DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR V. M/S SPYTECH BUILDCON, JAIPUR

ITA 809/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1864 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI
• Assessee Lawyers: ROHAN SOGANI CA DHK
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 809/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE-6, JAIPUR. CUKE VS. M/S SPYTECH BUILDCON, K-48-49, INCOME TAX COLONY, DURGAPURA, TONK ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAEFS 2767 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ROHAN SOGANI (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07.12.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07/12/2017. VKNS'K@ ORDER PER SHRI BHAGCHAND ,AM. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. CIT (A)- 2, JAIPUR, DATED 29.08.2017 PERTAINING TO THE ASSES SMENT YEAR 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 13,30,801/- IMPOSED BY AO IGNORING THE FACT THAT THE ORDER OF T HE ITAT ON THE QUANTUM ISSUE HAS BEEN CHALLENGED BY THE DEPARTMENT BEFORE THE HONBLE HIGH COURT. (II) THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. THE ONLY ISSUE IS INVOLVED IN THIS APPEAL IS AGA INST DELETING THE PENALTY OF RS. 13,30,801/- U/S 271(1)(C) OF THE ACT. AT THE OUTSE T OF HEARING, THE LD. AR HAS SUBMITTED THAT HONBLE ITAT WHILE DECIDING THE QUAN TUM OF APPEAL OF THE ASSESSEE 2 ITA NO. 809/JP/2017. M/S SPYTECH BUILDCON, JAIPUR. HAS DELETED THE ADDITION AND THE LD. CIT(A) HAS GRA NTED RELIEF BY RELYING UPON THE DECISION OF THE HONBLE ITAT, JAIPUR BENCH IN ASSES SEES QUANTUM APPEAL. THEREFORE, THERE IS NO MERIT IN THE APPEAL OF THE R EVENUE. 2.1 ON THE OTHER HAND, LD. D/R HAS SUBMITTED THAT, THE DEPARTMENT HAS PREFERRED THE APPEAL AGAINST THE QUANTUM ORDER OF THE ITAT BE FORE THE HONBLE RAJASTHAN HIGH COURT. 2.2 I HAVE HEARD BOTH THE SIDES. THE LD. CIT(A) HA S DELETED THE PENALTY BY HOLDING AS UNDER:- THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILE D A COPY OF THE ORDER OF THE HON'BLE ITAT, JAIPUR BENCH IN THE ASSESSEE'S OWN CA SE OF FOR ASSESSMENT YEAR 2010-11 AGAINST THE ORDER UNDER SECTION 143(3) . VIDE THIS APPEAL ORDER DATED 14.09.2016 (ITA NO.149/JP/2015 AND 205/JP/201 5), THE HON'BLE ITAT HAS DELETED THE ADDITION STATING THEREIN: '19. FOR THE ABOVE, WE DO NOT FIND ANY MERIT IN THE OBJECTION SOUGHT TO BE RAISED BY THE DEPARTMENT TO THE EFFECT THAT SINC E THE ASSESSEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION TO THE EXTENT OF RS. 4,68,43,199/- 20. THE ACTION OF THE LD. CIT(A) IN HAVING SUSTAINE D THE DISALLOWANCE TO THE EXTENT OF RS. 43,06,801/- HAS GRIEVANCE THE ASS ESSEE AND THE ASSESSEE HAS RAISED GROUND NO. 1 OF ITS APPEAL BEFO RE US. 25. IT REMAINS UNDISPUTED THAT THE PROVISION WAS MA DE BY THE ASSESSEE FOR CERTAIN EXPECTED EXPENDITURE. AS SUCH, THE PROV ISION WAS MADE DUE TO THE ARISING OF THE POSSIBILITY OF THE EXPENDITUR E IN FUTURE. THIS WAS WHAT HAD PROMOTED THE ESTIMATION. NOW, IF THE PROVI SION DOES NOT STAND EXHAUSTED EVEN FOUR YEARS FROM THE END OF THE YEAR IN WHICH IT WAS MADE, THIS DOES NOT MEAN THAT THE PROVISION TO THAT EXTENT WAS ILL CONCEIVED. THE DETAILS OF THE EXPENDITURE INTENDED WERE DULY MADE AVAILABLE. THAT SUCH INCURRENCE OF EXPENDITURE DID NOT COME ABOUT, 3 ITA NO. 809/JP/2017. M/S SPYTECH BUILDCON, JAIPUR. CANNOT PUT TO NAUGHT THE PROVISION WHICH WAS MADE B ONAFIDE. THE LEGAL POSITION REMAINS THAT THE AMOUNT UNUTILIZED W OULD BE AVAILABLE FOR BEING OFFERED TO TAX N THE NEXT ASSESSMENT YEAR . THE BASIS OF THE PROVISION MADE HAS NOT BEEN OBSERVED BY THE LD. CIT (A) TO BE IRRATIONAL. IN THIS REGARD, THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF `BHARAT EARTH MOVERS VS CH', (2000) 245 TTR 428 (SC), WHICH WAS FOLLOWED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF YUM RESTAURANTS (I)(P) LTD ' (2015) 371 ITR 139 (D EL), UNDER SIMILAR CIRCUMSTANCES, IS DIRECTLY ATTRACTED ' 26. THEREFORE, WE ARE OF THE CONSIDERED OPINION THA T THE LD CIT(A) HAS GONE WRONG IN SUSTAINING THE ADDITION TO THE EXTENT OF RS. 43,06,801/-. THE SAME SHOULD ALSO HAVE BEEN DELETED. WE ORDER SO NOW. THEREFORE, THE ADDITION OF RS. 5,11,50,000/- IS DELETED IN TOT O.' FOLLOWING THE ABOVE JUDGMENT OF HON'BLE ITAT, JAIPU R, SINCE THE QUANTUM ADDITIONS HAVE BEEN DELETED, THE PENALTY IMPOSED TH EREON CANNOT BE SUSTAINED. THE APPEAL OF THE ASSESSEE IS ALLOWED. SINCE, THE RELIEF HAS BEEN GRANTED BY THE LD. CIT(A ) ON THE BASIS OF THE DELETION OF QUANTUM OF ADDITION BY HONBLE ITAT. THEREFORE, THE BENCH FIND NO MERIT IN THE APPEAL OF THE REVENUE SAME IS HEREBY DISMISSED. 3. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 809/JP/2017 IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 07/12/201 7. SD/- ( HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 07/12/2017. 4 ITA NO. 809/JP/2017. M/S SPYTECH BUILDCON, JAIPUR. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- DEPUTY COMMISSIONER OF INCOME TA X, CIRCLE-6, JAIPUR. 2. THE RESPONDENT M/S SPYTECH BUILDCON, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.809/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR