Sri Ashok Bardhan Kothari, Kolkata V. DCIT,CIRCLE-7,KOL, Kolkata

ITSSA 1/KOL/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8867 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-03-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 27-04-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 07-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DILIP KR RAKSHIT L; DILIP KR RAKSHIT LD SR DR
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Depreciation; Question of law; Valuation report
• Section: 14A; 260A; 158BFA; 271(1)(c)

Judgement Text

, C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C CALCUTTA () BEFORE , SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER /AND !'!# 1%&, SHRI GEORGE MATHAN, JUDICIAL MEMBER ' / IT (SS) NO. 1/KOL/2010 BLOCK PERIOD 1-4-1989 TO 9-09-1999 SHRI ASHOK BARDHAN KOTHARI PAN: AGEPK 7008G D.C.I.T,CIRCLE-7, KOLKATA (%( / APPELLANT ) - & - - VERSUS - . (*%(/ RESPONDENT ) %( , /FOR THE APPELLANT / SHRI SUBASH AGARWAL, ADVOCATE, LD. AR *%( , / FOR THE RESPONDENT: / SHRI DILIP KR. RAKSHIT, LD. SR.DR &- . / /DATE OF HEARING : 25-03-2013 01 . / /DATE OF PRONOUNCEMENT:26-03-2013 2 / ORDER !'!# 1%&, SHRI GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST ORD ER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), VIII, KOLKATA IN APPEAL NO. 1 68/CIT(A)-VIII/KOL/07-08 DATED 06-11- 2009 IN CONFIRMING THE LEVY OF PENALTY U/S. 158BFA (2) OF THE INCOME-TAX ACT 1961 2. SHRI SUBASH AGARWAL, ADVOCATE, LEARNED AUTHORISE REPRESENTATIVE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI DILIP KR. RAKSHIT, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LEARNED AUTHORISE REPRESENTATIVE FOR THE ASSESSEE THAT THE ASSESSEE HAS FILED AN APPEAL AGAINST THE QUANTUM ASSESSMENT BEFORE THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA AND THE APPEAL OF THE ASSESSEE HAS BEEN ADMITTED, WHEREIN THE SUBSTANTIAL QUESTION OF LAW H AS BEEN RAISED BY THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ISSUE OF RECEIPT OF CASH WAS ON E OF THE QUESTIONS RAISED BY THE ASSESSEE. IT IT(SS) NO.1/KOL/10-C-GM 2 WAS THE SUBMISSION THAT THE APPEAL OF THE ASSESSEE HAVING BEEN ADMITTED BY THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT, IT CLEARLY SHOW S THAT THE ISSUE IS DEBATABLE AND NO PENALTY WAS LIABLE TO BE LEVIED IN THE CASE OF THE ASSESSE E. 4. THE LEARNED AUTHORISE REPRESENTATIVE FOR THE ASS ESSEE HAS PLACED HIS RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CIT II VS. LIQUID INVESTMENT & TRADING CO. IN ITA 240/2009 05-10-2010, WHEREIN TH E HONBLE DELHI HIGH COURT HAS HELD AS FOLLOWS:- BOTH THE CIT(A) AS WELL AS THE ITAT HAVE SET ASIDE THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT THE ISSUE OF DEDUCTION UNDE R SECTION 14A OF THE ACT WAS A DEBATABLE ISSUE. WE MAY ALSO NOTE THAT A GAINST THE QUANTUM ASSESSMENT WHERE UNDER DEDUCTION UNDER SECTION 1 4A OF THE ACT WAS PRESCRIBED TO THE ASSESSEE, THE ASSESSEE HAS PREFER RED AN APPEAL IN THIS COURT UNDER SECTION 260A OF THE ACT WHICH HAS ALSO BEEN ADMITTED AND SUBSTANTIAL QUESTION OF LAW FRAMED. THIS ITSELF SHO WS THAT THE ISSUE IS DEBATABLE. FOR THESE REASONS, WE ARE OF THE OPINIO N THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASE. 4.1 IT WAS ALSO THE SUBMISSION THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS ALSO FOLLOWED THE SIMILAR VIEW. THE LEARNED AUTHORISED REPRESENTA TIVE FOR THE ASSESSEE HAS PLACED BEFORE US THE COPY OF THE ORDER DATED 12-02. 2013 IN ITA NO .272/IND/2011 IN THE CASE OF SHRI YUGAL KISHORE JAJOO VS. DY.CIT, WHEREIN THE CO-ORDINATE B ENCH OF THIS TRIBUNAL IN PARAS 9 TO 11 HAS HELD AS FOLLOW:- 9. FURTHERMORE, HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS. LIQUID INVESTMENT LIMITED, I.T.A NO. 240/2009 VIDE ITS ORDER DATED 5.10.2010 HAS CLEARLY HELD THAT WHERE HIGH COURT HA S ACCEPTED SUBSTANTIAL QUESTION OF LAW U/S. 260A, THIS ITSELF SHOWS THAT ISSUE IS DEBATABLE. ACCORDINGLY, NO PENALTY WAS IMPOSSIBLE U/S. 271(1)( C) OF THE INCOME-TAX ACT, 1961. HONBLE SUPREME COURT IN THE CASE OF SANTOSH HOSIERY, CIVIL APPEAL NO.1117 OF 20001 IN ITS ORDER DATED 3 RD FEBRUARY, 2001, OBSERVED THAT TO BE SUBSTANTIAL, A QUESTION OF LAW MUST BE DEBATABLE. HONBLE SUPREME COURT WHILE DECIDING A S TO WHAT IS SUBSTANTIAL QUESTION OF LAW HAS HELD THAT SAME MUST BE DEBATABLE. 10. IN THE INSTANT CASE, THE APPEAL AGAINST QUANTUM ADDITIONS WAS ADMITTED BY HONBLE M.P HIGH COURT VIDE ORDER DAT ED 6.9.2005, ON THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW:- IT(SS) NO.1/KOL/10-C-GM 3 1) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE TRIBUNAL WAS RIGHT IN LAW IN DIRECTING DEPRECIATION ON THE ESTIMATED VALUE OF RS.18,00,000/- AS AGAINST ACTUAL PURCHASE VALUE OF RS.26,05,000/- ON WHICH ASSESSEE TOOK OVER THE ASSET IGNORING BASIC VALUATION REPORT OF THE CHARTERED ENGINEER? 2) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE TRIBUNAL WAS RIGHT IN LAW IN DIRECTING THE OUTSTAN DING LIABILITIES AGAINST PURCHASES OF RS.8,34,690/- AS INCOME AND THE ORDER OF THE TRIBUNAL IS PERVERSE IN LAW WHEN PURCHASES ARE ASSESSED AS GENU INE? 3) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE TRIBUNAL WAS RIGHT IN DIRECTING THE OUTSTANDING LIA BILITIES OF JOB WORKS OF RS.3,490,395/- AS INCOME IGNORING THE DETAILED FACT S CONSIDERED BY CIT(A) AND FACTS ON RECORDS AND THE ORDER OF THE TRIBUNAL IS PERVERSE AND BAD IN LAW? 11) IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING TH E DECISION OF CO-ORDINATE BENCH AS WELL AS PROPOSITIONS LAID DOWN BY HONBLE HIGH COURT AND SUPREME COURT, AS NARRATED ABOVE, WE DIRE CT THE ASSESSING OFFICER TO CANCEL THE PENALTY IMPOSED U/S. 271(1)( C) WITH RESPECT TO THE ADDITIONS SO MADE BY ASSESSING OFFICER WHICH WERE DELETED BY CIT(A), AND FOR WHICH SUBSTANTIAL QUESTION OF LAW HAS BEEN ACCEPTED BY HONBLE HIGH COURT. AGREEING WITH THE CONTENTIONS OF MR. SH AH, WE DO NOT FIND ANY MERIT IN THE ORDER OF ASSESSING OFFICER FOR LEVYING THE PENALTY U/S. 271(1)( C) OF THE INCOME-TAX ACT, 1961. 4.2 THE LEARNED AUTHORISED REPRESENTATIVE FOR THE A SSESSEE HAS FURTHER PLACED HIS RELIANCE IN THE CASE OF DY.CIT VS. SURESH KUMAR REPORTED IN 97 ITD 527(KOL), WHEREIN IN PARA 13 OF THE SAID ORDER, IT HAS BEEN HELD AS FOLLOWS:- PARA 13: SINCE THE PROVISION OF SECTION 271(1)( C) ARE SIMILAR TO THE PROVISION OF SECTION 158BFA(2), THEREFORE, WE ARE O F THE VIEW THAT THE SAME WILL APPLY MUTATIS MUTANDIS AND THE RATIO AS LAID D OWN BY THE VARIOUS COURTS WHILE DEALING WITH THE PENALTY RELATING TO C ONCEALMENT OF INCOME WILL ALSO APPLY. THEREFORE, RESPECTFULLY FOLLOWIN G THE DECISION OF ITAT, BANGALORE BENCH, C IN THE CASE OF SMT. MALA DAYAN ITHI, WE DO NOT FIND ANY MERIT IN THE PLEA OF THE LD. DR, THAT THE PENAL TY UNDER SECTION 158BFA(2) IS MANDATORY AND NOT DISCRETIONARY AND A CCORDINGLY, THE SAME IS REJECTED. 4.3 IT WAS THE SUBMISSION THAT IN VIEW OF THE DECIS ION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF LIQUID INVESTMENT & TRADING CO. (REFER TO SUPRA) AS ALSO THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL, THE PENALTY AS L EVIED BY THE ASSESSING OFFICER AND CONFIRMED IT(SS) NO.1/KOL/10-C-GM 4 BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) U/S. 158BFA(2) OF THE ACT WAS LIABLE TO BE DELETED. 5. IN REPLY, THE LEARNED SR.DR HAS VEHEMENTLY SUPPO RTED THE ORDERS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE HONBLE DELHI HIGH COURT CLEARLY SHOWS THAT IF THE QUESTION OF LA W IS ADMITTED, IT WOULD SHOW THAT THE ISSUE IS DEBATABLE AND CONSEQUENTLY, NO PENALTY U/S. 271(1) ( C) OF THE ACT IS LEVIABLE. A PERUSAL OF THE ORDER OF THE INDORE BENCH OF THIS TRIBUNAL, IT CLEA RLY SHOWS THAT THE ITAT INDORE BENCH HAS TAKEN INTO CONSIDERATION THE DECISION OF THE HONB LE DELHI HIGH COURT IN THE CASE OF LIQUID INVESTMENT & TRADING CO. (REFER TO SUPRA) FOR CANC ELLING THE PENALTY LEVIED U/S. 271(1)( C) OF THE ACT. FURTHER, A PERUSAL OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SURESH KUMAR (REFER TO SUPRA) CLEARLY SHOWS THA T THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS ALREADY HELD THAT THE PROVISIONS OF SECTION 271(1) (1)( C) AND 158BFA(2) OF THE ACT ARE PARI MATERIA. NO CONTRARY DECISION HAS BEEN PLACED BEFO RE US. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH CO URT IN THE CASE OF LIQUID INVESTMENT & TRADING CO. (REFER TO SUPRA), THE PENALTY LEVIED U /S. 158BFA(2) OF THE ACT BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER O F INCOME-TAX (APPEALS) STANDS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. 3 2 4 & 5 36 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 26/03/201 3. SD/- SD/- *PP/SPS 2 . ,,7 8719 / COPY OF THE ORDER FORWARDED TO: 1. . %( / THE APPELLANT : SHRI ASHOK BARDHAN KOTHARI 6A, P ENN ROAD, ALANKAR ALIPORE, KOL-27. 2 *%( / THE RESPONDENT- DCIT, CIR-7, KOL P-7 CHOWRINGH EE SQ, AAYKAR BHAWAN, KOL-69. 3 ,2& / THE CIT, ( , ) (PRAMOD KUMAR, ACCOUNTANT MEMBER) ( !'!# 1 % & , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( (/ / / /) )) ) DATE 26/03/2013 IT(SS) NO.1/KOL/10-C-GM 5 4. . ,2& ( )/ THE CIT(A) 5 . :,5 ,& / DR, KOLKATA BENCH 6 . GUARD FILE . *7 ,/ TRUE COPY, 2&/ BY ORDER, 3 ! /ASSTT REGISTRAR