M/s. Hotz Industries, New Delhi V. DCIT, New Delhi

ITA 6724/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3956 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JASPAL SINGH SETHI
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-6724/DEL/2015 ( ASSESSMENT YEAR: 2011-12) HOTZ INDUSTRIES 703-707, CHIRANJIV TOWER, NEHRU PLACE, NEW DELHI. AAACH0092G VS DCIT CIRCLE 12(1) NEW DELHI. ASSESSEE BY SH. JASPAL SINGH SETHI, ADV. REVENUE BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE O RDER DATED 16.10.2015 IN APPEAL NO. 216/14-15/CIT(A)-4 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, NEW DELHI ( HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)). 2. BRIEFLY STATED FACTS ARE THAT DURING THE SCRUTIN Y OF ASSESSMENT OF THE INCOME OF THE ASSESSEE FOR THE AY 2011-12 AO FOUND THAT THE ASSESSEE EARNED DIVIDEND INCOME OF RS. 1,14,43,698/- AND LON G TERM CAPITAL GAIN DATE OF HEARING 21.09.2017 DATE OF PRONOUNCEMENT 09.10.2017 2 ITA NO. 6724/DEL/2015 OF RS. 3,42,23,771/- AND WHILE WORKING OUT THE DISA LLOWABILITY OF THE EXPENSES, AO ESTIMATED THE SAME AT RS. 8,61,941/-. SO ALSO THE AO FOUND THAT THE ASSESSEE DEBITED A SUM OF RS. 15,85, 829/- IN THE PROFIT AND LOSS ACCOUNT ON ACCOUNT OF LAND LEVELING CHARGES WH ICH THE AO CATEGORIZED AS CAPITAL EXPENSES AND DISALLOWED THE SAME. SIMULTANEOUSLY AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C ) OF THE INCOME TAX ACT (FOR SHORT CALLED AS THE ACT) AND CONCLUDED THEM BY WAY OF ORDER DATED 30.06.2014 WITH THE LEVY OF THE PENA LTY OF RS. 8,31,997/- . IN THE APPEAL LD. CIT (A) CONFIRMED THE SAME ON THE GROUND THAT IN SPITE OF THE AO GRANTING TWO OPPORTUNITIES TO THE ASSESSE E AS TO WHY THE PENALTY SHALL NOT BE IMPOSED AND ALSO IN VIEW OF THE FACT T HAT THE ASSESSEE DID NOT CHALLENGE THE ADDITIONS BEFORE THE LD.CIT (A). 3. IT IS THE ARGUMENT OF THE LD. AR THAT DISALLOWIN G EXPENSES CANNOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT PENALTY P ROCEEDINGS HAVE TO BE INITIATED. ACCORDING TO THE LD. AR ALL THE PARTICU LARS WERE FULLY AND TRULY FURNISHED TO THE AO AND THE DEPARTMENT DID NOT UNEA RTH ANYTHING WHICH WAS NOT FURNISHED BY THE ASSESSEE, DURING THE ASSES SMENT PROCEEDINGS. LD. DR VEHEMENTLY RELIED UPON THE AUTHORITIES BELOW . THE FACTS IN THIS CASE ARE ADMITTED. IT IS NOT THE CASE OF THE REVEN UE THAT THEY FOUND ANYTHING NEW DURING THE ASSESSMENT PROCEEDINGS THAT WAS NOT PRODUCED 3 ITA NO. 6724/DEL/2015 BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME. I T IS ONLY THE DISALLOWANCE OF SOME EXPENSES THAT PROMPTING THE AO TO INITIATE THE PROCEEDINGS U/S 271(1)(C ) OF THE ACT. WHEN ONCE A LL THE PARTICULARS ARE TRULY AND FULLY FURNISHED AND WERE AVAILABLE BEFORE THE AO MERE DISALLOWANCE WILL NOT LEAD TO THE INITIATION OF PEN ALTY PROCEEDINGS. WHILE MAKING THE DISTINCTION BETWEEN FALSE CLAIM AND WRON G CLAIM, WE ARE OF THE CONSIDERED OPINION THAT IN THIS MATTER THERE IS NO FALSE CLAIM THAT WAS PREFERRED BY THE ASSESSEE AND IT IS ONLY THE TREATM ENT THE AO HAD GIVEN TO THE EXPENSES THAT LEAD TO THE ADDITIONS. WHILE RES PECTFULLY FOLLOWING THE RATIO OF THE HONBLE SUPREME COURT IN CIT VS. RELIA NCE PETRO CHEMICALS 332 ITR 158 (SC), WE HOLD THAT PENALTY IN THIS MATT ER CANNOT BE SUSTAINED. WITH THIS VIEW OF THE MATTER, WE DELETE THE PENALTY . 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 09.10.2017 *KAVITA ARORA 4 ITA NO. 6724/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI