M/s Ad-Manum Packaging Ltd., Indore V. The ACIT 5(1), Indore

ITA 569/IND/2012

• Counselvise Citation: 56922714 RSA 2012
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 05-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: S N AGRAWAL; PANKAJ MOGRA CAS
• Keywords: Question of law; Accommodation entries
• Section: 143(3); 14A; 260A; 115JB; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 569/IND/2012 A.Y. :2004-05 M/S.AD-MANUM PACKAGING LIMITED, ACIT, 5(1), INDORE. INDORE. VS APPELLANT RESPONDENT P.A.N. NO A ABCA4240L APPELLANT BY SHRI S.N.AGRAWAL AND SHRI PANKAJ MOGRA, CAS RESPONDENT BY SHRI G. S. GAUTAM, DR DATE OF HEARING : 28.07.2015 DATE OF PRONOUNCEMENT : 08 .09.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 30.08.2012 FOR THE ASSE SSMENT YEAR 2004-05. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE H AS TAKEN LOAN OF RS. 10 LACS FROM HINDUSTAN CONTINENTA L LIMITED, A DUMMY AND PAPER COMPANY ENGAGED IN PROVIDING ACCOMMODATION ENTRIES FOR UNSECURED LOAN, SHARE CAP ITAL AT PREMIUM ETC., AND INTEREST PAYABLE ON SUCH LOAN AT RS. 42,658/-. THE AO FOUND THAT THE ASSESSEE FAILED TO ESTABLISH THE CASE AS PER PROVISIONS OF SECTION 68 EVEN PRIMA FACIE, CONSIDERING CUMULATIVE REQUIREMENT OF THE PROVISION . HE ACCORDINGLY IMPOSED PENALTY U/S 271(1)(C) OF THE I NCOME-TAX ACT, 1961. -: 3: - 3 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE PENALTY. 4. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED THE WRI TTEN SUBMISSION, WHICH READS AS UNDER :- SUMMARY OF INCOME AS ASSESSED 0.1 THE ASSESSEE HAD FILED ITS RETURN OF TOTAL INCOME ON 29.10.2004 DECLARING TOTAL INCOME AT RS. NIL 2.1 BOOK PROFIT U/S 115JB CALCULATED AT RS. 92,19,097/ - 2.2 TAX ON BOOK PROFIT CALCULATED AT 7.5 % ON RS. 92,19,097/- RS. 6,91,432/ - 3.1 THAT IN THE ORDER AS PASSED U/S 143(3) TOTAL INCOME WAS ASSESSED AT RS. 8,64,004/ - 3.2 TAX ON INCOME AS ASSESSED CALCULATED AT RS. 3,02,401/ - 4.1 THE LD. CIT(A) VIDE HIS ORDER DATED 28.1.2010 HAS PARTLY ALLOWED THE APPEAL AND REDUCED THE AMOUNT OF TOTAL INCOME AT RS. 8,04,373/ - 4.2 TAX ON INCOME AS ASSESSED AFTER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) RS. 2,81,531/ - 05 THE ASSESSEE COMPANY PAID TAX AS PAID WITH ITS RETURN OF INCOME U/S 115JB WHICH IS HIGHER THAN WHAT WAS FINALLY ASSESSED WHICH CALCULATED COMES TO RS. 6,91,43 2/ - -: 4: - 4 S.NO. PARTICULARS INCOME RETURNED INCOME AS ASSESSED U/S 143(3) INCOME AS ASSESSED BY THE LD. CIT(A). 1.1 INCOME AS RETURNED U/S 28-44D NIL 8,64,004 8,04,373 1.2 TAX ON ABOVE NIL 3,02,401 2,81,531 2.1 INCOME U/S 115JB 92,19,097/- 92,19,097 92,19,097 2.2 TAX ON ABOVE 6,91,432 6,91,432 6,91,432 3 TAX FINALLY PAID ON INCOME ASSESSED 6,91,432 6,91,432 6,91,432 6.1 A STATEMENT GIVING LIST OF 23 DECISIONS OF DIFFEREN T COURTS WERE ALREADY FILED BEFORE THE HON'BLE BENCH ON THE EARLIER DATE OF HEARING WHEREIN IT WAS HELD BY THE COURTS T HAT NO PENALTY U/S 271(1)(C) SHALL BE LEVIABLE WHEN THE T OTAL INCOME OF AN ASSESSEE IS FINALLY ASSESSED U/S 115JB OF THE INCOME-TAX ACT, 1961. 6.2 IN THIS REGARD, WE WOULD ALSO LIKE TO RELY UPON DECISION OF I.T.A.T. DELHI BENCH IN THE CASE OF DCIT VS. ONGC V IDESH LIMITED ( I.T.A.NO. 3120/DEL/2013) ORDER DATED 29.08,2014 WHERE THE HON'BLE ACCOUNTANT MEMBER OF T HE PRESENT BENCH HAS ALSO APPROVED THE ABOVE POSITION OF LAW. COPY OF SAID DECISION IS ENCLOSED FOR YOUR HON OUR KIND REFERENCE. -: 5: - 5 5. THE LD. AUTHORIZED REPRESENTATIVE HAS ALSO SUBMITTE D BEFORE US THAT THE ASSESSEE HAS FILED THE APPEAL BE FORE HON'BLE HIGH COURT AND HIGH COURT HAS ADMITTED THE QUESTION OF LAW. THEREFORE, NO PENALTY CAN BE LEVIED. 6. THE LD. SENIOR D.R. RELIED UPON THE ORDER OF THE BOMBAY TRIBUNAL IN THE CASE OF TRIUMPH INTERNATIONA L FINANCE I LIMITED, VS. ACIT PASSED IN I.T.(SS).A.NO. 169/M UM/2007. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN THIS CASE THE ASSESSEE HAS FILED IT S RETURN OF INCOME ON 29.10.2014 DECLARING TOTAL INCOME AT NIL. THE BOOK PROFIT U/S 115JB WAS CALCULATED AT RS. 92,19,097/-. THE TAX ON BOOK PROFIT WAS CALCULATED AT 7.5 % I.E. RS. 6,9 1,432/-. THE INCOME WAS PROCESSED U/S 143(3) AND TOTAL INCOME WA S ASSESSED AT RS. 8,64,004/-. THE TAX ON INCOME ASSES SED WAS CALCULATED AT RS. 3,02,401/-. THE LD. CIT(A) HAS PA RTLY ALLOWED THE APPEAL. THE TOTAL INCOME REDUCED TO RS. 8,04,37 3/-. THE TAX ON ASSESSED INCOME WOULD BE RS. 2,81,531/-. THE ASSESSEE COMPANY HAS PAID TAX U/S 115JB, WHICH IS HIGHER THA N WHAT -: 6: - 6 WAS FINALLY ASSESSED. THEREFORE, THE ASSESSEE HAS P AID FINALLY TAX ON THE INCOME ASSESSED AT RS. 6,91,432/-. THERE FORE, WE ARE OF THE VIEW THAT THE INCOME OF THE ASSESSEE WAS ASSESSED U/S 115JB AND NOT UNDER THE NORMAL PROVISIONS. WE A RE OF THE VIEW THAT THE TRIBUNAL HAS TAKEN CONSISTENT VIEW TH AT WHEN THE ASSESSEES INCOME HAS BEEN ASSESSED U/S 115JB O F THE ACT AND NOT UNDER THE NORMAL PROVISIONS OF THE ACT, THE ADDITION MADE BY THE ASSESSING OFFICER IN THE ORDER WERE CON FIRMED TO THE INCOME DETERMINED UNDER THE NORMAL PROVISIONS O F THE ACT AND NOT IN RESPECT OF BOOK PROFIT U/S 115JB OF THE ACT. IN THAT CIRCUMSTANCES, RELYING UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NALWA SONS INVESTMENTS LIMITED, (2010) 194 TAXMAN 387 (DEL), NO PENALTY CAN BE LEVI ED. WE FIND THAT ONE OF OUR MEMBERS WHO IS PARTY TO THE ORDER IN I.T.A.T. DELHI BENCH IN THE CASE OF DY. CIT VS. ONG C VIDESH LIMITED, IN I.T.A.NO. 3120/DEL/2013, WHEREIN THE TR IBUNAL HAS HELD AS UNDER :- 9. FROM THE AFORESAID IT IS EVIDENT THAT INCOME OF THE ASSESSEE WAS FINALLY ASSESSED U/S 115JB OF THE ACT AND NOT UNDER THE NORMAL PROVISION OF THE ACT. -: 7: - 7 THE ADDITION MADE BY THE ASSESSING OFFICER IN THE ORDER WERE CONFIRMED TO THE INCOME DETERMINED UNDER THE NORMAL PROVISION OF THE ACT AND NOT IN RESPECT OF THE BOOK PROFIT U/S 115JB OF THE ACT. IN SUCH CIRCUMSTANCES THE RATIO OF HON'BLE DELHI HIGH COURT IN NALWASONS (SUPRA) HAS BEEN RIGHTLY RELIED UPON BY THE LD. CIT(A) AND THEREFORE NO PENALTY IS LEVIABLE . MOREOVER, IT HAS BEEN BROUGHT TO OUR NOTICE THAT TH E QUANTUM APPEAL PREFERRED BY THE DEPARTMENT AGAINST THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR HAS BEEN DISMISSED AND THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED BY THE TRIBUNAL VIDE ORDER DATED 14.3.2014. THEREFORE, IN SUCH CIRCUMSTANCES WE ARE INCLINED NOT TO INTERFERE IN THE ORDER OF THE LD. C IT(A) AND WE CONFIRM THE SAME AND DISMISS THE APPEAL OF THE REVENUE. 8. WE, RESPECTFULLY FOLLOWING SAME, ALLOW THE APPEAL OF THE ASSESSEE. -: 8: - 8 9. SECONDLY, IN THIS CASE, THE ASSESSEES APPEAL IS ADMITTED BY THE HON'BLE MADHYA PRADESH HIGH COURT A ND THE ASSESSEE HAS SUBMITTED THE ORDER OF HON'BLE M.P. JURISDICTIONAL HIGH COURT AND WHEN HIGH COURT HAS A DMITTED THE APPEAL, THE PENALTY U/S 271(1)(C) OF THE INCOME -TAX ACT, 1961, CANNOT BE IMPOSED. FOR THAT PROPOSITION, WE R ELY UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. LIQUID INVESTMENT & TRADING CO. VIDE ITS ORDER DATE D 5.10.2010 IN I.T.A.NO. 240/2009. THEREFORE, WE ARE OF THE VIEW THAT NO PENALTY CAN BE LEVIED, WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER :- BOTH THE CIT(A) AS WELL AS THE I.T.A.T. HAVE SET-A SIDE THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT ON THE GROUND THAT ISSUE OF DEDUCTION U/S 14A OF THE ACT WAS DEBATABLE ISSUE. WE MAY ALSO NOTE THAT AGAINST THE QUANTUM ASSESSMENT WHERE DEDUCTION U/S 14A OF THE ACT WAS PRESCRIBED TO THE ASSESSEE, THE ASSESSEE HAS PREFERRED AN APPEAL IN THIS COURT U/S 260A OF THE A CT WHICH HAS ALSO BEEN ADMITTED AND SUBSTANTIAL -: 9: - 9 QUESTION OF LAW FRAMED. THIS ITSELF SHOWS THAT ISSU E IS DEBATABLE. FOR THESE REASONS, WE ARE OF THE OPIN ION THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASE. 10. WE, RESPECTFULLY FOLLOWING THE SAME, DELETE THE PENALTY. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 8 TH SEPTEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 8 TH SEPTEMBER, 2015. CPU* 1.7.9