Bhartiya City Developers Pvt Ltd, New Delhi V. Addi. CIT Special Range, New Delhi

ITA 8158/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5077 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 13-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMIT GOEL
• Section: 43; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.8158/DEL/2019 Assessment Year 2015-16 Bhartiya City Developers Pvt. Ltd., E-52, New Mangalpuri, Mandi Road, Mehrauli, South West, New Delhi. v. Addl. CIT, Special Range, New Delhi. TAN/PAN: AAACZ3571A (Appellant) (Respondent) Appellant by: Shri Amit Goel, CA, Shri Nipun Mittal, CA Respondent by: Shri Kanav Bali, Sr.D.R Date of hearing: 29 06 2022 Date of pronouncement: 07 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een filed at th e in s tan ce o f th e assesse e ag ain st t h e o rd er o f th e Co mmiss io n er o f Inco me Tax (Ap p eals)-II, New Delh i (‘CIT(A)’ in sh o rt), d ated 0 9 .0 9 .20 1 9 arisin g fro m th e a ssess men t o rd er d ated 1 2 .1 2 .2 01 7 p assed b y the Assessin g Offic er (AO) u n d er Sectio n 1 43 (3 ) o f th e In co me Tax Act, 1 9 6 1 (th e Act ) co n cern in g AY 20 1 5 -1 6 . 2 . As p er its g ro u n ds o f ap p eal, th e a ssessee h as ch a ll e n g ed th e i mp o si tio n o f p en al ty o f Rs .2 ,4 7 ,7 2 4 /- o n acco un t o f d isal lo wan ce o f Rs .8 ,2 5 ,7 4 7 /- mad e u n d er Sectio n 1 4A o f th e Ac t. 3 . On p eru sal o f th e o rd ers o f th e au th o rit ies b e low, we o b serv e I.T.A. No.8158/DEL/2019 2 th at th e d isa llo wan ce was carried o u t at Rs .8 ,2 5 ,7 47 /- in th e lig h t o f th e p ro v isio n o f Sect io n 1 4A r.w. Ru le 8 D(2 )(iii) o f th e In co me Tax Ru les wh ich was co n fir med b y th e CIT(A) h av in g reg ard to ex emp t in co me d ec lared b y asse ssee . 4 . We straig h tway no te th at in o rd er to attrac t p enalty u n d er Sect io n 2 7 1 (1 )(c) o f th e Ac t, i t is n ecessary th a t th ere mu s t b e co n ceal men t b y t h e assess ee o f p arti cu lars o f h is in co me o r fu rn ish in g o f in ac cu rate p ar ticu lars th ereo f. Th e di sal l o wan ce o f certa in ex p en d itu re o n esti ma ted b a sis o n so me n o tio n al b asis is n eith er th e co n ce al men t o f in co me p articu lars o f inco me n o r fu rn ish in g o f in acc u rate p art icu l ars as su ch . 5 . Need less to s ay , t o in v o k e Sectio n 27 1 (1)(c), the en tir ety o f circu ms tan ce s mu st re aso n ab le p o in t to th e co n clu sio n th at th e d isp u ted amo u n t re p resen ts in co me an d th e assess ee h as co n cealed th e p articu lars o r fu rn ish ed in accu rate p art icu lars th ereo f. Th e Rev en u e in th e in stan t c ase h as co mp u ted an esti mated d isal lo wan ce u n d er Sect io n 1 4 A read with Ru le 8 D(2 )(iii) @ 0 .5 % o f av erag e in v estmen t. I t is n o t th e case o f th e Rev en u e Au th o rities th at a ssessee h as , in fa ct, in cu rred any ex p en ses to earn th e ex emp t i n co me an d co n cealed th e fac ts th ere o n b eyo nd an y d ou b t. Th e Rev en u e Au th orit ies h av e d et ermin ed th e d isal lo wan ces o n th e b asis o f d eemi n g pro v isio n s o f co mp u tat io n o f d isa llo wan ces p ro v id ed u n d er Ru le 8 D o f th e In come T ax Ru les. 6 . A co n sp ectu s o f Ex p lan atio n -1 to Sect io n 2 7 1 (1 )(c) o f th e Act, mak es i t cl e ar th a t th e s tatu t e v isu al iz es th e assess men t p ro ceed in g s an d pen alty p ro ceed in g s to b e wh o lly d istin c t an d in d ep en d en t o f ea ch o th er. Wh ile t h e Assessin g Officer may b e I.T.A. No.8158/DEL/2019 3 ju sti fied in ma k in g esti ma ted d isal lo wan ce i n q u an tu m p ro ceed in g s, su ch d isa llo wan ce o f ex p en ses an d t h at to o o n est imat ed b asis an d fu rth er su b stan tially red u ced in th e ap p ella te p ro ceed in g s, co u ld n o t au to matic al ly fal l with in the misch ie f o f Sect io n 2 71 (1 )(c) o f th e Act o n th e g ro un d s o f co n cealmen t e tc. Wh ile th e cl ai m to ward s ex p en d itu re may n o t b e fo u nd accep t ab le in q u an tu m p ro ceed in g s, su ch d isall o wan ce p er se ca n n o t in v ite rig o rs o f p en alty . Wh ere all ma ter ia l fac ts re lev ant to th e is su e were p laced o n reco rd , mi tig a t in g ci rcu mstan c es to d is p ro v e any cu lp ab il ity o f an y so rt ag ain st th e assess ee is es tab lish ed b y imp lic at io n . Th e cla i m o f ex p en d it u re to ward s ex empt in co me mad e, a t b est , b e t ak en as erro n eo u s cla i m b y th e ass es see. Su ch cla i m, a l th o u g h , may n o t b e main tain ab l e fo r th e p urp o ses o f q u an tu m p ro ceed in g s, h o wev er would n o t in v ite p en alty in th e ab sen ce o f fals i ty p er se. 7 . Th e Hon ’b le Ap ex Co u rt in th e case o f CIT vs. Re l ia n ce Petro p ro d u cts Pvt. Ltd . a s rep o rted i n 3 22 ITR 1 5 8 (S C) h eld th a t p en alty u n d er Sectio n 2 7 1 (1 )(c) is n o t lev iab le fo r a d ho c d isal lo wan ce mad e o n esti ma ted b asis in th e ab sen ce o f any ele men t o f fals i ty p er se. It was o b serv ed th at in th e ab sen ce o f an y fin d in g th at an y d etai ls su p p lied b y th e assessee i n its retu rn are fo u n d to b e in co rrect o r erroneo u s o r false , there is n o q u estio n o f in v it i n g th e p en alty u nd er Sectio n 2 7 1 (1)(c) o f th e Act. I t was fu rth er o b serv ed th at a mere mak in g o f cl ai m, wh ich i s n o t su stain ab l e in law, b y its el f w i ll n o t a mo u n t to fu rn ish in g in accu rat e p articu l ars reg ard in g th e in co me o f th e ass es see. Su ch a cla i m mad e in th e retu rn can n o t amo u n ts to fu rn ish in g in accu rat e p articu l ars. 8 . In CIT vs. Liqu id In vestmen t & T ra d in g Co ., ITA I.T.A. No.8158/DEL/2019 4 No .2 4 0 /2 0 09 ju dgmen t d a ted 0 5 .10 .2 0 10, th e Ho n ’b le Delh i Hig h Co u rt o b serv ed that issu e o f d i sal lo wan ce u n d er Secti o n 14 A is a d eb atab le issu e . 9 . In v iew o f th e a fo resaid d el ib era tio n s, th e i mp ug n ed o rder o f th e CIT(A) is set asid e an d th e Assessin g Officer is d irected to d elet e th e p en al ty i n q u estio n . 1 0 . In th e resu l t, th e a p p eal o f th e asses s ee is a llo wed . Order pronounced in the open Court on 21/07/2022. Sd /- Sd /- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /07/2022 Prabhat