ACIT, CENTRAL CIRCLE- 15, NEW DELHI V. NAGAR DAIRY PVT. LTD., NEW DELHI

ITA 3989/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9637 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV PUNDIR
• Keywords: Search and seizure
• Section: 271(1)(c); 274; 73; 153C; 144

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE MS SUCHITRA KAMBLE , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3989 /DEL/ 2018 (ASSESSMENT YEAR: 2010 - 11 ) ACIT, CENTRAL CIRCLE - 15, NEW DELHI VS. NAGAR DAIRY PVT. LTD, 3/10 PASCHIMI MARG, VASANT VIHAR, NEW DELHI PAN: AABCN7304C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI GAURAV PUND I R, SR. DR ASSESSEE BY: SHRI DIVYANSH JAIN, CA DATE OF HEARING 27/7 / 2021 DATE OF PRONOUNCEMENT 27 / 07 / 2021 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XXVI , NEW DELHI 16.03.2018 FOR ASSESSMENT YEAR 2010 - 11, WHEREIN, THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT VIDE ORDER DATED 2 0 .03.2017 BY THE LD ASS TT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 15, NEW DELHI WAS DELETED. 2. BRIEFLY STATED THE FACTS SHOWS THAT A SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF THE ASSESSEE ON 17.09.2010. THE ASSESSMENT U/S 14 4 READ WITH SECTION 153C WAS COMPLETED ON 28.03.2013 AT THE TOTAL INCOME OF RS. 2 , 90,63,39,72 8 / - WHICH WAS LATER ON RECTIFIED AT AN INCOME OF RS. 1 , 82,29,24,640/ - AGAINST THE RETURN OF INCOME WAS RS. 1,52,44,063/ - . THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE BEING DISALLOWANCE OF VARIOUS EXPENDITURE. THE PENALTY PROCEEDINGS WERE INITIATED BY ISSUE OF NOTICE U/S 274 OF THE ACT READ WITH SECTION 271(1)(C) OF THE ACT DATED 28.03.2013. INITIALLY THE PENALTY PROCEEDINGS WERE KEPT IN ABEYANCE AS THE ASSESS EE HAS PREFERRED AN APPEAL AGAINST THE ADDITION. SUBSTANTIALLY , THE ADDITION WERE DELETED BY THE LD CIT(A). THEREFORE, AFTER THAT A FURTHER NOTICE WAS ISSUED TO THE ASSESSEE AND ASSESSEE SUBMITTED A REPLY STATING THAT SUBSTANTIAL RELIEF HAS BEEN GRANTED BY THE LD CIT(A) HOWEVER, ADDITION OF RS. 42,13,198/ - WAS SUSTAINED. THE DISALLOWANCE WAS MADE OUT OF TRANSPORTATION EXPENDITURE AS THE ASSESSEE COULD NOT PRODUCE THE LOG BOOK OF RUNNING OF THE VEHICLE AND THERE WERE CERTAIN DEFECT IN THE VOUCHERS. 30% OF TH E TOTAL TRANSPORTATION CHARGES WAS DISALLOWED OUT OF WHICH , ON APPEAL BEFORE THE LD CIT(A) RS. 14,53,659/ - WAS SUSTAINED. HOWEVER, THERE WAS A DISALLOWANCE OF RS. 14 , 15 , 900/ - OUT OF OTHER EXPENSES WAS MADE BY THE LD AO WHICH WAS RESTRICTED TO RS. 1,01,028 / - BY THE LD CIT(A). ON THIS DISALLOWANCES A PENALTY PROCEEDINGS INITIATED AND CONTINUED. THE ASSESSEE SUBMITTED BEFORE THE LD AO VARIOUS LEGAL OBJECTIONS HOWEVER, SAME WERE REJECTED AND THE LD AO HELD THAT THE ASSESSEE HAS CONCEALED ITS INCOME TO THE EXT ENT OF RS. 49,50,693/ - AND THEREFORE, HE LEVIED A PENALTY OF RS. 16,9 2 ,938/ - BY ORDER DATED 20.03.2017. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) WHEREIN, DETAILED SUBMISSION WERE MADE AND THE LD CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE PENALTY NOTING THAT THE PENALTY HAS BEEN LEVIED ON ALL ADHOC DISALLOWANCE AND PENALTY IS NOT TENABLE ON ADHOC DISALLOWANCES. HE FURTHER HELD THAT THE ISSUES ARE PRIMA FACIE DEBATABLE AND FURTHER THE NOTICE ISSUED U/S 274 OF THE ACT DI D NOT SPECIFY THE SPECIFIC LIMB OF SECTION 271(1)(C) OF THE ACT AND THEREFORE, THE ISSUE IS SQUARELY COVERED BY THE ORDER OF THE HONBLE KARNATAKA HIGH COURT AND WHERE THE SLP IS DISMISSED BY THE HONBLE SUPREME COURT IN CASE OF CIT VS. SSA S EMERALD MEA DOWS 73 TAXMANN .COM 248. 4. THE LD AO IS AGGRIEVED WITH THE ORDER HAS PREFERRED THIS APPEAL. 5. THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD AO. 6. THE LD AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. WE AGREE WITH THE FINDINGS OF LD CIT(A) THAT THE ISSUES ON WHICH PENALTY IS LEVIED ARE PRIMA FACIE DEBATABLE AND FURTHER DISALLOWANCES ARE ALSO ON ADHOC BASIS , THUS IT CANNOT BE SAID THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME OR HAS CONCEAL ED ITS INCOME. FURTHER , IT IS CATEGORICAL FINDING OF THE LD CIT(A) THAT THE NOTICE ISSUES U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT DID NOT SPECIFY UNDER WHICH LIMB THE PENALTY IS LEVIED AND THEREFORE, THE PENALTY ORDER OF LD AO IS NOT SUSTAINABLE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT RELIED UPON BY THE LD CIT(A) . IN VIEW OF THIS WE UPHOLD THE ORDERS OF THE LD CIT(A) AND DISMISSED THE APPEAL OF THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 / 07 / 2021 . - SD/ - - SD/ - ( SUCHITRA KAMBLE ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 / 07 / 2021 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI