M/S Samar estate Pvt Ltd., Panchkula V. Income Tax Officer Ward-2, Panchkula

ITA 441/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95462 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 441/CHD/2015 ASSESSMENT YEAR: 2008-09 M/S SAMAR ESTATE PVT. LTD., VS. THE ITO, WARD-2, PANCHKULA PANCHKULA PAN NO. AAICS0083L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 03.08.2015 DATE OF PRONOUNCEMENT : 04.08.2015 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.05.2013 OF CIT(A), PANCHKULA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE IMPO SITION OF PENALTY OF RS. 74,67,660/- LEVIED U/S 271(1)(C) OF THE ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 2. THAT NO PENALTY U/S 271(1)(C) OF THE ACT IS CALL ED FOR IN AS MUCH AS THERE HAS NEITHER BEEN ANY CONCEALMENT OF I NCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS SUCH THE ORDER IS UNJUSTIFIED AND ARBITRARY. 3. THAT WHETHER THE INTEREST INCOME IS TO BE TREATE D AS BUSINESS INCOME OR INCOME FROM OTHER SOURCES IS A DEBATABL E ISSUE WHICH DOES NOT ATTRACT PENAL PROVISIONS AS CONTAINE D IN SECTION 271(1)(C) OF THE ACT AND AS SUCH THE PENALT Y LEVIED ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT IN T HIS CASE ASSESSEE HAD FILED RETURN DECLARING NIL INCOME. DURING ASSESSM ENT PROCEEDINGS IT WAS 2 NOTICED THAT ASSESSEE HAD RECEIVED INTEREST ON BANK DEPOSITS AMOUNTING TO RS. 2,19,70,183/-. IT WAS STATED THAT THIS INTEREST HAS BEEN CREDITED TO THE COST OF CONSTRUCTION BECAUSE INTEREST WAS RECEIVED OUT OF THE ADVANCES RECEIVED FROM THE CUSTOMERS. HOWEVER, THE ASSESSING OFFICER HELD THIS AMOUNT TAXABLE AS INCOME FROM OTHER SOURCES. PENALT Y U/S 271(1)(C) OF THE ACT WERE ALSO INITIATED ON THIS ISSUE AND ULTIMATEL Y PENALTY HAS SEEN LEVIED AT THE MINIMUM OF 100% AMOUNTING TO RS. 74,67,660/- . 4. ON APPEAL, THE ACTION OF THE ASSESSING OFFICER H AS BEEN CONFIRMED BY LD. CIT(A). 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION ITSELF HAS BEEN DELETED BY TRIBUNAL IN ITA NO. 1252/CHD/20 11, THEREFORE, THERE WAS NO QUESTION OF LEVY OF PENALTY. 6. ON THE OTHER HAND LD. DR SUPPORTED THE ORDER OF THE LD. CIT(A). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND ADDITIONS ITSELF HAS BEEN DELETED BY THE TRIBUNAL BY ALLOWING THE APPEAL OF THE ASSESSEE IN ITA NO. 1252/CHD/2011. THEREFORE, THERE CANNOT BE ANY Q UESTION OF LEVY OF PENALTY. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DELETE THE PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 04/08/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 4 TH AUGUST, 2015 RKK 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR