DCIT, Jaipur V. M/S DINESH KUMAR SOMANI HUF, Jaipur

ITA 854/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7829 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 08-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA , ACCOUNTANT MEMBER . ITA.NO. 85 4 /JP /20 1 2 (ASSESSMENT YEAR: 200 6 - 0 7 ) DCIT, CIRCLE - 5, JAIPUR APPELLANT VS. M/S. DINESH KUMAR SOMANI HUF 128, FRONTIER COLONY, ADARSH NAGAR, JAIPUR. RESPONDENT PAN: A A CHD4006M / BY APPELLANT : SHRI KAILASH MANGAL , D.R. / BY RESPONDENT : SHRI P. C. PARWAL, A.R. / DATE OF HEARING : 04 .1 2 .2014 / DATE OF PRONOUNCEMENT : 5 .1 2 .2014 ORDER PER SHAILENDRA KUMAR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY THE REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - II , JAIPUR , DATED 2 9 . 0 8 .201 2 FOR A.Y. 200 6 - 0 7 ON THE FOLLOWING GROUND: I.T .A. NO. 85 4 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( D C IT VS. M/S DINESH KR. SOMANI HUF) PAGE 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(APPEALS) HAS ERRED IN: - ( I ) DIRECTING TO CANCEL THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE I.T. ACT, 1961 AMOUNTING TO RS.5,15,200/ - WITH REFERENCE TO ESTIMATED DISALLOWANCE OF SALARY, SALES PROMOTION AND CONSUL TATION CHARGES WITHOUT APPRECIATING THE FACT THAT THE ADDITION WAS NOT ON THE BASIS OF ESTIMATION BUT ON THE BASIS OF NON GENUINE AND BOGUS EXPENSES CLAIMED BY THE ASSESSEE. 2. ASSESSING OFFICER LEVIED PENALTY OF RS.5,15,200/ - UNDER THE PROVISIONS OF SEC TION 271(1)(C) ON ACCOUNT OF DISALLOWANCE OF SALARY EXPENSES OF RS.7 LACS, DISALLOWANCE OF SALES PROMOTION EXPENSES OF RS.5 LACS AND DISALLOWANCE OF CONSULTATION CHARGES OF RS.3.30 LACS. ALL ABOVE DISALLOWANCES WERE ESTIMATED DISALLOWANCES. CIT(A) OBSERV ED THAT ISSUE IN THIS APPEAL IS SIMILAR TO THAT OF A.Y. 2005 - 06 IN ASSESSEE S OWN CASE. IT WAS BROUGHT TO OUR KNOWLEDGE THAT IN A.Y. 2005 - 06 ON SIMILAR POINTS, PENALTY WAS DELETED BY CIT(A) AND FOLLOWING THE SAME, CIT(A) DELETED THE PENALTY IN YEAR UNDER CONSIDERATION. 3. LD. DEPARTMENTAL REPRESENTATIVE OPPOSED THE DELETION WHILE LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE SAME. 4. AFTER GOING THROUGH RIVAL SUBMISSION AND MATERIAL ON RECORD, WE FIND THAT THERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES OF THE CASE IN PRESENT YEAR AS WELL. ASSESSING OFFICER HAS LEVIED PENALTY OF RS.5,15,200/ - ON THE BASIS OF ADDITION SUSTAINED BY APPELLATE AUTHORITY, WHICH WAS IN NATURE OF DISALLOWANCE OF SALARY EXPENSES, SALES PROMOTION EXPENSES AND CONSULTATION CHARGES. THE DISALLOWANCE OF CONSULTATION I.T .A. NO. 85 4 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( D C IT VS. M/S DINESH KR. SOMANI HUF) PAGE 3 CHARGES WAS MADE BECAUSE IT WAS RELATED TO A NEW PROJECT AND THERE WAS NO EVIDENCE THAT IT RELATED TO EXISTING BUSINESS OF ASSESSEE. THE SAID DISALLOWANCE WAS MADE ON ACCOUNT OF CAPITAL EXPENDITURE. THERE WAS NOTHING ON RECORD TO SUGGEST THAT ASSESSEE HAS NOT DISCLOSED THE REQUIRED FACTS OR IT HAD INTENTION OF CONCEALING ANY INCOME. IT IS NOT THE CASE OF ASSESSING OFFICER THAT THESE EXPENSES WERE BOGUS OR INFLATED. TAKING UP NEW PROJECT FOR EXPANSION OF THE EXISTING BUS INESS WAS ALSO AN EXPENDITURE INCURRED IN COURSE OF BUSINESS. IN VOW OF ABOVE DISCUSSION , AS WELL AS FOLLOWING THE DECISION FOR A.Y. 2005 - 06, CIT(A) CANCELLED THE PENALTY IN QUESTION. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5 . AS A RESULT, APPEAL FILED BY THE REVENU E IS DISMISSE D . PRONOUNCED IN THE OPEN COURT ON THIS THE 5 TH DAY OF DECEMBER , 2014. SD/ - SD/ - ( B. C. MEENA ) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT - D CIT, CIRCLE - 5 , JAIPUR 2. THE RESPONDENT - M/S DINESH KR. SOMANI HUF 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NO. 85 4 /JP/ 201 2 ) BY ORDER A.R., JAIPUR.