THE PENALTY AFTER OBSERVING AND HOLDING AS UNDER: 8.3 I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AND SUBMISSIONS OF THE APPELLANT. AMOUNT OF RS.51,48,881/- WAS ON ACCOUNT OF INTEREST PAID ON L OAN AGAINST I.T.A. NO.3723/DEL/2016 5 PROPERTY WHICH WAS WRONGLY CLAIMED U/S 57 AGAINST I NCOME FROM OTHER SOURCES. THEREFORE, APPELLANTS CLAIM OF INTE REST/EXPENSES WAS NOT EX-FACIE WRONG, ONLY IT HAD BEEN CLAIMED AG AINST INCOME FROM OTHER SOURCES. FROM PERUSAL OF PENALTY ORDER, IT IS SEEN THAT ASSESSING OFFICER HAS ARRIVED AT THE CONCLUSION THA T APPELLANT HAD FILED INACCURATE PARTICULARS OF INCOME MERELY ON TH E BASIS THAT HE HAD REVISED HIS RETURN OF INCOME. THEREFORE, IT IS A MERE MISTAKE BY APPELLANT THAT HE WRONGLY CLAIMED DEDUCTION U/S 57 AGAINST INCOME FROM OTHER SOURCES. THEREFORE, NO STRONG CASE FOR I MPOSING OF PENALTY HAS BEEN MADE BY ASSESSING OFFICER. 8.4 THE LEARNED ASSESSING OFFICER HAS LOST SIGHT O F THE FACT THAT THE PENALTY U/S 271(1)(C) IS NOT AUTOMATIC ON ANY D ISALLOWANCE OR ADDITION MADE TO THE INCOME, BUT RATHER IT HAS TO B E BROUGHT OUT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS I NCOME AND/OR HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . IN THE ABSENCE OF ANY SUCH REASONED FINDING, PENALTY U/S 271(1)(C) CANNOT BE IMPOSED OR SUSTAINED MERELY BECAUSE APPELLANT HAD R EVISED HIS RETURN AND PENALTY NOTICE U/S 271(1)(C) WAS ISSUED. IN THE INSTANT CASE, THERE IS NOTHING TO SHOW THAT THE ASSESSEE HA D DELIBERATELY SOUGHT TO FURNISH INACCURATE PARTICULARS. THOUGH TH E LD. ASSESSING OFFICER HAS STATED IN THE PENALTY ORDER THAT THE AS SESSEE HAD FURNISHED HIS INACCURATE PARTICULARS, BUT SUCH FIND ING OF THE LD. ASSESSING OFFICER WAS MERELY ON THE BASIS THAT APPE LLANT HAD REVISED HIS RETURN OF INCOME AND NOT ON ANY OTHER M ATERIAL / EVIDENCE/REASONING. 8.5 HON'BLE SUPREME COURT IN THE CASE OF CIT VS. R ELIANCE PETROPRODUCTS (P) LTD., 322 ITR 158 HAVE HELD THAT MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING T HE INCOME OF THE ASSESSEE. I.T.A. NO.3723/DEL/2016 6 8.6 HONBLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF SIDDHARTHA ENTERPRISES, 322 ITR 80 (P&H) HAVE HELD THAT PENALTY FOR CONCEALMENT CAN BE LEVIED ONLY WHEN THERE SOME ELEMENT OF DELIBERATE DEFAULT AND NOT A MERE MISTAKE. IT CANNO T BE SAID THAT IN EVERY CASE WHERE PARTICULARS OF INCOME ARE INACCURA TE, PENALTY MUST FOLLOW. THEREFORE, LEVY OF PENALTY U/S 271 (1) (C) IS NOT JUSTIFIED. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE DESP ITE SERVICE OF NOTICE. ACCORDINGLY, WE ARE PROCEEDING TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AF TER CONSIDERING THE SUBMISSION MADE BY THE LEARNED DR A ND RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER. 7. WE FIND THAT THE GROUNDS FOR LEVYING THE PENA LTY IS THAT, FIRSTLY , THE ASSESSEE HAS WRONGLY CLAIMED THE DEDUCTION OF INTEREST PAID ON LOAN U/S.57; AND SECONDLY , ASSESSEE HAS FILED THE REVISED RETURN OF INCOME DISALLOWING THE SAID C LAIM IN THE REVISED RETURN OF INCOME FILED ON 31.03.2014 ONLY W HEN ASSESSEE WAS CONFRONTED BY THE ASSESSING OFFICER DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE ASSESSEE BEFORE THE LD. CIT (A) HAS GIVEN THE ENTIRE DETAILS OF LOA NS TAKEN BY THE HIM AND THE UTILIZATION OF LOAN AND THE INTERES T PAID. IT HAS BEEN STATED THAT THE ENTIRE AMOUNT OF INTEREST PAID ON THE LOANS WERE TAKEN PURELY FOR THE BUSINESS PURPOSE ON LY. NOWHERE IT HAS BEEN HELD THAT INTEREST PAID ON LOAN AGAINST THE PROPERTY WAS NOT FOR THE BUSINESS PURPOSE AND S IMPLY BECAUSE ASSESSEE HAS CLAIMED IT AGAINST INCOME FROM OTHER SOURCES, IT DOES NOT LEAD TO INFERENCE THAT SUCH A CLAIM OF I.T.A. NO.3723/DEL/2016 7 INTEREST UTILIZED PURELY FOR THE BUSINESS PURPOSE C ERTAINLY WAS EX-FACIE WAS WRONG, ALBEIT IT WAS CLAIMED UNDER THE WRONG HEAD, I.E., AGAINST INCOME FROM OTHER SOURCES. TH US, IT CANNOT BE A CASE OF FURNISHING OF ANY KIND OF INACC URATE PARTICULARS OF INCOME. EVEN IF ASSESSEE HAS OFFERED IT IN THE REVISED RETURN DURING THE COURSE OF ASSESSMENT PROC EEDINGS THEN ALSO IT DOES NOT LEAD TO ANY INFERENCE THAT AS SESSEE HAS DELIBERATELY SOUGHT TO FURNISH INACCURATE PARTICULA RS OF INCOME ESPECIALLY IN THE LIGHT OF THE FACT THAT THE INTEREST PAID ON THE LOANS WERE PURELY FOR THE BUSINESS PURPOSE A ND NOTHING CONTRARY HAS BEEN FOUND BY THE ASSESSING OF FICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. TH US, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT (A) IN DELETING THE PENALTY AND ACCORDINGLY SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2018. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH MAY, 2018