DCIT, New Delhi v. M/s. NKG Infrastructure Ltd., New Delhi

ITA 2733/DEL/2014 | 2010-2011
Pronouncement Date: 16-11-2017 | Result: Dismissed

Appeal Details

RSA Number 273320114 RSA 2014
Assessee PAN AAACN4109N
Bench Delhi
Appeal Number ITA 2733/DEL/2014
Duration Of Justice 3 year(s) 6 month(s) 14 day(s)
Appellant DCIT, New Delhi
Respondent M/s. NKG Infrastructure Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 16-11-2017
Date Of Final Hearing 04-05-2017
Next Hearing Date 04-05-2017
First Hearing Date 04-05-2017
Assessment Year 2010-2011
Appeal Filed On 02-05-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH JUDICIAL MEMBER ITA NO.2730/DEL./2014 (ASSESSMENT YEAR : 2008-09) ITA NO.2731/DEL./2014 (ASSESSMENT YEAR : 2009-10) ITA NO.2732/DEL./2014 (ASSESSMENT YEAR : 2010-11) ITA NO.2733/DEL./2014 (ASSESSMENT YEAR : 2011-12) DCIT CENTRAL CIRCLE 18 VS. M/S. NKG INFRASTRUCTU RE LTD. NEW DELHI. 124 GROUND FLOOR WORLD TRADE CENTRE CONNAUGHT PLACE NEW DELHI 110 001. (PAN : AAACN4109N) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI ADESH KUMAR JAIN RAJAT JAIN AND AKSHANT JAIN CAS REVENUE BY : MS. SHEFALI SWROOP CIT DR DATE OF HEARING : 08.11.2017 DATE OF ORDER : 16.11.2017 O R D E R PER BENCH : ITA NOS.2730 TO 2733/DEL./2014 2 SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN THE AFORESAID APPEALS THE SAME ARE BEING DISPOS ED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. THE APPELLANT DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 18 NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEALS BEARING ITA NOS.2730/DEL/2014 2731/DEL/2014 AND 2732/DEL/2014 SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 19.02.2014 19.0 2.2014 & 26.02.2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- III NEW DELHI QUA THE ASSESSMENT YEARS 2008-09 20 09-10 & 2010-11 RESPECTIVELY DELETING THE PENALTY LEVIED UN DER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 (FOR SHORT T HE ACT) ON THE GROUND THAT :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN CANCELLING THE PENALTY OF RS.30 14 473/- RS.46 07 976/- AND RS.84 95 360/- FOR ASSESSMENT YEARS 2008-09 2009-10 & 2010-11 RESPECTIVELY LEVIED BY THE AO UNDER SECTION 271(1)( C) OF THE INCOME TAX ACT 1961. 3. THE APPELLANT DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 18 NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL BEARING ITA NOS.2733/DEL/2014 SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 28.02.2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- ITA NOS.2730 TO 2733/DEL./2014 3 III NEW DELHI QUA THE ASSESSMENT YEAR 2010-11 DELE TING THE PENALTY LEVIED UNDER SECTION 271AAA OF THE INCOME-T AX ACT 1961 (FOR SHORT THE ACT) ON THE GROUND THAT :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN CANCELLING THE PENALTY OF RS.2 60 63 900/- LEVIED BY THE AO UNDER SECTION 271AAA OF THE INCOME TAX ACT 1961. ITA NO.2730/DEL/2014 ITA NO.2731/DEL/2014 AND ITA NO.2732/DEL/2014 (PENALTY U/S 271 (1)(C) 4. SINCE ALL THE AFORESAID APPEALS IN WHICH PENALTI ES DELETED BY LD. CIT (A) LEVIED BY THE AO U/S 271(1)(C) HAVE EMA NATED FROM SIMILAR SET OF FACTS THE FACTS OF APPEAL IN ITA NO .2730/DEL/2014 ARE TAKEN TO ADJUDICATE CONTROVERSY AT HAND FOR THE SAKE OF BREVITY. 5. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMEN T COMPLETED U/S 153A READ WITH SECTION 143 (3) OF THE ACT PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT ON ACCOUNT OF ADDITION OF RS.88 66 705/- RS.1 35 56 857/- AND RS.2 49 93 708 /- FOR ASSESSMENT YEARS 2008-09 2009-10 & 2010-11 RESPECT IVELY BY MAKING ADDITION @ 0.25% OF THE TOTAL TURNOVER DECLA RED BY THE ASSESSEE COMPANY. 6. AO PROCEEDED TO LEVY THE PENALTY ON THE GROUND T HAT WHEN THE ACCOUNT BOOKS WERE TEST CHECKED AND DISCREPANCI ES WERE ITA NOS.2730 TO 2733/DEL./2014 4 POINTED OUT TO THE ASSESSEE COMPANY AND ONLY THEN THE ASSESSEE COMPANY HAD OFFERED ADDITIONAL SURRENDER DURING THE ASSESSMENT PROCEEDINGS WHICH IS A CLEAR CASE OF CONCEALMENT ON THE PART OF THE ASSESSEE COMPANY AND THEREBY IMPOSED A PENALTY OF R S.30 14 473/- RS.46 07 976/- AND RS.84 95 360/- FOR ASSESSMENT YEARS 2008-09 2009-10 & 2010-11 RESPECTIVELY. ITA NO.2733/DEL/2014 (PENALTY U/S 271AAA) 7. AO INITIATED THE PENALTY PROCEEDINGS U/S 271AAA FOR AY 2010-11 ON THE BASIS OF ASSESSMENT ORDER DATED 30.1 2.2011 PASSED U/S 143 (3) AND IMPOSED THE PENALTY OF RS.2 60 63 9 00/- ON THE GROUND THAT THE ASSESSEE COMPANY HAS NEITHER SPECIF IED THE MANNER IN WHICH THE DISCLOSURE OF AMOUNT OF RS.2 60 63 900 /- WAS DERIVED NOR HE HAS SUBSTANTIATED THE MANNER IN WHICH SUCH I NCOME WAS DERIVED. 8. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EALS BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITIONS MADE BY THE AO BY ALLOWING THE APPEALS. FEELING AGGRIEVED THE REVEN UE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUG NED ORDER PASSED BY LD. CIT (A) . 9. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NOS.2730 TO 2733/DEL./2014 5 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2730/DEL/2014 ITA NO.2731/DEL/2014 AND ITA NO.2732/DEL/2014 (PENALTY U/S 271 (1)(C) 10. UNDISPUTEDLY DURING THE SEARCH AND SEIZURE OPE RATION CONDUCTED AT THE PREMISES OF THE ASSESSEE COMPANY O N 05.11.2009 WHICH IS INTO THE CONSTRUCTION LINE THE ASSESSEE C OMPANY HAS SURRENDERED RS.20 00 000/- RS.25 00 000/- AND RS.3 0 00 000/- FOR AYS 2008-09 2009-10 AND 2010-11 RESPECTIVELY AND F ILED THE RETURN U/S 153A. IT IS ALSO NOT IN DISPUTE THAT TH E ASSESSEE COMPANY OFFERED INCOME PAID TAX AND INTEREST THEREON. HOW EVER AO AFTER PERUSING THE BOOKS OF ACCOUNT REJECTED THE SURRENDE R AND PROCEEDED TO ASSESSED THE ADDITION INCOME @ 0.25% OF THE TOTA L TURNOVER DECLARED AND THEREBY MADE AN ADDITION OF RS.88 66 7 05/- RS.1 35 56 857/- AND RS.2 49 93 708/- FOR ASSESSMEN T YEARS 2008- 09 2009-10 & 2010-11 RESPECTIVELY. THE LD. CIT (A ) DELETED THE PENALTY BY RELYING UPON HIS OWN ORDER PASSED FOR AY 2004-05 WHICH WAS PASSED BY RELYING UPON THE DECISION RENDE RED BY HONBLE SUPREME COURT IN RELIANCE PETRO PRODUCTS PR IVATE LIMITED - 322 ITR 158 (S.C.) . ITA NOS.2730 TO 2733/DEL./2014 6 11. HONBLE SUPREME COURT IN A CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCE D FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRE CT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. ITA NOS.2730 TO 2733/DEL./2014 7 12. HONBLE DELHI HIGH COURT IN CASE OF CIT VS. AERO TRADERS (P.) LTD. (2010) 322 ITR 316 (DELHI) DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE COMPANY BY RETURNING THE FOLLOWING FINDINGS :- THE ASSESSING OFFICER OBSERVING THAT THE PROFIT W AS ESTIMATED AFTER REJECTION OF THE BOOKS OF ACCOUNT D UE TO CERTAIN DISCREPANCIES IMPOSED A PENALTY ON THE ASSESSEE ON THE GROUND THAT IT WAS A CLEAR CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL HELD THAT AS SUBSTANTIAL QUANTUM RELIEF WA S GIVEN BY THE COMMISSIONER (APPEALS) WHICH HAD BEEN CONFIRMED BY THE TRIBUNAL AND THE BALANCE PERTAINED TO ESTIMATED RATE OF PROFIT APPLIED ON THE TURNOVER OF THE ASSESSEE IT DID NOT AMOUNT TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. THE TRIBUNAL THEREFORE DELETED THE PENALTY. HELD THAT THE FINDING ARRIVED AT BY THE TRIBUNAL D ID NOT WARRANT INTERFERENCE FROM THIS COURT AS IT WAS PURE LY A FINDING OF FACT. NO PERVERSITY HAD BEEN POINTED IN SUCH A FINDING. CONSEQUENTLY NO SUBSTANTIAL QUESTION OF LAW AROSE FOR CONSIDERATION. 13. WE ARE OF THE CONSIDERED VIEW THAT AO MADE THE ADDITION MERELY ON THE GROUND THAT THE SURRENDER WAS NOT TO HIS SATISFACTION RATHER PROCEEDED TO ESTIMATE THE DISALLOWANCE @ 0.2 5%. WHEN THE ASSESSEE COMPANY HAS PRODUCED ACCOUNT BOOKS BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AO WAS REQUIRED TO C OMPUTE THE INCOME ON THE BASIS OF DOCUMENTARY EVIDENCE AND NOT ON THE BASIS OF ESTIMATION. BUT THE AO PROCEEDED TO GUESSWORK T HE ADDITIONAL INCOME ON THE BASIS OF SOME DEFECTS IN THE ACCOUNT BOOKS AND ON ITA NOS.2730 TO 2733/DEL./2014 8 THE GROUND THAT THE INCOME OFFERED IS NOT ADEQUATE. IN THE GIVEN CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT T HERE IS NO QUESTION OF FURNISHING OF INACCURATE PARTICULARS TO ATTRACT THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT. 14. SO FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDERS PASSED BY LD. CIT (A) APPEALS BEARING NOS. ITA NO.2730/DEL/2014 ITA NO.2731/DEL/2014 AND ITA NO.2732/DEL/2014 FOR AY 2008-09 2009-10 AND 2010-1 1 RESPECTIVELY ARE DISMISSED BEING WITHOUT ANY MERIT. ITA NO.2733/DEL/2014 (PENALTY U/S 271AAA) 15. ON THE BASIS OF DISCLOSURE MADE DURING SEARCH A ND SEIZURE OPERATION AND POST-SEARCH ENQUIRY AMOUNT OF RS.26 0 6 38 986/- WAS ASSESSED AS THE INCOME OF THE ASSESSEE FOR AY 2 010-11. AO IMPOSED PENALTY BY TAKING A VIEW THAT THE ASSESSEE COMPANY HAS NEITHER SPECIFIED THE MANNER IN WHICH SUCH INCOME W AS DERIVED NOR HAS SUBSTANTIATED THE MANNER IN WHICH SUCH INCOME W AS DERIVED AND IMPOSED PENALTY OF RS.2 60 63 900/-. 16. UNDISPUTEDLY THE ASSESSEE COMPANY HAS SURRENDE RED AN AMOUNT OF RS.26 06 38 986/- DURING SEARCH AND SEIZU RE OPERATION BUT SHOWN HIS INABILITY TO PRODUCE PURCHASE BILLS O F THE VARIOUS PARTIES WHO HAVE ALLEGEDLY SUPPLIED MITTI AND GRIT (RAW MATERIAL) ITA NOS.2730 TO 2733/DEL./2014 9 RECORDED IN THE LEDGER. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE COMPANY BY FILING RETURN U/S 139 DEPOSITED THE TAX ALONG WITH INTEREST. 17. UNDER SECTION 271AAA (2) NO PENALTY SHALL BE L EVIED U/S 271AAA QUA THE UNDISPUTED INCOME IN CASE THE ASSESS EE COMPANY FURNISHED DECLARATION OF THE UNDISCLOSED INCOME IN THE FOLLOWING MANNER :- (A) THERE IS DEEMING FICTION OF 'UNDISCLOSED INCO ME' RELATING TO 'SPECIFIED PREVIOUS YEAR' AS DEFINED UN DER SECTION 271AAA. (B) WITH RESPECT TO 'UNDISCLOSED INCOME' RELATING TO 'SPECIFIED PREVIOUS YEAR' PENALTY IS LEVIABLE AT T HE RATE OF TEN PERCENT OF 'UNDISCLOSED INCOME'. (C) SUB-SECTION (2) OF SECTION 271AAA PROVIDES THA T NO PENALTY UNDER SECTION 271AAA SHALL BE LEVIED WIT H RESPECT TO THE 'UNDISCLOSED INCOME' OF THE 'SPECIFI ED PREVIOUS YEAR' IN CASE ASSESSEE MAKES DECLARATION OF THE UNDISCLOSED INCOME IN THE FOLLOWING MANNER :- (I) IN THE STATEMENT RECORDED UNDER SECTION 132(4) DURING THE COURSE OF SEARCH ASSESSEE ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHIC H SUCH INCOME HAS BEEN DERIVED. (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. (III) PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF THE UNDISCLOSED INCOME. FOR GETTING IMMUNITY FROM PENALTY UNDER SECTION 271 AAA THE ABOVE THREE CONDITIONS ARE REQUIRED TO BE FULFILLED CUMULATIVELY. ITA NOS.2730 TO 2733/DEL./2014 10 18. WHEN WE APPLY THE PROVISIONS CONTAINED UNDER SU B-SECTION (2) OF SECTION 271AAA TO THE INSTANT CASE UNDISPUT EDLY THE ASSESSEE COMPANY HAS SURRENDERED INCOME OF RS.26 06 38 986/- U/S 132 (4) PAID TAXES ALONG WITH INTEREST WHICH THE A SSESSEE COMPANY HAS DISCLOSED IN PROFIT & LOSS ACCOUNT UNDER THE HE AD OTHER INCOME AND CONSEQUENTLY SHOWN THE GROSS PROFIT AND NET PROFIT AND MADE NECESSARY ADJUSTMENT IN THE TAXABLE INCOME AT RS.71 95 64 719/- SO ALL THE CONDITIONS REQUIRED U NDER SUB-SECTION (2) OF SECTION 271AAA HAVE BEEN COMPLIED WITH. 19. MOREOVER THE AO HAS NOT PUT ANY SPECIFIC QUERY TO THE ASSESSEE TO FURTHER SPECIFY THE MANNER IN WHICH SUC H INCOME WAS DERIVED AND TO SUBSTANTIATE THE MANNER IN WHICH SUC H INCOME WAS DERIVED. FURTHERMORE AO HAS NOWHERE RECORDED ANY F INDING IN THE ASSESSMENT ORDER THAT IT IS UNDISCLOSED INCOME OF T HE ASSESSEE SUFFICIENT TO ATTRACT THE PROVISIONS CONTAINED U/S 271AAA. 20. COORDINATE BENCH WHILE DEALING WITH THE IDENTIC AL ISSUE IN CASE CITED AS NEERAT SINGAL VS. ACIT (2013) 37 TAXMANN.COM 189 (DELHI TRIB.) ALSO HELD THAT THE AO WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S 271AAA WHEN AUTHORIZED OFFICER HAS NOT RAISED ANY QUERY DURING COURSE OF RECORDING OF STAT EMENT U/S 132 (4) ABOUT THE MANNER IN WHICH THE UNDISCLOSED INCOM E HAS BEEN DERIVED AND ABOUT ITS SUBSTANTIATION. ITA NOS.2730 TO 2733/DEL./2014 11 21. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE WE AR E OF THE CONSIDERED VIEW THAT THERE IS NO ILLEGALITY OR PERV ERSITY IN THE FINDINGS RETURNED BY LD. CIT (A) IN DELETING THE PE NALTY IMPOSED U/S 271AAA HENCE APPEAL IN ITA NO.2733/DEL/2014 IS DISMISSED. 22. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE ALL T HE AFORESAID APPEALS FILED BY THE REVENUE STAND DISMISSED BEING WITHOUT ANY MERIT. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF NOVEMBER 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 16 TH DAY OF NOVEMBER 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-III NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.