ITO, Mathura V. M/s Jindal Concrete Udyog, Shivpuri

ITA 608/AGR/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6929 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 18-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C SHARMA
• Assessee Lawyers: APPLICATION REJECTED
• Keywords: Depreciation; Wrong claim; Revised return
• Section: 271(1)(c); 40(b)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.608/AGR/2008 ASST. YEAR: 2005-06 THE INCOME-TAX OFFICER, VS. M/S. JINDAL CONCRET E UDYOG, WARD 3(2), MATHURA. 132/6, DELHI ROAD, CHARORA, CHHATIKARA, MATHURA. (PAN : AAAFJ 7072 K). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. SHARMA, JR. D.R. RESPONDENT BY : APPLICATION REJECTED. ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 10.07.2008 BY WHICH THE CIT(A) HAS DELETED THE PENA LTY IMPOSED BY THE A.O. UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (THE ACT HE REINAFTER) AS PER HIS OBSERVATION GIVEN AT PARA NO.4 OF THE ORDER. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE ALTHOUGH ADJOURNMENT VIDE LETTER DATED 16.04.2010 WAS SOUGHT. IN THE ABSENCE OF REASONABL E CAUSE, THE ADJOURNMENT APPLICATION STANDS REJECTED. WE, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. D.R. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SUBMITTED THE INCOME TAX RETURN ON 31.10.2005 DECLARING A LOSS OF RS14,170/- CONSISTIN G OF PROFIT OF RS.39,065/- FROM MANUFACTURING OF CEMENT PIPES, AFTER CLAIMING DEDUCTION UNDER SEC TION 40(B) AND SET OFF OF BROUGHT FORWARD DEPRECIATION OF RS.53,235/-. SUBSEQUENTLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AFTER ISSUE OF NOTICE UNDER SECTION 143(2), THE ASSESSEE FILED THE REVISED RETURN ON AN INCOME OF RS.4,02,217/- COMPUTED AS UNDER :- PROFIT AS PER PROFIT & LOSS ACCOUNT RS.39,065/- BU T PROFIT DECLARED HIGHER MORE THAN 5% OF CONTRACT REC EIPTS OF RS.1,14,40,350/- RS.5,77,738/- NET PROFIT @ 1.40% OF WHOLESALE SALES OF RS.90,17,4 38/- RS.1,26,244/- NET PROFIT RS.7,03,982/- LESS: INTEREST TO PARTNERS RS.1,69,330/- LESS: REMUNERATION TO PARTNERS RS.79,200/- RS.2,48,530/- RS.4,55,452/- BROUGHT FORWARD DEPRECIATION SET OFF RS.53,235 /- RS.4,02,217/- OR RS.4,02,220/- 4. THE ASSESSEE HAS ENCLOSED A NOTE ALONGWITH THE R EVISED RETURN STATING THEREIN THAT NO PENALTY ACTION SHOULD BE INITIATED. ULTIMATELY, TH E ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS.6,12,687/- MAKING THE FOLLOWING ADDITIONS IN THE REVISED RETURN :- INCOME AS PER REVISED RETURN RS.4,02,217/- ADD:- 1. EXTRA PROFIT AS ABOVE RS.1,71,605/- 2. OUT OF TELEPHONE EXPENSES AS ABOVE RS.15,157/- 3. 15% DISALLOWANCE OF DEPRECIATION CAR RS.7,980/- 4. 15% DISALLOWANCE OF OUT OF VEHICLE RUNNING RS.1 5,728/- (PETROL) EXPENSES. -------------- TOTAL INCOME RS.6,12,687/- 3 5. IN REPLY TO THE NOTICE UNDER SECTION 271(1)(C) O F THE ACT, THE ASSESSEE SUBMITTED THE EXPLANATION THAT THE ADDITIONS HAVE BEEN MADE MERE LY ON ESTIMATE BASIS AND NO PENALTY SHOULD BE IMPOSED ON THE BASIS OF THE ROUTINE DISALLOWANCE S AND ADHOC ADDITIONS IN THE NET PROFIT. THE A.O. DID NOT AGREE WITH THE ASSESSEE BUT LEVIED THE PENALTY UNDER SECTION 271(1)(C). THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WHO DELETED THE PE NALTY. 6. LD. D.R. BEFORE US RELIED ON THE ORDER OF THE A. O. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT IN THIS CASE THE ADDITION HAS BEEN MADE BY THE A.O. MERELY ON HIGHER ESTIMATE OF THE PROFIT AS WELL AS DISALLOWAN CES OF CERTAIN EXPENSES OUT OF TELEPHONE, CAR EXPENSES AND DEPRECIATION. SIMILARLY, ADDITION HAS BEEN MADE ON ESTIMATE CANNOT BE REGARDED THAT THE ASSESSEE HAS SUBMITTED INACCURATE PARTICUL ARS OF THE INCOME OR CONCEALED THE PARTICULARS OF THE INCOME. SIMILARLY, IF THE DISALLOWANCES ARE MADE OUT OF AN EXPENDITURE, IT DOES NOT MEAN THAT THE ASSESSEE HAS MADE A FALSE CLAIM OF THE EXP ENDITURE. IN OUR VIEW, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY AND IT IS NOT A FIT CASE WHICH WARRANTS OUR INTERFERENCE. OUR AFORESAID VIEW IS DULY SUPPORTED BY THE DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC) IN WHICH IT WAS HELD AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, T HERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SEC ONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. TH E MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM, MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PE NALTY, UNLESS THE CASE IS STRICTLY 4 COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAM OUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE TH AT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EX ACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. 8. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) D ELETING THE PENALTY. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2010) . SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 21 ST APRIL, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY