M/s. Profile India, Faridabad V. ACIT, Faridabad

ITA 5121/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81684 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: VINAY BHATIA
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : D : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM ITA NO.5121/DEL/2013 ASSESSMENT YEAR : 2007-08 PROFILE INDIA, 20/6, MATHURA ROAD, FARIDABAD. PAN : AABFV5239R VS. ACIT, CENTRAL CIRCLE-1, FARIDABAD. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI VINAY BHATIA, CA DEPARTMENT BY : DR. B.R.R. KUMAR, SR. DR ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT (A) ON 26.06.2013 UPHOLDING THE P ENALTY OF ` 20,028/- IMPOSED BY THE AO U/S 271(1)(C) OF THE INC OME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATIO N TO THE ASSESSMENT YEAR 2007-08. ITA NO.5121/DEL/2013 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE, TWO UNDATED BILLS WERE FO UND TOWARDS LABOUR CHARGES FOR ` 29,000/- AND ` 30,500/- WHICH DID NOT CONTAIN THE NAME OF THE PARTIES IN WHOSE FAVOUR THESE WERE ISSUED. THE FIRST BILL OF ` 29,000/- WAS BEARING THE NAME OF S S AUTO ENGINEERING WORKS PRINTED ON ITS TOP AS THE SELLE R/SERVICE PROVIDER AND THE OTHER BILL HAD THE NAME OF SUPER AUTO POWERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS ASKED TO EXPLAIN THE ABOVE BILLS AND GET THEM VERIF IED FROM THE BOOKS OF ACCOUNT. AS PER THE AO, THERE WAS NO EXPL ANATION FURNISHED BY THE ASSESSEE, WHICH RESULTED INTO AN A DDITION OF ` 59,500/- TOWARDS CLAIM OF BOGUS EXPENSES. ON THE BASIS OF SUCH ADDITION, THE AO INITIATED PENALTY PROCEEDINGS. TH E ASSESSEE ALSO SPECIFICALLY STATED DURING THE COURSE OF PENALTY PR OCEEDINGS THAT THESE BILLS DID NOT BELONG TO IT AS THESE ARE NEVER ENTERED IN ITS BOOKS OF ACCOUNT AND, HENCE, NOT CLAIMED AS EXPENDI TURE. NOT CONVINCED WITH THE ASSESSEES SUBMISSIONS, THE AO I MPOSED A PENALTY AMOUNTING TO ` 20,028/-, WHICH CAME TO BE UPHELD IN THE FIRST APPEAL. ITA NO.5121/DEL/2013 3 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS SEEN THAT THE VE RY FOUNDATION FOR THE INSTANT PENALTY IS THE ADDITION OF ` 59,500/- I N RESPECT OF THE TWO BILLS FOUND FROM THE ASSESSEES PREMISES AT THE TIME OF SEARCH, WHICH WERE UNDATED AND DID NOT CONTAIN THE NAME OF THE PARTY TO WHOM THESE WERE TO BE ISSUED. THE ASSESSEE SPECIFICALLY STATED BEFORE THE AO THAT THESE BILLS WERE NOT RECO RDED IN ITS BOOKS OF ACCOUNT AND NO DEDUCTION WAS EVER CLAIMED ON THIS COUNT. NOTWITHSTANDING THE FACT THAT THE ASSESEE OFFERED THIS AMOUNT AS INCOME, WE FAIL TO APPRECIATE AS TO HOW T HERE CAN BE ANY QUESTION OF IMPOSING PENALTY IN THE ABSENCE OF THERE BEING ANY DEDUCTION CLAIMED AND FOUND TO BE INAPPROPRIATE . THE AO HAS MADE OUT A CASE OF CLAIM OF BOGUS EXPENSES, W HEREAS THE FACT IS THAT THE ASSESSEE DID NOT, AT ALL, CLAIM DEDUCTION IN RESPECT OF SUCH EXPENSE. THE VERY FOUNDATION FOR I MPOSITION OF PENALTY, IN OUR CONSIDERED OPINION, IS LACKING INAS MUCH AS THE ADDITION HAS BEEN MADE BY TREATING THE AMOUNT AS BO GUS EXPENSE, WHICH IN FACT, WAS NEVER CLAIMED BY THE AS SESSEE. WE, THEREFORE, ORDER FOR THE DELETION OF THE PENALTY. ITA NO.5121/DEL/2013 4 4. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 09.09.201 4. S SD/- SD/- [ A.T. VARKEY ] [ R.S. SYAL ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 09 TH SEPTEMBER, 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.