The DCITGNR Circle, Gandhinagar V. M/s. Horn Ok Please Transport Ltd., Gandhinagar

ITA 453/AHD/2011

• Counselvise Citation: 45320514 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID SR D R
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMADABAD , , , , BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND .., ! '# '# '# '# SHRI T.R. MEENA, ACCOUNTANT MEMBER $%.. , &' ( & ! ) & ! ) & ! ) & ! ) ITA NO. 453/AHD/2011 ASSESSMENT YEAR :2006-07 DEPUTY COMMISSIONER OF INCOME TAX, GANDHINAGAR CIRCLE, BLOCK NO.14, 4 TH FLOOR, UDHYOG BHAVAN, SECTOR-11, GANDHINAGAR V/S . M/S. HORN OK PLEASE TRANSPORT LTD. 80/394, IOC ROAD, CHANDKHEDA, DIST. GANDHINAGAR PAN NO. A A ACV6344H (APPELLANT) .. (RESPONDENT) *+ , - & / BY APPELLANT SHRI J. P. JHANGID, SR. D.R. ./*+ , - & /BY RESPONDENT SHRI SAKAR SHARMA, A.R. 0 , 1%' /DATE OF HEARING 25.03.2014 234 , 1%' /DATE OF PRONOUNCEMENT 27.03.2014 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE CIT(A), GANDHINAGAR, ORDER DATED 22.11.2010 FOR A.Y. 2006-2 007. THE SOLE GROUND OF APPEAL IS AGAINST DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE IT ACT OF RS. 6,56,758/-. 2. IN THIS CASE, SCRUTINY ASSESSMENT U/S. 143(3) WA S MADE ON 19.12.2008. THE A.O. MADE FOLLOWING ADDITIONS: I. SHORTAGE EXPENSES RS.64,257/- II. TANKER DIESEL EXPENSES RS. 25,15,727/- III. TRANSPORT EXPENSES RS. 25,00,000/- IV. TRUCK RUNNING & MAINTENANCE EXPENSES RS. 5,00, 000/- ITA NO. 453/AHD/2011 DCIT VS. HORN OK PLESAE TRANSP ORT LTD. A.Y. 2006-2007 PAGE 2 THUS, TOTAL ADDITION OF RS.55,79,984/- WAS MADE. T HE LD. A.O. HAD INITIATED PENALTY PROCEEDING U/S. 271(1)(C) FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME. THE ASSESSEE CHALLENGED THE QUANTUM ADDITI ON. FINALLY, LD. CIT(A) HAD CONFIRMED FOLLOWING ADDITIONS UNDER VARIOUS HEA DS: I. SHORTAGE EXPENSES RS.64,257/- II. TANKER DIESEL EXPENSES RS. 5,82,679/- III. TRANSPORT EXPENSES RS. 10,00,000/- IV. TRUCK RUNNING & MAINTENANCE EXPENSES RS. 3,04, 214/- 2(I). THE LD. A.O. GAVE REASONABLE OPPORTUNITY OF B EING HEARD ON CONFIRMED ADDITION OF RS. 19,51,150/-. AFTER CONSIDERING THE ASSESSEES REPLY, IT HAS BEEN HELD BY THE A.O. THAT ASSESSEE HAD FURNISHED I NACCURATE PARTICULARS OF INCOME OF RS.19,51,150/-. THE AMOUNT OF TAX SOUGHT TO BE EVADED WORKED OUT TO RS.6,56,758/- MINIMUM PENALTY @ 100% WAS IMPOSED U/S. 271(1)(C) OF THE IT ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD ALLOWED THE APPEAL BY OBSERVING AS UNDER: 6. I HAVE CONSIDERED THE CONTENTIONS OF THE APPELL ANT AS WELL AS THE PENALTY ORDER. THE FOLLOWING OBSERVATIONS ARE MADE WITH RESPECT TO THE FACTS OF THE CASE: > THE PENALTY HAS BEEN LEVIED ON THE DISALLOWANCES OF EXPENSES CLAIMED UNDER FOUR HEADS ON ESTIMATE BASIS . > THE CONCEALMENT OF INCOME HAS NOT BEEN PROVED CONCLUSIVELY TO ANY EXTENT, IN CASE OF ANY OF THE DISALLOWANCES, AND ADDITIONS HAVE BEEN CONFIRMED BY THE CIT APPEALS ON AD HOC BASIS, WHICH CAN BE TREATED A S AN ESTIMATE BASED ON POSSIBILITIES/PROBABILITIES ONLY. THE CIT APPEALS IN THE QUANTUM PROCEEDINGS AND ALSO REDUCED THE DISALLOWANCE AS ORIGINALLY ; MADE ON ACCOUNT OF EXPENSES ITA NO. 453/AHD/2011 DCIT VS. HORN OK PLESAE TRANSP ORT LTD. A.Y. 2006-2007 PAGE 3 CLAIMED UNDER THE TRUCK RUNNING AND MAINTENANCE EXP ENSES, TANKER DIESEL AND TRANSPORT EXPENSES. THE FOURTH DISALLOWANCE MADE WAS FROM SHORTAGES CLAIMED, AND T HE ASSESSING OFFICER HIMSELF HAD ACCEPTED 50% OF THE E XPENSES CLAIMED BASED ON THE ASSESSEE'S EXPLANATION. > IN THE PENALTY PROCEEDINGS EXPLANATIONS TO THE Q UERIES RAISED WERE GIVEN, WHICH WERE CONSIDERED WHILE DECIDING TH E QUANTUM OF DISALLOWANCE. THE EXPLANATIONS WERE NOT PROVED TO BE EITHER BOGUS OR FALSE. > IT IS A FACT THAT PENALTY WAS INITIATED FOR FUR NISHING INACCURATE PARTICULARS OF INCOME WHILE IT WAS LEVIED UNDER EXP LANATION 1, FOR CONCEALING THE PARTICULARS OF INCOME. THEREFORE, CONSIDERING THE ABOVE IT IS HELD THAT TH E ASSESSING OFFICER HAS NOT BEEN ABLE TO PROVE THAT THE CONDITIONS OF E XPLANATION 1 TO THE SECTION ARE SATISFIED, THE DISALLOWANCES ARE BEST A N ESTIMATE BASED ON PROBABILITIES AND ON AD HOC BASIS, CONCEALMENT OF P ARTICULARS HAS NOT BEEN CONCLUSIVELY PROVED FOR EVEN PART OF THE EXPENSES C LAIMED. THEREFORE IT IS HELD TO BE NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C); NEITHER UNDER THE MAIN CLAUSE NOR IN CONJUNCTION WITH EXPLA NATION 1, AND THEREFORE THE PENALTY LEVIED IS DIRECTED TO BE DELETED AND AP PEAL OF THE ASSESSEE IS ALLOWED. 4. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. SUPP ORTED THE ORDER OF THE A.O. AT THE OUTSET, LD. A.R. FOR THE ASSESSEE ARGU ED THAT THE HONBLE C BENCH IN ASSESSEES OWN CASE IN ITA NO. 452/AHD/201 1 FOR A.Y. 2005-06 HAS DISMISSED THE APPEAL OF THE REVENUE AS IDENTICAL AD DITIONS WERE MADE IN THAT YEAR ALSO. THEREFORE, HE PRAYED TO CONFIRM THE ORD ER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IN ASSESSEES OWN CASE FOR A.Y. 05-06, THE CO-ORDINATE BENCH OBSERVED AS UNDER: 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND NO JUSTIFICATION FOR OUR INTERFE RENCE IN THE ORDER OF THE ITA NO. 453/AHD/2011 DCIT VS. HORN OK PLESAE TRANSP ORT LTD. A.Y. 2006-2007 PAGE 4 CIT(A). IT IS A CASE WHERE THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF ESTIMATED DISALLOWANCE OF EXPENSES, WHICH WAS PARTL Y REDUCED BY THE CIT/ITAT. NO SPECIFIC ITEM OF EXPENDITURE WAS HELD TO BE BOGUS OR NON- GENUINE. WE FIND THAT THE CASE OF THE ASSESSEE ALSO GETS SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD.(SUPRA), WHEREIN THE HON'BLE SUPREME COURT HELD AS UNDER: 'A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS ' USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSE SSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGI NATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. (EMPHASIS ADDED) THERE CAN BE NO DISPU TE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULAR S ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EX ACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOU S OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 2 71(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNO T AMOUNT TO FURNISHING INACCURATE PARTICULARS.' ITA NO. 453/AHD/2011 DCIT VS. HORN OK PLESAE TRANSP ORT LTD. A.Y. 2006-2007 PAGE 5 FROM THE ABOVE IT IS EVIDENT THAT THEIR LORDSHIPS H AVE CLEARLY LAID DOWN THAT MERELY AN INCORRECT CLAIM WAS MADE BY THE ASSESSEE, IT WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PA RTICULARS SO AS TO MAKE THE ASSESSEE LIABLE FOR PENALTY UNDER SECTION 271(1)(C). THEREFORE, IN SUCH SITUATION NO PENALTY CAN BE LEVI ED UNDER SECTION 271(1)(C). IN VIEW OF THE ABOVE, WE RESPECTFULLY FO LLOWING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF R ELIANCE PETROPRODUCTS LTD. (SUPRA) UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND DISMISS THE APPEAL OF THE REVENUE. IN THAT YEAR ALSO, THE LD. CIT(A) HAS CONFIRMED THE ADDITION UNDER THE HEAD OF SHORTAGE EXPENSES, TANKER DIESEL EXPENSES AND TRANS PORT EXPENSES, WHICH ARE SIMILAR TO ADDITION MADE IN THE YEAR UNDER CONSIDERATION. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH , WE DISMISS THE APPEAL OF THE REVENUE AS ASSESSEES CLAIMS WERE MERELY INCORRECT WHICH WOULD NOT TANTAMOUNT TO FURNISHING INACCURATE PARTI CULARS SO AS TO MAKE THE ASSESSEE LIABLE FOR PENALTY U/S. 271(1)(C). 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27.03.2014 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA &5 &5 &5 &5 , ,, , .16 .16 .16 .16 7&641 7&641 7&641 7&641 / COPY OF ORDER FORWARDED TO:- 1. *+ / APPELLANT 2. ./*+ / RESPONDENT 3. ## 1 ; / CONCERNED CIT 4. ;- / CIT (A) 5. 6? .1 , , / DR, ITAT, AHMEDABAD 6. A BC / GUARD FILE. BY ORDER/ &5 &, / # , )