Spinks India, New Delhi V. ACIT, New Delhi

ITA 5265/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69188 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: M K BHATT
• Keywords: Tax effect

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 BENCH BENCH BENCH G GG G : 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 I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.5265/DEL/2012 5265/DEL/2012 5265/DEL/2012 5265/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 M/S SPINKS INDIA, M/S SPINKS INDIA, M/S SPINKS INDIA, M/S SPINKS INDIA, 19, RANI JHANSI, 19, RANI JHANSI, 19, RANI JHANSI, 19, RANI JHANSI, MOTIA KHAN, MOTIA KHAN, MOTIA KHAN, MOTIA KHAN, DELHI DELHI DELHI DELHI 110 0 110 0 110 0 110 055. 55. 55. 55. PAN : PAN : PAN : PAN : AABFS0535R. AABFS0535R. AABFS0535R. AABFS0535R. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -39(1), 39(1), 39(1), 39(1), ROOM NO.212, C.R.BUILDING, ROOM NO.212, C.R.BUILDING, ROOM NO.212, C.R.BUILDING, ROOM NO.212, C.R.BUILDING, I.P.ESTATE, I.P.ESTATE, I.P.ESTATE, I.P.ESTATE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.K.BHATT, CA. RESPONDENT BY : SMT.RENUKA JAIN GUPTA, 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 BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XXVIII, NEW DELHI DATED 6 TH AUGUST, 2012 FOR THE AY 2008-09. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 AMOUNTING TO ` 69,670/-. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE ASSESSEE HAS CLAIMED AN EXPENDITURE OF ` 44,80,373/- ON COMMISSION PAYMENT, OUT OF WHICH, THE SUM OF ` 2,25,468/- WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND T HAT THE ASSESSEE FAILED TO FURNISH THE CONFIRMATION AND THE COPY OF INCOME TAX RETURN OF THE 11 PERSONS TO WHOM THE TOTAL COMMISSION OF ` 2,25,468/- WAS PAID. NO APPEAL WAS FILED AGAINST THE SAID ADDITION. DUR ING PENALTY PROCEEDINGS, IT WAS STATED BY THE ASSESSEE BEFORE T HE ASSESSING OFFICER ITA-5265/DEL/2012 2 THAT DURING ASSESSMENT PROCEEDINGS, CONFIRMATIONS O F ALL 11 PERSONS WAS FILED BUT NO PERMANENT ACCOUNT NUMBERS OR COPIE S OF RETURN OF INCOME WERE PROVIDED. THE ASSESSING OFFICER WAS NO T SATISFIED ABOUT THE EXPLANATION OF THE ASSESSEE AND LEVIED PENALTY OF ` 69,670/- WHICH IS SUSTAINED BY THE LEARNED CIT(A). HENCE, THIS AP PEAL BY THE ASSESSEE. 4. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE ARE OF THE OPINION THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. [2010] 322 IT R 158 (SC), WHEREIN THEIR LORDSHIPS HELD AS UNDER:- WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE 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 REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE R ETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 5. THE RATIO OF THE ABOVE DECISION WOULD BE SQUAREL Y APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IN THIS CASE, TH E ASSESSEE COULD NOT PRODUCE THE EVIDENCE THAT THE COMMISSION AGENTS WER E ASSESSED TO INCOME TAX, THEREFORE, THE ASSESSING OFFICER DISALL OWED THE COMMISSION. THAT HONBLE APEX COURT HAS CLEARLY HE LD IN THE ABOVEMENTIONED CASE OF RELIANCE PETROPRODUCTS PVT.L TD. THAT MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW B Y ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGA RDING THE INCOME OF THE ASSESSEE. IN THIS CASE ALSO, IT WAS NOT FOUND THAT THE CLAIM OF THE ASSESSEE WAS INCORRECT OR ERRONEOUS OR FALSE. ON T HE OTHER HAND, OUT OF THE TOTAL CLAIM OF COMMISSION OF ` 44,80,373/-, MORE THAN 90% OF THE EXPENDITURE IS ALLOWED AND A MEAGER SUM OF ` 2,25,468/- IS DISALLOWED, THAT TOO, FOR INABILITY OF THE ASSESSEE TO PRODUCE THE INCOME TAX DETAILS OF THE COMMISSION AGENTS. IN OUR OPINION, ON THE F ACTS OF THE ITA-5265/DEL/2012 3 ASSESSEES CASE, THE DECISION OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) WOULD BE SQ UARELY APPLICABLE. THE LEARNED CIT(A) HAS DISTINGUISHED THE ABOVE DECI SION ON THE GROUND THAT IN THIS CASE, NOT ONLY THE REVENUE BUT THE ASS ESSEE ITSELF BELIEVES THAT IT HAS WRONGLY CLAIMED THE SAID EXPENDITURE. IT WAS EXPLAINED BY THE LEARNED COUNSEL THAT MERELY BECAUSE THE ASSESSE E DID NOT FILE THE APPEAL AGAINST PART DISALLOWANCE OUT OF COMMISSION EXPENSES, IT CANNOT BE PRESUMED THAT THE ASSESSEE HAS ACCEPTED T HE CLAIM OF COMMISSION TO BE WRONG. THE APPEAL WAS NOT FILED B ECAUSE OF MEAGER TAX EFFECT. 6. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRO DUCTS PVT.LTD. (SUPRA), WE CANCEL THE PENALTY LEVIED UNDER SECTION 271(1)(C). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2013. SD/- SD/- ( (( (I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 08.08.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S SPINKS INDIA, M/S SPINKS INDIA, M/S SPINKS INDIA, M/S SPINKS INDIA, 19, RANI JHANSI, MOTIA KHAN, DELHI 19, RANI JHANSI, MOTIA KHAN, DELHI 19, RANI JHANSI, MOTIA KHAN, DELHI 19, RANI JHANSI, MOTIA KHAN, DELHI 110 055. 110 055. 110 055. 110 055. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -39(1), ROOM NO.212, C.R.BUILDING, 39(1), ROOM NO.212, C.R.BUILDING, 39(1), ROOM NO.212, C.R.BUILDING, 39(1), ROOM NO.212, C.R.BUILDING, I.P.ESTATE, NEW DELHI I.P.ESTATE, NEW DELHI I.P.ESTATE, NEW DELHI I.P.ESTATE, NEW DELHI 110 002. 110 002. 110 002. 110 002. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR