Twinkle Star Properties Pvt Ltd, RAJKOT-GUJARAT V. The Assistant Commissioner Of Income Tax, Circle 2, RAJKOT-GUJARAT

ITA 758/RJT/2010

• Counselvise Citation: 75824914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-06-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 04-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA PRABHAKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.758/RJT/2010 (ASSESSMENT YEAR 2000-01) TWINKLE STAR PROPERTIES PVT LTD VS THE ACIT, CIR.2 STAR PLAZA, 1 ST FLOOR RAJKOT PHULCHHAB CHOWK, RAJKOT PAN : AAACT7824J (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY: SHRI KRISHNA PRABHAKAR O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-III, RAJKOT DATED 11-01-2010 AND PERTAINS TO ASSESSMENT YEAR 2000-01 CONFIRMING LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 2. NONE APPEARED FOR THE ASSESSEE EVEN THOUGH NOTIC E OF HEARING WAS ISSUED. HOWEVER, THE ASSESSEE HAS FILED WRITTEN SU BMISSION. THEREFORE, WE HEARD THE LD.DR AND PROCEEDED TO DISPOSE OFF THE AP PEAL ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY THE ASSESSEE. 3. SHRI KRISHNA PRABHAKAR, THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THE GROU ND THAT THE ASSESSEE INFLATED THE LOSS IN THE GUISE OF REPAYMENT ON ACCOUNT OF CA NCELLATION OF BOOKING OF OFFICE BY THE BUYERS. ACCORDING TO THE LD.DR, THE CLAIM O F LOSS IN THE GUISE OF CANCELLATION OF THE BOOKING WAS NOT ESTABLISHED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE DISALLOWANCE MADE BY THE ASSESSIN G OFFICER IN THE QUANTUM WAS CONFIRMED BY CIT(A) AND ALSO BY THIS TRIBUNAL. THEREFORE, ACCORDING TO THE ITA NO.758/RJT/2010 2 LD.REPRESENTATIVE, THE CLAIM OF THE ASSESSEE WITH R EGARD TO THE PAYMENT ON ACCOUNT OF CANCELLATION OF THE BOOKING OF OFFICE PR EMISES AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME, THEREFORE, THE AS SESSING OFFICER HAS RIGHTLY LEVIED PENALTY. REFERRING TO THE GROUNDS OF APPEAL OF THE ASSESSEE, THE LD.DR SUBMITTED THAT THE LIMITATION ISSUE RAISED BY THE A SSESSEE IN GROUNDS 2 & 3 WAS NOT RAISED BEFORE THE CIT(A) OR BEFORE THE ASSESSIN G OFFICER. ACCORDING TO THE LD.DR, THIS LIMITATION ISSUE IS RAISED BEFORE THIS TRIBUNAL FOR THE FIRST TIME. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR AND HAVE ALSO PERUSED THE RECORDS. THE ASSESSEE HAS FILED WRITTEN SUBMIS SION ENCLOSING THE COPY OF THE ORDER OF THIS TRIBUNAL IN ACIT VS M/S SIYARAM METAL S P LTD ITA NO.1058/RJT/09 DATED 26 TH AUGUST, 2010. THE CONTENTION OF THE DEPARTMENT IS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME BY C LAIMING PAYMENT WITH REGARD TO CANCELLATION OF BOOKING OF OFFICE. THE ASSESSEE CONTENDED IN THE WRITTEN SUBMISSION THAT MERE CLAIMING OF PAYMENT DOES NOT A MOUNT TO FURNISHING OF INACCURATE PARTICULARS. THE ASSESSEE APPARENTLY PL ACED HIS RELIANCE ON THE ORDER OF THIS TRIBUNAL IN M/S SIYARAM METALS P LTD (SUPRA ). THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSESSEE CLAIMS AN EXPEND ITURE WITH REGARD TO CANCELLATION OF BOOKING BY THE BUYERS, WHETHER SUCH A CLAIM WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE FIND THAT THIS ISSUE WAS EXAMINED BY THE APEX COURT IN RELIANCE PETRO PRODUC TS 322 ITR 158 (SC). THE APEX COURT FOUND THAT MERE CLAIM DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. THEREFORE, MERELY BECAUSE THE ASSESSE E CLAIMED THE PAYMENT WHICH WAS NOT SUBSTANTIATED TO THE SATISFACTION OF THE AU THORITIES DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. FU RNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALING ANY PART OF THE INCOME WOULD BE ONE THING AND CLAIMING A PAYMENT WHICH COULD TURN OUT TO BE N OT SUBSTANTIATED BY NECESSARY MATERIAL IS ANOTHER THING. IN VIEW OF TH E JUDGMENT OF THE APEX COURT IN THE CASE OF RELIANCE INDUSTRIES (SUPRA), IN OUR OPI NION, LEVY OF PENALTY IN THIS CASE IS NOT JUSTIFIED. IN VIEW OF THE ABOVE, IT MAY NOT BE NECESSARY FOR THIS TRIBUNAL TO ITA NO.758/RJT/2010 3 GO INTO THE ISSUE OF LIMITATION RAISED BY THE ASSES SEE. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THE PENALTY IS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-06-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 24 TH JUNE, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT