SHRI AGNELO ALMEIDA, MUMBAI V. ITO 25(1)(2), MUMBAI

ITA 3982/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1049 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 13-07-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 25-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: N O N E
• Keywords: Depreciation; Reason to believe
• Section: 271(1)(c); 80HHC; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI PRAMOD KUM AR ,(AM) ITA NO.3982/MUM/2009 ASSESSMENT YEAR : 1999-00 ITA NO.3983/MUM/2009 ASSESSMENT YEAR : 2000-01 ITA NO.3984/MUM/2009 ASSESSMENT YEAR : 2001-02 SHRI AGNELO ALMEIDA 11-B/405, ASHISH COMPLEX CSC ROAD NO.4, DAHISAR(E) MUMBAI-400068. ..( APPELLANT ) P.A. NO. (AAYPA 7592 D) VS. INCOME TAX OFFICER-25(1)(2) C-10, BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400051. ..( RESPONDENT ) APPELLANT BY : NO NE RESPONDENT BY : SHRI HARI GOVIND SINGH O R D E R PER D.K. AGARWAL (JM). ALL THESE APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED A GAINST THE COMMON ORDER DATED 22.4.2009 PASSED BY THE LD. CIT (A) FOR THE ASSESSMENT YEARS 1999-00, 2000-01 AND 2001-02. SINCE FACT S ARE IDENTICAL GROUNDS ARE COMMON ALL THESE APPEALS ARE DISPO SED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE TIME OF HEARING NONE ATTENDED ON BEHALF O F THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE . IT WAS THEREFORE ITA NO.3982,83 & 84/M09 A.Y:99-00 TO 01-02 2 DECIDED TO DISPOSE OF THE APPEALS EXPARTE QUA THE ASSESSE E ON MERITS AFTER HEARING THE LD. DR. 3. BRIEFLY STATED FACTS OF THE CASE EXTRACTED FROM ITA NO.3982/M/2009 FOR ASSESSMENT YEAR 1999-00 ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS ENGAGED IN THE BUSINESS OF PHARMA PRODUCT S. HE FILED RETURN DECLARING TOTAL INCOME OF RS.75,995/- ALONG WIT H P&L ACCOUNT, BALANCE SHEET AND AUDIT REPORT INTERALIA CLAIMING DEDUCTION U/S.80HHC RS.11,16,752/-. AFTER PROCESSING OF THE RETURN U/S.143( 1) OF THE INCOME TAX ACT, 1961 (THE ACT), THE ASSESSING OFFICER HAD R EASON TO BELIEVE THAT BANK INTEREST OF RS.2,67,660/- HAS ESCAPED ASSESSMENT AS PER PROVISIONS OF SECTION 147 OF THE ACT. ACCORDINGLY THE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE ACT. IN RESPONSE, TH E ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF RS.2,19,540/-. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT TOTAL INTEREST RECEIVED BY THE ASSESSEE DURIN G THE YEAR IS RS.2,67,660/-. THE ASSESSEE HAD NOT OFFERED THIS INTEREST INCOME AS PER ORIGINAL RETURN OF INCOME FILED. HOWEVER, IN THE RETURN FILED U/S.148 THE ASSESSEE ADDED INTEREST TOTALLING TO RS.2,67,6 60/-. SIMILARLY, IN THE ORIGINAL RETURN THE ASSESSEE HAS CLAIME D DEPRECIATION OF RS.4,88,625/- ON MACHINERY. HOWEVER, AS PER RETURN OF INCOME FILED U/S.148 ON 6.11.2006 THE ASSESSEE HAD ADDED DEPRE CIATION OF RS.4,88,625/-. THE ASSESSING OFFICER AFTER MAKING THE ADD ITION OF INTEREST INCOME AND DEPRECIATION AS ABOVE AND AFTER RED UCING THE AMOUNT OF DEDUCTION U/S.80HHC FROM RS.17,14,492/- TO RS.16,81,372/- COMPLETED THE ASSESSMENT AT AN INCOME OF RS.2,52,660/- VIDE ORDER DATED 27.12.2006 PASSED U/S.14 3(3) R.W.S. 147 OF THE ACT. ON APPEAL, THE LD. CIT(A) DIRECTED T HE ASSESSING OFFICER TO TREAT INTEREST ON FIXED DEPOSIT ON MARGIN M ONEY AS BUSINESS ITA NO.3982,83 & 84/M09 A.Y:99-00 TO 01-02 3 INCOME BUT 90% OF IT IS TO BE EXCLUDED WHILE WORKING D EDUCTION U/S.80HHC AS MENTIONED IN CLAUSE (BAA) OF SUB SECTION (4A) O F SECTION 80HHC AND ACCORDINGLY PARTLY ALLOWED THE APPEAL. IN R ESPONSE TO NOTICE TO SHOW CAUSE AS TO WHY PENALTY U/S.271(1)(C) SHOU LD NOT BE IMPOSED, THE ASSESSEE FILED NO EXPLANATION. IN THE ABSE NCE THEREOF, THE ASSESSING OFFICER WHILE OBSERVING THAT HE IS SATISFIED THAT THE ASSESSEE HAS COMMITTED DEFAULT U/S.271(1)(C) OF THE ACT IN REGARD TO (I) DEPRECIATION AND (II) INTEREST INCOME, IMPOSED PENA LTY OF RS.1,78,058/- EQUIVALENT TO THE AMOUNT OF TOTAL CONCEA LED INCOME OF RS.6,18,197/- (INTEREST RS.129572/- + DEPRECIATION RS.48 8625/-), VIDE ORDER DATED 29.5.2008 PASSED U/S.271(1)(C) OF THE ACT. ON APPEAL, THE LD. CIT(A) WHILE RELYING ON THE DECISION OF HON'BL E SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS 174 TAXMAN 571; (2008) 306 ITR 277 (SC) DIRECTED THE ASSESSI NG OFFICER TO RE-CALCULATE THE QUANTUM OF PENALTY IN VIEW OF EXP LANATION 4 TO SEC. 271(1)(C) OF THE ACT AND ACCORDINGLY PARTLY ALLOWED TH E APPEAL. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE SU STENANCE OF PENALTY IMPOSED BY THE ASSESSING OFFICER WITHOUT APPRECIAT ING THAT IT WAS UNINTENDED LAPSES ON THE PART OF THE ACCOUNTANT WHIC H HAVE BEEN CORRECTED IN THE SUBSEQUENT RETURN FILED IN RESPONSE TO T HE NOTICE U/S.148 AND AS SUCH IT IS NOT A FIT CASE FOR LEVYING PEN ALTY U/S.271(1)(C) OF THE ACT. 5. AT THE TIME OF HEARING THE LD. DR SUPPORTS THE OR DER OF THE ASSESSING OFFICER AND THE LD. CIT(A) . ITA NO.3982,83 & 84/M09 A.Y:99-00 TO 01-02 4 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD . DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THA T THERE IS NO DISPUTE THAT THE ASSESSING OFFICER HAS INITIATED PROCEEDIN G U/S.147 AS HE HAD REASON TO BELIEVE THAT BANK INTEREST OF RS.2,67 ,660/- HAS ESCAPED ASSESSMENT AS PER PROVISIONS OF SECTION 147 OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS DISCLOSED INTEREST I NCOME RS.2,67,660/- AND ADDED DEPRECIATION RS.4,88,625/- IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S.148. WE FURTHER FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT FILE D COMPLETE PARTICULARS OF INTEREST INCOME AND DEPRECIATION. IN OR DER TO APPLY THE PROVISIONS OF SECTION 271(1)(C), THERE HAS TO BE CONCEALME NT OF PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE A SSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. 7. IN A RECENT JUDGMENT OF THE HONBLE APEX COURT IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158(SC ) THEIR LORDSHIPS, AFTER CONSIDERING VARIOUS DECISIONS INCLUDING DI LIP N. SHROFF VS. JCIT (2007) 291 ITR 519(SC) AND UNION OF INDIA V S. DHARAMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277(SC) HAVE OBSERVED AND HELD (PAGE 158 HEADNOTES) AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) O F THE INCOME- TAX ACT, 1961, SUGGESTS THAT IN ORDER T O BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDL Y, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING A N INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE ITA NO.3982,83 & 84/M09 A.Y:99-00 TO 01-02 5 PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUC H PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLI ED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCOR RECT 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. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HONBLE AP EX COURT AND KEEPING IN VIEW THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT DISCLOSED THE INTEREST INCOME AND HAS NOT ADDED TH E DEPRECIATION IN THE RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT, WE ARE OF THE VIEW THAT THERE IS NO CONCEALMEN T ON THE PART OF THE ASSESSEE WHICH MAY CALL FOR LEVY OF PENALTY U/S.271(1) (C) OF THE ACT. ACCORDINGLY THE PENALTY IMPOSED BY THE ASSESSING OFFI CER AND SUSTAINED BY THE LD. CIT(A) IS DELETED. THE GROUNDS TA KEN BY THE ASSESSEE ARE THEREFORE, ALLOWED. ITA NO.3983/MUM/2009 (A.Y. 2000-01) AND ITA NO.3984/MUM/2009 (A.Y. 2001-02) (ASSESSEES AP PEALS): 8. AFTER HEARING THE LD. DR AND KEEPING IN VIEW OF OUR FINDING RECORD IN PARAS 6 -7 OF THIS ORDER WE ARE OF THE VIEW THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) FOR THE ABOVE ASSESSMENT YEARS 2000-01 AND 2001-02 IS ALSO NOT SUSTAINABLE IN LAW AND ACCORDINGLY THE SAME IS DELETED. WE HOLD AND ITA NO.3982,83 & 84/M09 A.Y:99-00 TO 01-02 6 ORDER ACCORDINGLY. THE COMMON GROUNDS TAKEN BY THE ASSESSE E ARE THEREFORE ALLOWED. 9. IN THE RESULT, ASSESSEE'S APPEALS STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.07.2010 SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICI AL MEMBER MUMBAI, DATED: 23.7.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. ITA NO.3982,83 & 84/M09 A.Y:99-00 TO 01-02 7 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 13.7.2010 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 13.7.2010 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 23.7.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 26.7.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER