Shri Abdul Farid, Bhopal V. THE ITO 2(2), Bhopal

ITA 964/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2356 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 21-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 80C; 143(3)

Judgement Text

ABDUL FARID 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.964/IND/2016 ASSESSMENT YEAR: 2009-10 ORDER PER MANISH BORAD, AM. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1, BHOPAL [IN SHORT REFERRED TO AS THE CIT (A)] DATED 06.06.2016 ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT DATED 26.09.2014 FR AMED BY THE SHRI ABDUL FARID, NEAR STAR TRAVELS, WAHID MANZIL, MLB COLLEGE ROAD, KATHI KHANA, BUDHWARA, BHOPAL VS. INCOME TAX OFFICER, 2(2) , BHOPAL (APPELLANT) (RE SPONDENT ) PAN NO.APXPA2052J RESPONDENT BY SHRI K.G.GOYAL , SR. DR APPELLANT BY SHRI A SHISH GOYAL & SHRI N.D . PATWA,ADVOCATES (AR) DATE OF HEARING: 09.01.2018 DATE OF PRONOUNCEMENT: 12. 01.2018 ABDUL FARID 2 INCOME TAX OFFICER, WARD 2(2), BHOPAL PERTAINING TO ASSESSMENT YEAR 2011-12. 2. BRIEFLY STATED OF CASE AS CULLED OUT FROM THE RE CORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS O F PLYING OF BUSES. THE RETURN OF INCOME E-FILED ON 30.9.2011 DECLARING INCOME OF RS.6,28,470/- AND SELECTED FOR SCRUTINY. ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 11.3.2014 ASSESSING INCOME AT RS.17,98,620/- AFTER MAKING VARIOUS ADDITIONS WHICH INTER ALIA INCLUDED ADDITION FOR DISALLOWANCE OF DEPRECIATION OF RS.10,83,240/- CLAIMED ON THE BUSES PURCHASED DURING THE YEAR. IN THE QUANTUM APPEAL, ASSESSEE FAILED TO SUCCEED AND MOST OF THE ADDITIONS WERE CONFIRMED AND NO FURTHER APPEAL WAS PREFERRED BY HI M BEFORE THE TRIBUNAL. 3. SUBSEQUENTLY, PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED AND THE LD. ASSESSING OFFICER AFTER GOING THROUGH T HE DETAILED SUBMISSIONS OF THE ASSESSEE COULD NOT FAVOUR THE AS SESSEE AND IMPOSED THE PENALTY OF RS.3,21,506/- FOR CONCEALME NT OF PARTICULARS OF INCOME U/S 271(1)(C ) OF THE ACT. A GAINST THE PENALTY PROCEEDINGS, THE ASSESSEE FILED AN APPEAL BEFORE LD . CIT(A) BUT COULD NOT SUCCEED. 4. NOW THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL ARISING FOLLOWING GROUNDS; ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. THE LD. CIT(A)-I, BHOPAL ERRED AND WAS NOT JUSTIFIED:- ABDUL FARID 3 1. IN DISMISSING THE APPEAL AND SUSTAINING THE PENALTY ORDER OF THE LD.AO UNDER THIS APPEAL WHICH IS CONTRARY TO THE MATERIAL ON RECORDS AND PROVISIONS OF THE ACT, UNJUST, BAD IN LAW AND WITHO UT JURISDICTION. 2. IN SUSTAINING PENALTY U/S 271(1)( C) LEVIED BY THE LD.AO AMOUNTING TO RS.3,21,510/- WITHOUT APPRECIATING THE FACT THAT TH E EXPLANATIONS FURNISHED BY THE APPELLANT DURING THE COURSE OF QUA NTUM PROCEEDINGS WERE NOT PROVED AS FALSE AND THESE EXPLANATIONS WERE BON AFIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF INCOME HAVEN BEEN DULY DISCLOSED. 3. IN SUSTAINING THE PENALTY ORDER OF THE LD.AO BY PAS SING A CRYPTIC APPELLATE ORDER WITHOUT CONSIDERING THE TOTALLY DIS REGARDING THE DETAILED SUBMISSIONS MADE BY THE APPELLANT ON THE FACTS AND ON THE LEGAL POSITION IN RESPECT OF ITEM OF ADDITION ON WHICH PENALTY WAS LEVIED BY THE LD.A.O. 5. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE WR ITTEN SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES, ARGU ED AT LENGTH ON THE LEGALITY OF THE PENALTY ORDER. AS REGARDS MERIT S OF THE CASE IT WAS SUBMITTED THAT THERE WAS NO DISCREPANCY IN THE DETA ILS AND INFORMATION SUPPLIED AND IT WAS A BONAFIDE CLAIM WH ICH WAS NOT FOUND SUSTAINABLE BY THE ASSESSING AUTHORITY. ON T HE OTHER HAND LD. DEPARTMENTAL REPRESENTATIVES SUPPORTED THE ORD ERS OF LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS PLACED BEFORE US. ALL THE GROUNDS RAISED IN THIS AP PEAL RELATES TO PENALTY LEVIED BY LD. A.O U/S 271(1)(C) AT RS.3,21, 510/- AND CONFIRMED BY THE LD. CIT(A). 7. AS FAR AS LEGAL GROUND IS CONCERNED WE OBSERVE T HAT THE LD.COUNSEL FAILED TO BRING ON RECORD NECESSARY DETA ILS IN THE LIGHT OF VARIOUS JUDGMENTS OF HONBLE COURTS WITH REGARD TO ALLEGED ERROR IN ISSUANCE OF NOTICE U/S 274 RWS 271(1)(C ) OF THE AC T. IT IS ALSO WELL ABDUL FARID 4 EVIDENT THAT AT THE TIME OF INITIATION OF PENALTY P ROCEEDINGS THE LD.A.O CARRIES OUT THE PENALTY PROCEEDINGS IN LIGHT OF VARIOUS DETAILS AND DOCUMENTS FILED BY THE ASSESSEE IN ORDER TO ARR IVE AT A CONCLUSION AS TO WHETHER ANY PENALTY IS LEVIABLE AN D IN CASE IT IS LEVIABLE THEN WHETHER IT IS TO BE LEVIED FOR CONCEA LING PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL FAILED TO BRING ANY SUCH CO-RELATION TOWARD S THIS LEGAL ISSUE AND WE THEREFORE DISMISS THE LEGAL GROUND RAISED BY THE ASSESSEE. 8. NOW TAKING UP THE ISSUE ON THE MERITS WE FIND TH AT PENALTY OF RS.321510/- WAS IMPOSED ON FOLLOWING 3 ADDITIONS CO NFIRMED BY THE LD.CIT(A). PARTICULARS AMOUNT (I)DISALLOWANCE OF DEPRECIATION OF FOUR VEHICLES RS.10,83,240/- (II)DISALLOWANCE OF DEPRECIATION CLAIMED ON HIGHER RATE RS. 5,895/- (III)DISALLOWANCE OF DEDUCTION CLAIMED U/S 80C RS . 8,514/- TOTAL RS.10,97,649/- 9. ONE THING COMMON IN ALL THESE THREE ADDITIONS IS THAT THE ASSESSEE MADE BONAFINE CLAIM ON THE BASIS OF DOCUME NTS AND INFORMATION POSSESSED BY HIM BUT THESE WERE NOT ACC EPTED BY THE LOWER AUTHORITIES. EVEN IN THE CASE OF DEPRECIATIO N ON FOUR VEHICLES, THE ASSESSEE WAS IN POSSESSION OF PURCHASE DOCUMENT S OF THESE VEHICLES AND THE DATE OF PURCHASE WERE FALLING IN THE FINANCIAL YEAR 2010-11 AND THEY WERE TREATED AS READY FOR BUSINESS USE BY THE ABDUL FARID 5 ASSESSEE EVEN THOUGH THE DATE OF REGISTRATION AND D ATE OF INSURANCE WERE FALLING IN FINANCIAL YEAR 2011-12 RELEVANT TO ASSESSMENT YEAR 2012-13. ALL THE FOUR VEHICLES WERE SHOWN IN THE BL OCK OF ASSETS DULY EVIDENCED BY PURCHASE BILLS AND PAYMENT PROOF. SIMILARLY THE CLAIM OF ASSESSEE FOR DEPRECIATION AT RS.5895/- AND DEDUCTION U/S 80C OF THE ACT FOR PAYMENT OF LIFE INSURANCE PREMIU M WERE DISALLOWED. 10. NOW THE QUESTION BEFORE US IS WHETHER THE ALLEGE D THREE ADDITIONS TANTAMOUNT TO FALL UNDER THE CATEGORY OF FURNISHING OF INCORRECT PARTICULARS OF INCOME AND CONCEALING PART ICULARS OF INCOME AS ENVISAGED UNDER PROVISION 271(1)(C) OF THE ACT. TO ADJUDICATE THIS QUESTION, WE FIND IT NECESSARY TO GO THROUGH T HE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF CIT V/S RELIANCE PETRO PRODUCTS (P) LTD [CIVIL APPEAL NO.2463 OF 210 DATED 17.3.201 0] WHEREIN THE HONBLE COURT HELD IN FAVOUR OF THE ASSESSEE OBSERV ING THAT WE DO NOT AGREE, AS THE ASSESSEE HAS FURNISHED ALL THE DE TAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INCORRECT INFORMAT ION COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. I T WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY BECAUSE THE ASSESSEE HAS CLAIMED THE EXPENDITURE, WHICH CLAIM W AS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSEL F WOULD NOT, IN OUR OPINION ATTRACT THE PENALTY U/S 271(1)(C). 11. EXAMINING THE FACTS OF INSTANT APPEAL IN THE L IGHT OF ABOVE JUDGMENT OF HONBLE APEX COURT AS WELL AS IN THE GI VEN FACTS AND ABDUL FARID 6 CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT T HE ASSESSING OFFICER ACTION LEVYING PENALTY US 271(1)(C ) OF THE ACT CANNOT BE SUSTAINED AND WE ACCORDINGLY DELETE THE IMPUGNED P ENALTY LEVIED AT RS.3,21,510/- AND PARTLY ALLOW ASSESSEES APPEAL. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.01.201 8. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 12, JANUARY, 2018 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE