Shri Amit Jaynatilal Shah, Ahmedabad V. The ACIT.,Circle-10, Ahmedabad

ITA 547/AHD/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6887 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 17-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Difference of opinion

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , . .!'#$, % & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.547/AHD/2010 ( ( ) ( ) ( ) ( ) / / / / ASSESSMENT YEAR : 2004-05) SHRI AMIT JAYANTILAL SHAH PROP.OF M/S.AURUM FINTRADE 5 TH FLOOR, NAVRANGPURA AHMEDABAD ( ( ( ( / VS. THE ACIT CIRCLE-10 AHMEDABAD * % ./+, ./ PAN/GIR NO. : ACKPS 9289 D ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI VIJAY RANJAN ./*- 1 0 / RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR. D.R. (2 1 3% / / / / DATE OF HEARING : 07/12/2011 4') 1 3% / DATE OF PRONOUNCEMENT : 9-12-11 5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XVI AHMEDABAD DATED 24/11/2009 PASSED FOR A.Y. 2004-05. THE ONLY ISSUE AS PER THE SEVERAL GROUNDS IS IN RESPECT OF CONFIRMATION OF LE VY OF PENALTY OF RS.81,400/- U/S.271(1)(C) OF THE I.T.ACT. ITA NO.547/AHD/ 2010 SHRI AMIT JAYANTILAL SHAH VS. ACIT ASST.YEAR - 2004-05 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATE D 6/10/2006 AND THE PENALTY ORDER U/S.271(1)(C) OF THE I.T.ACT DATE D 31/03/2009 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS TRADING IN INTER- MEDIATORIES AND ALSO IN THE BUSINESS OF FINANCE. T HE ASSESSEE HAS CLAIMED INTEREST EXPENSE U/S.57 OF THE I.T.ACT. IN THIS REGARD, INCOME UNDER THE HEAD OTHER SOURCES OF RS.1,01,80 3/- WAS DECLARED AND AGAINST THE SAID INTEREST INCOME, THE ASSESSEE HAS CLAIMED INTEREST TOWARDS VATVA PLOT AMOUNTING TO RS.1,40,168/-. THE ASSESSEE HAS EXPLAINED THAT THE INTEREST PAID O N LOAN AMOUNT WAS NOT ONLY FOR THE PURPOSE OF PURCHASE OF PLOT, BUT I NTEREST WAS ALSO PAID ON THE TEMPORARY LOAN TAKEN FROM ONE M/S.ORIEN T TRADING CORPORATION. THEREFORE AN ALTERNATE CLAIM HAS ALSO BEEN MADE THAT THE EXPENDITURE OF INTEREST WAS ADMISSIBLE AS BUSIN ESS EXPENDITURE U/S.36(1)(III) OF THE I.T.ACT. AN ADDITION WAS MAD E WHICH WAS CHALLENGED BEFORE THE TRIBUNAL, HOWEVER, THE REVENU E AUTHORITIES ACTION WAS UPHELD. THERE WAS AN ANOTHER ADDITION I N RESPECT OF MAINTENANCE CHARGES. THE ASSESSEE HAS CLAIMED MAIN TENANCE CHARGES OF RS.1,19,080/- WHICH HAS INCLUDED AN AMOU NT OF RS.91,600/- BY WAY OF A GENERAL ENTRY PASSED ON 31. 03.2004. IT WAS EXPLAINED THAT ON CHANGE OVER OF MANAGEMENT IN JANU ARY-2003, THE BUILDER WHO WAS MAINTAINING THE BUILDING IN THE PAS T DID NOT TRANSFER THE SAID MAINTENANCE DEPOSIT TO THE NEW MANAGEMENT. THEREFORE, THE SAID AMOUNT WAS WRITTEN OFF. REVENUE WAS OF TH E VIEW THAT THE ITA NO.547/AHD/ 2010 SHRI AMIT JAYANTILAL SHAH VS. ACIT ASST.YEAR - 2004-05 - 3 - SAID EXPENSE WAS NOT REVENUE IN NATURE AND IT PERTA INED TO PREVIOUS YEAR. THE SAID DISALLOWANCE WAS ALSO CONFIRMED BY THE APPELLATE AUTHORITY. WHILE LEVYING THE PENALTY, THE ASSESSIN G OFFICER HAS HELD THAT THE ASSESSEE HAD MADE A DELIBERATE ADMIT TO RE DUCE ITS LIABILITY BY INFLATING THE EXPENSES AND RESULTANTLY A SUM OF RS.81,400/- WAS LEVIED U/S.271(1)(C) OF THE I.T.ACT. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY WHO HAS AFFIRMED THE ACTION OF THE ASSESS ING OFFICER. 4. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERU SED THE ORDERS OF THE AUTHORITIES BELOW. AS FAR AS THE FAC TS OF THE CASE ARE CONCERNED, IT WAS EVIDENT THAT THE ASSESSEE HAS PLA CED BEFORE US ALL THE RELEVANT MATERIAL FACTS AND EXPLAINED THE REASO N FOR THE CLAIM OF THE EXPENDITURE. THE ASSESSEE WAS UNDER THE IMPRES SION THAT THE INTEREST WAS PAID ON BORROWED FUNDS THEREFORE ADMIS SIBLE AGAINST THE INCOME UNDER THE HEAD OTHER SOURCES AND IN SUPPOR T THE RELEVANT INTEREST ACCOUNTS WERE EXPLAINED. LIKEWISE, THE AS SESSEE HAS PASSED A GENERAL ENTRY IN RESPECT OF MAINTENANCE CHARGES UNDER THE IMPRESSION THAT THE CLAIM CAN BE ALLOWED AS A REVEN UE EXPENDITURE. NEVERTHELESS, IT IS NOT IN DISPUTE THAT THE RELEVAN T INFORMATION WAS ON RECORD AND ON THAT BASIS THIS IS NOT THE ALLEGATION OF THE REVENUE THAT THE CLAIM WAS BOGUS OR ALTOGETHER FALSE. IN FACT, AS PER THE DISCUSSION MADE DURING THE APPELLANT PROCEEDINGS, I T IS APPARENT THAT DUE TO DIFFERENCE OF OPINION THE ADDITION WAS CONFI RMED. THE ASSESSEE HAS OFFERED AN EXPLANATION AND THAT EXPLA NATION WAS ITA NO.547/AHD/ 2010 SHRI AMIT JAYANTILAL SHAH VS. ACIT ASST.YEAR - 2004-05 - 4 - REJECTED NOT BECAUSE OF ITS FALSITY BUT BECAUSE OF AN ANOTHER OPINION, HENCE UNDER THESE CIRCUMSTANCES, WE CAN HOLD THAT A S PER EXPLANATION-1 TO SECTION 271(1)(C) OF THE I.T.ACT, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE I.T.A CT. THE SAME IS HEREBY DELETED. GROUND IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. SD/- SD/- ( A.K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 09/12/2011 63..(, .(../ T.C. NAIR, SR. PS 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-XVI, AHMEDABAD 5. 7 >> >/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..7/12/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08/12/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S12/12/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12/12/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER