ITO, New Delhi V. M/s. N.S.R. Farms Pvt. Ltd., New Delhi

ITA 5776/DEL/2012

• Counselvise Citation: 577620114 RSA 2012
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 08-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Assessee Lawyers: GAUTAM JAIN
• Keywords: Depreciation
• Section: 27; 143(3)

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 E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 5776/DEL/2012 & 5777/DEL/2012 5776/DEL/2012 & 5777/DEL/2012 5776/DEL/2012 & 5777/DEL/2012 5776/DEL/2012 & 5777/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2006 2006 2006 2006 - -- - 07 & 2007 07 & 2007 07 & 2007 07 & 2007 - -- - 08 0808 08 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WA WAWA WARD RDRD RD- -- -13(1), 13(1), 13(1), 13(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S N.S.R. FARMS PVT.LTD., M/S N.S.R. FARMS PVT.LTD., M/S N.S.R. FARMS PVT.LTD., M/S N.S.R. FARMS PVT.LTD., 606 606 606 606- -- -CHIRANJIV TOWER, CHIRANJIV TOWER, CHIRANJIV TOWER, CHIRANJIV TOWER, 61 6161 61- -- -NEHRU PLACE, NEHRU PLACE, NEHRU PLACE, NEHRU PLACE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. 110 019. 110 019. 110 019. PAN : AAACN3068J. PAN : AAACN3068J. PAN : AAACN3068J. PAN : AAACN3068J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P. DAM KANUNJNA, SENIOR DR. RESPONDENT BY : SHRI GAUTAM JAIN, ADV OCATE. DATE OF HEARING : 08.12.2015 08.12.2015 08.12.2015 08.12.2015 DATE OF PRONOUNCEMENT : 15.12.2015 15.12.2015 15.12.2015 15.12.2015 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THESE APPEALS BY THE REVENUE FOR THE ASSESSMENT YE AR 2006-07 & 2007-08 ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVI, NEW DELHI DATED 31 ST JULY, 2012. 2. THE ONLY COMMON GROUND RAISED IN THESE TWO APPEA LS IS AGAINST CANCELLATION OF PENALTY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 AMOUNTING TO ` 17,28,498/- AND 14,19,257/-. 3. IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR TH E ASSESSEE THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10, WHEREIN THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED ON IDENTICAL FACTS. A COPY OF THE ORDER OF THE ITAT FOR ASSESSMENT YEAR 2 009-10 IN ITA NO.1737/DEL/2014 IS PLACED ON RECORD. ITA-5776 & 5777/DEL/2012 2 4. WE HAVE HEARD BOTH THE SIDES AND HAVE PERUSED TH E MATERIAL PLACED BEFORE US AS WELL AS THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10. WE FIND THAT THE PENA LTY U/S 271(1)(C) OF THE ACT WAS LEVIED IN RESPECT OF DISALLOWANCE OF EX PENDITURE. WE FIND THAT UNDER IDENTICAL FACTS, THE PENALTY WAS LEVIED FOR ASSESSMENT YEAR 2009-10 WHICH WAS DELETED BY THE LEARNED CIT(A) AND ITAT SUSTAINED THE ORDER OF LEARNED CIT(A) WITH THE FOLLOWING FIND ING:- 4. I FIND THAT AGAINST THE RETURNED INCOME OF RS.6 8,270, THE ASSESSMENT UNDER SEC. 143(3) WAS FRAMED AT RS.14,15,759. THE ASSESSEE FIRM IS ENGAGED IN THE B USINESS OF SALE, PURCHASE AND DEVELOPMENT OF REAL ESTATE PROPERTIES, INVESTMENT AND AGRICULTURAL PRODUCE. DU RING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER N OTICED THAT THE ASSESSEE WAS HAVING INCOME FROM SALE OF AGRICULTURAL PRODUCE, INTEREST RECEIVED FROM THE BA NKS AND OTHERS TOTALING TO RS.16,86,435. AGAINST THIS INCOM E, THE ASSESSEE CLAIMED EXPENDITURE OF RS.14,79,260 UNDER THE HEAD ADMINISTRATIVE EXPENSES, PERSONNEL, FINANCIAL EXPENSES AND DEPRECIATION. THE ASSESSING OFFICER CONSIDERED THE ABOVE INCOME AS PASSIVE INCOME AND O N THE GROUND OF EARLIER YEARS ASSESSMENTS, HE ALLOWED ONLY RS.85,475 TOWARDS EXPENSES ON AN ESTIMATE BASIS. TH E ASSESSING OFFICER HAS IMPOSED PENALTY UNDER SEC. 27 1(1)(C) OF THE ACT AT RS.4,16,372. THE LEARNED CIT(APPEALS) HAS DELETED THE SAME ON THE BASIS THAT THERE WAS CLAIM OF VARIOUS EXPENSES IN THE PROFIT AND LOSS ACCOUNT OF WHICH THE ASSESSING OFFICER HAS ALLOWED RS.1 LAC ON ESTIM ATE BASIS, HENCE, PENALTY CANNOT BE LEVIED. I FIND THAT THE ASSESSEE HAD CLAIMED CERTAIN EXPENSES IN THE PROFIT AND LOSS ACCOUNT WHICH WERE ALLOWED BY THE ASSESSING OF FICER ONLY TO THE EXTENT OF RS.1 LAC FOLLOWING IDENTICAL DISALLOWANCE MADE IN THE ASSESSMENT YEAR 2005-06, 2 006- 07, 2007-08 AND 2008-09 FOR THE REASON THAT THE ASS ESSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE HAS EARNED ONLY PASSIVE INCOME LIKE INTEREST AND DIVIDEND DURI NG THE YEAR, NOT MUCH EXPENDITURE WOULD HAVE BEEN INVOLVED FOR EARNING OF SUCH INCOME. THUS, IT IS VERY MUCH CLEAR THAT THE DISALLOWANCE WAS MADE ON THE BASIS OF ESTIMATION AN D PENALTY HAS BEEN LEVIED WITHOUT SPECIFIC FINDING BE YOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE LEADING TO THE SAID DISALLOWANCE. BEIN G PENAL ITA-5776 & 5777/DEL/2012 3 IN NATURE, THE PROVISIONS OF SEC. 271(1)(C) OF THE ACT CANNOT BE INVOKED IN ABSENCE OF POSITIVE EVIDENCE AND FIND ING BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE. THE DECISIONS RELIED UPON BY THE LEARNED AR SUPPORT THIS VIEW. I THUS DO NOT FIND RE ASON TO INTERFERE WITH THE FIRST APPELLATE ORDER AS THE LEA RNED CIT(APPEALS) HAS RIGHTLY DELETED THE PENALTY IN ABS ENCE OF THE CLEAR FINDING BY THE ASSESSING OFFICER THAT THE RE WAS CONCEALMENT OF PARTICULARS OF INCOME FOR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE A SSESSEE TOWARDS THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER. THE SAME IS UPHELD. THE GROUND IS ACCORDINGLY REJEC TED. 5. ADMITTEDLY, THE FACTS OF THE YEARS UNDER CONSIDE RATION ARE IDENTICAL. IN VIEW OF THE ABOVE, RESPECTFULLY FOLL OWING THE ABOVE DECISION OF ITAT IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF LEARNED CIT(A) FOR THE YEARS UNDER APPEAL BEFORE US AND DISMISS THE APPEALS FILED BY THE REVENUE. 6. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 15.12.2015 . SD/- SD/- (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -13(1), NEW DELHI. 13(1), NEW DELHI. 13(1), NEW DELHI. 13(1), NEW DELHI. 2. RESPONDENT : M/S N.S.R. FARMS PVT.LTD., M/S N.S.R. FARMS PVT.LTD., M/S N.S.R. FARMS PVT.LTD., M/S N.S.R. FARMS PVT.LTD., 606 606 606 606- -- -CHIRANJIV TOWER, 61 CHIRANJIV TOWER, 61 CHIRANJIV TOWER, 61 CHIRANJIV TOWER, 61- -- -NEHRU PLACE, NEHRU PLACE, NEHRU PLACE, NEHRU PLACE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. 110 019. 110 019. 110 019. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR