The DCITMehsan Circle, Mehsana V. B. Patel Infrastructure (P) Ltd., Mehsana

ITA 806/AHD/2010

• Counselvise Citation: 80620514 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 15-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Difference of opinion
• Section: 14A

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , .. !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI B.P.JAIN, ACCOUNTANT MEMBER ./ I.T.A. NO.806/AHD/2010 ( ' ' ' ' ' ' ' ' / / / / ASSESSMENT YEAR : 2005-06) THE DCIT MEHSANA CIRCLE MEHSANA ' ' ' ' / VS. B.PATEL INFRASTRUCTURE PVT.LTD. SARDAR SOCIETY MEHSANA ( #$ ./ ) ./ PAN/GIR NO. : AAACB 8590 K ( (* / // / APPELLANT ) .. ( +,(*/ RESPONDENT ) (* - #/ APPELLANT BY : SHRI SAMIR TEKRIWAL, SR.D.R. +,(* . - # / RESPONDENT BY : -NONE- '/ . 0$/ // / DATE OF HEARING : 19/12/2011 12' . 0$ / DATE OF PRONOUNCEMENT : 21/12/2011 #3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-GANDHINAGAR DATED 30/12/2009 PASSED FOR A.Y. 2005-06. THE REVENUE HAS CHALLENGE D THE DELETION OF PENALTY LEVIED U/S.271(1)(C) OF THE I.T.ACT. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE I.T. ACT, 1961 DATED 2 7/10/2009 AND THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T.ACT D ATED 28/12/2007 WERE ITA NO .806/AHD/2010 DCIT VS. B.PATEL INFRASTRUCTURE PVT.LTD. ASST.YEAR - 2005-06 - 2 - THAT THE ASSESSEE-COMPANY IS IN THE CONSTRUCTION B USINESS. WHILE LEVYING THE PENALTY, IT WAS NOTED BY THE ASSESSING OFFICER THAT THE HON'BLE ITAT HAS CONFIRMED AN ADDITION OF RS.6 LACS WHICH WAS MA DE BY INVOKING THE PROVISIONS OF SECTION 14-A OF THE I.T.ACT. DURING THE ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD MADE AN INVESTMENT OF RS.50 LACS IN SHARES OF M/S.K ARNAVATI INFRASTRUCTURE PVT.LTD. THE DIVIDEND INCOME ON SUC H SHARES WAS EXEMPT U/S.10(34) OF THE I.T.ACT. DUE TO THE SAID REASO N, THE CORRESPONDING INTEREST EXPENSES ON THE MONEY BORROWED WAS DISALLO WED AND THE SAID DISALLOWANCE WAS WORKED OUT @ 12% ON THE INVESTMENT OF RS.50 LACS WHICH AMOUNTED TO RS.6 LACS HELD AS DISALLOWANCE OF INTEREST . WITH THIS FACTUAL BACKGROUND, IT WAS HELD BY THE ASSESSING OF FICER THAT IN THE LIGHT OF DHARMENDRA TEXTILES UOI VS. DHARMENDRA TEXTILE 3 06 ITR 277 (SC), THE PENALTY BEING A CIVIL LIABILITY, HENCE IMPOSED A SUM OF RS.2,20,000/- U/S.271(1)(C) OF THE I.T.ACT. THE MATTER WAS CARRI ED BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED CIT(APPEALS) HAS REFERRED AN EARLIER DECISION OF THE TRIBUNAL AND DELETED THE PENALTY AS UNDER:- 7. THE MATTER HAS BEEN GIVEN DUE CONSIDERATION AND I AM AFRAID IN THE FACTS AND CIRCUMSTANCES OF THE CASE T HERE IS NO JUSTIFIABLE REASON FOR LEVY OF PENALTY U/S.271(1)(C ). VIDE ORDER NO.CIT(A)/GNR/150/2007-08 DATED 30/12/2007 IN THE A PPELLANTS CASE FOR ASSESSMENT YEAR 2004-05, THE ISSUE THAT PE R SE THE ASSESSEE HAD NOT CONCEALED ANY PARTICULARS AND THE FACT THAT THERE EXISTED DIFFERENCE OF OPINION AMONG VARIOUS AUTHORI TIES TILL THE DATE OF RECEIPT OF ITATS ORDER ON 31/12/2005, HAD BEEN HIGHLIGHTED TO HOLD THAT THE ASSESSEE CANNOT BE VIS ITED PENALTY U/S.271(1)(C). DISALLOWANCE OF AN EXPENSE ON DIFFE RENT ITA NO .806/AHD/2010 DCIT VS. B.PATEL INFRASTRUCTURE PVT.LTD. ASST.YEAR - 2005-06 - 3 - INTERPRETATION OF A SECTION DOES NOT AMOUNT TO FURN ISHING INACCURATE PARTICULARS INCOME. THE BASIC SPIRITS O F THE SAME LOGIC WILL HAVE TO BE APPLIED FOR THIS ASSESSMENT YEAR AL SO. THE ASSESSEE HAD MADE A CLAIM OF TOTAL AMOUNT OF INTEREST ON BOR ROWING IN THE RETURN FILED ON 31/10/2005, I.E. BEFORE THE DATE IT RECEIVED THE ITATS ORDER. THE ACT OF CONCEALMENT HAS TO BE REL ATED TO A RETURN OF INCOME AND NOT TO WHAT AN ASSESSEE SHOULD HAVE D ONE. FROM THE CHRONOLOGY OF DATES IT IS CLEAR THAT ON THE DAT E OF RETURN OF INCOME WAS FILED, IT DID NOT HAVE THE BENEFIT OF IT ATS DECISION TO DELETE PART OF THE INTEREST EXPENSES AS RELATABLE T O INVESTMENT IN SHARES. OTHERWISE, NOTHING SEEMS TO HAVE BEEN CONC EALED FROM THE ASSESSING OFFICER. ALL THE FACTS ABOUT INVESTMENT IN SHARES AND BORROWINGS WERE VERY MUCH ON RECORD AND THE COMPUTA TION FOR DISALLOWANCE HAS BEEN DONE ON THE BASIS OF THE ASSE SSEES DATA ONLY. THE POINT MADE BY THE AUTHORISED REPRESENTAT IVE THAT ANY CASE THE APPELLANT HAD NOT ACCEPTED THE ITATS DECI SION AND HAVE EVEN GONE UPTO THE HIGH COURT, WHOSE DECISION WAS R ENDERED ON 07/02/2007, HAS ALSO TO BE KEPT IN MIND IN COMING T O THE CONCLUSION AS TO WHETHER THE APPELLANT MADE ANY INA CCURATE PARTICULARS OF CLAIM OF EXPENSES. 4. NO ONE HAS APPEARED FROM THE SIDE OF THE RESPOND ENT-ASSESSEE, HOWEVER WE HAVE DECIDED TO PROCEED EX-PARTE QUA THE ASSESSEE, AFTER HEARING LD.SR.DR MR.SAMIR TEKRIWAL WHO HAS PLACED R ELIANCE ON THE PENALTY ORDER. 5. AT THE OUTSET, IT IS WORTH TO MENTION THAT ON ID ENTICAL FACTS FOR A.Y.2004-05 THE RESPECTED CO-ORDINATE BENCH B AHM EDABAD IN ITA NO.984/AHD/2008 TITLED AS ACIT VS. B.PATEL INFRAST RUCTURE PVT.LTD. VIDE AN ORDER DATED 31/05/2010 HAS HELD AS UNDER:- 4. HAVING HEARD BOTH THE SIDES WE ARE OF THE CONS CIENTIOUS VIEW THAT THE ISSUE OF DISALLOWANCE U/S.14A WAS ALWAYS B EEN A SUBJECT OF ITA NO .806/AHD/2010 DCIT VS. B.PATEL INFRASTRUCTURE PVT.LTD. ASST.YEAR - 2005-06 - 4 - CONTROVERSY IN THE PAST. RATHER THIS ISSUE HAS A C HEQUERED HISTORY. THE REVENUE AUTHORITIES HAVE NOT DOUBTED BONAFIDES OF THE STAND TAKEN BY THE ASSESSEE AT THE TIME WHEN THE CLAIM WA S MADE BUT DUE TO DIFFERENCE OF OPINION AROSEN ON ACCOUNT OF CHANG E IN LAW AND FEW DECISIONS OF THE HON'BLE COURTS HAVE TAKEN ADVE RSE VIEW AGAINST THE ASSESSEE. IN A SITUATION WHERE THERE I S A DIFFERENCE OF OPINION AND ISSUE BEING CONTENTIOUS THE QUESTION OF LEVY OF CONCEALMENT PENALTY SHOULD NOT ARISE RATHER A TAXPA YER IN PENALTY MATTER MAY GET THE BENEFIT OF AMBIGUITY OF LAW. IN VIEW OF THESE REASONS WE HEREBY AFFIRM THE FINDINGS OF LD. C.I.T. (A)., THIS GROUND OF THE REVENUE IS DISMISSED. IN THE RESULT, APPEAL IS DISMISSED. 6. UNDISPUTEDLY, FOR ASSESSMENT YEAR 2004-05 A DISA LLOWANCE OF RS.6 LACS WAS MADE BY INVOKING THE PROVISIONS OF SE CTION 14A OF THE I.T.ACT AS IT WAS MADE IN THE YEAR UNDER CONSIDERAT ION FOR ASSESSMENT YEAR 2005-06. ON IDENTICAL FACTS A PENALTY HAS ALR EADY BEEN DELETED BY THE RESPECTED CO-ORDINATE BENCH, THEREFORE WE FIND NO FORCE IN THIS GROUND OF THE REVENUE. THE DELETION IS HEREBY CONF IRMED AND GROUND IS DISMISSED. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. SD/- SD/- ( .. !' ) ( ) #$ ( B.P. JAIN ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 21/ 12 /2011 40..', .'../ T.C. NAIR, SR. PS ITA NO .806/AHD/2010 DCIT VS. B.PATEL INFRASTRUCTURE PVT.LTD. ASST.YEAR - 2005-06 - 5 - #3 . +5 6#5' #3 . +5 6#5' #3 . +5 6#5' #3 . +5 6#5'/ COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 7 / CONCERNED CIT 4. 7() / THE CIT(A)-GANDHINAGAR 5. 5:; +' , , / DR, ITAT, AHMEDABAD 6. ;< =/ / GUARD FILE. #3' #3' #3' #3' / BY ORDER, ,5 + //TRUE COPY// > >> >/ // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..19.12.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.12.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 21/12/2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21/12/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER