M/s Farrukhabad Investment (India) Ltd, Farrukhabad v. DCIT, Farrukhabad

ITA 238/AGR/2009 | 2003-2004
Pronouncement Date: 25-02-2011 | Result: Allowed

Appeal Details

RSA Number 23820314 RSA 2009
Assessee PAN AAACT0503G
Bench Agra
Appeal Number ITA 238/AGR/2009
Duration Of Justice 1 year(s) 8 month(s) 23 day(s)
Appellant M/s Farrukhabad Investment (India) Ltd, Farrukhabad
Respondent DCIT, Farrukhabad
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 25-02-2011
Date Of Final Hearing 02-02-2011
Next Hearing Date 02-02-2011
Assessment Year 2003-2004
Appeal Filed On 01-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO.238/AGR/2009 ASST. YEAR: 2003-04 FARRUKHABAD INVESTMENT (INDIA) LTD. VS. DY. COMM ISSIONER OF INCOME TAX C/O. HOTEL HINDUSTAN CIRCLE 2(1) FARRUAKHABA D. BARPUR FARRUKHABAD. (PAN : AAACT 0503 G). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANURAG SINHA ADVOCATE RESPONDENT BY : SHRI VINOD KUMAR JR. D.R. ORDER PER H.S. SIDHU J.M. : THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 24.03.2009 PASSED BY THE LD. CIT(A) ON THE FOLLOWING GROUNDS :- 1. BECAUSE THE ORDER PASSED BY THE CIT(APPEALS) M UZAFFARNAGAR IS BAD IN LAW AS HE HAS NOT EXAMINED THE FACTS OF THE CASE C ONTENTIONS OF THE APPELLANT TRUT BLINDLY FOLLOWED THE ORDERS OF HIS COLLEAGUE. 2. BECAUSE THE AD HOC DISALLOWANCES OUT OF CERTAIN EXPENSES HAVE BEEN TREATED AS CONCEALED INCOME AND EVEN PROPERTY INCOM E WHICH HAD DISCLOSED IN THE RETURN OF INCOME HAS BEEN TREATED AS CONCEALED INCO ME. 3. BECAUSE THE INCOME FROM FORFEITED DEPOSITS BY AP PLYING STRANGE FORMULA HAS BEEN TREATED AS CONCEALED INCOME. 4. BECAUSE THE ADDITION OF INTEREST INCOME IS PUREL Y IMAGINARY WITHOUT ANY BASIS. 5. BECAUSE THE ENTIRE CONCEALED BUSINESS INCOME REL ATES TO BUSINESS WHICH DID NOT EXIST. 6. BECAUSE THE PENALTY ORDER IS BAD IN LAW AS NEITH ER ANY SATISFACTION WAS RECORDED NOR IS ASCERTAINABLE FROM RECORDS. 2 2. BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME DECLARING LOSS OF ` 7 94 730/- ON 08.12.2005 ALONG WITH AUDITED COPY O F ACCOUNTS. THE ASSESSING OFFICER COMPLETED THE SAME ON THE INCOME OF ` 39 96 180/- VIDE ORDER DATED 10.03.2006 AFTER MAKING VARIOUS ADDITIONS WHICH THE LD. FIRST APPELLATE AUTHORITY HAS MENTIONED IN THE IMPUGNED ORDER IN PARA NO.3 PAGE 1 & 2. AG GRIEVED BY THE AFORESAID ADDITION THE ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPEL LATE AUTHORITY WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 19.09.2006. AGAINST THE SAME THE ASSESSEE FILED AN APPEAL BEFORE THE ITAT AGRA BENCH AGRA. THIS TRIBUNAL VIDE ORD ER DATED 20.07.2010 IN THE QUANTUM APPEAL FILED BY THE ASSESSEE HAS ALSO PARTLY ALLOWED THE A PPEALS DELETING THE MAJOR ADDITIONS OF RS.84 00 000/- RS.62 00 000/- AND RS.80 640/- BUT SUSTAINED THE ADDITION OF RS.15 000/- RS.8 000/- AND RS.27 627/-. 3. THE DCIT CIRCLE 2(1) FARRUKHABAD VIDE ITS ORDER DATED 05.03.2008 LEVIED THE PENALTY IN DISPUTE BECAUSE CIT(A) GHAZIABAD CONFIRMED THE ADD ITION OF RS.47 85 907/- BY OBSERVING THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS I NCOME AND FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND IS LIABLE FOR PENALTY UNDER SECTION 271( 1)(C) OF THE INCOME-TAX ACT 1961 (THE ACT HEREINAFTER) AND HE LEVIED THE PENALTY OF RS.16 75 070/-. AGGRIEVED BY THE SAME THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORI TY WHO VIDE IMPUGNED ORDER DATED 24.03.2009 DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THA T THE CIT(A) GHAZIABAD HAS VIDE ORDER IN APPEAL NO.08/2007-08/GZB-FBD DATED 30.01.2009 UPHEL D THE PENALTY BY GIVING DETAILED REASONING ON THE SUBMISSION MADE BY THE ASSESSEE AN D HE FULLY IN AGREEMENT WITH THE REASONING OF HIS COLLEAGUE AND DISMISSED THE APPEAL FILED BY THE ASSESSEE BY PASSING THE IMPUGNED ORDER DATED 24.03.2009. NOW THE ASSESSEE HAS FILED THE P RESENT APPEAL. 3 4. AT THE TIME OF HEARING THE LD COUNSEL FOR THE A SSESSEE STATED THAT THE ITAT AGRA BENCH AGRA VIDE ORDER DATED 20.07.2010 IN QUANTUM APPEALS BEARING NOS.489 490 & 491/AGR/2005 FOR THE ASSESSMENT YEARS 1999-2000 2000-01 & 2001-02 (WHICH IS IN DISPUTE) HAD DELETED THE ADDITION OF RS.84 00 000/- RS.62 00 000/- & RS.80 640/-. HE FURTHER STATED THAT AS REGARDS TO THE OTHER ADDITIONS OF RS.15 000/- RS.27 267/- & RS.80 00/- ON ACCOUNT OF GENERATOR RUNNING & MAINTENANCE EXPENSES GENERAL EXPENSES AND DISALLOW ANCE IN REPAIR & MAINTENANCE RESPECTIVELY THIS TRIBUNAL HAS SUSTAINED THE ADDITION BUT NO PEN ALTY IS LEVIABLE ON THE SAME. KEEPING IN VIEW OF THE ORDER OF THIS TRIBUNAL PASSED IN ITA NOS.138 139 & 140/AGR/2009 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1999-2000 2000-01 & 2001- 02 WHEREBY THE PENALTY LEVIED ON THE SIMILAR ADDITIONS UNDER SECTION 271(1)(C) OF THE AC T HAS BEEN DELETED BY THIS BENCH. HE FURTHER STATED THAT MERELY BECAUSE THERE IS A DIFFERENCE OF OPINION FOR THIS ALLOWING OR DISALLOWING THE EXPENDITURE BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER IT CANNOT BE SAID THAT THE ASSESSEE HAS INTENTION TO CONCEAL INCOME AND PENALTY IS NOT LEVIABLE. IN SUPPORT OF HIS CONTENTION HE CITED A DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT AHMEDABAD VS. RELIANCE PETROPRODUCTS (P) LTD. REPORTED IN (2010) 322 ITR 1 58 (SC) AND LASTLY HE STATED THAT EXACTLY UNDER SIMILAR FACTS AND CIRCUMSTANCES OF THE PRESEN T CASE THIS BENCH HAS DELETED THE PENALTY VIDE ITS ORDER DATED 27.08.2010. HE HAS ALSO FILED COPY OF THE ORDER REFERRED BY HIM. HE REQUESTED THAT PENALTY IN DISPUTE MAY KINDLY BE DELETED. ON THE CONTRARY LD. D.R. RELIED UPON THE ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. 5. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RELE VANT RECORDS AVAILABLE WITH US. WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HA S ALREADY BEEN ADJUDICATED BY THIS BENCH IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1999-2 000 2000-01 & 2001-02 IN ITA NOS.138 139 & 140/AGR/2009 IN THE CASE OF FARRUKHABAD INVES TMENT (INDIA) LIMITED FARRUKHABAD VS. 4 DCIT CIRCLE-2(1) FARRUKHABAD VIDE ORDER DATED 27 .08.2010. FOR THE SAKE OF CONVENIENCE THE RELEVANT PORTION OF THE SAME AT PARAGRAPH NO.5 PAG E NOS.2 & 3 IS REPRODUCED AS UNDER :- 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN ITS APPEA LS FOR ALL THE EARS. IT IS SEEN THAT THE MAJOR ADDITION WAS MADE ON ACCOUNT OF ESTIMATED BUSINESS INCOME AT ` 84 LACS ON ACCOUNT OF ESTIMATED INTEREST INCOME AT ` 62 LACS AND ON ACCOUNT OF RENT AT ` 1 54 000/-. THESE ESTIMATION OF INCOME WERE MADE F OR ALL THE THREE YEARS. THE TRIBUNAL HAS DISPOSED OFF THE APPEAL OF THE ASS ESSEE WHILE DECIDING THE APPEAL IN ITA NOS.489 TO 491/AGR/2005 BY ORDER DATE D 20.7.2010 BY WHICH THESE ADDITIONS HAVE BEEN DELETED. HOWEVER ADDITIONS OF ` 10 000/- AND ` 15 000/- HAVE BEEN CONFIRMED ON ACCOUNT OF GENERAL EXPENSES AND ON ACCOUNT OF REPAIR AND MAINTENANCE. ON THESE TWO AMOUNTS ALSO NO PENA LTY IS LEVIABLE AS THEY ARE MERELY DISALLOWANCE OF EXPENSES CLAIMED IN PROFIT & LOSS ACCOUNT. ALL THE PARTICULARS IN RESPECT OF THESE EXPENSES WERE FURNI SHED ALONG WITH THE RETURN. THEREFORE IT CANNOT BE SAID THAT ASSESSEE HAS MADE A WRONG CLAIM OR HAS NOT FURNISHED THE PARTICULARS OF EXPENDITURES CLAIMED. RELIANCE IS PLACED ON VARIOUS CASE LAWS WHICH SUPPORT THE CASE OF THE ASSESSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE HOLD THAT PENALTY LEVIED AND CONF IRMED BY LOWER AUTHORITIES ARE LIABLE TO BE CANCELLED. ACCORDINGLY WE CANCEL THE LEVY OF PENALTY IN ALL THE THREE YEAS HERE BEFORE US. 6. AFTER GOING THROUGH THE ORDER PASSED BY THIS BEN CH (SUPRA) AS WELL AS THE CITATION CITED BY THE LD. COUNSEL FOR THE ASSESSEE WE ARE OF THE CON SIDERED OPINION THAT THE PENALTY IN DISPUTE DESERVES TO BE CANCELLED BECAUSE THIS BENCH HAS ALR EADY ADJUDICATED THE ISSUE IN DISPUTE AND DELETED THE PENALTY SIMILAR TO THE PENALTY IN DISPU TE. RESPECTFULLY FOLLOWING THE SAME THE PENALTY IN DISPUTE IS DELETED AND THE APPEAL OF THE ASSESSEE IS ACCEPTED. 7. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.02.2011) SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 25 TH FEBRUARY 2011 5 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY