GSJ Envo Ltd., Panipat V. DCIT, Panipat

ITA 5167/DEL/2011

• Counselvise Citation: 516720114 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH C BENCH C BENCH C BENCH C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.5167/DEL/2011 5167/DEL/2011 5167/DEL/2011 5167/DEL/2011 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007- -- -08 0808 08 M/S GSJ M/S GSJ M/S GSJ M/S GSJ ENVO LIMITED, ENVO LIMITED, ENVO LIMITED, ENVO LIMITED, 290 290 290 290- -- -L, L,L, L, MODEL TOWN, MODEL TOWN, MODEL TOWN, MODEL TOWN, PANIPAT. PANIPAT. PANIPAT. PANIPAT. PAN : AAACG6 PAN : AAACG6 PAN : AAACG6 PAN : AAACG6001G. 001G. 001G. 001G. VS. VS. VS. VS. DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, PANIPAT CIRCLE, PANIPAT CIRCLE, PANIPAT CIRCLE, PANIPAT CIRCLE, PANIPAT. PANIPAT. PANIPAT. PANIPAT. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.RANO JAIN, FCA. RESPONDENT BY : SHRI SALIL MISHRA, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 14 TH SEPTEMBER, 2011 FOR THE ASSESSMENT YEAR 2007-08 CHALLENGING THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C). 2. THE ASSESSEE IN THE PRESENT CASE IS A CIVIL CONTRACTOR AND IS ENGAGED IN CIVIL WORKS OF CONSTRUCTING SEWAGE TREATMEN T PLANT, STORM WATER DEVELOPMENT, CONSTRUCTION OF UNDERGROUND RESER VOIRS AND BOOSTER PUMPING STATIONS ON TURNKEY BASIS AT VARIOUS SITES AT DIFFERENT STATIONS OF CIVIL CONTRACT. DURING THE YEAR UNDER C ONSIDERATION, THE ASSESSEE HAD GIVEN INTEREST FREE ADVANCE OF ` 1,30,500/- TO M/S KHURANA & SONS, HUF, ONE OF THE DIRECTORS OF THE ASSESSEE COMPAN Y WITHOUT ANY INTEREST. THE ASSESSING OFFICER HELD THAT THE SAME WAS N OT IN THE NATURE OF A TRADE ADVANCE AND HE DISALLOWED 11% OF T HE INTEREST PAID TO BANK AMOUNTING TO ` 14,355/-. HE ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). DURING PENALTY PROCEEDING S, IT WAS SUBMITTED ITA-5167/DEL/2011 2 BY THE ASSESSEE THAT NO INACCURATE PARTICULARS OF INCOME WERE FILED BY IT. THE ARGUMENTS OF THE ASSESSEE WERE NOT ACCEPTED BY THE ASSESSING OFFICER AND HE HELD THAT THE ASSESSEE HAS FURNISHED INAC CURATE PARTICULARS OF ITS INCOME AND LEVIED A PENALTY OF ` 4,833/-. 3. IN APPEAL BEFORE THE LEARNED CIT(A), HE SUSTAINED THE PENALTY. HENCE, THIS APPEAL BY THE ASSESSEE. 4. AT THE TIME OF HEARING BEFORE US, THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN A NY REASON OR JUSTIFICATION AS TO HOW ASSESSEE FURNISHED INACCU RATE PARTICULARS OF HIS INCOME. ALL THE RELEVANT DETAILS W ERE FILED ALONGWITH THE RETURN OF INCOME. RELIANCE HAS BEEN PLACED ON H ON'BLE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. RELIANCE PETROP RODUCTS PVT.LTD. 322 ITR 158 FOR THE PROPOSITION THAT UNLESS THE ASSESSEE FILES INACCURATE PARTICULARS IN THE RETURN OF INCOME, IT C ANNOT BE HELD TO HAVE FILED INACCURATE PARTICULARS. 5. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND CONTENDED THAT THE ASSESSEE ON ONE HAND HAS BORROWED FUNDS FOR ITS BUSINESS NEEDS AND HAS CLAIMED PA YMENT OF INTEREST THEREON BUT, ON THE OTHER HAND, IT HAD MADE INTEREST FREE ADVANCE TO THE HUF OF ONE OF ITS DIRECTORS. THE SAME, THEREFORE, CANNOT BE TERMED AS A BONA-FIDE CLAIM AND THE PENALT Y UNDER SECTION 271(1)(C) HAS BEEN RIGHTLY LEVIED FOR FILING INACCUR ATE PARTICULARS OF INCOME. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA), THE HON'BLE SUPREME C OURT HAS CLEARLY HELD THAT IF THE ASSESSEE HAS FURNISHED WRONG PARTICULA RS IN THE RETURN ITA-5167/DEL/2011 3 OF INCOME, THE PENALTY CAN BE IMPOSED. HOWEVER, IN CASE THE ASSESSEE MAKES A BONA-FIDE LEGAL CLAIM, THE SAME CANNOT BE HE LD LIABLE FOR PENALTY. ON THIS PRINCIPLE, HON'BLE SUPREME COURT D ELETED THE PENALTY IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) . THE ASSESSEE IN THE PRESENT CASE HAS DISCLOSED ALL RELEVANT PARTICULARS O F ITS INCOME AND THERE WAS NO CONCEALMENT OF FACTS OR FILING OF IN ACCURATE PARTICULARS OF INCOME. THE INCOME DECLARED WAS DULY SUPPORTED BY A COPY OF AUDITED FINANCIAL STATEMENT AND AUDIT REPORT UNDER SECTION 44AB OF THE IT ACT. THE AUTHORITIES BELOW HAVE NOT BROUGHT ANY MATERIAL TO SHOW THAT THE ASSESSEE HAS CONCEALED ANY PART ICULARS OF ITS INCOME OR FURNISHED INACCURATE PARTICULARS. IN OUR V IEW, THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PET ROPRODUCTS PVT.LTD. (SUPRA) IS APPLICABLE TO THE FACTS OF THE PRE SENT CASE. RESPECTFULLY FOLLOWING THE SAME, WE REVERSE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE PENALTY IMPOSED UNDER SECTION 2 71(1)(C). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 23 RD JANUARY, 2012. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBE MEMBE MEMBE MEMBER RR R VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 23.01.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR