ITO, New Delhi V. Mr. Vivek Gupta, New Delhi

ITA 4974/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7279 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 14-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SM C - 1 , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO S . 4974 /DEL/2014 : ASSTT. YEAR : 2008 - 09 INCOME TAX OFFICER, WARD - 24(2), CIVIC CENTRE, NEW DE LHI VS MR. VIVEK GUPTA, 7, KALU SARAI, BEGAMPUR, NEW DELHI - 110017 (APPELLANT) (RESPONDENT) PAN NO. A FDPG1036N ASSESSEE BY : NONE REVENUE BY : SH. V. R. SONBHADRA, SR. DR DATE OF HEARING : 14 .06 .201 6 DATE OF PRONOUNCEMENT : 15 .06 .201 6 ORDER THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 25 .06 .2014 OF LD. CIT(A) - XVIII, NEW DELHI . 2 . THE ONLY GROUND RAISED IN THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.10,42,503/ - IMPOSED BY THE AO U/S 271(1)(C) OF THE I.T ACT, 1961, AS THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS OF THE CASE THAT BOTH THE PROPRIETOR CONCERNS WERE SEPARATE ENTITIES AND THERE WAS NO JUSTI FICATION FOR MAKING CASH PAYMENTS IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE I.T. ACT, 1961 . ITA NO . 4974 /DEL /201 4 VIVEK GUPTA 2 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE E - FILED HIS RETURN OF INCOME DECLARING AN INCOME OF RS.3,25,921/ - ON 29.09.2008 WHICH WAS PROCES SED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON EXAMINATION OF THE BOOKS OF ACCOUNT, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT ASSESSEE HAD MADE CASH PURCHASES OF RS.30,63, 087/ - . THEREFORE, ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THESE PAYMENT MAY NOT BE TERMED AS VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. IN RESPONSE TO THE SAME, IT WAS SUBMITTED BY THE ASSESSEE THAT HE IS THE PROPRIETOR OF BOTH THE CONCERNS WHICH IS MAKING PURCHASES AND FROM WHOM PURCHASES HAVE BEEN MADE. HOWEVER, SUBMISSION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO CONSIDERING THE FACT THAT BOTH THE CONCERNS WERE FILING SEPARATE VAT RETURNS, HAVE DIFFERENT TIN AND WERE MAINTAI NING SEPARATE BOOKS OF ACCOUNTS. THEREFORE, ASSESSING OFFICER MADE ADDITION OF RS.30,63,087/ - AS PER PROVISIONS OF SECTION 40A(3) OF THE ACT. THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT AT AN INCOME OF RS.38,59,700/ - AS AGAINST THE RETURNED INCOM E OF RS.3,25,921/ - . THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT. AGGRIEVED BY THE ABOVE ADDITION ASSESSEE FILED THE APPEAL BEFORE CIT(A) - XXIII, NEW DELHI WHO VIDE HIS ORDER DATED 11.10.2011 IN APPEAL NO.199/10 - 11 CONF IRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER. ACCORDINGLY, THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE U/S 271(L)(C) OF THE ACT TO ITA NO . 4974 /DEL /201 4 VIVEK GUPTA 3 THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER THIS SECTION BE NOT IMPOSED FOR FILING INACCURATE PARTICULARS OF INCO ME. HOWEVER, ASSESSEE SUBMITTED THAT SINCE APPEAL IS PENDING BEFORE THE ITAT, PENALTY PROCEEDINGS MAY BE KEPT IN ABEYANCE. BUT, AO IMPOSED T HE PENALTY U/S 271(L)(C) OF RS. 10,42,503/ - , BY PLACING RELIANCE ON THE JUDICIAL PRONOUNCEMENTS IN THE CASE OF CIT V S. DRAPCO ELECTRIC CORPORATION 106 ITR 359 (GUJ), ZOOM COMMUNICATION (P) LTD. 327 ITR 510 (DEL) AND HELD THAT ASSESSEE HAS CONCEALED TRUE PARTICULARS OF INCOME TO THE EXTENT OF RS.30,63,087/ - . 4 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD . CIT(A) WHO VIDE IMPUGNED ORDER DATED 25.6.201 4 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY HOL DING AS UNDER: 4.1 IN ALL THE GROUNDS OF APPEAL TAKEN BY THE APPELLANT, HE HAS IMPUGNED THE IMPOSITION OF THE PENALTY AMOUNTING TO RS.10,42,503/ - U/S 271(1)(C) OF THE ACT. THE LD. AR OF THE APPELLANT, THROUGH HIS LETTER DATED 24.06.2014 HAS PLACED BEFORE ME THE ORDER OF HON BLE ITAT, NEW DELHI DATED 14.08.2014 IN ITA NO. 5727/DEL/2011 FOR A.Y. 2008 - 09 IN THE ASSESSEE S OWN CASE, AS PER WHICH THE QUANTUM ADDITION TOTALLING RS.30,63,087/ - HAVE BEEN DELETED. SINCE, THE ADDITION ITSELF, BASED ON WHICH PENALTY U/S 271(1)(C) HAS BEEN IMPOSED, HAS BEEN DELETED BY THE HON BLE ITAT, THE PENALTY ORDER HAS NO LEGS TO STAND ON. THEREFORE, IN CONSEQUENCE OF AND FOLLOWING THE ORDER OF HON BLE ITAT MENTIONED ABOVE, THE PENALTY IMPOSED ON THE APPELLANT AMOUNTING TO RS.10,42,503/ - U/S 271(1)(C) OF THE ACT IS HEREBY DELETED. ITA NO . 4974 /DEL /201 4 VIVEK GUPTA 4 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE , THE REVENUE S APPEAL IS DECIDED EX - PATE QUA ASSESSEE. 7. I HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD , I FIND THAT IN THE INSTAN T CASE THE ITAT VIDE ITS ORDER DATED 14.8.2013 IN ITA NO. 5727/DEL/2011 FOR AY 2008 - 09 IN THE ASSESSEE S OWN CASE HAS DELETED THE QUANTUM ADDITION, HENCE, THE PENALTY IN DISPUTE HAS NO LEGS TO STAND ON. THEREFORE, THE LD. CIT(A) HAS RIGHTLY DELETED THE PE NALTY IN DISPUTE AND PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, THE SAME IS AFFIRMED. 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. (O RDER PRONOUNCED IN THE COURT ON 15 /06 /2016 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 15 /06 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEAL S) 5. 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