ACIT,Circle Panchkula, Panchkula V. M/s V.K.Sood Engineers & Contractor, Panchkula

ITA 79/CHANDI/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8888 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 21-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA
• Keywords: Depreciation; Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B,CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NO. 79/CHD/2020 / ASSESSMENT YEAR : 2011-12 THE ACIT, CIRCLE, PANCHKULA M/S V.K. SOOD ENGINEERS & CONTRACTOR DDSJV, UNIT-III, H.NO. 20, SECTOR-6 PANCHKULA-134109, HARYANA ./ PAN NO: AAGFV0584J / APPELLANT / RESPONDENT HEARING THROUGH VIDEO CONFERENCING / ASSESSEE BY : SHRI VINEET KRISHAN, ADVOCATE / REVENUE BY : SHRI ASHOK KHANNA, ADDL. CIT / DATE OF HEARING : 12/01/2021 / DATE OF PRONOUNCEMENT : 19/01/2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 22/11/2019 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), PANCHKULA (FOR SHORT THE CIT(A) FOR THE ASSESSMENT YEAR 2011-12 , WHEREBY TH E LD THE LD. CIT(A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM ENGAGED IN CONSTRUCTION ACTIVITY FILED ITS RETURN OF INCOME FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION. ACCORDINGLY, A.O. PASSED ASSESSMENT ORDER UNDER SEC TION 143(3) OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 1,97,42,335/- A S AGAINST THE RETURNED INCOME OF RS. 49,56,930/- . THE AO DETERMINED THE TOTAL INCOM E OF THE ASSESSEE AFTER MAKING ADDITION OF RS. 1,29,89,679/- ON ACCOUNT OF UNVERIF IABLE BOGUS AND EXCESSIVE EXPENSES CLAIMED, RS. 1,16,995 ON ACCOUNT OF DISALL OWANCE OF EXPENSES OF PERSONAL NATURE, RS. 13,25,838/- ON ACCOUNT OF INTEREST FREE ADVANCES MADE BY THE ASSESSEE AND RS. 3,52,893/- ON ACCOUNT OF DISALLOWANCE MADE ON EXCESSIVE DEPRECIATION 2 CLAIMED. THE ASSESSEE CHALLENGED THE ASSESSMENT ORD ER BEFORE THE CIT(A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE DISMISSED THE APP EAL AND CONFIRMED THE ADDITIONS MADE BY THE A.O. 3. IN THE SECOND APPEAL, THE ITAT SET ASIDE THE ORD ER PASSED BY THE LD. CIT(A) AND SENT THE APPEAL BACK TO THE LD. CIT(A) WITH THE DIRECTION TO DECIDE THE SAME AFRESH. ACCORDINGLY, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITIONS MADE BY THE ASSESSEE ON ACCOU NT OF UN UNVERIFIABLE BOGUS AND EXCESSIVE EXPENSES, INTEREST FREE ADVANCES MADE BY THE ASSESSEE AND EXCESSIVE DEPRECIATION CLAIMED, HOWEVER, RESTRICTED THE ADDITION OF 20% MADE ON ACCOUNT OF EXPENSES OF PERSONAL NATURE TO 10%. IN T HE MEANTIME THE A.O. INITIATED THE PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND IMPOSED PENALTY OF RS. 61,48,730/- UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE CHALLENGED THE PENALTY ORDER PASSED BY THE AO BEFORE THE CIT(A). THE LD. C IT(A) SET ASIDE THE ORDER PASSED BY THE AO AND DELETED THE PENALTY LEVIED U/S 271(1) (C) OF THE ACT. AGAINST THE SAID FINDINGS THE LD. CIT(A) THE REVENUE IS IN APPEAL BE FORE THIS TRIBUNAL. 4. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPE AL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A), PANCHKULA HAS ERRED IN DELETING THE PENALTY UNDER SECTION 271(1)(C) SINCE THE ASSESSEE HAS DELIBERATELY FURNI SHED INACCURATE PARTICULARS OF ITS INCOME. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE G ROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT SINCE THE LD. CIT(A) HAS SUSTAINED THE ADDITION OF 10% OF THE ADD ITION MADE ON ACCOUNT OF EXPENSES OF PERSONAL NATURE IN QUANTUM APPEAL, THE LD. CIT(A) OUGHT TO HAVE SUSTAINED THE PENALTY TO THE EXTENT OF THE ADDITION SUSTAINED. HENCE, THE LD. CIT(A) HAS WRONGLY DELETED THE PENALTY LEVIED BY THE A.O. 6. LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND S UPPORTING THE ORDER PASSED BY THE LD., CIT(A) SUBMITTED THAT SINCE THE LD. CIT (A) HAS SUSTAINED 10% OF THE ADDITION MADE BY THE AO ON ACCOUNT OF EXPENSES OF P ERSONAL NATURE ON ESTIMATE BASES AND DELETED THE REMAINING ADDITIONS IN QUANT UM APPEAL, NO CASE OF EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME IS MADE 3 OUT AGAINST THE ASSESSEE. THE LD. COUNSEL FURTHER S UBMITTED THAT AS PER THE LAW LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF SHRI HARI GOPAL, 258 ITR 85, NO PENALTY CAN BE IMPOSED ON THE ADDITION MADE ON E STIMATE BASIS. HENCE THE LD. COUNSEL CONTENDED THAT THERE IS NO MERIT IN THE APPEAL OF THE REVENUE, THEREFORE THE SAME IS LIABLE TO BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASE RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. WE NOTICE THAT THE LD. CIT(A) HAS DELETED THE THREE AD DITIONS OUT OF THE FOUR ADDITION MADE BY THE A.O. AND IN RESPECT OF ONE ADDITION MAD E ON ESTIMATE BASIS, RESTRICTED THE ADDITION TO 10% OF THE EXPENSES CLAIMED BY THE ASSESSEE. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF SHRI HARI GOPAL (SUPRA) HAS HELD THAT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE NOT ATTRACTED WHERE ADDITION IS MADE ON ESTIMATE BASIS. 8. IN OUR CONSIDERED VIEW THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH CO URT IN THE AFORESAID CASE. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). WE ACCORDINGLY, UPHOLD THE ORDER PASSED BY THE LD. CIT(A) AND DISMI SSED THE APPEAL OF THE REVENUE. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JAN, 2021. SD/- SD/- . . , . . ( N.K. SAINI) (R.L. NE GI ) / VICE PRESIDENT / JUDICIAL MEMBER AG DATE: 19/01/2021 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE