DCIT, New Delhi V. M/s. Akoi Enterprises, New Delhi

ITA 868/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3717 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-06-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 03-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: J S KOCHAR
• Keywords: Business income
• Section: 263

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 BENCH A : NEW DELHI DELHI BENCH A : NEW DELHI DELHI BENCH A : NEW DELHI DELHI BENCH A : NEW DELHI BEFORE SHRI G.E.VEERABHADRAPPA, VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA, VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA, VICE PRESIDENT AND BEFORE SHRI G.E.VEERABHADRAPPA, VICE PRESIDENT AND SHRI A.D.JAIN, JUDICIAL MEMBER SHRI A.D.JAIN, JUDICIAL MEMBER SHRI A.D.JAIN, JUDICIAL MEMBER SHRI A.D.JAIN, JUDICIAL MEMBER ITA NO.868/DEL/2010 ITA NO.868/DEL/2010 ITA NO.868/DEL/2010 ITA NO.868/DEL/2010 ASSESSMENT YEAR : 1999 ASSESSMENT YEAR : 1999 ASSESSMENT YEAR : 1999 ASSESSMENT YEAR : 1999- -- -2000 2000 2000 2000 DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -31(1), 31(1), 31(1), 31(1), NEW DELH NEW DELH NEW DELH NEW DELHI. I.I. I. VS. VS. VS. VS. M/S AKOI ENTERPRISES, M/S AKOI ENTERPRISES, M/S AKOI ENTERPRISES, M/S AKOI ENTERPRISES, 2, KASTURBA GANDHI MARG, 2, KASTURBA GANDHI MARG, 2, KASTURBA GANDHI MARG, 2, KASTURBA GANDHI MARG, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. GIR NO.A GIR NO.A GIR NO.A GIR NO.A- -- -183. 183. 183. 183. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.ANUSHA KHURANA, SR.DR RESPONDENT BY : SHRI J.S.KOCHAR, CA. ORDER ORDER ORDER ORDER PER A.D.JAIN, JM : PER A.D.JAIN, JM : PER A.D.JAIN, JM : PER A.D.JAIN, JM : THIS IS DEPARTMENTS APPEAL FOR AY 1999-2000, CONTE NDING THAT THE LEARNED CIT(A) HAS ERRED IN DELETING THE PENALT Y IMPOSED ON THE ASSESSEE U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 WITHOUT CONSIDERING THAT THE SAME HAS BEEN IMPOSED FOR CONCEALING THE P ARTICULARS OF INCOME BY CLAIMING HIGHER DEDUCTION BY BUSINESS INC OME, WHICH THE ASSESSEE HAD ITSELF CLAIMED AS INCOME FROM HOUSE PR OPERTY IN AY 2001- 02. 2. THE ASSESSEE RECEIVED `27,60,000/- ON ACCOUNT OF LETTING OUT OF WAREHOUSE AND STORAGE FACILITIES PROVIDED TO ONE SH RI RAJDEV SINGH & CO. THE ASSESSEE CLAIMED IT AS A LICENSE FEE. THI S ARRANGEMENT WAS UNDER A LICENSE AGREEMENT, AS PER WHICH, THE POSSES SION OF THE WAREHOUSE WAS TO ALWAYS REMAIN WITH THE OWNER AND T HE ASSESSEE WAS RESPONSIBLE FOR MAINTENANCE OF STORE RECORDS, RECEI PT AND DISPATCH OF GOODS, PROPER UPKEEP OF THE WAREHOUSE TO PREVENT DA MAGE TO GOODS AND SECURITY FOR THE SAFE CUSTODY OF THE GOODS ETC. FOR AY 1997-98, THE ASSESSEE SHOWED INCOME FROM CARRYING ON OF BUSINESS OF PROVIDING ITA-868/DEL/2010 2 WAREHOUSING FACILITY. THE AO TREATED THE RECEIPT A S INCOME FROM HOUSE PROPERTY. IT WAS OBSERVED THAT IN AY 2001-02, THE ASSESSEE HAD ITSELF SHOWN SUCH INCOME AS INCOME FROM HOUSE PROPERTY. F OR AY 1996-97 ALSO, A SIMILAR TREATMENT WAS ACCORDED TO THE RECEI PT, HOLDING IT TO BE INCOME FROM HOUSE PROPERTY. THE TRIBUNAL ALSO HELD IT TO BE INCOME FROM HOUSE PROPERTY. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LEARNED CIT (A) DELETED THE PENALTY. 4. CHALLENGING THE IMPUGNED ORDER, THE LEARNED DR H AS CONTENDED THAT THE ASSESSEE HAS WRONGLY MAINTAINED THE RECEIP T TO BE BUSINESS INCOME, WHEREAS FOR AY 2001-02, THE ASSESSEE HAD IT SELF STATED IT TO BE INCOME FROM HOUSE PROPERTY, WHICH IS THE VIEW MAINT AINED BY THE DEPARTMENT OVER THE YEARS; AND THAT THE LEARNED CIT (A) HAS GONE WRONG IN DELETING THE PENALTY RIGHTLY LEVIED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS CONTENDED THAT FOR AY 1996-97, THE AO HAD ACCEPTED SUCH RECEIPT TO BE BUSINESS INCOME; THAT, HOWEVER, UNDER SECTION 26 3 OF THE ACT, THE LEARNED COMMISSIONER HAD HELD IT TO BE INCOME FROM HOUSE PROPERTY; THAT THE TRIBUNAL HAD HELD THE AOS VIEW TO BE A PO SSIBLE VIEW; THAT, AS SUCH, FOR AY 1996-97, THE RECEIPT WAS TREATED AS BU SINESS INCOME; THAT FOR AY 1998-99, THE AO HELD THE INCOME TO BE INCOME FROM HOUSE PROPERTY WHEREAS THE LEARNED CIT(A) HELD IT TO BE B USINESS INCOME AND THE TRIBUNAL HELD IT TO BE INCOME FROM HOUSE PROPER TY; THAT, AS SUCH, THE ISSUE HAS REMAINED A DEBATABLE ONE; THAT ALL RE LEVANT PARTICULARS OF INCOME WERE DULY FILED AND THERE WAS NEITHER ANY CO NCEALMENT, NOR ANY FURNISHING OF INACCURATE PARTICULARS OF INCOME; THAT THE AO DID NOT FIND ANY ADDITIONAL INCOME; AND THAT THE LICENSE HA D BEEN GRANTED FOR STORAGE OF GOODS. RELIANCE HAS BEEN PLACED ON FOLL OWING CASE LAWS:- ITA-868/DEL/2010 3 (I) CIT VS. RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 (SC). (II) CIT VS. M/S JOYCO INDIA PVT.LTD. CC 3022/200 9 (SC). (III) CIT VS. LOTUS TRANS TRAVELS (P) LTD. 177 TA XMAN 37 (DEL). (IV) CIT VS. E.I.DUPONT INDIA LTD. ITA NO.485/200 7 (DELHI HC). (V) CIT VS. INSILCO LTD. ITA 1404/2010. (VI) CIT VS. M/S SSP LTD. ITA NO.450 OF 2009 (P&H HC). (VII) CIT VS. M/S GEM PLUS JEWELLERY INDIA LTD. I TA NO.2418 OF 2009 (BOMBAY HC). (VIII) CIT VS. M/S INDERSONS LEATHER (P) LTD. ITA NO.118 OF 2009 (P&H HC). 6. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD. THE ISSUE IS AS TO WHETHER THE LEARNED CIT(A) HAS R IGHTLY DELETED THE PENALTY. AS NOTED BY THE LEARNED CIT(A) AND AS ALS O ARGUED BEFORE US, THE RECEIPT IN QUESTION HAS BEEN DIFFERENTLY TREATE D IN DIFFERENT YEARS. THEREFORE, THE MATTER IS OBVIOUSLY DEBATABLE. ON T HIS SCORE ITSELF, THE DELETION OF PENALTY IS PROPER. 7. IN CIT VS. LOTUS TRANS TRAVELS (P) LTD., 177 T AXMAN 37 (DEL), [RELIED ON BY THE LEARNED CIT(A)], THE TRIBUNAL HEL D THAT WHERE THE CLAIM OF THE ASSESSEE WAS BONA-FIDE, BEING BASED ON ADOPTION OF ONE OF POSSIBLE VIEWS, AND THE ASSESSEE HAD FURNISHED ALL MATERIAL FACTS RELEVANT TO SUCH CLAIM, IT COULD NOT BE SAID THAT T HE ASSESSEE HAD CONCEALED INCOME BY FURNISHING INACCURATE PARTICULA RS. THE HONBLE HIGH COURT HELD THAT THE TRIBUNAL HAD CORRECTLY APP RECIATED THE LAW. LOTUS TRANS TRAVELS (P) LTD. (SUPRA), WE FIND, HA S BEEN CORRECTLY APPLIED. UNDISPUTEDLY, OVER THE YEARS, THE ISSUE O F THE RECEIPT HAD BEEN DIFFERENTLY TREATED. THE ASSESSEE HAD BASED I TS CLAIM ON ONE OF THE POSSIBLE VIEWS. ALSO, IT IS NOT THE CASE OF TH E DEPARTMENT THAT THE ASSESSEE HAD NOT FURNISHED ALL MATERIAL RELEVANT TO SUCH CLAIM. IT IS ITA-868/DEL/2010 4 ONLY THAT THE DEPARTMENT CONTENDS THAT THE ASSESSEE HAS WRONGLY CLAIMED A DEDUCTION HIGHER THAN THAT AVAILABLE TO I T. ON THESE FACTS, EVIDENTLY, NO PENALTY IS LEVIABLE, THE ASSESSEE DUL Y HAVING FURNISHED ALL PARTICULARS AT THE TIME OF ITS ASSESSMENT. 8. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT IS REJECTED. THE ORDER PASSED BY THE LEARNED CIT(A) IS CONFIRMED. 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2011. SD/- SD/- (G.E.VEERABHADRAPPA) (G.E.VEERABHADRAPPA) (G.E.VEERABHADRAPPA) (G.E.VEERABHADRAPPA) (A.D.JAIN) (A.D.JAIN) (A.D.JAIN) (A.D.JAIN) VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 10.06.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR