M/s Raj Transmission Engg. L:td., Panchkula V. CIT(A), Chandigarh

ITA 717/CHANDI/2012

• Counselvise Citation: 71721514 RSA 2012
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 28-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Assessee Lawyers: NEERAJ JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.717/CHD/2012 (ASSESSMENT YEAR : 2007-08) M/S RAJ TRANSMISSION ENGG.LTD., VS. THE A.C.I.T., # 527, SECTOR 10, CIRCLE-2(1), PANCHKULA. PANCHKULA. PAN: AADCR 2722 G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NEERAJ JAIN RESPONDENT BY : SHRI MANJEET SINGH, DR DATE OF HEARING : 30.08.2012 DATE OF PRONOUNCEMENT : 31.08.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), CHANDIGARH DAT ED 17.05.2012 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE PEN ALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT). 2. THE EFFECTIVE ISSUE RAISED BY THE ASSESSEE IN TH E PRESENT APPEAL IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE AC T AMOUNTING TO RS.1,01,700/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD SHOWN INCOME FROM CONS ULTANCY CHARGES OF RS.3,39,000/-, AGAINST WHICH IT HAD CLAIMED VARIOUS EXPENSES UNDER DIFFERENT HEADS OF INCOME AND FURNISHED RETURN OF I NCOME DECLARING LOSS OF RS.2,99,615/-. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF 2 EXPENDITURE AND COMPUTED THE INCOME OF THE ASSESSEE AT NIL RESULTING IN TOTAL ADDITION OF RS.3,27,282. 4. THE CIT (APPEALS) WAS OF THE VIEW THAT THE ASSES SEE HAD NOT STARTED ITS BUSINESS OF MANUFACTURING OF TOWERS AND HAD ONLY SHOWN INCOME FROM CONSULTANCY CHARGES. THE CIT (APPEALS ) WAS OF THE VIEW THAT THE EXPENSES CLAIMED BY THE ASSESSEE WERE NOT IN RELATION TO THE EARNING OF THE CONSULTANCY CHARGES. CONSEQUENTLY, THE INCOME OF THE ASSESSEE WAS ENHANCED AND DETERMINED AT RS.3,39,000 /-. THE TRIBUNAL IN ITA NO.179/CHD/2012 RELATING TO ASSESSMENT YEAR 200 7-08 VIDE ORDER DATED 25.6.2012 HELD THAT THE ESTIMATED EXPENSES OF RS.2 LACS BE ALLOWED IN THE HANDS OF THE ASSESSEE AND REST OF THE EXPENS ES RELATING TO PRODUCTION OF TOWERS WERE TO BE INCLUDED IN THE CLO SING STOCK. HOWEVER, THE INCOME IN THE HANDS OF THE ASSESSEE WAS THUS AS SESSED AT RS.1,39,000/-. 5. THE CIT (APPEALS) HAD INITIATED PENALTY PROCEEDI NGS U/S 271(1)(C) OF THE ACT AGAINST THE ADDITION MADE IN THE HANDS O F THE ASSESSEE AND LEVIED PENALTY OF RS.1,01,700/-. 6. THE ASSESSEE IS IN APPEAL AGAINST THE SAID PENAL TY LEVIED BY THE CIT (APPEALS). 7. WE FIND THAT THE TRIBUNAL IN THE QUANTUM APPEAL FILED BY THE ASSESSEE HAD ALLOWED THE CLAIM OF EXPENDITURE VIS- -VIS INCOME EARNED BY THE ASSESSEE DURING THE YEAR TO THE EXTENT OF RS .2 LACS AND THE BALANCE EXPENSES OF RS.1,39,000/- WERE TREATED TO BE CAPITA L EXPENDITURE INCURRED BY THE ASSESSEE, TO BE ALLOWED IN THE SUCCEEDING YE AR. IN VIEW THEREOF, WHERE PART OF THE EXPENDITURE HAS BEEN ALLOWED IN T HE HANDS OF THE ASSESSEE ON ESTIMATE BASIS AND PART OF THE EXPENDIT URE HAS BEEN DISALLOWED IN THE HANDS OF THE ASSESSEE, IT CANNOT BE HELD THAT THE 3 ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME JUSTIFYING LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE PENALTY U/S 271(1)(C) O F THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWE D. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DAY OF AUGUST, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST AUGUST, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH