Sawan Trading Pvt. Ltd, New Delhi V. ACIT, New Delhi

ITA 841/DEL/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0108 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-11-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 06-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTY
• Assessee Lawyers: A MATHUR
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH G BENCH G BENCH G BENCH G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI K.G.BANSAL K.G.BANSAL K.G.BANSAL K.G.BANSAL, AM , AM , AM , AM ITA NO. ITA NO. ITA NO. ITA NO.841/DEL/2009 841/DEL/2009 841/DEL/2009 841/DEL/2009 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 1995 1995 1995 1995- -- -96 9696 96 M/S SAWAN TRADING PVT.LTD., M/S SAWAN TRADING PVT.LTD., M/S SAWAN TRADING PVT.LTD., M/S SAWAN TRADING PVT.LTD., B BB B- -- -II/99, II/99, II/99, II/99, MOHAN COOPERATIVE INDUSTRIAL MOHAN COOPERATIVE INDUSTRIAL MOHAN COOPERATIVE INDUSTRIAL MOHAN COOPERATIVE INDUSTRIAL ESTATE, ESTATE, ESTATE, ESTATE, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN PAN PAN PAN NO. NO. NO. NO.AABCS8225R. AABCS8225R. AABCS8225R. AABCS8225R. VS. VS. VS. VS. ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -7(1), 7(1), 7(1), 7(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.MATHUR, CA. RESPONDENT BY : MS.S.MOHANTY, DR. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI, J , J, J , JM : M : M : M : THE ASSESSEE IS IN APPEAL AGAINST THE LEARNED CIT( A)S ORDER DATED 10.11.2008 CONFIRMING THE PENALTY AMOUNTING T O `27,600/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX AC T, 1961 FOR THE AY 1995-96. 2. THE ASSESSEES CLAIM OF EARNING AGRICULTURAL INC OME TO THE EXTENT OF `69,000/- WAS NOT ALLOWED IN THE ASSESSMENT. TH E AOS ORDER IN NOT ALLOWING THE ASSESSEES CLAIM HAS BEEN ULTIMATELY A FFIRMED BY THE TRIBUNAL BY OBSERVING AS UNDER:- 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND RELEVA NT FACTS. NEITHER BEFORE THE AO NOR BEFORE THE CIT(A) OR BEFORE US, THERE IS ANY MATERIAL TO HOLD THAT THE I NCOME OR EXPENSES AS DECLARED IN MONTHLY STATEMENT ARE IN RE LATION TO AGRICULTURAL OPERATION. AN ACTIVITY, WHICH IS A GRICULTURAL IN NATURE, IS NOT PROVED ON PAPER. SOME CONCRETE E VIDENCE IS REQUIRED TO BE FURNISHED PARTICULARLY WHEN A PER SON CLAIMS EXEMPTION U/S 10(1) OF THE ACT. EARNING OF INCOME IS NOT DENIED BY ASSESSEE BUT ANY EVIDENCE IN SUPPO RT OF CONTENTION THAT THE SAME IS EARNED BY WAY OF AGRICU LTURAL OPERATIONS HAS NOT BEEN FURNISHED SO FAR. MERELY PURCHASING LAND DOES NOT GIVE RISE TO AGRICULTURAL INCOME ITA-841/DEL/2009 2 AS SUCH INCOME CAN BE EARNED ONLY ON AGRICULTURAL OPERATIONS AND NOT OTHERWISE. IN ABSENCE OF ANY EV IDENCE, WE ARE UNABLE TO DISLODGE THE FINDING OF LEARNED CI T(A). 3. SINCE THE ASSESSEES CLAIM OF EARNING AGRICULTUR AL INCOME WAS DISALLOWED, THE AO INITIATED PENALTY PROCEEDINGS U/ S 271(1)(C) IN THAT RESPECT. AO THEN ULTIMATELY LEVIED PENALTY AMOUNTI NG TO `27,600/- WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A). TH E CONCLUSION OF THE AO IN LEVYING PENALTY IS AS UNDER:- THE EXPLANATION OFFERED BY THE ASSESSEES COUNSEL HAS BEEN DULY CONSIDERED AND I FIND NO FORCE IN IT BECA USE OF THE FACT THAT INSPITE OF SO MANY OPPORTUNITIES OFFE RED TO THE ASSESSEE ON DIFFERENT OCCASIONS, HE HAS NOT BEEN AB LE TO SUBSTANTIATE ITS CLAIM FOR EXEMPTION U/S 10(1). TH E ASSESSEE DID NOT PROVIDE ANY SUBMISSION WITH REGARD TO EITHER AT THE ASSESSMENT OR AT THE APPELLATE STAGE. I AM, THEREFORE, SATISFIED THAT THE ASSESSEE HAS DELIBERA TELY TRIED TO FURNISH INACCURATE PARTICULAR OF ITS INCOME BY C LAIMING EXEMPTION U/S 10(1). I, THEREFORE, IMPOSE A PENALT Y OF RS.27,600/- WHICH IS 100% OF THE TAX SOUGHT TO BE E VADED AS CALCULATED HERE UNDER:- CONCEALED INCOME : RS.69,000/- TAX ON CONCEALED INCOME : RS.27,600/- MINIMUM PENALTY @ 100% : RS.27,600/- MAXIMUM PENALTY @ 300% : RS.82,800/- PENALTY IMPOSED : RS.27,600/- 4. THE LEARNED CIT(A) HAS AFFIRMED THE AOS PENALTY ORDER FOR THE REASON THAT ASSESSEE DID NOT APPEAR BEFORE HIM AND GAVE ANY EXPLANATION OR SUBMISSION IN SUPPORT OF THE CONTENT ION THAT NO PENALTY WAS LEVIABLE. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 6. ON PERUSAL OF TRIBUNALS ORDER, WE FIND THAT THE ASSESSEE SUBMITTED IN THE QUANTUM APPEAL BEFORE THE TRIBUNAL THAT ASSESSEE ITA-841/DEL/2009 3 WAS HOLDING AGRICULTURAL LAND AND HIRED THE SERVICE S OF TWO PERSONS, NAMELY, MOHAN SINGH AND VISHWANATH THAKUR TO CARRY OUT THE AGRICULTURAL ACTIVITIES ON BEHALF OF THE COMPANY. THE ASSESSEE FURTHER SUBMITTED THAT AGRICULTURAL ACTIVITIES LIKE GROWING OF VEGETABLES, FRUITS AND FLOWERS ETC. WERE BEING CARRIED OUT BY THE AFO RESAID TWO PERSONS AND NO GRAINS WERE CULTIVATED ON THE ALLEGED LAND. ASSESSEE FURTHER SUBMITTED THAT AS AFORESAID TWO PERSONS WERE NOT MA INTAINING ANY PROPER BOOKS OF ACCOUNT AND WERE IN FACT PREPARING ONLY THE MONTH- WISE DETAILS OF EXPENSES INCURRED AND INCOME EARNED FROM AGRICULTURAL PRODUCE, THE ASSESSEE COULD NOT PRODUCE THE SUFFICI ENT EVIDENCES BEFORE THE AO. FROM THE ORDER OF THE TRIBUNAL, IT IS FURTHER CLEAR THAT THE FACT THAT ASSESSEE WAS OWNING THE AGRICULTURAL LAND WAS NOT IN DISPUTE. THE ASSESSEES CLAIM OF EARNING AGRICULTU RAL INCOME HAS BEEN REJECTED FOR WANT OF CONCRETE EVIDENCE. THE AO ALS O IN THE PENALTY ORDER HAS STATED THAT THE ASSESSEE HAS NOT BEEN ABL E TO SUBSTANTIATE ITS CLAIM BUT THE CLAIM OF THE ASSESSEE WAS NOT FOU ND TO BE BOGUS OR FALSE SO AS TO ATTRACT PENALTY LEVIABLE U/S 271(1)( C) OF THE ACT. THIS IS THE CASE WHERE THE CLAIM OF THE ASSESSEE IS REJECTE D FOR WANT OF CONCRETE EVIDENCE. WHATEVER DETAILS WERE AVAILABLE WITH THE ASSESSEE WERE PRODUCED BEFORE THE REVENUE AUTHORITIES. IN T HE LIGHT OF THESE FACTS, WE, THEREFORE, HOLD THAT NO PENALTY U/S 271( 1)(C) IS LEVIABLE INASMUCH AS ASSESSEE HAS GIVEN A BONA-FIDE EXPLANAT ION AND HAS FURNISHED ALL THE DETAILS RELATING THERETO. WE, TH EREFORE, DELETE THE PENALTY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH, 2011. SD/- SD/- (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI) )) ) ACCOUNTAN ACCOUNTAN ACCOUNTAN ACCOUNTANT MEMBER T MEMBER T MEMBER T MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 18.03.2011. VK. ITA-841/DEL/2009 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR