Shri Sunil Kumar Bansal, Indore V. The DCIT 5(1), Indore

ITA 499/IND/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82700 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKU L KR. SHRAWAT, JUDICIAL MEMBER PAN NO. AEDPB0852L ITA NO. 499/IND/2013 A.Y. : 2007-08 SHRI SUNIL KUMAR BANSAL INDORE VS. DY. CIT, 5(1), INDORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH GOYAL, ADV. REVENUE BY : SHRI R. A. VERMA, SR. DR / // / DATE OF HEARING : 12.09.2014 /DATE OF PRONOUNCEMENT: 13/10/2014 / O R D E R PER P.K.BANSAL, A.M. THIS APPEAL BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF THE CIT(A)-II, INDORE, BY WHICH HE CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOM E-TAX ACT. 1961, AMOUNTING TO RES. 80,000/-. 2. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT TH E ASSESSEE IS RUNNING A PROPRIETORY CONCERN DOING BUS INESS OF PLASTIC ACRYLIC SHEETS OF THE ELECTRICITY DEPARTMEN T. THEY FOUND CERTAIN DISCREPANCY. THE ASSESSEE PAID A COMPOUNDIN G FEE OF RS. 2.60 LAKHS DUE TO DEFAULT OF ELECTRICITY REGULATION . THE ASSESSING SHRI SUNIL KUMAR BANSAL, INDORE [TYPE THE DOCUMENT TITLE] 2 OFFICER RELYING ON EXPLANATION TO SECTION 37 MADE T HE ADDITION. THE ASSESSING OFFICER IN CONSEQUENCE THEREOF INITIA TED THE PENALTY PROCEEDINGS U/S 271(1) AND ULTIMATELY IMPOSED PENA LTY ON THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF I NCOME U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. WHEN THE MA TTER WENT BEFORE THE CIT(A), THE LD. CIT(A) CONFIRMED THE ORD ER OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. MERELY THE ASSESSEE AGGRIEVED FOR THE ADDITI ON DOES NOT MEAN THAT THE ASSESSEE CANNOT TAKE THE PLEA DURING THE COURSE OF THE PENALTY PROCEEDINGS THAT THE EXPENDITURE IN RES PECT OF WHICH THE DISALLOWANCE WAS MADE WAS, IN FACT, ALLOWABLE A S A DEDUCTION AND THE PROVISION ON WHICH THE ASSESSING OFFICER RE LIED FOR DISALLOWING THE EXPENDITURE WAS NOT APPLICABLE IN T HE CASE OF THE ASSESSEE. WE HAVE GONE THROUGH THE PROVISION OF SEC TION 37 EXPLANATION THERETO. THIS EXPLANATION CLEARLY STATE S THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF THE BUSINESS OR PR O VISION. WE NOTED THAT THE ASSESSEE HAS COMMITTED CERTAIN IRREG ULARITY IN SHRI SUNIL KUMAR BANSAL, INDORE [TYPE THE DOCUMENT TITLE] 3 ACCORDANCE WITH THE ELECTRICITY ACT AND DUE TO WHIC H HE HAS TO PAY COMPOUNDING FEE AMOUNTING TO RS. 2,60,000/- TO M.P. ELECTRICITY BOARD. IN OUR OPINION, THIS IS DEBATABL E WHETHER THE EXPENDITURE SO INCURRED BY THE ASSESSEE RELATE TO T HE PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW. THIS DIFFERENCE BETWEEN THE IRREGULARITY AND ILLEGALITY THOUGH WE N OTED FROM THE ASSESSEE ORDER OF THE ASSESSING OFFICER IN WHICH WE FOUND THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY CATEGORICAL FINDING THAT THE EXPENDITURE SO INCURRED BY THE ASSESSEE RELATES TO THE OFFENCE OR PROHIBITED BY LAW. HE SIMPLY OBSERVED THAT THIS CASE APPEARS RELATING TO THE THEFT OF THE ELECTRICITY. NOTHING H AS BEEN MENTIONED UNDER WHICH PROVISION OF THE ELECTRICITY ACT, ILLEGALITY HAS BEEN CONDUCTED BY THE ASSESSEE. SINCE MERELY TH E ASSESSEE HAS NOT GONE IN APPEAL AGAINST THE DISALLOWANCE, IN OUR OPINION, THIS ISSUE CANNOT BE TERMED UN-DEBATABLE, AS IS APP ARENT FROM THE TAX AUDIT REPORT, WHICH FORMS PART OF THE INCOM E TAX RETURN. IT IS NOT A CASE OF FILING THE INACCURATE PARTICULARS OF HIS INCOME BY THE ASSESSEE. MERELY A CLAIM HAS BEEN DISALLOWED DO ES NOT MEAN THAT THE ASSESSEE HAS FILED THE INACCURATE PARTICUL ARS. THIS CASE, IN OUR OPINION, IS DULY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS SHRI SUNIL KUMAR BANSAL, INDORE [TYPE THE DOCUMENT TITLE] 4 PRIVATE LIMITED, (2010) 322 ITR 158 (S.C.), IN WHIC H THE HON'BLE SUPREME COURT HAS HELD AS UNDER :- A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. 4. WE HAVE GONE THROUGH THE DECISION IN THE CASE OF DY . CIT VS. CHIRAG METAL ROLLING MILLS LIMITED, (2008) 305 ITR 29 (M.P.). THE DECISION, IN OUR OPINION, IS NOT APPLICABLE AS IT RELATES TO EXPLANATION (1) TO SECTION 271(1)(C), TO WHICH THE UNDERSIGNED WAS THE AUTHOR AS THE TRIBUNAL. A MERE MAKING OF TH E CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO INACCURATE PARTICULARS. SINCE THE ISSUE IS DULY COV ERED BY THE DECISION OF THE HON'BLE SUPREME COURT, THEREFORE, W E NEED NOT TO REFER TO THE OTHER DECISIONS RELIED BY THE LD. SENI OR DR AND LD. AUTHORIZED REPRESENTATIVE, WHICH ARE JUDGMENTS OF H IGH COURT SHRI SUNIL KUMAR BANSAL, INDORE [TYPE THE DOCUMENT TITLE] 5 AND TRIBUNAL. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND CANCEL THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. 6. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) BY PUTTING ITS PRONOUNCEMENT ON THE NOTICE BOARD SD/- SD/- (MUKUL KR. SHRAWAT) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT M EMBER INDORE; DATED 13/10/2014 CPU*SPS / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' # # ( / CONCERNED CIT 4. # # ( ( ) / THE CIT(A), INDORE 5. +,# &' , # # &' , -.% / DR, ITAT, INDORE 6. ,/0 1 / GUARD FILE. / BY ORDER, -# -# -# -# $2 $2 $2 $2 (ASSTT.REGISTRAR) ITAT, IN DORE SHRI SUNIL KUMAR BANSAL, INDORE [TYPE THE DOCUMENT TITLE] 6 1. DATE OF DICTATION- 18.09.2014 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .09.2014 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER