M/s. K.C.Land & Finance (Regd.), Nawanshahr V. The Deputy Commissioner of Income-tax, , Jalandhar

ITA 525/ASR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3622 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWIND ER KAUR LD
• Assessee Lawyers: BHAGAT; RAJINDER KR CHOP RA
• Keywords: Depreciation; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.525(ASR)/2017 ASSESSMENT YEAR:20 06-07 MS. K.C. LAND & FINANCE (REGD.), K.C. TOWER, CHANDIGARH ROAD, NAWANSHAHAR PAN:AAEFK 0109J VS. DY. CIT, CENTRAL CIRCLE-II, JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. M.R. BHAGAT & RAJINDER KR. CHOP RA RESPONDENT BY: SMT. PARWIND ER KAUR (LD. DR) DATE OF HEARING: 07.08.2018 DATE OF PRONOUNCEMENT: 16 .08.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 03.05.2017, PASSE D BY THE LD. CIT(A)-5, LUDHIANA, U/S. 250(6) OF THE I.T. ACT, 1961 (HEREIN AFTER CALLED AS THE ACT) FOR ASST. YEAR: 2006-07 WHEREBY THE LD. CIT(A) HAS CONFIRMED THE PENALTY OF RS.75,000/- IMPOSED BY THE ASSESSING OFFICER. 2 . THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSE E. THAT THE LD. CIT(A) ERRED IN CONFIRMING PENALTY OF RS.17,000/- WITHOUT APPRECIATING THE FACTS THAT THE ADDITION OF RS.49,271/- AS 40% DISALLOWANCES OF EXPENSES ARE PURELY ON ESTIMATION BASIS AND WITHOUT HAVING ANY DOCUMENTARY EVIDENCE IN HAND. SI NCE NO PENALTY CAN BE IMPOSED ON DIFFERENCE OF OPINION AND ESTIMATION AS IS COVERED IN VARIOUS CASES OF PUNJAB & HARYANA HIGH COURT. IT IS PRAYED THAT PENALTY MAY BE DELETED. 3. AT THE OUTSET, IT REFLECTS FROM THE RECORD THAT THE ASSESS ING OFFICER IN ADDITION TO OTHER DISALLOWANCES ALSO DISALLOWED @ 40% OF SUC H EXPENSES AS SHOWN IN THE DEBIT SIDE IN THE INCOME AND EXPENDITURE ACCOUNT UN DER VARIOUS HEADS WHICH INCLUDES SALARIES, PRINTING AND STATIONARY, POSTAGE AND TELEGRAM, OFFICE EXPENSES, BANK CHARGES, LEGAL FEES , MISC. EXPENSES, NEWS PAPER, INCOME TAX , CONVEYANCE ITA NO.525/ASR/2017 (A.Y.2006-07) M/S K.C. LAND & FINANCE., NAWANSHAHAR V. DCIT 2 AND MAINTENANCE AND DEPRECIATION ETC. IT WAS FURTHE R AFFIRMED BY THE LD. CIT(A) AND PENALTY OF RS.17,000/- WAS MADE ON THE ADDITION OF RS.49,271/-. OUR ATTENTION WAS DRAWN BY THE LD. AR TO THE P&L AC COUNT FOR THE YEAR UNDER CONSIDERATION AND SUBMITTED THAT THE ADDITION WAS M ADE EVEN OF THE INCOME TAX PAID BY THE ASSESSEE AND OTHER MONETARY EXPENSES SU CH AS SALARIES, PRINTING AND STATIONARY, POSTAGE AND TELEGRAM, OFFICE EXPENSES, BANK CHARGES, LEGAL FEES ETC. WHICH GOES TO SHOW THAT THE ASSESSING OFFICER HAS N OT APPLIED HIS MIND. 4. THE LD. DR RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSION OF THE PARTIES. THE ASSESSING OFFICER ALSO TAKEN INTO CONSIDERATION THE INCOME TAX AS WELL AS LEGAL FEES PAID BY THE ASSESSEE WHILE DISALLOWING EXPENSE S @ 40% AND THE ASSESSING OFFICER WITHOUT CONSIDERING THE CRUCIAL FACTS AS ME NTIONED ABOVE IMPOSED THE PENALTY, HENCE WE ARE IN AGREEMENT WITH THE SUBMISS ION OF THE LD. AR TO THE EFFECT THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND INDEPENDENTLY WHILE IMPOSING THE PENALTY. IN OUR VIEW, THE SAID CRUCIAL FACTS WE RE PARAMOUNT TO BE CONSIDERED BY LD. CIT(A) WHILE ADJUDICATING THE ISSUE, WHO ALSO F AILED TO OBSERVE, HENCE THE NON- APPLICATION OF MIND GOES TO THE ROOT OF THE CASE WH ICH AT LEAST CAN VITIATE THE PENALTY ORDER, THEREFORE ON THE REASONS STATED ABOV E, WE DO NOT FIND ANY SUBSTANCE TO UPHOLD THE PENALTY ORDER IMPOSED BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE LD. CIT(A), AND CONSEQUENTLY THE PENALTY OF RS.17,0 00/- STANDS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.08.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED:16.08.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) MS. K.C LAND 7 FINANCE (REGD.), K.C. TOWER, CHANDIGARH ROAD, NAWANSHAHAR (2) THE DCIT, CENTRAL CIRCLE-II, JALANDHAR (3) THE CIT(A)-5, LUDHIANA (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER