M/s GRS Health Care Pvt. Ltd., Mohali V. ITO, Chandigarh

ITA 609/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6653 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 15-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: TEJ MOHAN
• Keywords: Depreciation; Wrong claim
• Section: 43B; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE SHRI. SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.609/CHD/2016 ASSESSMENT YEARS: 2011-12 M/S GRS HEALTH CARE PVT. LTD. VS. THE ITO C/O GRECIAN HOSPITAL, SECTOR 69 WARD 4(4) MOHALI CHANDIGARH PAN NO. AADCG1949E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. TEJ MOHAN DEPARTMENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 01/08/2017 DATE OF PRONOUNCEMENT : 27/10/2017 ORDER PER DR. B.R.R. KUMAR, A.M THE PRESENT APPEAL HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-2, CHANDIGARH DT. 17/03/2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: THAT THE LD. CIT(A)-2 HAS FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN SUSTAINING PENALTY U/ S 271(1)(C) OF THE INCOME TAX ACT, 1961. THERE WAS NO FURNISHING OF ANY INACCURATE PARTICULA RS OF INCOME AS THE DISALLOWANCE WAS ON ACCOUNT OF INTEREST TO BANK U/S 43B OF THE INCOME TAX ACT 1961 AND DISALLOWANCE U/S 40(A)(I) ON ACCOUNT OF NO N DEDUCTION OF TDS ON PART RENT. THE SAME DOES NOT TANTAMOUNT OF FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE ORDER U /S 271(1)(C) OF THE INCOME TAX ACT 1961 MAY KINDLY BE QUASHED. 3. BRIEF FACTS OF THE CASE ARE THAT ON PERUSAL OF T HE DETAILS. ASSESSING OFFICER NOTED THAT ASSESSEE HAS DEBITED AN AMOUNT OF RS. 87 ,12,980/- ON ACCOUNT OF INTEREST PAID TO THE BANK., ON VERIFICATION ASSESSI NG OFFICER FOUND THAT THE INTEREST OF RS. 87,12,980/- DEBITED IN P&L ACCOUNT HAS NOT BEEN PAID AND THEREFORE IT HAS BEEN CLAIMED AGAINST THE PROVISION OF SECTION 43B OF THE ACT. 2 4. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE S IMPLY STATED THAT IT DOES HAVE ANY OBJECTION TO THE DISALLOWANCE OF INTEREST. THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) CLAUSE B OF EXPLANA TION 1 OF RS. 27,54,110/- FOR CONCEALING CORRECT PARTICULARS OF INCOME ON THE DIS ALLOWANCE MADE UNDER SECTION 43B. 5. DURING APPEAL PROCEEDING BEFORE THE LD. CIT(A) A SSESSEE MADE SUBMISSIONS THAT DURING THE UNDER CONSIDERATION THE ASSESSEE COMPANY HAD DEBITED INTEREST TO BANK ON LOAN TAKEN IN THE P&L A CCOUNT. THE INTEREST WAS DEBITED BY THE BANK DURING THE FY 2010-11 RELEVANT TO AY 2011-12. THE ASSESSEE COMPANY WHILE COMPUTING THE INCOME DID NOT ADD BACK THE INTEREST PAYABLE WHICH WAS NOT PAID UNDER SECTION 43B OF INCOME TAX ACT, 1961. THE ASSESSEE COMPANY HAD A LOSS AND THE ADDITION OF UNPAID INTER EST WOULD HAVE ONLY REDUCED THE LOSS. THE SAME WAS BY OVERSIGHT AND NOT INTENTIONAL. THE INTEREST PAID IS AN ALLOWABLE DEDUCTION IN THE YEAR OF ACTUA L PAYMENT. THERE IS NO FURNISHING OF INACCURATE PARTICULARS OF INCOME AS N O BENEFIT HAS BEEN DERIVED BY THE ASSESSEE COMPANY. THE ASSESSEE HAS PLACED RELIA NCE ON VARIOUS JUDICIAL DECISIONS. 6. THE LD. CIT(A) HAS CONFIRMED THE ADDITION RELYIN G ON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN CASE OF M/S ZOOM COMMUN ICATIONS PVT. LTD. (327 ITR 510) [2010] 7. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE US. 8. THE LD. AR REITERATED THE ARGUMENTS TAKEN BEFORE THE LD. CIT(A) AND THE AO WHILE THE LD. DR RELIED ON THE PENALTY ORDER OF THE ASSESSING OFFICER. 9. WE HAVE GONE THROUGH THE RECORDS AVAILABLE BEFOR E US. IT WAS FOUND THAT THE PENALTY WAS LEVIED ON THE DISALLOWANCE UNDER SE CTION 43B. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. BUDHWELL COOPERATIVE SUGAR MILLS HAS HELD THAT WHEN ASSESSEE MADE A BONAFIDE C LAIM ON THE BASIS OF THE LAW LAID DOWN BY VARIOUS COURTS THEN PENALTY WOULD NOT BE LEVIED UPON SUCH AN ASSESSEE MERELY ON THE GROUNDS THAT THE CLAIM WAS D ISALLOWED. IN THE JUDGMENT OF THE HONBLE SUPREME COURT IN CIT VS. RELIANCE PE TROPRODUCTS P. LTD. [2010] 322 ITR 158 (SC); [2010] 230 CTR 320, THE LEGAL POSITIO N TO THIS EFFECT HAS BEEN REITERATED. IF THE ASSESSEE HAS MADE FULL DISCLOSUR E IN THE RETURN, THE CLAIM FOR DEDUCTION CANNOT BE HELD TO BE GIVING OF INACCURATE PARTICULARS. IN THE CASE OF 3 CIT VS. BRAHMAPUTRA CONSORTIUM LTD. 348 ITR 339(201 1)(DELHI) THE HONBLE COURT HELD THAT THE EXPLANATION OF THE ASSESSEE CAN BE AC CEPTED AS GENUINE AND BONAFIDE IN CASE OF WRONG CLAIM OF DEPRECIATION ON EARTHMOVING EQUIPMENTS. SIMILARLY IN THE CASE OF PRICE WATERHOUSE COOPERS ( P) LTD. VS. CIT (2012 025 TAXMANN. COM 400/211 TAXMAN 40/253 CTR) THE HONBLE SUPREME COURT HELD THAT PENALTY CANNOT BE LEVIED ON A BONAFIDE AND INA DVERTENT ERROR. SIMILARLY IN THE CASE OF CIT VS. NATIONAL INSTITUTE OF TECHNICAL TEACHER TRAINING OF RESEARCH [2015] 231 TAXMAN 657 (P&H HIGH COURT). HONBLE JUR ISDICTIONAL COURT HAS HELD THAT PENALTY CANNOT BE LEVIED ON THE DISALLOWANCES UNDER SECTION 43B. SINCE FULL PARTICULARS OF INCOME WERE GIVEN IN THE RETURN AND THE SAME WERE NOT FOUND TO BE INCORRECT. THE HONBLE HIGH COURT OF MADRAS IN T HE CASE OF CIT VS. MSK CONSTRUCTIONS PVT. LTD. 296 ITR 18 (MAD) (2008) CLE ARLY HELD THAT DISALLOWANCE OF INTEREST UNDER SECTION 43B DOES NOT AMOUNT TO CONCE ALMENT OF INCOME WHEN THERE IS NO TAX PAYABLE, PENALTY COULD NOT BE LEVIE D. 10. HENCE, KEEPING IN VIEW THE CASE LAW CITED ABOVE AND TOTALITY OF THE ISSUE THAT IN THE INSTANT CASE THE PENALTY HAS BEEN LEVIE D ON THE DISALLOWANCES MADE UNDER SECTION 43B, THE PENALTY LEVIED IS HEREBY DE LETED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER 27/10/2017 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE