Nextgen Communication Ltd., New Delhi V. DCIT, New Delhi

ITA 4355/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0179 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-03-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 24-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAORAM SENIOR
• Assessee Lawyers: SATISH KUMAR GUPTA
• Keywords: Capital asset; Depreciation; Period of limitation; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4355/DEL./2010 (ASSESSMENT YEAR : 1998-99) M/S. NEXT GEN COMMUNICATIONS LIMITED, VS. DCIT, CI RCLE 13 (1), 51, UDAY PARK, 2 ND FLOOR, NEW DELHI. NEW DELHI 110 049. (PAN : AAACS0557R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATISH KUMAR GUPTA, CA REVENUE BY : MS.BANITA DEVI NAORAM, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF THE ORDER OF CIT (APPEALS)-XVI, NEW DELHI DATED 16.06.2010. THE GR OUNDS OF APPEAL READ AS UNDER :- 1. THE LD. CIT-A HAS ERRED BOTH ON FACTS AND IN LA W IN SUSTAINING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT 1961 EVEN THOUGH SAME BEING BARRED BY LIMITATION. 2. THE LD. CIT-A HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE IMPOSITION OF PENALTY IGNORING THAT THERE IS NO CONCEALMENT OF INCOME AND/OR EXCESSIVE CLAIM OF EXP ENDITURE / FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. BOTH THE GROUNDS OF APPEAL ARE INDEPENDENT OF EA CH OTHER AND THE APPELLANT CRAVE LEAVE TO ADD, ALTER, AMEND AND/OR MODIFY ITA NO.4355/DEL./2010 2 ANY OF THE GROUNDS OF APPEAL ON / BEFORE OR AT THE TIME OF HEARING. 2. IN THE GROUND NO.1, THE ASSESSEE HAS CHALLENGED THAT THE ORDER PASSED FOR LEVYING OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 WAS BARRED BY LIMITATION. 3. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE F IND THAT THE ASSESSEE HAS FAILED PRODUCE CONCRETE EVIDENCES THAT THE ORDE R OF THE ITAT RECEIVED IN THE OFFICE OF CIT (A) PRIOR TO THE DATE AS SHOWN BY ASSESSING OFFICER FOR CALCULATING THE PERIOD OF LIMITATION. THE LEARNED AR HAS FAILED TO DISPROVE THE FINDING RECORDED BY THE AUTHORITIES BELOW THAT ORDE R OF THE ITAT WAS RECEIVED IN THE OFFICE OF CIT (A)-V, NEW DELHI ON 27.2.2009. ARS CLAIM THAT THE ORDER WAS DISPATCHED FROM THE OFFICE OF ITAT IN THE MONTH OF AUGUST, 2008 IS NOT SUFFICIENT TO DISTURB THE FACTS RECORDED BY THE AUTHORITIES. A FACT RECORDED CANNOT BE DISLODGED ONLY ON THE BASIS OF PRESUMPTIO N. THEREFORE, AFTER HEARING BOTH THE SIDES, WE DISMISS THIS GROUND OF A SSESSEES APPEAL. 4. IN THE GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE IMPOSITION OF PENALTY BY STATING THAT THERE IS NO CONCEALMENT OF INCOME OR EXCESSIVE CLAIM OF EXPENDITURE AND FURNISHING OF INACCURATE PARTICU LARS OF INCOME. 5. AFTER HEARING BOTH SIDES ON THIS ISSUE, WE RECOR D THAT THIS PENALTY HAS BEEN LEVIED ON TWO ASPECTS. FIRST, THERE WAS AUDIT ORS NOTE IN THE ACCOUNTS FILED WITH THE INCOME-TAX DEPARTMENT ALONG WITH RET URN OF INCOME. AS PER THIS AUDIT NOTE, THE ASSESSEE WAS NOT ABLE TO PRODU CE COPY OF THE PURCHASE VOUCHERS OF CERTAIN ADDITIONS TO THE CAPITAL ASSETS . THE AMOUNT OF THESE PURCHASES WAS NOT DEBITED IN THE P&L ACCOUNT. THE SECOND NOTE WAS THAT 9 CASH PAYMENTS OF RS.2,36,065/- WERE NOT SUPPORTED B Y THE VOUCHERS. THEREFORE, THE ASSESSING OFFICER TOOK THE VIEW THAT THERE IS NOTHING WHICH COULD SHOW THAT THE PAYMENTS WERE NOT IN EXCESS OF RS.20,000/-. CIT (A) SUSTAINED THE ADDITION BY HOLDING THAT ALTHOUGH THE ADDITIONS ARE MADE ON THE ITA NO.4355/DEL./2010 3 BASIS OF THE AUDITOR REPORT AND THE NOTES TO ACCOUN TS BUT THE BURDEN IS ON THE APPELLANT COMPANY TO SUPPORTS ITS TAX RETURN WITH T HE DOCUMENTARY EVIDENCES AND THE FAILURE TO DO SO DEFINITELY RESULTS INTO FI LING OF INACCURATE PARTICULARS OF INCOME. CIT (A) RELIED ON THE ORDER OF ESCORTS FIN ANCE LIMITED 226 CTR 105 (DELHI). AFTER CONSIDERING PLEADINGS AND CASE LAWS , WE HOLD THAT PURCHASES OF CAPITAL GOODS WERE NOT DEBITED IN THE PROFIT AND LO SS ACCOUNT. THE TAXABLE INCOME HAD NOT BEEN REDUCED. AT THE MOST IT COULD HAVE BEEN A CASE OF CLAIM OF EXCESS DEPRECIATION. THE ASSESSEE HAS NOT FILED SECOND APPEAL AGAINST THE QUANTUM DECISION. SINCE THE CAPITAL EXPENDITURE WA S NOT DEBITED IN THE PROFIT & LOSS ACCOUNT HENCE IT HAS NOT REDUCED THE WORKING OF THE TAXABLE PROFITS FOR THE YEAR, THEREFORE, THERE CANNOT BE ANY EVASION OF TAX. AT THE MOST IT COULD HAVE DISTURBED THE WORKING OF THE CLAIM OF THE DEPR ECIATION WHICH HAD NOT BEEN CONSIDERED BY AUTHORITIES BELOW. REVENUE HAD NOT MADE OUT ANY SUCH CASE ON THIS ISSUE IN QUANTUM APPEAL. SIMPLY NOT F ILING APPEAL SHALL NOT MAKE ASSESSEE TO BE VISITED BY PENALTY U/S 271(1)(C) OF INCOME-TAX ACT FOR FILING INACCURATE PARTICULARS. THE SECOND ADDITION SUSTAI NED IN QUANTUM APPEAL IN RESPECT OF THE CASH PURCHASES WHICH WERE DULY DISCL OSED IN THE NOTES OF ACCOUNTS FILED ALONG WITH THE RETURN OF INCOME. I T WAS ALSO EXPLAINED THAT THE OFFICES WERE SITUATED AT VARIOUS LOCATIONS AND FOR THAT REASON, THEY COULD NOT COLLECT THE SUPPORTING VOUCHERS. THEREFORE, THEY C ONCEDED THE ADDITION AND DID NOT CHALLENGE IN THE HIGHER FORUM. REVENUE HAD NOT ESTABLISHED THAT EXPLANATION OF ASSESSEE WAS FALSE. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE FIND THAT THERE WAS NO INTENTION TO FILE THE INACCURATE PARTICULARS OF INCOME AND IT WAS ONLY DUE TO THE LO GISTIC REASONS THAT ASSESSEE COULD NOT PRODUCE THE SUPPORTING VOUCHERS IN RESPEC T OF PURCHASES OF MACHINERY AS WELL AS IN RESPECT OF THE PAYMENTS OF MORE THAN RS.20,000/-. THE RELEVANT FACTS WERE DULY DISCLOSED IN THE TAX A UDIT REPORT FILED ALONG WITH RETURN OF INCOME. THERE IS NO DEFINITE FINDING THA T PAYMENTS ARE MORE THAN ITA NO.4355/DEL./2010 4 RS.20,000/- AND ALSO NO FINDING THAT THESE WERE NOT GENUINE PAYMENTS. THEREFORE, IT IS ALSO NOT A CASE WHERE ASSESSEE HAS DISCLOSED THE FACTS ONLY AFTER POINTED OUT BY THE REVENUE AUTHORITIES. IN S UCH CIRCUMSTANCES, WE HOLD THAT THE ASSESSEE CANNOT BE VISITED BY PENALTY U/S 271(1)(C) OF INCOME-TAX ACT, 1961 FOR FILING INACCURATE PARTICULARS OF INCOME. THEREFORE, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE PENALTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 21 ST DAY OF MARCH, 2011 AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 21 ST DAY OF MARCH, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.