J.C.I.T., Range-3, Gwalior V. M/s Runway Devilopers, Guna

ITA 390/AGR/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76627 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARSHAD
• Assessee Lawyers: RAJENDRA SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO.390/AGRA/ 2011 ASSESSMENT YEAR: 2005-06 JOINT COMMISSIONER OF INCOME TAX, VS. M/S. RUNWAY DEVELOPERS, RANGE-3, GWALIOR. 15, PANCHAYAT BHAWAN, A.B. ROAD, GUNA (M.P.). (PAN AAGFR 7704 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI RAJENDRA SH ARMA, ADVOCATE DATE OF HEARING : 10.06.2014 DATE OF PRONOUNCEMENT : 27.06.2014 ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: BY WAY OF THIS APPEAL, THE APPELLANT ASSESSING OFF ICER HAS CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 18 TH JULY, 2011, IN THE MATTER OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 F OR THE ASSESSMENT YEAR 2005- 06, ON THE GROUND THAT ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.3,83 ,96,688/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE IS ENGAGED IN CONTRACT WORK, AND IS WORKING, FOR VARIO US AGENCIES, AS A CONTRACTOR. ONE OF THE DISALLOWANCES, IN RESPECT OF WHICH THE I MPUGNED PENALTY WAS LEVIED, ITA NO.390/AGRA/2011 A.Y. 2005-06 2 WAS FOR RS.3,37,30,882/- UNDER SECTION 40(A)(IA) OF THE ACT. HOWEVER, VIDE ORDER DATED 30.04.2014, THE SAID DISALLOWANCE ITSELF STAN DS DELETED. ACCORDINGLY, THERE IS NO LEGALLY SUSTAINABLE BASIS FOR THE PENALTY TO THA T EXTENT. THAT LEAVES THE PENALTY IN RESPECT OF FOLLOWING DISALLOWANCES/ADDITIONS:- (I) RS.2,99,550/- BEING TAKEN AS CONTRACT RECEIPT F ROM NAGAR PALIKA, WHEREAS CORRECT AMOUNT OF THIS RECEIPT WAS RS.3,45, 501; AND (II) RS.12,00,000/- HAVING BEEN DISALLOWED, ON ADHO C BASIS, ON ACCOUNT OF EXPENSES NOT PROPERLY VOUCHED. 3. THE ASSESSING OFFICER IMPOSED PENALTY IN CONNECT ION WITH THE ABOVE DISALLOWANCES/ADDITIONS, AND, WHILE DOING SO, OBSER VED AS FOLLOWS:- THE ASSESSEES SUBMISSION HAS BEEN CONSIDERED AND IS NOT ACCEPTABLE. DURING THE COURSE OF ASSESSMENT AND PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT IT IS OBSERVED THAT A SSESSEE HAS WILLFULLY FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND HAS CONCEALED PARTICULARS OF HIS INCOME. THE ASSESSEE HAS WRONGLY CLAIMED THE EXPENDITURE OF RS.3,37,30,882/- WHICH WAS NOT ALLOW ABLE AS PER PROVISIONS OF SECTION 40(A)(IA) AND RS.12 LAKHS FO R WHICH THE ASSESSEE WAS NOT HAVING ANY SUPPORTING VOUCHERS AND BILLS. T HE ASSESSEE HAD ALSO CONCEALED HIS INCOME TO THE EXTENT OF RS.45,95 1/- BY SUPPRESSION OF ITS RECEIPT. ACCORDINGLY, THE ASSESSEE HAS DELIB ERATELY AND WILLFULLY FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS CONCEALED HIS INCOME WITH AN INTENTION TO DEFRAUD THE REVENUE. TH E FACT THAT THE LD. CIT(A) HAS CONFIRMED THE ABOVE MENTIONED ADDITIONS CONFIRMS THE MALAFIDE INTENTIONS OF THE ASSESSEE. AS THE ASSESSE E HAS WILLFULLY FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND HAS CONCEALED HIS INCOME FOR THE RELEVANT ASSESSMENT YEAR WITH A MALA FIDE INTENTION, THE ASSESSEE IS LIABLE TO PENALTY U/S. 271(1)(C) READ W ITH EXPLANATION1 OF I.T. ACT 1961. 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL . WHILE CIT(A) CONFIRMED THE PENALTY ON FIRST POINT AND ASSESSEE IS NOT IN A PPEAL AGAINST THE SAME, LEARNED ITA NO.390/AGRA/2011 A.Y. 2005-06 3 CIT(A) DELETED THE PENALTY ON THE DISALLOWANCE OF R S.12,00,000/- AND, THOUGH NOT RELEVANT RIGHT NOW, ON 40(A)(IA) DISALLOWANCE OF RS .3,37,30,882/-AS WELL. REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. THE SHORT ISSUE THAT REALLY SURVIVES FOR OUR ADJ UDICATION, ON MERITS, IS WHETHER OR NOT LEARNED CIT(A) WAS JUSTIFIED IN DELE TING PENALTY IN RESPECT OF DISALLOWANCE OF RS.12,00,000/- ON ADHOC BASIS WHICH WAS ACCEPTED BY THE ASSESSEE. IN OUR CONSIDERED VIEW, AS THERE IS NOTHING MORE TH AN SOME GENERALIZED REMARKS ON THE NATURE OF VOUCHERS, AND THE FACT OF ASSESSEE HA VING ACCEPTED THIS DISALLOWANCE, TO SUPPORT THIS DISALLOWANCE EVEN ON MERITS, IT CAN NOT BE A FIT CASE FOR CONFIRMATION OF PENALTY. LEARNED CIT(A) RIGHTLY DELETED THE SAME . WE APPROVE HIS ACTION ON THIS POINT AND DECLINE TO INTERFERE IN THE MATTER. 7. FOR THE REASONS SET OUT ABOVE, WE APPROVE THE CO NCLUSIONS ARRIVED AT BY THE CIT(A) ON BOTH THE POINTS. NO INTERFERENCE IS CALLE D FOR. 8. IN THE RESULT, THE APPEAL IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.06.2014) SD/- SD/- (BHAVNESH SAINI) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOU NTANT MEMBER DATE: 27 TH JUNE, 2014 ITA NO.390/AGRA/2011 A.Y. 2005-06 4 PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY