M/s. Add On Securities Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5915/DEL/2012

• Counselvise Citation: 591520114 RSA 2012
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 27-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS RENUKA JAIN GU PTA
• Assessee Lawyers: SANJEEV KAPOOR
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC : NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER ITA NO. 5915/DEL/2012 ASSESSMENT YEAR: 2006- 2007 M/S. ADD ON SECURITIES PVT. LTD. VS. ITO D-36, FLAT NO. 3, WARD 1(2), SOUTH EXT. PART-2, NEW DELHI-110 049 NEW DELHI. (PAN : AAACA8397B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJEEV KAP OOR, CA RESPONDENT BY : MRS. RENUKA JAIN GUPTA, SR. DR ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED LEVY OF PENA LTY OF RS. 21,000/- U/S 271(1) OF THE ACT UPHELD BY THE LD. CIT(A). 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANC ED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND THE DECISIONS RELIED UPON. 3. THE AO MADE AN ADDITION OF RS. 61,264/- ON ACCOUNT OF DISALLOWANCE U/S 79(A) AS THERE WAS A CHANGE OF MORE THAN 51% IN SHA RE HOLDING DURING THE YEAR AND THEREFORE NO ADJUSTMENT OF BROUGHT FORWARD LOS S WAS ADMISSIBLE TO THE ASSESSEE COMPANY. THE ADDITION WAS ALSO UPHELD BY THE LD. CIT(A) AND THE TRIBUNAL. THE AO LEVIED PENALTY U/S 271(1)(C) OF T HE ACT ON THE SAID ADDITION OF ITA NO.5915 /DEL/2012 2 RS. 61,264/- AT THE MINIMUM PRESCRIBED RATE OF 100% RESULTING INTO RS. 21,000/-. THE LD. CIT(A) HAS UPHELD THE SAME WITH THIS FINDIN G THAT THE ASSESSEE HAD MADE WRONG CLAIM AS SECTION 79(A) OF THE ACT SPECIF ICALLY PROVIDES THAT IN SUCH CASES WHERE THERE IS A CHANGE OF SHARE HOLDING PATT ERN OF MORE THAN 51% BROUGHT FORWARD LOSS IS TO BE DISALLOWED. IT WAS HE LD THAT BENEFIT PROVIDED UNDER EXPLANATION I OF SECTION 271(1)(C) IS NOT AVAILABLE TO THE ASSESSEE AS THE EXPLANATION OFFERED BY THE ASSESSEE IN THIS REGARD WAS NOT FOUND CORRECT NOR SUCH EXPLANATION WAS SUBSTANTIATED. THE LD. CIT(A) HELD FURTHER THAT THE CASE LAWS CITED BY THE ASSESSEE INCLUDING THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158 (SC ) ARE NOT HELPFUL TO THE ASSESSEE SINCE THE CONCEALMENT HAS TO BE SEEN WITH RESPECT TO THE RETURN OF INCOME. 4. THE CONTENTION OF THE LD. AR BEFORE THE TRIBUNAL REMAINED THAT THERE IS NO PROVISION IN THE PROFORMA OF RETURN OF INCOME TO DECLARE SHARE HOLDING CHANGE AND THE RETURNED INCOME WAS ACCEPTED AS ONLY BROUGH T FORWARD LOSS WAS DISALLOWED. HIS FURTHER SUBMISSION REMAINED THAT DI RECTORS AND OTHERS OF THE ASSESSEE COMPANY REMAINED SAME ONLY INTERNAL RESTR UCTURING WAS THERE. HE PLACED RELIANCE ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RUBBER UDYOG VIKAS P. LTD. 335 ITR 558 ( P & H) INCLUDING THOSE RELIED UPON BEFORE THE AUTHORITIES BELOW. LD. DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. SHE SU BMITTED THAT STATUS OF ASSESSEE ITA NO.5915 /DEL/2012 3 WAS CHANGED AND WRONG CLAIM WAS MADE BY THE ASSESSE E MISREPRESENTING THE FACTS ON SHARE HOLDING CHANGE. 5. CONSIDERING THE ABOVE SUBMISSION I FIND THA T ONLY ON THE BASIS OF INFORMATION FURNISHED BY THE ASSESSEE THE DISALLOWA NCE OF RS. 61,264/- WAS MADE IN THE ASSESSMENT ORDER. THUS IT CANNOT BE SAI D THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TO ATTRACT PENAL PROVIS IONS U/S 271(1)(C) OF THE ACT. I AM OF THE VIEW THAT IN CASE OF APPLICATION OF SUCH PENAL PROVISIONS A CLEAR FINDING BEYOND DOUBT IS REQUIRED TO BE ARRIVED AT THAT THER E WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULAR THEREOF ON THE PART OF THE ASSESSEE REGARDING THE DISALLOWANCE TO JUSTIFY THE ACTION U/S 271(1)(C) OF THE ACT. UNDER ALMOST SIMILAR FACTS IN THE CASE OF CIT VS. RUBBER UDYOG VIKAS PVT. LTD. (SUPRA) THE CLAIM OF THE ASSESSEE ABOUT THE DE DUCTION ON ACCOUNT OF SET OFF OF UNABSORBED BUSINESS LOSSES AGAINST THE INCOME FR OM THE CAPITAL GAINS WAS DISALLOWED AND PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED. THE TRIBUNAL DELETED THE PENALTY WITH THIS FINDING THAT ASSESSEE HAD DIS CLOSED ALL THE PARTICULARS ALONGWITH THE CLAIM AND IT WAS NOT A FIT CASE FOR L EVY OF PENALTY. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) HAS BEEN PLEASED TO HOLD THAT A MERE MAKIN G OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF WILL NOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS OF THE INCOME OF THE ASSESSEE. RESPECTFULLY FOLLOWING ABOVE CITED DECISIONS IN THE PRESENT CASE BEFORE THE TRIBUNAL I HOLD THAT THE AU THORITIES BELOW WERE NOT ITA NO.5915 /DEL/2012 4 JUSTIFIED IN INVOKING THE PENAL PROVISIONS U/S 271( 1) OF THE ACT AGAINST THE DISALLOWANCE OF RS. 61,264/- MADE U/S 79(A) OF THE ACT. THE AO IS ACCORDINGLY DIRECTED TO DELETE THE PENALTY IN QUESTION. THE GRO UND IS AS WELL AS THE APPEAL IS ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON .30 TH AUGUST, 2013. SD/- ( I.C. SUDHIR ) JUDICIAL ME MBER DATE : 30 TH .AUGUST, 2013 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT