M/s. Surya Enterprises, New Delhi V. ACIT, New Delhi

ITA 6360/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97854 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 05-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GARIMA JAIN
• Assessee Lawyers: N S BHATNAGAR
• Section: 143(3); 133A

Judgement Text

ITA NO. 6360/DEL/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 6360/DEL/2014 A.Y. : 2007-08 M/S SURYA ENTERPRISES, C/O SH. RAHUL SEHGAL, (EX-PARTNER), A-44, NARAINA INDL. AREA, NEW DELHI 16 (PAN: ABHFS5332B) VS. ACIT, CENTRAL CIRCLE - 25 NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. N.S. BHATNAGAR, ADVOCATE DEPARTMENT BY : MS. GARIMA JAIN, SR. DR DATE OF HEARING: DATE OF HEARING: DATE OF HEARING: DATE OF HEARING: 05 0505 05- -- -1 11 11 11 1- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 1 11 16 66 6- -- -1 11 11 11 1- -- -201 201 201 2015 55 5 ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VI, NEW DELHI DATED 29.10.2014 PERTAINING TO ASSESSMENT YEAR 2007-08 ON THE FOLLOW ING GROUNDS:- 1. THAT THE LD. CIT(A) ERRED IN LAW IN ARBITRARILY AND AG AINST THE JUDICIAL PRONOUNCEMENT, IN UPHOLDING THE IMPOSING OF PENALT Y U/S. 271(1)(C) LEVIED AT RS. 90,950/- AND REJECTING THE APPEAL. ITA NO. 6360/DEL/2014 2 2. THAT THE LD. CIT(A) ERRED IN LAW IN WRONGLY REFERRING THE JUDGMENTS IN THE ORDER WHICH HAVE NO APPLICATION TO THE CASE UNDER APPEAL. 3. THAT THE LD. CIT(A) ERRED IN IGNORING THE SUBMISSION T HAT THE ADDITIONS MADE IN THE ASSESSMENT ORDER WERE PURELY ON THE BAS IS OF PRESUMPTIONS AND ASSUMPTIONS AND WITHOUT BRINGING ANY MATERIAL I N THE RECORD TO ESTABLISH THAT THERE WAS CONCEALMENT, SUPPRESSION O R MISSTATING THE FACTS. 4. THAT THE LD. CIT(A) ERRED IN IGNORING THE SUBMISSIONS THAT THE CASE IS DIRECTLY COVERED BY THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. 322 PAGE 158. SHE FURTHER ERRED NOT EVEN DIFFERENTIATING THE FACTS IN THE JUDGMENT QUOTED W ITH THE CASE UNDER APPEAL. 5. THAT THE LEVY OF PENALTY U/S. 271(1)(C) OF I.T. ACT, 1 961 AT RS. 90,950/- WAS AGAINST FACTS AND CIRCUMSTANCES OF THE CASE AND DESERVES TO BE QUASHED. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SURVE Y U/S. 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 22.11.2006. ACC ORDINGLY, THE ASSESSMENT PROCEEDINGS U/S. 143(3) WAS COMPLETED BY THE AO ON 1 6.11.2009 AT AN INCOME OF RS. 22,59,080/-. BEING AGGRIEVED BY THE ORDER OF T HE AO, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER 7.1.2013 HAD HELD THAT ITA NO. 6360/DEL/2014 3 OVERALL TURNOVER COMES TO RS. 40,29,228/-. APPLYIN G THE GP RATE OF 19.44% TO THE OVERALL TURNOVER OF RS. 40,29,228/-, THE GROSS PROF IT OF THE ASSESSEE COMES TO RS. 7,83,282/-. THE ASSESSEE HAD ALREADY DISCLOSED RS. 4,81,986/- AS GROSS PROFIT IN ITS TRADING RESULT FILED WITH THE RETURN. THUS, THE DIFFERENCE OF RS. 3,01,296/- WAS ADDED TO THE GROSS PROFIT OF THE ASSESSEE. THEREA FTER, THE AO INITIATED PENALTY PROCEEDINGS, ON DIFFERENCE OF RS. 3,01,296/-, U/S. 2 71(1)(C) OF THE I.T. ACT, BY ISSUING NOTICES DATED 12.12.2013. ACCORDINGLY, THE A O LEVIED A PENALTY OU/S. 271(1)(C) AMOUNTING TO RS. 90,950/- ON THE SAID CON CEALED INCOME. 3. AGAINST THE ABOVE PENALTY ORDER DATED 24.1.2014 P ASSED BY THE ASSESSING OFFICER, ASSESSEE AGAIN APPEALED BEFORE THE LD. FIR ST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 29.10.2014 DISMISSED THE APP EAL OF THE ASSESSEE. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 29.10.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT AD DITIONS MADE IN THE ASSESSMEN TORDER WERE PURELY ON THE BASIS OF PRESUM PTIONS AND ASSUMPTIONS AND WITHOUT BRINGING ANY MATERIAL IN THE RECORD TO ES TABLISH THAT THERE WAS CONCEALMENT, SUPPRESSION OR MISSTATING THE FACTS. HE FURTHER STATED THAT THE PRESENT CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DEC ISION OF THE APEX COURT IN THE ITA NO. 6360/DEL/2014 4 CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. 322 ITR 158, HENCE, HE REQUESTED THAT PENALTY AMOUNTING TO RS. 90,950/- MADE U/S. 2 71(1)(C) OF THE I.T. ACT, 1961 MAY BE QUASHED. 6. LD. DEPARTMENTAL REPRESENTATIVE CONTROVERTED T HE ARGUMENTS ADVANCED BY THE LD. COUNSEL OF THE ASSESSEE AND HE RELIED UPON THE ORDER OF LD. CIT(A). 7. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE O RDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE CASE LAW RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE. 7.1 I FIND THAT SECTION 271(1)(C) POSTULATES I MPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASSESSEES CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. 7.2 IN THIS REGARD, I FIND THAT HONBLE APEX COURT DECISION IN THE CASE OF CIT VS. CIT VS. CIT VS. CIT VS. RELIANCE PETRO PRODUCTS LTD. IN RELIANCE PETRO PRODUCTS LTD. IN RELIANCE PETRO PRODUCTS LTD. IN RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 CIVIL APPEAL NO. 2463 OF 2010 CIVIL APPEAL NO. 2463 OF 2010 CIVIL APPEAL NO. 2463 OF 2010 IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE WHER EIN IT WAS HELD AS UNDER:- 'A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINAB LE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS. MERELY BECAUSE THE ASSESSEE HAD CLAIME D THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NO T ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT , IN OUR ITA NO. 6360/DEL/2014 5 OPINION, ATTRACT THE PENALTY UNDER S. 271(1)(C). IF W E ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER S. 2 71 (1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATUR E.' 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AN D PRECEDENT, I FIND THAT THE LEVY OF PENALTY IN THIS CASE IS NOT JUSTIFIED. ACC ORDINGLY, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY IN DISPUTE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/11/2015. S SS SD DD D/ // /- -- - [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES