M/s. B.K. Concast Pvt. Ltd., Uttar Pradesh V. DCIT, New Delhi

ITA 800/DEL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8111 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Cost of acquisition; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.800/DEL./2015 (ASSESSMENT YEAR : 2008-09) M/S. B.K. CONCAST PVT. LTD., VS. DCIT, CIRCLE 2 (1 ), C/O M/S. MALIK & CO. (ADV.) NEW DELHI. 305/7, THAPAR NAGAR, MEERUT. (PAN : AADCB1424F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY MALIK, ADVOCATE REVENUE BY : SHRI K.K. JAISWAL, DR DATE OF HEARING : 07.04.2016 DATE OF ORDER : 29.04.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. B.K. CONCAST PVT. LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 14.11.2014 PASSED BY CIT ( A)-V, NEW DELHI QUA THE ASSESSMENT YEAR 2008-08 ON THE GROUND S INTER ALIA THAT:- 1. THAT THE SHORT TERM CAPITAL GAIN DECLARED AT RS.10,70,72,206/- IN THE ORIGINAL RETURN BASED ON C LERICAL ERROR WAS SUBSEQUENTLY REVISED AT RS.10,87,22,146/- BY FILING REVISED RETURN VOLUNTARILY AND SUO MOTO. ON FACTS AND IN LAW IT WA S NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME WARR ANTING APPLICATION OF PENAL PROVISIONS U/S 271(1)(C) OF I. T. ACT. ITA NO.800/DEL./2015 2 2. THAT ON FACTS AND IN LAW THE INITIATION OF PENAL PROVISIONS AND RESULTANT LEVY OF PENALTY OF RS.5,60,790 BASED ON VARIOUS GROUNDS AND REASONING ASSIGNED BY THE LD. ASSESSING OFFICER WAS VOID, ILLEGAL, ERRONEOUS AND WITHOUT JURISDICTION. 3. THAT THE LEVY OF PENALTY U/S 271(1)(C) SUSTAINED BY THE LD. CIT(APPEALS) FOR CONCEALMENT OF INCOME AND FURNISHI NG INACCURATE PARTICULARS OF INCOME BASED ON VARIOUS GROUNDS AND REASONING RECORDED IN THE VIDE APPELLATE ORDER DATED 14.11.20 14 DESERVES TO BE QUASHED AND CANCELLED BEING VOID, ILLEGAL AND WI THOUT JURISDICTION. 2. BRIEFLY STATED, THE FACTS OF THIS CASE ARE : DUR ING THE SCRUTINY OF THE RETURN OF INCOME FILED BY THE ASSESSEE DECLA RING INCOME OF RS.10,65,22,280/- QUA THE ASSESSMENT YEAR 2008-09 A DDITION OF RS.16,49,870/- HAS BEEN MADE ON THE GROUND THAT THE ASSESSEE COMPANY HAS ACCEPTED THAT IT HAS TAKEN COST OF ACQU ISITION AT RS.3,49,88,474/- INSTEAD OF RS.3,33,38,604/- AND AS SUCH ADDITION OF RS.16,49,870/- IS MADE TO THE SHORT TERM CAPITAL GAIN ON SALE OF LAND, ON ACCOUNT OF EXCESS COST OF ACQUISITION CLAI M OF THE ASSESSEE. THE AO ON THE BASIS OF ADDITION OF RS.16,49,870/- S OUGH TO INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER THE ACT). 3. PENALTY PROCEEDINGS WERE INITIATED AND DESPITE I SSUANCE OF A NOTICE, ASSESSEE HAS NOT PREFERRED TO CONTEST THE S AME AND CONSEQUENTLY, THE AO PASSED THE PENALTY ORDER AS UN DER :- 7. IN THE CASE OF THE ASSESSEE COMPANY, PENALTY N OTICE WAS ISSUED TO ASSESSEE FIXING THE PENALTY PROCEEDINGS U /S 271 (1)( C) FOR HEARING ON 22.12.2010. NO RESPONSE TO THIS NOTI CE WAS MADE BY THE ASSESSEE. ANOTHER NOTICE DATED 01.06.2011 WAS I SSUED TO THE ASSESSEE FIXING THE CASE FOR HEARING ON 08.06.2011. ON THIS DATE NO ITA NO.800/DEL./2015 3 BODY ATTENDED THE PROCEEDINGS NOR ANY WRITTEN SUBMI SSION WAS FILED BY THE ASSESSEE. SUFFICIENT OPPORTUNITY HAVE BEEN GIVEN BY THE ASSESSEE HAS FAILED TO AVAIL THEM. SINCE THE ASSESS EE FAILS TO OFFER AN EXPLANATION IN THIS REGARD, THEREFORE, THE CASE OF THE ASSESSEE IS COVERED BY THE DEEMING PROVISION OF CLAUSE A OF EXP LANATION 1 OF SECTION 271 (1)(C) AND THE ADDITION OF RS.16,49,870 /- DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. IT IS ALSO PERTINENT TO MENTION HERE T HAT ASSESSEE HAS NOT FILED APPEAL BEFORE THE LD.CIT(A) AGAINST THE A SSESSMENT ORDER. THIS REFLECTS THAT ASSESSEE HAS ACCEPTED THE ADDITI ON IN PRINCIPLE. KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCE OF THE CASE AND IN THE LIGHT OF ABOVE DISCUSSION, IT IS ES TABLISHED THAT THE ASSESSEE HAS CONCEALED THE PARTICULAR OF INCOME AND FURNISHED INACCURATE PARTICULAR OF INCOME AND LIABLE TO PENAL TY U/S 271(1) (C) OF THE 1.T. ACT, 1961 IN RESPECT OF ADDITION OF RS. 16,49,870/- MADE IN THE RETURNED INCOME OF THE ASSESSEE COMPANY. 8. IN VIEW OF THE ABOVE, IN TERMS OF SECTION 271 ( 1) (C) THE PENALTY IS CALCULATED AS UNDER: (AMOUNT. IN RS.) INCOME IN RESPECT OF WHICH ASSESSEE HAS 16,49,8 70/- FURNISHED INACCURATE PARTICULARS OF INCOME FOR WHICH TAX HAS BEEN SOUGHT TO BE EVADED INCOME TAX, SURCHARGE & EDU. CESS THEREON 5,6 0,790/- AMOUNT OF TAX SOUGHT TO BE EVADED 5,60,790/- MINIMUM PENALTY (100% OF X 5,60,790/-) 5,60,790 /- MAXIMUM PENALTY (300% OF X 5,60,790/-) 16,82,370/ - CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE, I HEREBY LEVY A PENALTY OF RS.5,60,790/- ON THE ASSESSEE. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT (A) WHO HAS DISMISSED THE APPEAL. FEELING AGGRIEVED, THE A SSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.800/DEL./2015 4 6. THE LD. COUNSEL FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED THAT BY FILING THE RETURN OF INCOME QUA AY 2008- 09, THE ASSESSEE HAS NOT CONCEALED INCOME NOR HAS F URNISHED INACCURATE PARTICULARS RATHER DUE TO INADVERTENT MI STAKE, HE HAS WRONGLY CALCULATED THE COST OF ACQUISITION OF THE L AND AND RELIED UPON THE JUDGMENT CITED AS CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC). HOWEVER, ON THE OTHER HAND, THE LD. DR FOR THE RELEVANT RELIED UPON THE ORDER PASSED BY TH E CIT (A). 7. UNDISPUTEDLY, THE ASSESSEE HAS ADMITTED DURING T HE SCRUTINY PROCEEDINGS THAT HE HAS ENHANCED THE COST OF THE AC QUISITION OF LAND, BUT DUE TO INADVERTENCE, FOR THE PURPOSE OF C ALCULATING THE SHORT TERM CAPITAL GAIN ON SALE OF LAND. IT IS ALS O NOT DISPUTED THAT ASSESSEE HAS HIMSELF REVISED THE COMPUTATION OF INC OME AND PAID THE BALANCE TAX PAYABLE. 8. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, THE SOLE QUESTION FOR DETERMINATION IN TH IS CASE IS AS TO WHETHER THE ASSESSEE HAS CONCEALED ITS INCOME AND H AS FURNISHED INACCURATE PARTICULARS OF INCOME. 9. BARE PERUSAL OF THE PROVISIONS CONTAINED U/S 271 (1)(C) OF THE ACT GOES TO PROVE THAT TO IMPOSE PENALTY UPON THE A SSESSEE UNDER THE RELEVANT PROVISIONS OF THE ACT, TWO CONDITIONS ARE REQUIRED TO BE FULFILLED ONE: THAT THE ASSESSEE MUST HAVE FURNISHE D INACCURATE ITA NO.800/DEL./2015 5 PARTICULARS OF INCOME AND TWO: THE ASSESSEE MUST HA VE CONCEALED PARTICULARS OF INCOME FROM THE TAX AUTHORITIES. 10. THE ISSUE IN CONTROVERSY HAS BEEN DEALT WITH BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA). THE OPERATIVE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I. T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SEC ONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS I NCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MADE. WHERE NO INFORMATION GIV EN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE C ANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXP OSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAG INATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHE RE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH P ARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRA CT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EX ACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTIO N 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT A MOUNT TO FURNISHING INACCURATE PARTICULARS. 11. BY APPLYING THE RATIO OF THE JUDGMENT (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT IN THIS CASE, THE ASSESSEE HAS NEITHER FURNISHED INACCURATE PARTICULARS OF INCOME NOR HE HAS CONCEAL ED THE PARTICULARS OF INCOME FROM TAX AUTHORITIES, BECAUSE THE ASSESSEE HAS MERELY ENHANCED THE COST OF ACQUISITION OF THE LAND FOR THE PURPOSE ITA NO.800/DEL./2015 6 OF COMPUTATION OF INCOME STATED TO BE DUE TO INADVE RTENT MISTAKE, WHICH HE HAS SUBSEQUENTLY REVISED AND PAID THE TAX ON THE REMAINING AMOUNT. IN OUR VIEW, THIS IS A CASE OF M ERE CLERICAL MISTAKE WHICH WAS TO BE EXAMINED BY THE AO AT THE V ERY OUTSET TO TAKE INTO ACCOUNT THE ACTUAL COST OF THE ACQUISITIO N OF THE LAND TO ASSESS THE SHORT TERM CAPITAL GAIN. 12. MOREOVER, THE COST OF ACQUISITION OF THE LAND W AS ALREADY IN THE NOTICE OF THE TAX AUTHORITIES, THE ASSESSEE BEI NG A TAX PAYEE. SO, MAKING INCORRECT CLAIM DOES NOT AMOUNT TO FURNISHIN G OF INACCURATE PARTICULARS. MOREOVER, IN THE PENALTY ORDER, IT IS NOWHERE RECORDED THAT THE DETAILS SUBMITTED BY THE ASSESSEE IN ITS R ETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE AND IN THESE CIR CUMSTANCES, PENALTY U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE . 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE HE REBY ALLOW THE PRESENT APPEAL FILED BY THE ASSESSEE AND THE IM PUGNED ORDER PASSED BY THE LD. CIT (A) CONFIRMING THE PENALTY OR DER DATED 24.06.2011 IS HEREBY SET ASIDE. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF APRIL, 2016. SD/- SD/- (N.K. SAINI) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF APRIL, 2016/TS ITA NO.800/DEL./2015 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-V, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.