ACIT, New Delhi V. M/s. Shree Ram Exports Import, New Delhi

ITA 6381/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97144 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-07-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 02-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Keywords: Wrong claim
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO . 6381/DEL/2013 ASSESSMENT YEAR: 2001 - 02 ASSTT. COMMISSIONER OF VS. M/S SHREE RAM EXPORT IMPORT, INCOME TAX, CIRCLE - 27(1), C/O - RAMESH GOYAL & ASSOCIATED, NEW DELHI. 26/36, EAST PATEL NAGAR, NEW DELHI (PAN: AAAKF9753K ) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. V.R. SONBHADRA, SR. DR RESPONDENT BY : SH. RAMESH GOYA L , CA DATE OF HEARING: 15.07.2015 DATE OF PRONOUNCEMENT: 02.09.2015 ORDER PER INTURI RAMA RAO, A.M. : THIS IS THE APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF LD. CIT(A), DATED 11.09.2013 PASSED FOR THE ASSESSMENT YEAR 2001 - 02 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I. DELETING THE PENALTY OF RS. 3,94,538/ - IMPOSED BY THE AO U/S 271(1)(C) WHERE THE ASSESSEE MAD E CLAIM OVER AND ABOVE THE SALE CONSIDERATION RECEIVED WHICH LEAD TO LOSS OF REVENUE AND TANTAMOUNT TO FURNISHING THE INACCURATE PARTICULARS. II. EXPLANATION 1 OF THE SECTION 271(1)(C) OF THE I.T. ACT IS SQUARELY COVERED. III. NON CONSIDERING THE FACT THAT THE ASS ESSEE HAS SUBMITTED INACCURATE PARTICULARS OF INCOME BY MAKING CLAIM OVER AND ABOVE THE SALE CONSIDERATION RECEIVE BY THEM TO AVOID THE TAX LIABILITY. THE ADDITION MADE ON THIS GROUND IN THE ASSESSMENT ORDER HAS BEEN CONFIRMED BY THE LD. CIT(A). IV. THE APPELL ANT CRAVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL. 2 2 . THE BRIEF FACTS OF THE CASE ARE THAT THE RESPONDENT ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF EXPORT OF LEATHER GARMENT. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001 - 02 WAS FILE D ON 30 TH OCTOBER, 2001, DECLARING INCOME OF RS. 8,12,300/ - . AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) AT A TOTAL INCOME OF RS. 16,99,460/ - . WHILE DOING SO, THE ASSESSING OFFICER RESTRICTED THE DEDUCTION UNDER SECTION 80HHC TO RS. 27,71,949/ - AS AGAINST THE CLAIM MADE OF RS. 32,49,188/ - ON THE GROUND THAT THE RESPONDENT ASSESSEE FAILED TO PRODUCE THE EVIDENCE IN SUPPORT OF EXPORT REALIZATION FOR AMOUNT OF RS. 10,06,474/ - AND ON AN APPEAL BEFORE THE CIT(A), THE SAME WAS CONFIRMED. ON FURTHER APPEAL BEFORE THE TRIBUNAL, THE ISSUE WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. ON REMAND PROCEEDINGS FOR NON - COMPLIA NCE WITH THE NOTICES UNDER SECTION 143(2) OF THE ACT, THE ORIGINAL ADDITION MADE WAS CONFIRMED AGAIN. WH ILE THE MATTER STOOD THUS, SHOW - CAUSE NOTICE DATED 8 TH APRIL, 2010 WAS ISSUED UNDER SECTION 274 R.W.S. 271 OF THE ACT. CALLING UPON THE ASSESSEE TO EXPL AIN AS TO WHY THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED. IN RESPONSE TO THIS SHOW CAUSE NOTICE, THE ASSESSEE FURNISHED EXPLANATION THAT THE REMAND ASSESSMENT PROCEEDINGS WERE COMPLETED EX - PARTE . THE ASSESSEE HAD NO OPPORTUNITY TO EXPLAIN THE CAS E AND THIS CANNOT BE CONSTRUED AS CONCEALMENT OF SOURCE OF INCOME. BRUSHING ASIDE THE EXPLANATION OFFERED BY THE ASSESSEE, THE LD. ASSESSING OFFICER VIDE ORDER DATED 30 TH APRIL, 2010 LEVIED THE PENALTY OF RS. 3 3,94,538/ - . BEING AGGRIEVED, A N APPEAL WAS FILED BEFORE THE LEARNED COUNSEL CIT(A) WHO VIDE ORDER DATED 11.09.2013 DELETED THE PENALTY BY PLACING RELIANCE ON THE DECISION OF HON BLE APEX COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS, 306 ITR 277. BEING AGGRIEVED , THE REVENUE IS BEFORE US WITH THE PRESENT APPEAL. 3. LD. SENIOR DR VEHEMENTLY ARGUED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY AS THE ASSESSEE FAILED TO BRING IN THE SALE PROCEED EXPORTS IN FOREIGN EXCHANGE OF RS. 10,06,474/ - AND DELIBERATELY MADE WRONG CLAIM. HENCE, HE SUBMITTED THAT THE ORDER OF CIT(A) MAY BE QUASHED. 4. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE PLACED RELIANCE ON THE ORDER OF CIT(A) AND SUBMITTED THAT THE ISSUE IN APPEAL IS COVERED BY THE FOLLOW ING DECISION S OF HO N BLE SUPREME COURT , HON BLE PUNJAB & HARYANA HIGH COURT AND TRIBUNAL: I. PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT (2012), 348 ITR 306 (SC) II. CIT VS. RELIANCE PETROPRODUCTS (P . ) LTD., 322 ITR 158 (SC); III. CIT VS. HARYANA EDUCATION SOCIETY, 2 51 ITR 846 (P&H) ; IV. RAJA EXPORTS VS. ITO, ITA NO. 1844/MUM/2013, AY 2001 (MUMBAI) (TRIB.) ; AND V. ACIT VS. NUBERG ENGINEERING LTD., ITA NO. 237/DEL/2013, AY 2008 - 09 (DEL.) (TRIB.) 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE DISALLOWANCE OF CLAIM OF THE APPELLANT FOR DEDUCTION OF RS. 10,06,474/ - UNDER SECTION 80HHC OF THE ACT HAD ATTAINED THE FINALITY. THIS DISALLOWANCE WAS MADE FOR MERE NON - PRODUCTION OF EVIDENCE IN SUPPORT OF REALIZATION OF THIS MONEY FROM THE FOREIGN COUNTRIES. NO DOUBT, THE PROVISIONS OF SECTION 80HHC 4 OF THE ACT STIPULATES THAT THE EXPORT PROCEEDINGS SHOULD BE REALIZED WITHIN THE PERIOD OF SIX MONTHS FROM THE END OF THE RELEVANT ACC OUNTING YEAR, OR WITHIN SUCH PERIOD AS MAY BE PERMITTED BY THE RESERVE BANK OF INDIA. THERE WAS NO EMBARGO ON THE PART OF THE ASSESSEE TO MAKE CLAIM IN RESPECT OF THE EXPORTS MADE BY HIM. IT IS ALWAYS PERMISSIBLE TO PROVE TO THE SATISFACTION OF THE ASSESS ING OFFICER THAT SALE PROCEEDINGS ARE REALIZED WITHIN SUCH EXTENDED PERIOD AS MAY BE PERMITTED BY THE RBI. IN THIS CASE, THE ASSESSEE COULD NOT PRODUCE THE EVIDENCE AS THE BUSINESS OF THE ASSESSEE WAS CLOSED. MERE DISALLOWANCE OF THE CLAIM CANNOT ENTAIL PE NALTY AND IN SUPPORT OF THIS PROPOSITION , THERE ARE PLETHORA OF JUDGMENTS TO SAY THAT MERE DISALLOWANCE OF CLAIM CANNOT LEAD TO LEVY OF PENALTY, AND EVEN THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., 322 ITR 158 (SC) HAD LAID DOWN THE SAME PROPOSITION. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) IN DELETING THE PENALTY. HENCE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. THE DECISION IS PRO NOUNCED IN THE OPEN COURT ON 2 ND SEPTEMBER , 2015. SD/ - SD/ - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 ND SEPTEMBER , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI