Shri Rajeev Ajmera, Indore V. THE ACIT4(1), Indore

ITA 431/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5822 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Assessee Lawyers: RAVI SARDA
• Keywords: Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER ITA NO. 431/IND/2016 (ASST. YEAR : 2011-12) SHRI RAJEEV AJMERA, 9-A,NEMI NAGAR, INDORE. VS. ACIT, 4(1), INDORE. PAN NO. ABGPA49301 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAVI SARDA, ADV. DEPARTMENT BY : SHRI R.P.MOURYA, DR DATE OF HEARING : 04/07/2016. DATE OF PRONOUNCEMENT : 04/07/2016. O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE, D ATED 29/02/2016. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING LEVY OF PENALTY OF R S. 2,50,000/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON REC ORD. 4. THE BRIEF FACTS OF THE CASE ARE THAT IN THE ASSESSM ENT MADE U/S 143(3) OF THE INCOME-TAX ACT, 1961, ON 22.3.2004, T HE AO MADE ADDITION OF RS. 7,33,056/- ON ACCOUNT OF INTEREST P AID ON LOAN OBTAINED SHRI RAJEEV AJMERA VS. ACIT, 4(1), INDORE I.T.A.N O. 431/IND/2016 A.Y. 2011-12 2 FOR PURCHASE OF FLAT AND ADDITION OF RS. 2,81,637/- ON ACCOUNT OF LOSS ON SALE OF CAR. ACCORDING TO THE AO, THE ASSESSEE MANI PULATED THE ACCOUNT AND CLAIMED THE CAPITAL EXPENDITURE ON ACCOUNT OF I NTEREST PAID ON LOAN FOR PURCHASE OF FLAT AND THAT THE ASSESSEE HAD DEBI TED LOSS OF RS. 2,81,637/- ON ACCOUNT OF LOSS ON SALE OF CAR, WHICH WAS REQUIRED TO BE REDUCED FROM THE BLOCK OF ASSETS. THEREFORE, HE LEV IED PENALTY OF RS. 2,50,000/- ON ACCOUNT OF FURNISHING OF INACCURATE P ARTICULARS OF INCOME. 5. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF T HE AO. 6. BEFORE ME, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT SIMILAR INTEREST ON LOAN FOR PURCHAS E OF FLAT WAS CLAIMED IN ASSESSMENT YEAR 2012-13 AND 2013-14 AND THE AO I N THE ORDER PASSED U/S 143(3) DATED 24.2.2015 AND 29.01.2016 RE SPECTIVELY ALLOWED THE CLAIM FOR INTEREST EXPENDITURE INCURRED ON LOAN FOR PURCHASE OF FLAT AMOUNTING TO RS. 8,64,899/- IN THE ASSESSM ENT YEAR 2012-13 AND RS. 9,70,372/- IN ASSESSMENT YEAR 2013-14. THER EFORE, HE SUBMITTED THAT THE LEVY OF PENALTY ON THIS ACCOUNT FOR THE YEAR UNDER APPEAL WAS, THEREFORE, NOT JUSTIFIED. 7. REGARDING THE DEBIT OF LOSS ON SALE OF CAR OF RS. 2 ,81,637/-, IT WAS SUBMITTED THAT IT WAS AN INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE NOT TO REDUCE THE SAME FROM THE BLOCK OF A SSETS AND, THEREFORE, THE PENALTY LEVIED WAS NOT JUSTIFIED. 8. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. SHRI RAJEEV AJMERA VS. ACIT, 4(1), INDORE I.T.A.N O. 431/IND/2016 A.Y. 2011-12 3 9. I FIND THAT THE INTEREST ON PURCHASE OF FLAT WAS CL AIMED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM. FROM THE DETAILS FURNISHED BY THE ASSESSEE, THE AO CAME TO KNOW ABOU T THE FACT OF THE CLAIM OF INTEREST EXPENDITURE ON LOAN FOR PURCHASE OF FLATS. THUS, THERE WAS NO SUBMISSION OF INACCURATE PARTICULARS OF INCO ME BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS CLAIMED ANY BOGUS EXPENDITURE IN THE RETURN OF INCOME FILED. FU RTHER, IT IS ALSO AN ADMITTED FACT THAT THE INTEREST EXPENDITURE CLAIMED ON LOAN FOR PURCHASE OF FLAT HAS BEEN ALLOWED BY THE AO HIMSELF IN THE S UBSEQUENT ASSESSMENT YEARS BEING ASSESSMENT YEARS 2012-13 AND 2013-14. 10. THUS, IN MY CONSIDERED OPINION, THE PENALTY LEVIED ON THIS AMOUNT WAS NOT JUSTIFIED AND, THEREFORE, I SET ASIDE THE O RDERS OF THE LOWER AUTHORITIES AND DELETE THE LEVY OF PENALTY ON THIS GROUND. 11. WITH REGARD TO CLAIM OF LOSS ON SALE OF CAR OF RS. 2,81,637/-, I FIND THAT THE ASSESSEE INSTEAD OF REDUCING THIS AMOUNT F ROM THE BLOCK OF ASSETS HAD CLAIMED THE SAME AS AN EXPENDITURE IN PR OFIT AND LOSS ACCOUNT. THE LOSS CLAIMED BY THE ASSESSEE IS NEITHE R BOGUS NOR FALSE. THEREFORE, IN MY CONSIDERED VIEW, DUE TO AN INADVER TENT MISTAKE ON THE PART OF THE ASSESSEE, NO PENALTY CAN BE LEVIED ON T HIS AMOUNT ALSO. I, THEREFORE, SET-ASIDE THE ORDERS OF THE LOWER AUTHOR ITIES AND DELETE THE LEVY OF PENALTY OF RS. 2,50,000/- AND ALLOW THE APP EAL OF THE ASSESSEE. SHRI RAJEEV AJMERA VS. ACIT, 4(1), INDORE I.T.A.N O. 431/IND/2016 A.Y. 2011-12 4 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON MONDAY, THE 4 TH DAY OF JULY, 2016 AT INDORE. SD/- (N.S.SAINI) ACCOUNTANT MEMBER DATED : 4 TH JULY, 2016. CPU COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., INDORE SHRI RAJEEV AJMERA VS. ACIT, 4(1), INDORE I.T.A.N O. 431/IND/2016 A.Y. 2011-12 5