M/s. Havells India Ltd., New Delhi V. ACIT (LTU), New Delhi

ITA 384/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58989 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: VED PRAKASH BANSAL
• Keywords: Wrong claim; Capital expenditure

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 C BENCH C BENCH C BENCH C : 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 A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.384/DEL/2012 384/DEL/2012 384/DEL/2012 384/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005- -- -06 0606 06 M/S HAVELLS INDIA LIMITED, M/S HAVELLS INDIA LIMITED, M/S HAVELLS INDIA LIMITED, M/S HAVELLS INDIA LIMITED, 1/7, RAM KISHORE ROAD, 1/7, RAM KISHORE ROAD, 1/7, RAM KISHORE ROAD, 1/7, RAM KISHORE ROAD, CIVIL LINES, CIVIL LINES, CIVIL LINES, CIVIL LINES, DELHI DELHI DELHI DELHI 110 054. 110 054. 110 054. 110 054. PAN : AAACH0351E. PAN : AAACH0351E. PAN : AAACH0351E. PAN : AAACH0351E. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, LTU, INCOME TAX, LTU, INCOME TAX, LTU, INCOME TAX, LTU, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED PRAKASH BANSAL, CA. RESPONDENT BY : SHRI SATPAL SINGH, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-LTU, NEW DELHI DATED 4 TH JANUARY, 2012 FOR THE AY 2005-06. 2. FOLLOWING GROUNDS ARE RAISED BY THE ASSESSEE :- 1. THAT THE IMPUGNED ORDER OF CIT(APPEALS), LTU, N EW DELHI IS BAD IN LAW AND WRONG ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE AND LEGAL POSITION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND THE LEGAL POSITION, THE LEARNED CIT(APPEAL S) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C ) IN RESPECT OF MISMATCH OF INTEREST INCOME WITH TDS CER TIFICATE AMOUNTING TO RS.52,497/-. ITA-384/DEL/2012 2 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND THE LEGAL POSITION, THE LEARNED CIT(APPEAL S) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C ) IN RESPECT OF MISCELLANEOUS EXPENDITURE INCURRED ON AC COUNT OF INCREASE IN AUTHORIZED CAPITAL AMOUNTING TO RS.41,012/-. 3. WITH REGARD TO GROUND NO.2, IT IS STATED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS RECORDING THE INTEREST RECEIVABLE ON ACCRUAL BASIS. THERE MIGHT BE SOME DIFFERENCE I N THE COMPUTATION OF INTEREST BY THE ASSESSEE/BANK BUT, FINALLY, WHEN THE INTEREST IS ACTUALLY RECEIVED ON MATURITY OF FDRS ETC., THE DIF FERENCE, IF ANY, IS ACCOUNTED FOR. HE FURNISHED A CHART TO INDICATE TH AT IN SOME YEARS, THE INTEREST DISCLOSED BY THE ASSESSEE IS MORE THAN THE INTEREST AS PER TDS CERTIFICATE. HE ALSO POINTED OUT THAT CONSIDERING THE TOTAL INTEREST RECEIVED BY THE ASSESSEE, THE DIFFERENCE IS NEGLIGI BLE. THUS, THERE CANNOT BE ANY INTENTION TO DISCLOSE LESS INCOME. F ROM THE CHART, HE ALSO POINTED OUT THAT OVER THE PERIOD OF EIGHT YEAR S, THE INTEREST INCOME DISCLOSED BY THE ASSESSEE AS COMPARED TO INT EREST INCOME FROM TDS CERTIFICATE WAS MORE BY ` 13,462/-. 4. WITH REGARD TO GROUND NO.3, IT IS STATED BY THE LEARNED COUNSEL THAT THE ASSESSING OFFICER DISALLOWED THE AMORTIZAT ION OF EXPENDITURE INCURRED BY THE ASSESSEE ON ACCOUNT OF INCREASE IN AUTHORIZED SHARE CAPITAL. HOWEVER, THERE IS NO DISPUTE EITHER WITH R EGARD TO GENUINENESS OF THE EXPENDITURE OR THE FULL FACTS HAVING BEEN DI SCLOSED BY THE ASSESSEE IN THIS REGARD. THAT MERELY BECAUSE THE C LAIM OF AN EXPENDITURE IS DISALLOWED BY THE ASSESSING OFFICER WOULD BE NO GROUND FOR LEVY OF PENALTY UNDER SECTION 271(1)(C). IN SU PPORT OF THIS CONTENTION, HE RELIED UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158. ITA-384/DEL/2012 3 5. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE ASSESSING OFF ICER RIGHTLY LEVIED THE PENALTY FOR UNDER DISCLOSURE OF INTEREST INCOME AS WELL AS WRONG CLAIM OF DEDUCTION FOR INCREASE IN THE AUTHORIZED S HARE CAPITAL WHICH IS CLEARLY A CAPITAL EXPENDITURE. HE, THEREFORE, SUBM ITTED THAT THE ORDER OF LEARNED CIT(A) ON THIS POINT SHOULD BE SUSTAINED . 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE ASS ESSEE HAS FURNISHED A CHART DISCLOSING INTEREST AS PER BOOKS OF ACCOUNT AND ALSO INTEREST AS PER TDS CERTIFICATE. THE SAME IS REPRO DUCED BELOW:- SL.NO. ASSESSMENT YEAR INTEREST AS PER BOOKS OF ACCOUNTS (RS.) INTEREST AS PER TDS CERTIFICATE (RS.) DIFFERENCE (RS.) CREDITED TO MISC. INCOME (RS.) NET DIFFERENCE (RS.) 1 2004-05 4,187,651 4,378,478 -190,827 -190,827 2 2005-06 3,827,586 3,916,428 -88,842 36,345 -52,49 7 3 2006-07 4,254,897 4,312,683 -57,786 -57,786 4 2007-08 3,807,606 3,822,121 -14,515 -14,515 5 2008-09 5,939,135 5,700,543 238,592 238,592 6 2009-10 5,874,541 5,995,411 -120,870 -120,870 7 2010-11 4,009,995 3,715,862 294,133 294,133 8 2011-12 423,956 506,725 -82,769 -82,769 TOTAL TOTAL TOTAL TOTAL 13,462 13,462 13,462 13,462 7. FROM THE ABOVE, IT IS EVIDENT THAT IN SOME YEARS , THE INTEREST AS PER BOOKS OF ACCOUNT IS LESS WHILE IN SOME YEARS, I T IS MORE. IT WAS ALSO EXPLAINED BY THE LEARNED COUNSEL THAT THE ASSESSEE ACCOUNTED FOR INTEREST INCOME IN THE BOOKS OF ACCOUNT ON ACCRUAL BASIS AND, THEREFORE, IT CALCULATES THE INTEREST ON THE FDRS E TC. AS ACCRUED DURING THE YEAR. HOWEVER, THERE REMAINS SOME DIFFERENCE I N THE CALCULATION OF INTEREST BY THE ASSESSEE AND THE CALCULATION OF INT EREST BY THE BANK/FINANCIAL INSTITUTION. THAT BY THE TIME THE T DS CERTIFICATE IS ITA-384/DEL/2012 4 RECEIVED, THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE ALREADY CLOSED. HOWEVER, DIFFERENCE IN THE INTEREST, IF ANY, IS DUL Y RECOGNIZED AND ACCOUNTED FOR UPON MATURITY OF FDR OR OTHER FINANCI AL INSTRUMENT. FROM THE YEAR-WISE CHART OF INTEREST, IT IS EVIDENT THAT AFTER EIGHT YEARS PERIOD, THE INTEREST AS PER BOOKS OF ACCOUNT IS MOR E BY ` 13,462/- THAN THE INTEREST AS PER TDS CERTIFICATE. WE HAVE ALSO SEEN THAT THE INCOME DISCLOSED BY THE ASSESSEE FOR THE YEAR UNDER APPEAL IS MORE THAN ` 26 CRORES. A PERSON WHO IS DISCLOSING SUCH A HIGH INC OME WILL HAVE NO INTENTION OF SUPPRESSING THE INCOME OF ` 52,497/-. MOREOVER, THE INCOME IS ALREADY DISCLOSED IN THE SUBSEQUENT YEARS . IN VIEW OF THE TOTALITY OF ABOVE FACTS, WE DO NOT FIND IT A FIT CA SE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) ON ACCOUNT OF MISMATCH OF T HE INTEREST INCOME WITH TDS CERTIFICATE. 8. SO FAR AS DISALLOWANCE OF EXPENDITURE ON THE INC REASE IN AUTHORIZED SHARE CAPITAL IS CONCERNED, IN OUR OPINI ON, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX CO URT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) WHEREIN THEIR LORDSHIPS 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 TAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANN OT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 9. IN THE CASE OF THE ASSESSEE, THE GENUINENESS OF THE EXPENDITURE ACTUALLY INCURRED BY IT IS NOT IN DISPUTE. IT IS A LSO NOT DISPUTED BY THE REVENUE THAT THE ASSESSEE HAS DISCLOSED FULL PARTIC ULARS WITH REGARD TO ITA-384/DEL/2012 5 THE EXPENDITURE INCURRED BY IT. ON THE ABOVE FACTS , THE DECISION OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) WOULD BE SQUARELY APPLICABLE. THEREFORE, W E ARE OF THE VIEW THAT MERELY BECAUSE THE EXPENDITURE INCURRED BY THE ASSESSEE FOR INCREASE IN ITS AUTHORIZED SHARE CAPITAL IS DISALLO WED, IT WOULD NOT AMOUNT TO CONCEALMENT OF INCOME SO AS TO ATTRACT LE VY OF PENALTY UNDER SECTION 271(1)(C). IN VIEW OF THE ABOVE, WE CANCEL THE PENALTY LEVIED UNDER SECTION 271(1)(C), IN RESPECT OF ABOVE TWO ITEMS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 28 TH MARCH, 2012. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (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 : 28.03.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. 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