Vepee Plastics Pvt. Ltd., Pune v. DCIT, Pune

ITA 1123/PUN/2010 | 2000-2001
Pronouncement Date: 15-12-2010 | Result: Allowed

Appeal Details

RSA Number 112324514 RSA 2010
Assessee PAN AAACV6271B
Bench Pune
Appeal Number ITA 1123/PUN/2010
Duration Of Justice 4 month(s) 3 day(s)
Appellant Vepee Plastics Pvt. Ltd., Pune
Respondent DCIT, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 15-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 15-12-2010
Date Of Final Hearing 07-10-2013
Next Hearing Date 07-10-2013
Assessment Year 2000-2001
Appeal Filed On 11-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 1123 TO 1126/PN/2010 A.Y: 2000-01 TO 2003-04 VEEPEE PLASTICS PVT. LTD. APPELLANT C/O. M/S. P.D.KUDVA & CO. CHARTERED ACCOUNTANTS 4 KUMAR PANORAMA 45/1-B SHANKAR SETH ROAD PUNE-411037 PAN AAACV 6271 B VS. DEPUTY COMMISSIONER OF INCOME TAX RESPONDENT (CIRCLE-7) PUNE APPELLANT BY : SHRI P.D. KUDVA RESPONDENT BY : SHRI ABHAY DAMLE ORDER PER SHAILENDRA KUMAR YADAV JM ALL THESE FOUR APPEALS PERTAIN TO THE SAME ASSESSEE . SO THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE RELEVANT FACTS OF THE CASE ARE THAT ON PERUS AL OF RETURNS OF INCOME FILED BY THE ASSESSEE THE ASSESS ING OFFICER FOUND THAT THE ASSESSEE HAS SHOWN RENTAL INCOME AND INTEREST INCOME UNDER THE HEAD BUSINESS INCOME AND CLAIMED SEVERAL OVERHEAD EXPENSES AS WELL AS DEPRECIATION DECLARING LOSS. THE ASSESSING OFFICER ALSO FOUND THAT THE ASSESSEE HAD CONSTRUCTED A FACTORY BUILDING BUT IT HAD NOT CARRIED OUT ANY B USINESS ITA NO.1123 TO 1126/PN/2010 VEEPEE PLASTICS PVT.LTD. A.Y. 2000-01 TO 2003-04 2 ACTIVITIES DURING THE YEARS UNDER CONSIDERATION. F OR THE FIRST TIME THE ASSESSEE FILED ITS RETURN OF INCOME FOR A .Y. 1996-97. FROM EXAMINATION OF RETURNS FILED FOR DIFFERENT ASS ESSMENTS YEARS VIZ. 1996-97 TILL 2003-04 THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE RECEIVED ONLY RENTAL AND INTEREST INCOME AND CLAIMED EXPENDITURE TOWARDS OVERHEAD EXPENSES DEPR ECIATION AND TAXATION IN THE P & L ACCOUNT. THOUGH AS CLAIME D BY THE ASSESSEE THE COMPANY WAS CONSTITUTED FOR CARRYING OUT BUSINESS OF MANUFACTURING PROCESSING DEALING ETC. IN SHEETS TUBES PIPES ETC. BUT NEVER ANY SUCH TYPE OF BUSIN ESS WAS CARRIED OUT BY IT IN ANY OF THE AFORESAID YEARS. T HEREFORE THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM OF BU SINESS INCOME AND THE INCOME FROM RENT AND INTEREST WAS AS SESSED UNDER THE HEAD INCOME FROM RENT AND INTEREST WAS ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND IN COME FROM OTHER SOURCES RESPECTIVELY. SINCE ACCORDING T O THE ASSESSING OFFICER THE ASSESSEE FILED INACCURATE PA RTICULARS OF INCOME BY WRONGLY CLAIMING DEDUCTION OF EXPENSES P ENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED AND PENALT Y WAS IMPOSED WHICH WAS CONFIRMED BY THE CIT(A) IN FIRST APPELLATE PROCEEDINGS. 3. AT THE OUTSET OF HEARING THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE I SSUE RAISED IN THESE APPEALS IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUN AL IN ITA NO.1123 TO 1126/PN/2010 VEEPEE PLASTICS PVT.LTD. A.Y. 2000-01 TO 2003-04 3 ASSESSEES OWN CASE IN ITA NO. 867/PN/2009 FOR A.Y. 2005-06 VIDE ORDER DATED 30 TH NOVEMBER 2010 WHEREIN IT WAS HELD THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTIO N OF THE ASSESSING OFFICER IN IMPOSING THE PENALTY BY OBSER VING AS UNDER 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE LOWER AUTH ORITIES AND THE DECISIONS RELIED UPON BY THEM. THE SUBMISSI ON OF THE LD. A.R. AT THE OUTSET OF HEARING REMAINED T HAT THE ISSUE RAISED IN THE GROUND IS FULLY COVERED BY THE FOLLOWING DECISIONS : 1.CIT V/S. RELIANCE PETROPRODUCTS PVT. LTD. (2010 ) 322 ITR 158 (SC) 2.KRISH NIR ENTERPRISES V. ITO ORDER DT. 6.8.2010 (COPY SUPPLIED). 3.ACIT V/S. VAZIR GLASS WORKS LTD. ITA NO.332/MUM/2007 ORDER DT.24TH NOVEMBER 2008. 4.ITO V/S. ROBORANT INVESTMENTS (P.) LTD. (2006) 7 SOT 181 (MUM) 3. THE LD. D.R ON THE OTHER HAND PLACED RELIAN CE ON THE ORDERS OF THE LOWER AUTHORITIES. 4. THE RELEVANT FACTS ARE THAT DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE CLAIM OF INCOME FROM L ET OUT OF FACTORY PREMISES AND CHATTELS AS BUSINESS INCOME MADE BY THE ASSESSEE WAS DISALLOWED BY THE A.O. TH E A.O ASSESSED INCOME AS INCOME FROM HOUSE PROPERTY. SIMULTANEOUSLY THE CLAIM OF BUSINESS EXPENSES AND DEPRECIATION WAS ALSO DISALLOWED. THE A.O INITIAT ED THE PENALTY PROCEEDINGS U/S. 271(1)(C ) AND BEING NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE LEVI ED PENALTY AT RS. 57 883/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD CIT(A) HAS ALSO UPHE LD THE SAME. HE DID NOT ACCEPT EXPLANATION OF THE ASSESSE E THAT ALL THE NECESSARY INFORMATIONS WAS FURNISHED BY THE ASSESSEE AND THE ASSESSED INCOME HAS VARIED FROM TH E INCOME SHOWN BY THE ASSESSEE ONLY BECAUSE RENT OF R S. 3 63 552/- EARNED BY THE ASSESSEE FIRM ON CHATTELS I.E. TRANSFORMERS GENERATORS ELECTRICAL INVERTERS ETC . HAS BEEN ASSESSED UNDER THE HEAD INCOME FROM HOUSE ITA NO.1123 TO 1126/PN/2010 VEEPEE PLASTICS PVT.LTD. A.Y. 2000-01 TO 2003-04 4 PROPERTY INSTEAD OF INCOME FROM BUSINESS AS CLAI MED BY THE ASSESSEE AND DISALLOWANCE OF BUSINESS EXPENSES OF RS.89 904/-. EXPLANATION OF THE ASSESSEE ALSO REMA INED BEFORE THE LD CIT(A) THAT THE VARIATION OF INCOME A RISING IN THE CASE ONLY DUE TO THE CONTROVERSIAL INTERPRET ATION OF PROVISIONS OF LAW WHICH COULD NOT BE ANTICIPATED BY THE NRI DIRECTORS OF THE COMPANY NOR THE COMPANY HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF IN COME. 5. WE FIND THAT THE LD CIT(A) SUSTAINED THE PENALT Y LEVIED BY THE A.O IN VIEW OF THE DECISION OF THE HO NBLE SUPREME COURT IN THE CASE OF UNION OF INDIA V/S. DHARMENDRA TEXTILE PROCESSORS 295 ITR 244 (SC) OBSERVING THAT THE OBJECT BEHIND ENACTMENT OF SECTI ON 271(1)(C ) READ WITH THE EXPLANATIONS INDICATES THA T THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A RE MEDY FOR LOSS OF REVENUE. PENALTY UNDER THE SAID SECTIO N IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESS ENTIAL INGREDIENT FOR ATTRACTING THE CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION U/S 276C. THE HONBLE SUPREME COURT IN ITS RESENT DECISION IN THE CASE O F CIT V/S. RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) WHE REIN ITS EARLIER DECISIONS IN THE CASE OF UNION OF INDIA V/S . DHARMENDRA TEXTILE PROCESSORS (SUPRA) AND OTHERS HA VE ALSO BEEN REFERRED TO HAS BEEN PLEASED TO HOLD THA T MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDI TURE WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT BY ITSELF WOULD NOT ATTRACT THE PENALTY U/S.271(1)(C) OF THE ACT. WHILE HOLDING SO THE H ONBLE SUPREME COURT HAS BEEN PLEASED TO OBSERVE AS UNDER : IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN I N CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C ). THAT IS CLEARLY NOT THE INTENMENT OF THE LEGISLATUR E ALSO IN THE PRESENT CASE IT IS NOT THE CASE OF T HE REVENUE THAT THE ASSESSEE HAD NOT FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN WHICH DETAILS IN THEMSELVES WERE FOUND TO BE INACCURATE OR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES T O ACCEPT ITS CLAIM IN THE RETURN OR NOT. WE THUS RESPECTF ULLY FOLLOWING RECENT DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V/S. RELIANCE PETROPRODUCTS PVT. LTD. ( SUPRA) HOLD THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WHEREIN IT IS NOT THE ALLEGATION OF T HE A.O. THAT ASSESSEE HAD NOT FURNISHED ALL THE NECESSARY D ETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURNS THE LD ITA NO.1123 TO 1126/PN/2010 VEEPEE PLASTICS PVT.LTD. A.Y. 2000-01 TO 2003-04 5 CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION O F THE A.O IN IMPOSING THE PENALTY IN QUESTION. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW IN TH IS REGARD DIRECT THE A.O TO DELETE THE PENALTY. THE GROUND IS ACCORDINGLY ALLOWED. 4. FACTS BEING SIMILAR SO FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE WE HOLD THAT U NDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WHEREI N IT IS NOT THE ALLEGATION OF THE ASSESSING OFFICER THAT ASSESS EE HAD NOT FURNISHED ALL THE NECESSARY DETAILS OF ITS EXPENDIT URE AS WELL AS INCOME IN ITS RETURNS THE CIT (A) WAS NOT JUSTIFIE D IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN IM POSING THE PENALTY IN QUESTION. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD DIRECT THE ASSESSI NG OFFICER TO DELETE THE PENALTY IMPOSED FOR THE YEARS UNDER CONS IDERATION. THE GROUND RAISED BY THE ASSESSEE FOR ALL THE YEARS IS ACCORDINGLY ALLOWED. 5. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE A LLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH DECEMBER 2010. SD/- SD/- ( D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 15 TH DECEMBER 2010 ANKAM ITA NO.1123 TO 1126/PN/2010 VEEPEE PLASTICS PVT.LTD. A.Y. 2000-01 TO 2003-04 6 COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. ACIT CIRCLE-2 KOLHAPUR 3. CIT(A) KOLHAPUR 4. CIT-I/II KOLHAPUR 5. D.R A BENCH PUNE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE