ACIT, New Delhi V. M/s. Bharti Aquanet Ltd., New Delhi

ITA 6400/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86495 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A: NEW DELHI BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNT ANT MEMBER ITA NO.6400/DEL/2012 ASSESSMENT YEAR 2001-02 ACIT VS. BH ARTI AQUANET LTD., CIRCLE-2(1), ROOM NO. 398D, (NOW BHARTI AIRTEL LTD.) NO. 1, C.R. BUILDING ARA VALI CRESCENT, NEW DELHI. NEL SON MANDELA ROAD, VASANT KUNJ, PHASE-III, NEW DELHI. (PAN AABCB4990J) (APPELLANT) (RESPON DENT) APPELLANT BY : S MT. PARWINDER KAUR, SR. DR RESPONDENT BY : SHRI ANIL BHALLA, CA ORDER PER GEORGE GEORGE K, JUDICIAL MEMBER THIS APPEAL AT THE INSTANCE OF ASSESSEE I S DIRECTED AGAINST THE CIT (A) ORDER DATED 17.10.2012. THE RELEVANT ASSESSMENT YEA R IS A.Y 2001-02. 2. THE SOLITARY ISSUE THAT ARISES FOR OUR CONS IDERATION IS WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 5,94,400/-. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS :- ASSESSEE IN ITS RETURN OF INCOME HAD CLAIMED R EVENUE EXPENDITURE OF RS. 15,02,910/-. ASSESSMENT U/S 143(3) OF THE ACT WAS C OMPLETED ON 8.12.2003 BY ITA NO. 6400/DEL/12 DCIT VS. M/S. BHARTI AQUANET LTD. 2 DISALLOWING THE REVENUE EXPENDITURE CLAIMED ON THE GROUND THAT THERE WAS NO COMMENCEMENT OF BUSINESS BY THE ASSESSEE COMPANY. T HE CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE COMPANY AND HELD TH E BUSINESS HAS BEEN SET UP AND DIRECTED THAT SUM OF RS. 1502910/- BE ALLOWED A S REVENUE EXPENDITURE. ON FURTHER APPEAL BEFORE THE ITAT, THE TRIBUNAL HELD T HAT THE BUSINESS HAS NOT BEEN SET UP, HOWEVER, THE EXPENSES WAS ALLOWED TO BE CAP ITALIZED. 4. THE AO SUBSEQUENT TO THE TRIBUNAL ORDER, IM POSED A PENALTY U/S 271(1) OF THE ACT AMOUNTING TO RS. 5,94,400/-. ON FURTHER APPEAL AGAINST THE IMPOSITION OF PENALTY, THE CIT(A) DELETED THE PENALTY. THE REL EVANT FINDING OF THE CIT(A) READS AS UNDER :- (AT PAGE 3) THE VERSION OF THE APPELLANT HAS BEEN CONSIDERED. FROM THE FACTS NOTED ABOVE IN PARA 3 IT MAY BE SEEN THAT THERE IS DIFF ERENCE OF OPINION BETWEEN THE AUTHORITIES INVOLVED ON THE ISSUE OF CO MMENCEMENT OF BUSINESS. THEREFORE, THE ISSUE IS DEBATABLE AND THE RATIO OF THE ITAT JUDGMENT REFERRED ABOVE BY THE APPELLANT IS APPLICA BLE. THEREFORE, NO PENALTY IS IMPOSABLE IN THIS CASE. PENALTY LEVIED B Y THE AO IS CANCELLED. GROUND OF APPEAL NO. 3 IS ALLOWED. 5. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US . LD. DR RELIED ON THE ORDER OF AO IMPOSING PENALTY U/S 271(1)(C) OF THE A CT. THE LD. AR ON THE OTHER HAND HAD FURNISHED ARGUMENT NOTES AND REITERATED TH E SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. IN THE INSTANT CASE, THE ISSUE IN QUANTUM PROCEEDINGS IS DEBATABLE. THE CIT(A) HELD ITA NO. 6400/DEL/12 DCIT VS. M/S. BHARTI AQUANET LTD. 3 IN FAVOUR OF THE ASSESSEE COMPANY. HOWEVER, THE TRI BUNAL HELD THAT EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT CAPITAL EXPENDITURE . THIS AMOUNTED TO RECLASSIFICATION OF THE CLAIM MADE BY THE ASSESSEE COMPANY. THE DISALLOWANCE OF CLAIM OF ASSESEEE IS BASED ON THE INFORMATION AND P ARTICULARS FILED BY THE ASSESSEE COMPANY ITSELF. THE EXPENDITURE HAS NOT BE EN HELD TO NON GENUINE EXPENDITURE. THEREFORE, ON FACTS AND CIRCUMSTANCES OF THIS CASE, IT CANNOT BE STATED THAT THERE IS A WILLFUL OR CONTUMACIOUS COND UCT ON THE PART OF ASSESSEE TO CONCEAL INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AS CORRECT AND IN A CCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDING LY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. THIS DECISION WAS PRONOUNCED IN THE OPEN COU RT ON 13 TH JANUARY, 2015. SD/- SD/- (N.S. SAINI) ( GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 13 TH JANUARY, 2015 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT