Bantam Enterprises Pvt. Ltd, New Delhi V. DCIT, New Delhi

ITA 4077/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4155 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y S KAKKAR
• Section: 14A

Judgement Text

ITA NO.4077/DEL/10 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.4077/DEL/2010 ASSTT. YEAR: 2002-03 BANTAM ENTERPRISES PVT. LTD., VS DC IT, DIAMOND PRESS BUILDING, CIRCLE 2(1), 8E, RANI JHANSI ROAD, NEW DELHI. JHANDEWALAN EXTENSION, NEW DELHI-110055 (PAN NO. AAACB0346B) APPELLANT BY: SHRI PRADEEP DINODIA RESPONDENT BY: MS Y.S. KAKKAR, SR.DR O R D E R PER G.E. VEERABHADRAPPA, V.P. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R OF THE CIT(A) DATED 26.5.2010 FOR AY 2002-03. 2. THE ASSESSEE IS A LIMITED COMPANY AND FILED A RE TURN DECLARING AN INCOME OF ` 13,540. THE AO ASSESSED THE TOTAL INCOME OF THE A SSESSEE AT ` 25,84,451 (BEFORE SET-FF OF B/F BUSINESS LOSSES) AS AGAINST THE RETURN INCOME STATED ABOVE VIDE ASSESSMENT ORDER DATED 17.1.2005. THE FOLLOWING DISALLOWANCES WERE MADE TO THE RETURNED INCOME IN T HE ASSESSMENT:- ITA NO.4077/DEL/10 2 I) DISALLOWANCE OUT OF INTEREST PAID U/S 14A OF TH E ACT ` 18,95,379/- II) SECURITY CHARGES PAID FOR PREMISES AT 29, ` 1,71,630/- RAJDOOT MARG, NEW DELHI. ---------------- ` 20,67,009/- 3. IN THE QUANTUM ASSESSMENT PROCEEDINGS WHICH MADE THE ABOVE ADDITIONS HAVE BECOME FINAL AND THE DEPARTMEN T IMPOSED PENALTY OF ` 7,37,922/- IN RESPECT OF THE ABOVE DISALLOWANCES. THE ASSESSEE WAS UNSUCCESSFUL BEFORE THE CIT(A) AND IS BEFORE US. 4. WE HAVE HEARD BOTH THE SIDES AT LENGTH AND GONE THROUGH THE RECORDS. THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING 71 P AGES. HE HAS ALSO INCLUDED THEREIN THE WRITTEN SUBMISSION THAT WERE M ADE BEFORE THE CIT(A) ALONG WITH COMPUTATION STATEMENT WHICH WERE FILED B EFORE THE AUTHORITIES, COMPARATIVE STATEMENT OF LOANS TAKEN FOR THE PERIOD 31.3.1996 TO 31.3.2002, DETAILS OF SHARES OF DCM SHRIRAM INDUSTRIES LTD. PU RCHASED, DETAILS OF INTEREST PAID/RECEIVED, COPIES OF THE TRIBUNAL ORDE R AND THE ORDER OF THE CIT(A) IN QUANTUM APPEAL AND THE CASE LAWS WHICH AR E RELIED UPON BY THE ASSESSEE. 5. HAVING GONE THROUGH THE DETAILS FILED IN THE PAP ER BOOK, WE ARE UNABLE TO FIND ANY REASONS FOR LEVY OF PENALTY. ALL THESE PAPERS CLEARLY SHOW THAT ITA NO.4077/DEL/10 3 THE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF I NCOME AND HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME IN WHICH THE A DDITIONS WERE MADE IN THE QUANTUM APPEALS. WE MAY OBSERVE THAT MAJOR ISSUE R ELATES TO DISALLOWANCE OF INTEREST U/S 14A OF THE ACT. THE ASSESSEE ON HI S PART HAS COMPLETELY DISCLOSED ALL THE PARTICULARS OF DIVIDEND INCOME AN D HAS MADE A BONA FIDE COMPUTATION OF DISALLOWANCE WHICH, ACCORDING TO HIM , IS TO BE MADE U/S 14A OF THE ACT. IN OUR VIEW, THIS SORT OF EXERCISE ON THE PART OF THE DEPARTMENT DOES NOT MEAN THAT THE ASSESSEE HAS CONCEALED THE P ARTICULARS OF INCOME IN RESPECT OF THE ADDITION WHICH THE DEPARTMENT HAS FI NALLY MADE. THERE HAS BEEN NO FAILURE ON THE PART OF THE ASSESSEE TO DISC LOSE FULL PARTICULARS IN RELATION TO THE EXPENSES DISALLOWED BY THE AO AND U PHELD BY THE APPELLATE TRIBUNAL OR IN RELATION TO THE PARTICULARS OF INCOM E WHICH ARE RELEVANT IN THIS REGARD. 6. EVEN AS REGARDS THE SECURITY CHARGES, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF INCOME. THE EXPENSES IN RELATION TO 29, RAJDOOT MARG PREMISES TAKEN ON NOMINAL RENT OF ` 1350/- HAVE BEEN INCURRED BY THE ASSESSEE AND ARE GENUINE EXPENDITUR E. EVEN IF THE PREMISES WERE FOUND VACANT, THE ASSESSEE WAS REQUIRED TO PRO TECT/PRESERVE THE PREMISES AND HAD AS SUCH INCURRED THE EXPENDITURE O N SECURITY CHARGES PAID TO S.D.S. SECURITIES (P) LTD., AB/14-B, SAFDARJUNG ENCLAVE MARKET, BEHIND ITA NO.4077/DEL/10 4 KAMAL CINEMA, NEW DELHI. IT IS NOT THE CASE OF THE REVENUE THAT THE PAYMENT OF SECURITY CHARGES FOR RESIDENTIAL HOUSE O F A DIRECTOR IS PROVED TO BE BOGUS. THE ASSESSEE HAS FULLY DISCLOSED THE FAC TS WITH REGARD TO THE CLAIM MADE FOR DEDUCTION IN THE INCOME TAX RETURN. IN OU R VIEW, THE DISALLOWANCE MADE IN THE ASSESSMENT IN THE CIRCUMSTANCES BY THEM SELVES DO NOT CONSTITUTE CONCEALED INCOME HAVING REGARD TO THE INFORMATION A ND DETAILS FURNISHED BEFORE THE AO IN RESPECT OF BOTH THE ISSUES. IT CAN NOT BE SAID THAT THE ASSESSEE HAS EITHER CONCEALED THE PARTICULARS THERE OF OR FURNISHED INACCURATE PARTICULARS. THE PENALTY WHICH HAS BEEN WRONGLY SU STAINED IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.4.2011. SD/- SD/- ( A.D. JAIN ) ( G.E. VEERABHADRAPPA ) JUDICIAL MEMBER VICE PRESIDENT DT. 29TH APRIL 2011 GS COPY FORWARDED TO:- 1. BANTAM ENTERPRISES PVT. LTD., NEW DELHI. 2. DCIT, CIRCLE 2(1), NEW DELHI. 3.CIT(A) 4.CIT 5. DR BY ORDER DY.REGISTRAR ITA NO.4077/DEL/10 5