Capital Tyre Manufacturing, New Delhi V. ITO, New Delhi

ITA 637/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58427 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-12-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 11-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Onus to prove

Judgement Text

ITA NO. 637/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 637/DEL/2010 A.Y. : 2001-02 M/S CAPITAL TYRE MANUFACTURING, 13484, YUSAF SARAI, NEW DELHI 110 016 (PAN: AAAFC9434C) VS. INCOME TAX OFFICER, WARD 22(3), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. SALIL KAPOOR, ADV,. & SH. VIKAS JAIN, ADV. DEPARTMENT BY : SH. ROHIT GARG, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 23.12. 2009 PERTAINING TO ASSESSMENT YEAR 2001-02. 2. THE GROUND RAISED IS THAT ON THE FACTS AND CIRCU MSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING PENALTY OF ` 92,505/- IMPOSED BY THE ITO U/S. 271(1)(C) OF THE IT ACT, 1961. 3. IN THIS CASE DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS HYP OTHECATED ITS STOCK WITH BANK OF INDIA, HAUZ KHAS, NEW DELHI FOR ENJOYI NG OVERDRAFT FACILITIES SHOWING VALUE OF HYPOTHECATED ITS STOCK AT ` 33,98,640/- WHILE THE STOCK IN ITS TRADING ACCOUNT WAS BEING SHOWN A T ` 16,14,155/-. THE ITA NO. 637/DEL/2010 2 ASSESSING OFFICER SUMMONED THE BANK OF THE ASSESSEE U/S. 131 AND OBTAINED THE CERTIFIED COPY OF BANK STATEMENT SUPPL IED BY THE ASSESSEE. THUS, THERE WAS A DIFFERENCE OF ` 17,84, 486/- IN THE VALUE OF STOCK SHOWN BY THE ASSESSEE IN ITS TRADING ACCOUNT AND ADDED TO THE LOSS OF THE ASSESSEE FOR WHICH THE ASSESSING OFFICE R INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) SEPARATELY. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) REDUCED THE ADDITION AT ` 2,35,983/- FROM ` 17,84,486/- MADE BY THE ASSESSING OFFICER. 5. THE DEPARTMENT PREFERRED AN APPEAL AGAINST THIS A DDITION BEFORE THE ITAT AND THE ITAT DISMISSED THE REVENUES APPEAL BY UPHOLDING THE LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER . ASSESSEE DID NOT FILE ANY APPEAL BEFORE THE ITAT. IN THIS BACK DROP THE PENALTY WAS COMPUTED AT ` 92505/- AND IMPOSED UPON THE ASSESSEE . 6. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO EXAMINE THE ISSUE AND CONFIRM ED THE ADDITION. LD. COMMISSIONER OF INCOME TAX (APPEALS) INTER-ALIA O BSERVED THAT AT THE FOOT IN THE ASSESSMENT ORDER ASSESSING OFFICER HAS WRITTEN PENALTY PROCEEDINGS U/S. 271(1)(C) ARE INITIATED S EPARATELY. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVE D THAT IT IS CRYSTAL CLEAR THAT THE ASSESSING OFFICER HAD GIVEN DIRECTION TO INITIATE PENALTY PROCEEDINGS IN THE ORDER U/S. 143(3). LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT THE ACT HAS NOW BEEN AMENDED AND SECTION 271(1B) HAS BEEN INSERTED WITH RETROSPECTIVE EFFECT I.E. 1.4.1989. IT SUGGESTS THAT A DIRECTI ON WOULD DEEMED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER. THIS HAS ALSO BEEN ITA NO. 637/DEL/2010 3 THE STAND OF THE JURISDICTIONAL HIGH COURT IN MS. MA DHUSHREE GUPTA VS. UOI & ANR. (2009) 317 ITR 107 (DELHI). 6.1 LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT DIFFERENCE IN STOCK TO THE TUNE OF ` 2,35,983/ - STANDS CONFIRMED WHICH HAS ALSO BEEN ACCEPTED BY THE ASSESSEE. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT THE EXPL ANATION OF THE ASSESSEE CANNOT BE CONSIDERED BONA-FIDE. HE OBSE RVED THAT ON THE DAY OF FILING OF RETURN OF INCOME, THE ASSESSEE WAS WELL AWARE OF THE STATEMENT FILED WITH THE BANK WITH REGARD TO THE S TOCK VIS A VIS THE FIGURE BEING REFLECTED IN THE BALANCE SHEET. THE DISCREPANCY WAS DISCOVERED, ONLY AFTER THE ASSESSING OFFICER EMBARK ED ON THE INVESTIGATION AND OBTAINED THE DETAILS WITH THE BAN K. THUS, THE ASSESSEES CONTENTION THAT ALL THE MATERIALS HAD BEE N DISCLOSED AND THAT THERE WAS NO CONCEALMENT DOES NOT STAND THE TE ST OF EVIDENCE. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (APPEALS ) PLACED RELIANCE UPON THE HONBLE APEX COURT IN THE CASE OF UOI VS. DHARMENDRA TEXTILE PROCESSORS & ORS. 306 ITR 277 AND UPHELD THE LEVY OF PENALTY. 7. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 8. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT ADDITION IN THIS CASE HAS BEEN MADE ON ACCOUNT OF DIFFERENCE IN STOCK AS FOUND IN THE BOOKS OF ACCOUNTS AND THAT AS SUBMITTED BEFORE THE BANK AUTHORITIES. THE DIFFERENCE CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS ` 2,35,983/- AND THAT HAS BEEN ACCEPT ED BY THE ASSESSEE ALSO. LD. COUNSEL OF THE ASSESSEE SUBMITT ED THAT THERE IS NO SATISFACTION BY THE ASSESSING OFFICER FOR THE IMPOS ITION OF THE PENALTY ITA NO. 637/DEL/2010 4 IN THE ASSESSMENT ORDER. HENCE, THE PENALTY IS BAD ON THAT ACCOUNT. HE FURTHER SUBMITTED WITH THE HELP OF THE CASE LAWS THAT THE ADDITION IN THIS REGARD WAS LIABLE TO BE DELETED. HENCE, NO PENALTY IS LEVIABLE. HE FURTHER PLACED RELIANCE UPON TRIBUNALS DECISION IN THE CASE OF AGGARWAL TRADING COMPANY VS. ITO 19 TTJ 439. IN THI S CASE IT WAS HELD THAT BURDEN TO PROVE THAT ASSESSEE WAS THE OWNER OF ENT IRE STOCK OR THAT IT HAD MADE ITS OWN INVESTMENT IN THE STOCK P LEDGED / HYPOTHECATED WITH THE BANK WAS ON REVENUE WHO HAS N OT DISCHARGED THE SAME. NO CASE OF CONCEALMENT HAVING BEEN MADE AGAINST THE ASSESSEE PENALTY U/S. 271(1)(C)WAS NOT LEVIABLE. LD. COUNSEL OF THE ASSESSEE FURTHER PLACED RELIANCE UPON THE HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF MS. MADHUSHREE GUPTA VS . UOI & ANR. (2009) 317 ITR 107 (DELHI). 8.1 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. W E FIND THAT UNDISPUTEDLY THERE IS A DIFFERENCE OF ` 2,35,983/- IN THE FIGURE OF STOCK AS SUBMITTED BY THE ASSESSEE AND AS VERIFIED BY THE ASSESSING OFFICER THROUGH BANK. THIS DIFFERENCE HAS BEEN ACCEPTED B Y THE ASSESSEE AND ASSESSEE HAS NOT APPEALED AGAINST THE SAME. IN THIS CONNECTION, WE DO NOT FIND FORCE IN THE LD. COUNSEL OF THE ASS ESSEES CONTENTION THAT THERE IS NO SATISFACTION FOR LEVY OF PENALTY IN THIS CASE. ASSESSING OFFICER HAS VERY MUCH MENTIONED THE SAME AND HIS SA TISFACTION IS DULY DISCERNIBLE FROM THE ORDER OF THE ASSESSMENT O RDER. FURTHERMORE, TO THE EXTENT OF THE DIFFERENCE OF ` 2 35983/- ASSESSEE IS CLEARLY GUILTY ON FURNISHING OF INACCURATE PARTICUL ARS AND CONCEALMENT ITA NO. 637/DEL/2010 5 OF INCOME. CASE LAWS REFERRED BY THE LD. COUNSEL O F THE ASSESSEE ARE NOT APPLICABLE ON THE FACTS HERE. IN THESE CIRCUMS TANCES, IN OUR CONSIDERED OPINION, THE LEVY OF PENALTY HAS BEEN RI GHTLY SUSTAINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCO RDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS), HENCE, WE UPHOLD THE SAME. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/1/2012. SD/- SD/- [ [[ [U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 06/1/2012 SRB 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