DCIT, Circle - 3, Kolkata, Kolkata v. M/s. ABP TV Pvt. Ltd., Kolkata

1 IN THE INCOME TAX APPELLATE TRIBUNAL : A BENC H : KOLKATA [ BEFORE SHRI B.R.MITTAL HONBLE J.M. & SHRI C. D. RAO HONBLE A.M .] I.T.A.NO. 370 (KOL) OF 2010 : ASSESSMENT YEA R 2004-05 D.C.I.T. CIRCLE-3 KOLKATA -VS- M/S. ABP TV PVT. LTD. KOLKATA [APPELLANT] (PAN: AADCA 7296A) [RESPONDENT] APPELLANT BY : SHRI K.K.TRIPATHI RESPONDENT BY : SHRI SOUMITRA CHOUDHURY O R D E R O R D E R O R D E R O R D E R PER SHRI C.D.RAO A.M . THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE C.I.T.(A)-I KOLKATA DATED 23.11.2009 FOR THE ASSESSMENT YEAR 2004-05. 2. AT THE OUTSET OF HEARING IT IS OBSERVED THAT TH E APPEAL FILED BY THE REVENUE IS DELAYED BY 04 DAYS FOR WHICH THE REVENUE HAS FILED AN APPLICATION DATED 16.02.10 FOR CONDONATION OF DELAY. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE DID NOT RAISE ANY OBJECTION AGAINST THE REQUEST OF THE LD. DR FOR CONDONATION OF DELAY. AFTER HEARING BOTH THE SIDES WE CONDONE THE DELAY AND PR OCEED TO HEAR THE APPEAL. 3. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS RELATING TO THE DELETION OF PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) AN D DISALLOWANCE OF DEDUCTION ON INTEREST ON BORROWED FUNDS FOR THE PURPOSE OF MAKIN G INVESTMENT UNDER SECTION 14A. 4. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L APPEARING ON BEHALF OF THE ASSESSEE HAS SUBMITTED THAT ON THE SIMILAR FACTS THE HONBLE SUPREME COURT IN THE CASE OF CIT-VS- RELIANCE PETROPRODUCTS PVT. LTD. HA S DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE HE CONTENDED THAT THE ACTI ON OF THE LD. CIT(A) IN DELETING THE PENALTY IS IN ACCORDANCE WITH LAW. 2 5. ON THE OTHER HAND THE LD. DR APPEARING ON BEHA LF OF THE REVENUE THOUGH RELIED ON THE ORDER OF THE AO COULD NOT CONTRADICT THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD IT IS OBSERVED THAT THERE IS N O DISPUTE THAT THE DISALLOWANCE MADE BY THE AO UNDER SECTION 14A IS THE ONLY ISSUE FOR L EVY OF PENALTY UNDER SECTION 271(1)(C) AND IN THE SAME SET OF FACTS THE HONBLE SUPREME COURT IN THE CASE OF CIT- VS- RELIANCE PETROPRODUCTS PVT. LTD. HAS DECIDED TH E ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 10. IT WAS TRIED TO BE SUGGESTED THAT SECTION 14A O F THE ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THE EXPENDITU RE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF T HE TOTAL INCOME UNDER THE ACT. IT WAS FURTHER POINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS THEREFORE RE ITERATED BEFORE US THAT THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUS ION THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORRECT; IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS; (I) AN I TEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (II) AN ITEM OF EXPENDITUR E MAY BE FALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIMED AND BOTH TYPES ATTEMPT TO REDUCE THE TAXABLE INCOME AND THEREFORE BOTH TYPES AMOUNT TO CONCEAL MENT OF PARTICULARS OF ONES INCOME AS WELL AS FURNISHING OF INACCURATE PA RTICULARS OF INCOME. WE DO NOT AGREE AS THE ASSESSEE HAD FURNISHED ALL THE DE TAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN WHICH DETAILS IN THE MSELVES WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT O F INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN TH E RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE W HICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT BY ITSELF WOULD NOT IN OUR OPINION ATTRACT THE PENALTY UNDER SECTION 271(1)(C ). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RET URN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON T HE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C). THAT IS CLEARLY NO T THE INTENDMENT OF THE LEGISLATURE. 3 6.1 KEEPING IN VIEW OF THE ABOVE OBSERVATIONS MADE BY THE HONBLE APEX COURT WE FIND NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A ). THEREFORE WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REV ENUE. 7. IN THE RESULT THE REVENUES APPEAL IS DISMISSE D. ORDER IS PRONOUNCED IN THE COURT ON 09-04-2010. SD/- SD/- [B.R.MITTAL] [C.D.RAO] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09-04-2010 COPY FORWARDED TO : 1. M/S. ABP TV PVT. LTD. 6 PRAFULLA SARKAR ST. KOLK ATA 700 001. 2. D.C.I.T. CIRCLE-3 KOLKATA 3. CIT(APPEAL) KOLKATA 4. CIT KOLKATA 5. D.R. ITAT KOLKATA. TRUE COPY BY OR DER DY. REGISTRAR ITAT KOLKATA MST