DCIT, New Delhi V. Sh. Vipin Kumar Agarwal, New Delhi

ITA 4255/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4057 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Document seized; Documents seized
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SH.R.K.PANDA, ACCOUNTANT MEMBER AND SH.K.N.CHARY, JUDICIAL MEMBER ITA NO. 4255/DEL/2014 (ASSESSMENT YEAR: 2 006-07) APPELLANT BY NONE RESPONDENT BY SH. AMIT JAIN, SR.DR DATE OF HEARING 16 . 1 0.2017 DATE OF PRONOUNCEMENT 17 . 1 0.2017 ORDER PER K.N.CHARY, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE, BEING AGGRIEVED BY THE ORDER DATED 23.05.2014 IN APPEAL NO.137/2013-14 PASSING BY THE COMMISSIONE R OF INCOME TAX (APPEAL) [IN SHORT CIT(A)]-III, NEW DELHI FOR ASSESSMENT Y EAR 2006-07, IS ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.4,68,190 /- IMPOSED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A HAS ERRED IN LAW AND ON FACTS IN RELYING UPON THE JUDGEMENT IN THE CASE OF COMMISSIONER OF INCOME TAX VS RELIANCE PETROPRODUCTS PVT. LTD. IN 322 ITR 158 (SC) AS THE FACTS OF THE CASE ARE TOTALLY DIFFERENT FROM THE INSTANT CASE. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TEN ABLE ON FACTS IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. 2. BRIEFLY STATED FACTS ARE THAT SCRUTINY OF THE RE TURN OF INCOME OF THE ASSESSEE UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (I N SHORT ACT), THE AO MADE DCIT, CENTRAL CIRCLE- 2, NEW DELHI. VS VIPIN KUMAR AGARWAL, 240, OKHLA INDUSTRIAL ESTATE, PHASE-III, NEW DELHI-110020. PAN-AAEPA5202G (APPELLANT) (RESPONDENT) ITA NO. 4255/DEL/2014 CERTAIN ADDITIONS. IN APPEAL, LD.CIT(A) SUSTAINED THE ADDITION OF RS.13,90,937/- ON ACCOUNT OF DISALLOWANCE U/S 40A(3) OF THE ACT. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED AND THE AO VIDE ORDER DATED 21.03.2013 CONCLUDED THE SAME WITH THE LEVY OF PENALTY OF RS.4 ,68,190/-. HOWEVER, IN APPEAL LD.CIT(A) FOUND ON FACTS THAT THERE IS NO CONCEALME NT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF THE SAME, INAS MUCH AS ALL THE EXPENSES WERE REFLECTED IN THE SEIZED DOCUMENTS AND DULY ACCOUNTE D IN THE BOOKS OF ACCOUNTS AND THE SOURCE OF THE SAME WAS ALSO DULY EXPLAINED. LD.CIT(A) FURTHER FOUND THAT DISALLOWANCE OF EXPENSES U/S 40A(3) DOES NOT MEAN T HAT THE CASH EXPENSES WERE NOT GENUINE. BASING ON THESE FACTS, LD.CIT(A) APPL IED THE LAW DECLARED BY THE HONBLE SUPREME COURT IN CIT VS RELIANCE PETROPRODUCTS PVT. LTD. [2010] 322 ITR 158 AND DELETED THE PENALTY. HENCE, THE REVENUE IS IN APPEAL BEFORE US. 3. IT IS THE ARGUMENT OF THE LD. DR THAT LD.CIT(A) COMMITTED AN ERROR IN DELETING THE PENALTY AND LD. DR PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW WHEREAS IT IS FOUND FROM THE ORDER OF LD.CIT( A) THAT NOTHING WAS UNEARTHED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AND THE ADDITIONS MADE ON ACCOUNT OF DISALLOWANCE U/S 40A(3) WAS PURELY ON THE BASIS OF THE DETAILS SUBMITTED BY THE ASSESSEE AT THE TIME OF RETURN OF INCOME ONLY AND T HAT EVERY ADDITION WILL NOT AUTOMATICALLY LEAD TO THE LEVY OF PENALTY, AND IN T HE ABSENCE OF THE CONCEALMENT OF INCOME OR INACCURATE PARTICULARS THEREOF, PENALTY U /S 271(1)(C) IS NOT BE JUSTIFIED AS SUCH THE DECISION IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) IS APPLICABLE TO THE FACTS OF THE CASE. 4. WE HAVE CAREFULLY GONE THROUGH THE RECORD. ORIG INALLY THE ADDITIONS WERE UNDER THREE GROUNDS NAMELY RS.14,86,584/- U/S 40A(3 ) OF THE ACT; RS.10 LACS U/S ITA NO. 4255/DEL/2014 40(1)(I)(A) AND RS.25 LACS ON ACCOUNT OF UNDISCLOSE D INCOME REPRESENTING INVESTMENT IN PROPERTY, BUT IN APPEAL, LD. CIT(A) S USTAINED THE DISALLOWANCE OF RS.13,90,937/- U/S 40A(3) OF THE ACT. THEREAFTER, ON ACCOUNT OF DISALLOWANCE OF RS.13,90,937/-, THE AO WORKED OUT THE PENALTY AT RS .4,68,190/-. THERE IS NO ALLEGATION AGAINST THE ASSESSEE THAT THE ASSESSEE C ONCEALED ANY INCOME PARTICULARS OR FURNISHED ANY INACCURATE PARTICULARS THEREOF. T HE DISALLOWANCE OF EXPENDITURE U/S 40A(3) OF THE ACT WAS ONLY BASED ON THE PARTICU LARS FURNISHED BY THE ASSESSEE. LD.CIT(A) IS PERFECTLY JUSTIFIED IN HIS FINDINGS TH AT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DIFFERENT THINGS AND AN ISSUE MAY CALL FOR AN ADDITION TO INCOME U/S 143(3) OF THE ACT BUT IN THE ABSENCE OF ANY SPECIFIC FINDING THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INA CCURATE PARTICULARS THEREOF, NO PROCEEDINGS U/S 271(1)(C) OF THE ACT CAN BE SUSTAIN ED. WE ARE OF THE CONSIDERED OPINION THAT THE DECISION IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) IS APPLICABLE TO THE FACTS OF THE CASE AND THE LD.CIT(A) IS PERFE CTLY JUSTIFIED IN DELETING THE PENALTY PASSING ON SUCH BINDING PRECEDENT. WE, THE REFORE, WHILE UPHOLDING THE FINDINGS OF THE LD.CIT(A), DISMISSED THE GROUNDS OF APPEAL. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH OCTOBER, 2017. SD/- SD/- (R.K.PANDA) (K.N.CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* DATE:- 17.10.2017 ITA NO. 4255/DEL/2014 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI