M/s. Rattan Lal Sharma, Narnaul V. ITO, Narnaul

ITA 788/DEL/2010

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 6999 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 22-04-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 22-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAREON
• Section: 271(1)(c); 191

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI VIMAL GANDHI, HONBLE PRESIDENTAND SHRI R.C.SHARMA, HONBLE ACCOUNTANT MEMBER ITA NO.788/DEL/2010 ASSESSMENT YEAR : 2001-02 SHRI RATTAN LAL SHARMA, PROP. CHHANO DEVI OIL CO., VILLAGE NIRPUR, TEHSIL NARNAUL. PAN NO.ADHPS9751J. VS. INCOME TAX OFFICER, A.O., WARD-I, NARNAUL. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE. RESPONDENT BY : SMT.BANITA DEVI NAREON, SR.DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 11.1.2010 FOR THE AY 2001-02, IN THE MATTER OF PENA LTY LEVIED U/S 271(1)(C) OF THE I.T.ACT. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO LE VY OF PENALTY U/S 271(1)(C) ON THE ESTIMATED ADDITION OF RS.40,000/- FOR INADEQ UATE MARRIAGE EXPENSES OF ASSESSEES SON. 3. WE HAVE HEARD THE LEARNED DR AND GONE THROUGH TH E ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD, WE FOUND THAT DURING THE COURSE OF ASSESSMENT, THE AO MADE AN ADDITION OF RS.75,000/- BY ESTIMATING INADEQUATE EXPENSES ON THE MARRIAGE OF ASSESSEES SON. IN AN APPEAL FILED BEFORE THE TRIBUNAL, THE QUANTUM OF ESTIMATED ADDITION WAS REDUCED FROM RS.75,000/- TO RS.40,000/-. ITA-788/DEL/2010 2 HOWEVER, THE AO LEVIED PENALTY U/S 271(1)(C) ON THE ADDITION OF RS.75,000/-. THE CIT(A), ON THE BASIS OF QUANTUM OF ADDITION REDUCED BY THE TRIBUNAL, DIRECTED THE AO TO RECALCULATE THE PENALTY ON THE ESTIMATED ADDI TION OF RS.40,000/- RETAINED BY THE TRIBUNAL. BEFORE THE CIT(A), THE ASSESSEE ALSO CITED DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SANGRUR VA NASPATI MILLS LTD. 303 ITR 53 IN SUPPORT OF THE PROPOSITION THAT WHEN ADDITION TO INCOME IS MADE ON ESTIMATED BASIS, NO PENALTY IS TO BE LEVIED. HOWEVER, THE CI T(A) WITHOUT CONSIDERING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT H ELD THAT ESTIMATION OF MARRIAGE EXPENSES WAS NOT ON MERE GUESS WORK. ACCORDINGLY, PENALTY WAS DIRECTED TO BE IMPOSED @ 150% WITH RESPECT TO THE ADDITION OF RS.4 0,000/- RETAINED BY THE TRIBUNAL. AGAINST THIS, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. FROM THE RECORD, WE FOUND THAT NO MATERIAL HAS B EEN INDICATED BY THE AO FOR ARRIVING AT ADDITION OF RS.75,000/- MADE IN RES PECT OF INADEQUATE MARRIAGE EXPENSES. MERELY BY REFERRING TO THE MARRIAGE HAVI NG BEEN SOLEMNIZED DURING THE YEAR, THE AO HAS ESTIMATED EXPENDITURE OF RS.75,000 /- AND MADE THE ADDITION. THE TRIBUNAL HAS REDUCED THE ESTIMATED ADDITION TO THE TUNE OF RS.40,000/-. HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF RAVAIL SIN GH & CO. 254 ITR 191 AND HARIGOPAL SINGH 258 ITR 85 HAS HELD THAT TO ATTRA CT CLAUSE (C) OF SECTION 271, IT IS NECESSARY THAT THERE MUST BE CONCEALMENT BY THE ASSESSEE OF THE PARTICULARS OF HIS INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME AND THAT PROVISIONS OF SECTION 271(1)(C) ARE NOT ATTRACTED T O CASES WHERE THE INCOME OF THE ASSESSEE IS ASSESSED ON ESTIMATE BASIS AND ADDITION S ARE MADE THEREIN. ON THE SIMILAR FACTS, THE HON'BLE JURISDICTIONAL HIGH COUR T IN THE CASE OF SANGRUR VANASPATI MILLS LTD. (SUPRA) HAS UPHELD THE ORDER O F THE TRIBUNAL DELETING THE PENALTY LEVIED ON ADDITION TO INCOME ON ESTIMATE BA SIS ON THE ALLEGED UNACCOUNTED SALES. IN THE INSTANT CASE BEFORE US, THERE IS NO CONCLUSIVE EVIDENCE OF EXPENSES HAVING BEEN INCURRED TO THE TUNE OF EXPENDITURE EST IMATED BY THE AO FOR MARRIAGE OF THE SON. IT WAS ONLY A GUESS WORK. RESPECTFULL Y FOLLOWING THE PROPOSITION OF ITA-788/DEL/2010 3 LAW LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH CO URT, WE DO NOT FIND ANY JUSTIFICATION FOR LEVY OF PENALTY IN RESPECT OF THE ADDITION MADE ON ESTIMATED BASIS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 23 RD APRIL, 2010. SD/- SD/- (VIMAL GANDHI) (R.C.SHARMA) PRESIDENT ACCOUNTANT MEMBER DATED : 23.04.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-788/DEL/2010 4