ACIT, UDAIPUR V. M/s. Chetak Enterprises Pvt. Ltd., UDAIPUR

ITA 501/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5311 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MADHU
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 501 / JODH /201 4 (ASST. YEAR : 200 7 - 0 8 ) AC IT, CIRCLE - 1, UDAIPUR . VS. M/S. CHETAK ENTERPRISES PVT. LTD. 396/11, HIRANMAGARI, UDAIPUR. PAN NO. AACCC 1498 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.K. GARGIEYA WITH SHRI DINESH SHRIMALI A DV . DEPARTMENT BY : SHRI S.K. MADHU - DR DATE OF HEARING : 09 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 09 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , UDAIPUR , DATED 0 2/0 7 /201 4 . 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE PENALTY OF RS. 18,15,675/ - UNDER SEC. 271(1)(C) OF THE ACT. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER LEVIED PENALTY UNDER SEC. 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME ON THE DISALLOWANCE OF 20% OF THE CASH EXPENSES OF RS. 27,93,477/ - AND DISALLOWANCE OF DEDUCTION CLAIMED UNDER SEC. 80IA(4) ON INTEREST EARNED ON FDR OF RS. 26, 00, 686/ - . 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED TH A T THE ASSESSING OFFICER ON ESTIMATE BASIS , DISALLOWED RS. 57,46,311/ - 2 ITA NO. 501/JODH/2014 BEING 20% OF THE CASH EXPENDITURE FOR WANT OF SUPPORTING BILLS AND VOUCHERS AND T H IS DISALLOWANCE WAS REDUCED TO RS. 27,93,477/ - ON ESTIMATE BASIS BEING 5% BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSING OFFICER CONSIDERED THIS AMOUNT AS CONCEALED INCOME OF THE ASSESSEE ON THE CONFIRMATION OF ADDITION/DISALLOWANCE BY THE APPE LLATE AUTHORITY AND AS PER THE JUDICIAL DECISIONS OF THE VARIOUS JUDICIAL AUTHORITIES, MERE CONFIRMATION OF SPECIFIC ADDITION IS NOT A SUFFICIENT GROUND FOR IMPOSITION OF PENALTY UNDER SEC. 271(1)(C). ADMITTEDLY, THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS PURELY ON ESTIMATE BASIS AND WITHOUT SPECIFIC ANY EXPENDITURE WHICH CAN BE SAID TO BE BOGUS AND NOT INCURRED FOR THE BUSINESS PURPOSE. HE, THEREFORE, DELETED THE LEVY OF PENALTY ON THIS AMOUNT. 5. REGARDING THE DISALLOWANCE OF DEDUCTION UNDER SEC. 80IA(4) ON INTEREST INCOME ON FDR OF RS. 26,00,686/ - , THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT IT IS A DEBATABLE ISSUE AND THEREFORE, NO PENALTY IS LEVIABLE AS HELD IN THE CASE OF ITO VS. VEGETABLE PRODUCTS LTD. [88 ITR 192 (SC)] , UNION OF INDIA & OTHERS VS. OMKAR S. KANWAR & OTHERS [258 ITR 762(SC)] AND MANUBHAI &BROS. [294 ITR 501 ( GUJ .)] . THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED TH A T IN THE CASE O F CIT VS. HARSHVARDHAN CHEMICALS & MINERALS LTD. [259 ITR 212 (RAJ.) , THE HON'BLE HIGH COURT UPHELD THE FINDINGS OF THE TRIBUNAL THAT WHEN ASSESSEE CLAIMED SOME AMOUNT THOUGH THAT IS DE B A TAB LE , IN SUCH CASES, IT CA N NOT BE SAID THAT THE ASSESSEE HAS CONCEAL E D ANY INCOME OR FURNISHED INACCURATE PARTICULARS FOR EVASION OF TAX. HE, THEREFORE, DELETED THE LEVY OF PENALTY. 6 . DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED BEFORE US THAT AT PAGE NOS. 23 TO 43 OF THE PAPER BOOK, COPY OF THE ORDER OF THE 3 ITA NO. 501/JODH/2014 ASSESSING OFFICER PASSED ON 12/10/2015 UNDER SEC. 254 READ WITH SEC. 143(3) OF THE ACT WHEREIN THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION ON ACCOUNT OF CASH PAY MENT UNDER SEC. 40 A( 3) OF THE ACT , T HEREFORE, THE ADDITION ITSELF BEING NOT MADE BY THE ASSESSING OFFICER. THE VERY BASIS OF LEVY OF PENALTY ON ADDITION OF RS. 27,93,477/ - UNDER SEC. 40A(3) WAS NOT BEING THERE , THE PENALTY LEVIED WAS RIGHTLY DELETED BY T HE COMMISSIONER OF INCOME TAX (APPEALS). FURTHER, HE SUBMITTED THAT THE ALLOWABILITY OF DEDUCTION UNDER SEC. 80IA(4) ON FIXED DEPOSIT RECEIPTS OF RS. 26,00,686/ - IS A DATABLE ISSUE AND NO PENALTY CAN BE LEVIED ON DISALLOWANCE MADE, THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN D E LETING THE PENALTY. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, PENALTY UNDER SEC. 271(1)(C) WAS LEVIED BY THE ASSESSING OFFICER ON DISALLOWANCE OF EXPENDITURE INCURRED IN CASH BY THE ASSESSEE UNDER SEC. 40A(3) OF THE ACT OF RS. 27,93,477/ - AND DISALLOWANCE OF DEDUCTION UNDER SEC. 80IA(4) ON INTERE ST EARNED ON FDR OF RS. 26,00,686/ - . WE FIND TH A T THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER IN PURSUANCE TO THE SET ASIDE OF THE MATTER TO THE FILE OF THE ASSESSING OFFICER BY THE TRIBUNAL ON 12/03/2015 , NO DISALLOWANCE UNDER SEC. 40A(3) HAS BEEN MADE BY THE ASSESSING OFFICER. SINCE THE DISALLOWANCE OF RS.27,93,477/ - UNDER SEC. 40A(3) ITSELF WAS DELETED BY THE ASSESSING OFFICER, THEREFORE, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE PENALTY ON THIS AMOUNT IS UPH E LD . 9. AS REGARDS THE DISALLOWANCE OF DEDUCTION UNDER SEC. 80IA(4) ON INTEREST EARNED ON FDR OF RS. 26,00,686/ - , WE FIND TH A T THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD, [ 322 ITR 158 (SC) ] HAS HELD THAT IN ORDER TO LEVY OF PE NALTY UNDER SEC. 271(1)(C) , THERE SHOULD BE A CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE . W HERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE 4 ITA NO. 501/JODH/2014 INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTI CULARS OF INCOME. FURTHER, B Y NO STRETCH OF IMAGINATION IN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR F ALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271 (1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. IN VIEW OF THE ABOVE OBSERVATION OF THE HON'BLE SUPREME COURT , WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS CONFIRMED AND THE GROU ND OF APPEAL OF THE REVENUE IS DISMISSED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 0 9 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 0 9 TH MARCH , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., JODHPUR .