M/s. Superex Industries, New Delhi V. ACIT, New Delhi

ITA 3727/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1243 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-02-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 19-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUKHVEER CHOUDHARY
• Assessee Lawyers: C S AGARWAL SENIOR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.3727/DEL/2012 3727/DEL/2012 3727/DEL/2012 3727/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 M/S SUPEREX INDUSTRIES, M/S SUPEREX INDUSTRIES, M/S SUPEREX INDUSTRIES, M/S SUPEREX INDUSTRIES, F FF F- -- -89/24, 89/24, 89/24, 89/24, OKHLA INDUSTRIAL AREA, OKHLA INDUSTRIAL AREA, OKHLA INDUSTRIAL AREA, OKHLA INDUSTRIAL AREA, PHAS PHAS PHAS PHASE EE E- -- -I, I,I, I, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAAFS8073M. PAN : AAAFS8073M. PAN : AAAFS8073M. PAN : AAAFS8073M. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -22(1), 22(1), 22(1), 22(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S.AGARWAL, SENIOR ADVOCATE. RESPONDENT BY : SHRI SUKHVEER CHOUDHARY, DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D DD D.AGRAWAL, .AGRAWAL, .AGRAWAL, .AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XXIII, NEW DELHI DATED 14 TH MAY, 2012 FOR THE AY 2004- 05. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN ITS A PPEAL. HOWEVER, THEY ARE ALL AGAINST THE IMPOSITION OF PENALTY OF ` 5,10,810/- IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 . 3. AT THE TIME OF HEARING BEFORE US, IT WAS STATED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESS EE FIRM HAS SPONSORED THE ENGINEERING STUDY EXPENSES OF SHRI SA LIL CHADHA AT THE UNIVERSITY OF MINNESOTA, USA. IT WAS THOUGHT THAT HIS STUDY ABROAD WOULD HELP THE ASSESSEE FIRM IN DEVELOPING NEW PROD UCT LINES. AFTER COMPLETING HIS STUDY, HE JOINED THE FIRM AS MANAGEM ENT TRAINEE ON 1 ST AUGUST, 2006 AND, THEREAFTER, AS PARTNER ON 1 ST APRIL, 2008. THAT ON HIS STUDY, THE TOTAL EXPENDITURE OF ` 14,71,807/- WAS INCURRED. THAT ALL THE ITA-3727/DEL/2012 2 RELEVANT FACTS IN THIS REGARD WERE DULY DISCLOSED B Y THE ASSESSEE AND THERE IS NO ALLEGATION IN THE ASSESSMENT ORDER THAT ASSESSEE EITHER FURNISHED ANY INACCURATE PARTICULARS OR CONCEALED A NY PARTICULARS. HE, THEREFORE, SUBMITTED THAT ON THESE FACTS, THE DECIS ION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. (2010) 322 ITR 158 (SC) WOULD BE SQUARELY APPLICABLE. 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW AND STATED THAT LEARNED CIT(A) HA S DULY CONSIDERED THE DECISION OF HONBLE APEX COURT IN THE CASE OF R ELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) AND HAS STATED THAT THE ABOVE DECISION IS NOT APPLICABLE AS THE CLAIM BY THE ASSESSEE IS C LEARLY DISALLOWABLE AND NOT A DEBATABLE CLAIM ON WHICH TWO VIEWS ARE PO SSIBLE. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT( A) SHOULD BE SUSTAINED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD . (SUPRA) HELD AS UNDER:- WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE R ETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 6. THUS, THE HONBLE APEX COURT HAS HELD THAT A MER E MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WIL L NOT AMOUNT TO ITA-3727/DEL/2012 3 FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. IN OUR OPINION, THE INTERPRETATION BY THE LEARNED C IT(A), THAT THE ABOVE DECISION OF HONBLE APEX COURT WOULD BE APPLICABLE ONLY WHEN THE CLAIM OF EXPENSES IS OF DEBATABLE NATURE, IS INCORR ECT. HONBLE APEX COURT HAS CLEARLY HELD THAT EVEN IF THE CLAIM IS NO T SUSTAINABLE IN LAW, THIS, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS SO AS TO LEVY PENALTY UNDER SECTION 271(1)(C). IN OUR OP INION, THE ABOVE DECISION IS SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE MADE A CLAIM OF THE EXPENSES INCURRED ON S PONSORING THE EDUCATION OF THE PARTNERS SON. THE ASSESSING OFFI CER HELD SUCH EXPENSES TO BE NOT ALLOWABLE. THE ABOVE FINDING OF THE ASSESSING OFFICER WAS SUSTAINED BY THE LEARNED CIT(A) AS WELL AS ITAT. BUT, THAT, BY ITSELF, WILL NOT AMOUNT TO FURNISHING OF INACCUR ATE PARTICULARS. FROM THE PENALTY ORDER, IT IS EVIDENT THAT THE ASSESSING OFFICER HAD LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS BY TH E ASSESSEE. HOWEVER, NEITHER IN THE PENALTY ORDER NOR AT THE TI ME OF HEARING BEFORE US, IT WAS POINTED OUT WHICH PARTICULAR FURNISHED B Y THE ASSESSEE WAS INACCURATE. THERE IS NO FINDING THAT ANY DETAILS S UPPLIED BY THE ASSESSEE IN ITS RETURN OF INCOME WAS INCORRECT, ERR ONEOUS OR FALSE. IN VIEW OF THE ABOVE, IN OUR OPINION, THE ABOVE DECISI ON OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD . WOULD BE SQUARELY APPLICABLE. RESPECTFULLY FOLLOWING THE SAME, WE DE LETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 15 TH FEBRUARY, 2013. SD/- SD/- ( (( (I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 15.02.2013 VK. ITA-3727/DEL/2012 4 COPY FORWARDED TO: - 1. APPELLANT : M/S SUPEREX INDUSTRIES, M/S SUPEREX INDUSTRIES, M/S SUPEREX INDUSTRIES, M/S SUPEREX INDUSTRIES, F FF F- -- -89/24, OKHLA INDUSTRIAL AREA, PHASE 89/24, OKHLA INDUSTRIAL AREA, PHASE 89/24, OKHLA INDUSTRIAL AREA, PHASE 89/24, OKHLA INDUSTRIAL AREA, PHASE- -- -I, NEW DELHI. I, NEW DELHI. I, NEW DELHI. I, NEW DELHI. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, C CC CIRCLE IRCLE IRCLE IRCLE- -- -22(1), NEW DELHI. 22(1), NEW DELHI. 22(1), NEW DELHI. 22(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR