Shri Nikhilendra Singh, JODHPUR V. DCIT, JODHPUR

ITA 457/JODH/2013

• Counselvise Citation: 45723314 RSA 2013
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.457/JODH/2013 ASSESSMENT YEAR: 2008-09 SHRI NIKHILENDRA SINGH, VS. DY. COMMISSIONER OF I NCOME TAX, C/O. B.M. KOTHARI & CO., CIRCLE-2, JODHPUR. PLOT NO.947, 11 TH D ROAD, SARDARPURA, JODHPUR. (PAN: ADAPS 9855 L). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT KOTHARI RESPONDENT BY : SHRI N.A. JOSHI, D.R. DATE OF HEARING : 20.11.2013 DATE OF PRONOUNCEMENT : 22.11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 8-09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), JODHPUR DATED 10.07.2013. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS REGARD ING IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 , THE ACT FOR SHORT, WHICH HAS BEEN LEVIED ON THE ESTIMATED ADDITION MADE AND CONFIRMED BY THE LD. CIT(A). 2 ITA NO.457/JODH/2013 A.Y. 2008-09 3. IN BRIEF, THE FACTS APROPOS THIS APPEAL ARE THAT FOR A.Y. 2008-09 ORDER WAS MADE UNDER SECTION 143(3) OF THE ACT ON 18.11.2010 AT A TOTAL INCOME OF RS.7,78,250/- AS AGAINST RETURNED AT RS.6,06,250/- BY THE ASSESSEE AND THEREBY RESULTING INTO ADDITION OF RS.1,72,000/-. THE ASSE SSEE DERIVED INCOME FROM SALARY AND COMMISSION. DURING THE RELEVANT YEAR THE ASSES SEE RECEIVED COMMISSION OF RS.4,30,000/-. THE ASSESSEE HAS CLAIMED EXPENDITUR E @ 50% OF THE INCOME EARNED AND THE SALARY INCOME AROUND RS.2,15,000/-. OUT OF COMMISSION, AS AGAINST THE 50% EXPENDITURE CLAIMED, THE A.O. HAS ALLOWED 10% E XPENDITURE AND HAS MADE ADDITION OF RS.1,72,000/- AFTER ESTIMATING AS ABOVE . ON THIS ESTIMATED ADDITION, THE A.O. HAS INITIATED AND IMPOSED PENALTY OF RS.53,148 /- UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS FURNISH ED INACCURATE PARTICULARS OF INCOME. THIS PENALTY HAS BEEN CONFIRMED BY THE LD. CIT(A). NOW THE ASSESSEE IS BEFORE US IN SECOND APPEAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ENTIRE RECORDS. WE HAVE FOUND FOR A FACT THAT THE IMPUGNE D ADDITION ON WHICH PENALTY IN QUESTION HAS BEEN IMPOSED IS A RESULT OF SIMPLY SIT TER ESTIMATION OF EXPENSES. THE ASSESSEE HAS CLAIMED 50% EXPENSES TOWARDS EARNING O F COMMISSION INCOME WHEREAS THE DEPARTMENT HAS ESTIMATED IT @ 10%. IT IS TRITE THAT WHEN ESTIMATED ADDITION IS MADE AND CONFIRMED, NO PENALTY UNDER SE CTION 271(1)(C) OF THE ACT IS 3 ITA NO.457/JODH/2013 A.Y. 2008-09 EXIGIBLE. THE HONBLE MADRAS HIGH COURT, INTER ALI A, HAS CLEARLY HELD THAT WHEN ONE ESTIMATE OF THE ASSESSEE IS SUBSTITUTED BY ESTI MATE OF A.O., WHEN ANY CLAIM OF EXPENDITURE IS DENIED, EVEN IN SUCH CASE, NO PENALT Y IS LEVIABLE. THIS HAS BEEN HELD BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MEHTA ENGINEERS LTD. (2008) 300 ITR 308 (P&H). CHENNAI BENCH OF IT AT IN THE CASE OF DR. HAKEEM S.A. SYED SATHAR VS. ACIT (2009) 314 ITR (AT ) 290 (CHENNAI) HAS HELD THAT WHERE ESTIMATION IS INVOLVED, PENALTY UNDER SE CTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. THE HONBLE JURISDICTIONAL HIGH COURT HA S HELD EVEN TO THE EXTENT THAT WHEN A CLAIM IS FOUND TO BE INCORRECT, IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR INACCURATE PARTICULARS OF INCOME. IN THIS REGAR D, THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF J.P. SHARMA & S ONS VS. CIT, 151 ITR 333 (RAJ) IS RELEVANT. ANOTHER DECISION RENDERED BY TH IS VERY BENCH IN THE CASE OF SHYAM SUNDER RATHI VS. A.O. IN ITA NO.72/JODH/2012 FOR A.Y. 2007-08 IS ON THE SAME LINES. ANOTHER DECISION OF THIS BENCH IS IN T HE CASE OF ITO VS. PURNIMA DEVI GUPTA REPORTED AS (2004) 83 TTJ (JD) 586 IN WHICH I T HAS BEEN CLEARLY HELD THAT WHEN ADDITION IS BASED ON ESTIMATION AND THERE IS N O CONCRETE EVIDENCE THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME OR CONCEALING THE PARTICULARS OF INCOME - PENALTY UNDER SECTION 271(1 )(C) CANNOT BE IMPOSED. THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F BASHU SAHIB VS. CIT (1977) 106 ITR 736 (MAD) IS ON DIFFERENT FACTS WHERE THE A SSESSEE ESTIMATED HIS INCOME 4 ITA NO.457/JODH/2013 A.Y. 2008-09 KNOWING IT WELL THAT HE WAS NOT ESTIMATING CORRECT INCOME AND WAS DELIBERATELY MAKING A WRONG COMPUTATION OF INCOME. THEREFORE, T HE DECISION ON WHICH THE LD. CIT(A) HAS RELIED IS DISTINGUISHABLE ON FACTS. IN THE GIVEN FACTS, A CLAIM OF EXPENDITURE HAS BEEN MADE WHICH HAS BEEN FOUND TO B E PROPER BUT IN THE OPINION OF THE A.O. THAT WAS ON THE HIGHER SIDE AND HE HAS RED UCED THIS EXPENDITURE AND ADDED DIFFERENTIAL AMOUNT. THEREFORE, BY RESPECTFULLY FO LLOWING THE SETTLED POSITION AND VIEW, WE ALLOW THIS APPEAL AND ORDER DELETION OF TH E IMPUGNED PENALTY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22.11.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND NOVEMBER, 2013 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR