Rishabh Birla, New Delhi V. ACIT, New Delhi

ITA 5021/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2193 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 142(1); 37(1)

Judgement Text

ITA NO. 5021/DEL/2015 A.Y. 2008-09 RISHABH BIRLA 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A, NEW DELHI BEFORE SHRI N.K. SAINI, HONBLE VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 5021/DEL/2015 AY: 2008-09 RISHABH BIRLA LEGAL HEIRS OF LT. SH. ANURAG BIRLA, C-37, BASEMENT, HAUZ KHAZ, NEW DELHI. AADPB3556B VS . ACIT CIRCLE 24(1) NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SANDEEP SAPRA, ADV. DEPARTMENT BY : SH. SRIDHAR DORA, SR. DR DATE OF HEARING : 13/11/2018 DATE OF PRONOUNCEMENT : 16/11/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT PENALTY APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORDER DATED 12/06/15 PASSED BY LD. CIT (A)-13, NEW DELHI FOR ASSESSMENT YEAR 2008-09 ON FOLLOWING GROUNDS OF APP EAL: 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN N OT DELETING THE PENALTY AMOUNTING TO RS. 3,53,079/- FU LLY AS IMPOSED BY LD. AO U/S 271(1)(C) ON ACCOUNT OF INTER EST EXPENSES AND ELECTRICITY & WATER EXPENSE BEING DISALLOWED U/S 36(1)(III) & U/S 37(1) OF THE INCOME TAX ACT, 1961 DURING THE ASSESSMENT PROCEEDINGS U/S 143(3), THE IMPUGNED PENALTY HAS BEEN IMPOSED WITHOUT APPRECIAT ING THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY RECO RDING INCORRECT FACTS AND FINDINGS. 2. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY CONFIRMING THE PENALTY INITIATED BY LD. AO ON ACCOU NT OF ITA NO. 5021/DEL/2015 A.Y. 2008-09 RISHABH BIRLA 2 DISALLOWANCE OF INTEREST EXPENSE AMOUNTING TO RS. 6,79,610/-. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY CONFIRMING THE PENALTY INITIATED BY LD.AO ON ACCOUN T OF DISALLOWANCE OF ELECTRICITY & WATER EXPENSE AMOUNTI NG TO RS. 3,54,303/-. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJU DICE TO EACH OTHER. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : ASSESSEE WOULD FILE ITS RETURN OF INCOME ON 29/09/0 8 DECLARING TOTAL INCOME OF RS.93,75,630/-. THE RETURN WAS PROC ESSED U/S 143(1) OF THE ACT AND CASE WAS SELECTED FOR SCRUTIN Y. THEREAFTER, NOTICE U/S 142(1) IS ALONG WITH QUESTIONNAIRE AND N OTICE U/S 143(2) WAS ISSUED TO ASSESSEE. IN RESPONSE TO STATU TORY NOTICES, REPRESENTATIVE OF ASSESSEE FILED REQUISITE DETAILS AS CALLED FOR. 3. LD.AO OBSERVED THAT ASSESSEE IS ENGAGED IN BUSIN ESS OF CARGO HANDLING AND TRAVEL AGENCY UNDER NAME OF M/S AIR SHAGOON. ASSESSMENT WAS COMPLETED AT AN ASSESSED IN COME OF RS.1,82,36,100/-. IN ASSESSMENT ORDER, LD. AO MADE ADDITION ON ACCOUNT OF INTEREST EXPENSES, ELECTRICITY AND WATER CHARGES. 3.1 LD.AO WAS OF OPINION THAT, INTEREST PAID ON PRO PERTY LOAN DESERVES TO BE ADDED AS ASSESSEE FAILED TO PUT IT T O USE FOR BUSINESS PURPOSES. FOR THIS DEFAULT PENALTY UNDER S ECTION 271(1)(C) OF THE ACT WAS INITIATED. 3.2 AS REGARDS DISALLOWANCE OF ELECTRICITY AND WATE R CHARGES AMOUNTING TO RS.3,64,409/- IS CONCERNED, LD.AO DISA LLOWED THE SAME, AS ASSESSEE HAD NOT OFFERED ANY EXPLANATION. ITA NO. 5021/DEL/2015 A.Y. 2008-09 RISHABH BIRLA 3 3.3 THEREAFTER, APPEAL WAS FILED BY ASSESSEE AGAINS T ASSESSMENT ORDER PASSED BEFORE LD. CIT (A) WHO REDUCED ADDITIO N IN RESPECT OF INTEREST EXPENSES AND RESTRICTED DISALLOWANCE IS AT RS.6,79,610/-. IN RESPECT OF ELECTRICITY AND WATER CHARGES, DISALLOWANCE WAS RESTRICTED TO RS.3,54,303/-. ACCORDINGLY, LD. AO INITIATED PENALTY PROCEEDINGS V IDE NOTICE DATED 30/01/13 FOR CONCEALMENT. VARIOUS SUBMISSIONS WERE ADVANCED BY ASSESSEE, HOWEVER, NOT SATISFIED WITH R EPLIES, LD. AO LEVIED 100% PENALTY OF TAX SOUGHT TO BE EVADED FOR CONCEALING OF PARTICULARS OF INCOME. 4. AGGRIEVED BY ORDER OF LD. AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHO UPHELD ORDER OF LD. AO. 5. AGGRIEVED BY ORDER OF LD. CIT (A) ASSESSEE IS IN APPEAL BEFORE US NOW. 6. LD.COUNSEL SUBMITTED THAT THERE IS NO CONCEALMEN T BY ASSESSEE AND DISALLOWANCES IN RESPECT OF EXPENSES C LAIMED. HE SUBMITTED THAT DISALLOWANCE HAS BEEN UPHELD BY LD. CIT (A) PARTIALLY, WHICH ITSELF PROVES THAT IT IS A DEBATAB LE ISSUE. 6.1 HE FURTHER SUBMITTED THAT IN ORDER OF LD. CIT ( A) PENALTY HAS BEEN CONFIRMED FOR FURNISHING OF INACCURATE PARTICU LARS FOR EXPENSES CLAIMED UNDER ELECTRICITY AND WATER CHARGE S AS WELL AS EXPENSES UNDER THE HEAD INTEREST EXPENDITURE. LD . COUNSEL PLACED RELIANCE UPON ORDER PASSED BY THIS TRIBUNAL IN CROSS APPEALS FILED BY ASSESSEE AS WELL AS REVENUE ITA NO S. 2105 & 2380/DEL/2012 FOR ASSESSMENT YEAR 2008-09 IN ASSESS EES OWN CASE, WHEREIN DISALLOWANCE OF INTEREST EXPENSES STA NDS DELETED. ITA NO. 5021/DEL/2015 A.Y. 2008-09 RISHABH BIRLA 4 7. LD.SR.DR PLACED RELIANCE UPON ORDERS OF AUTHORIT IES BELOW. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES AND IN THE LIGHT OF RECORDS PLACED BEFORE US. 9. IT IS OBSERVED THAT THIS TRIBUNAL IN QUANTUM PRO CEEDINGS DELETED DISALLOWANCE OF INTEREST EXPENSES AND, THER EFORE, THERE CANNOT ARISE QUESTION OF LEVY OF PENALTY ON THIS IS SUE. 9.1 IN RESPECT OF DISALLOWANCE RELATING TO ELECTRIC ITY AND WATER EXPENSES, IT IS OBSERVED THAT LD.AO HAS NOT LEVIED ANY CHARGE WHILE INITIATING PENALTY IN ASSESSMENT ORDER. SUBSE QUENTLY, WHILE PASSING PENALTY ORDER, PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF INCOME. ON PERUSAL OF ORDER PASSED BY LD. CIT(A) IN PENALTY PROCEEDINGS, LD. CIT (A) CONFIRMS PENALTY FOR FILIN G OF INACCURATE PARTICULARS. 10. IT IS OBSERVED THAT IN QUANTUM PROCEEDINGS BEFO RE TRIBUNAL ASSESSEE HAS NOT PRESSED ADDITION IN RESPECT OF ELE CTRICITY AND WATER CHARGES. THAT DOES NOT IPSO FACTO IS LEAD TO LEVY OF PENALTY. IN OUR CONSIDERED OPINION, ASSESSEE HAS NOT BEEN SP ECIFICALLY MADE AWARE OF THE CHARGE LEVIED AGAINST HIM, AS TO WHETHER IT IS A CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. UNDER SUCH CIRCUMSTANCES, WE DO NOT DEEM IT FIT AND PROPER TO CONFIRM PENALTY LEVIED BY LD.AO. ACCORDINGLY THE GROUNDS RAISED BY ASSESSEE STANDS A LLOWED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/11/2018 SD/- SD/- (N.K. SAINI) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER DT. 16 TH NOVEMBER,2018 *KAVITA ARORA ITA NO. 5021/DEL/2015 A.Y. 2008-09 RISHABH BIRLA 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES DATE DRAFT DICTATED ON 14.11.18 DRAFT PLACED BEFORE AUTHOR 15.11.18 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 16.11.2018 KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : 16.11.2018 FILE SENT TO THE BENCH CLERK 16.11.2018 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.