JHPL Holdings (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 6472/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6392 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-07-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 28-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Keywords: Question of law; Capital receipt
• Section: 14A; 260A

Judgement Text

ITA NO. 6472/DEL/2012 ASSTT. YEAR: 2002-03 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 6472/DEL/2012 ASSESSMENT Y EAR: 2002-03 JHPL HOLDING (P) LTD. VS ASST T. COMMISSIONER OF INCOME TAX 229 OKHLA INDUSTRIAL ESTATE-III, CIRC LE 4 (1), NEW DELHI NEW DELHI. (APPELLANT) (RESPON DENT) APPELLANT BY: SHRI GAUTAM JAIN, CA RESPONDENT BY: SHRI S.N. BHATIA, DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT(A)-VIII, DELHI DATED 30.10.2012 IN APPEAL NO. 3 61/2011-12 FOR AY 2002-03 BY WHICH THE CIT(A) UPHELD AND CONFIRMED TH E PENALTY IMPOSED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT 1961 (FO R SHORT THE ACT). 2. THE SOLE GROUND RAISED BY THE ASSESSEE RE ADS AS UNDER:- 2. THE AO HAS WRONGLY IMPOSED PENALTY OF RS. 173700 0/- U/S 271(1)(C) AND CONFIRMED BY CIT(A) STATING INACCURATE PARTICULARS WERE FILED, IT IS FACTUALLY INCORRECT. 3. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PA RTIES AND CAREFULLY PERUSED THE RECORD AND OTHER RELEVANT MATERIAL PLACED BEFOR E US. AT THE OUTSET THE LD. ITA NO. 6472/DEL/2012 ASSTT. YEAR: 2002-03 2 COUNSEL FOR THE ASSESSEE SUBMITTED A COPY OF THE OR DER OF HONBLE HIGH COURT OF DELHI IN ITA NO. 1235/2011 VIDE DATED 29.1 1.2011 IN ASSESSEES OWN APPEAL PERTAINING TO THE QUANTUM PROCEEDINGS WH EREIN FOLLOWING SUBSTANTIAL QUESTION OF LAW HAS BEEN FRAMED AND APP EAL OF THE ASSESSEE HAS BEEN ADMITTED. (1) WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS R IGHT IN HOLDING THAT RS. 48,64,490/- RECEIVED BY THE APPELLANT-ASSE SSEE FROM M/S. NEWELL RUBBERMAID INC. IN TERMS OF AGREEMENT DATED 4.3.2002 IS A REVENUE RECEIPT AND NOT A CAPITAL RECEIPT?? 4. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN VIEW OF DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT OF D ELHI INCLUDING DECISION IN THE CASE OF CIT VS. LIQUID INVESTMENTS LTD. IN I TA NO. 240/2009 DATED 5.10.2010 THAT WHEN A QUESTION OF LAW HAS BEEN FRA MED ON A PARTICULAR ISSUE THEN THE ISSUE BECOMES DEBATABLE AND NO PENALTY IS SUSTAINABLE IN REGARD TO SUCH IMPUGNED ADDITION. IN THIS CASE THEIR LORDSHIP HELD AS UNDER :- BOTH THE CIT(A) AS WELL AS THE ITAT HAVE SET ASID E THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271( 1)(C) OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT THE ISSUE O F DEDUCTION UNDER SECTION 14A OF THE ACT WAS A DEBATABLE ISSUE. WE MAY ALSO NOTE THAT AGAINST THE QUANTUM ASSESSMENT WHEREUNDER DEDUCTION UNDER SECTION 14A OF THE ACT WAS PRESCRIBED TO THE ASSESSEE, THE ASSESSEE HAD PREFERRED AN APPEAL IN THIS COURT UNDE R SECTION 260A OF THE ACT WHICH HAS ALSO BEEN ADMITTED AND SUBSTAN TIAL QUESTION OF LAW FRAMED. THIS ITSELF SHOWS THAT THE ISSUE IS DEB ATABLE. FOR THESE REASONS, WE ARE OF THE OPINION THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASE. THIS APPEAL IS ACCORDINGLY DISMISSED. ITA NO. 6472/DEL/2012 ASSTT. YEAR: 2002-03 3 5. THE DR FAIRLY ACCEPTED THAT THE HONBLE HIGH COURT HAS ADMITTED APPEAL OF THE ASSESSEE, FILED AGAINST THE ORDER OF THE TRIBUNAL, IN REGARD TO QUANTUM PROCEEDINGS AND A QUESTION OF LAW AS REPROD UCED HEREINABOVE, HAS BEEN FRAMED THEREIN. THE DR ALSO SUBMITTED THAT THE QUANTUM AND PENALTY PROCEEDINGS ARE INDEPENDENT AND SEPARATE AND THE RE VENUE AUTHORITIES ARE EMPOWERED TO EVALUATE EACH PROCEEDINGS ON ITS OWN F OOTINGS. THE DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. FROM THE ABOVE SUBMISSIONS AND CONTENTI ONS OF BOTH THE PARTIES AT THE OUTSET WE OBSERVED THAT , ADMITTEDLY THE IMPUGN ED ADDITION PERTAINING TO THE AMOUNT RECEIVED BY THE ASSESSEE FROM M/S. NE WELL RUBBERMAID INC. HAS BEEN UPHELD BY THE TRIBUNAL. AT THE SAME TIME W E ALSO OBSERVED THAT IN ASSESSEES APPEAL ITA NO. 1235/2011 ORDER VIDE DATE D 29.11.2011 (SUPRA) THE HONBLE HIGH COURT OF DELHI HAS ADMITTED APPEAL OF THE ASSESEE AND A SUBSTANTIAL QUESTION OF LAW HAS BEEN FRAMED THEREIN . IN VIEW OF VARIOUS DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT INCL UDING DECISION IN THE CASE OF LIQUID INVESTMENT LTD. (SUPRA) WE REACH TO A LOGICAL CONCLUSION THAT WHEN APPEAL OF THE ASSESSEE HAS BEEN ADMITTED IN THE HONBLE HIGH COURT AND SUBSTANTIAL QUESTION OF LAW HAS BEEN FRAM ED THEN THE ISSUE BECOMES DEBATABLE AND IN THIS SITUATION NO PENALTY U/S 271(1) OF THE ACT IS NOT LEVIABLE ON THE ASSESSEE. 7. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF LIQUID INVESTMEN T LTD. (SUPRA) AND OTHER RELEVANT DECISIONS WE ARE INCLINED TO HOLD TH AT THE PENALTY WAS IMPOSED ON THE ASSESSEE PERTAINING TO THE ISSUE ON WHICH A SUBSTANTIAL ITA NO. 6472/DEL/2012 ASSTT. YEAR: 2002-03 4 QUESTION OF LAW HAS BEEN FRAMED BY HONBLE HIGH COU RT AND THE SAME HAS BECOME DEBATABLE THEN NO PENALTY IS LEVIABLE THEREO N. ACCORDINGLY, WE HOLD THAT THE AO WAS NOT JUSTIFIED IN IMPOSING PENA LTY AND THE CIT(A) CONFIRMED THE SAME WITHOUT ANY BASIS AND JUSTIFIED GROUND WHICH IS NOT SUSTAINABLE IN VIEW OF FOREGOING DISCUSSIONS. RESU LTANTLY, THE SOLE GROUND OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS A LLOWED. 9. THE ORDER WAS PRONOUNCED ON CONCLUSION OF THE H EARING ON 4 TH JULY, 2014. SD/- SD/- (R.S. SYAL) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 4 TH JULY, 2014 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT REGISTRAR, ITAT