M/s Kabis Shines Pvt. Ltd, New Delhi v. ITO Ward-5 (1), New Delhi

ITA 371/DEL/2009 | 1996-1997
Pronouncement Date: 23-03-2011 | Result: Allowed

Appeal Details

RSA Number 37120114 RSA 2009
Assessee PAN EMBER2008U
Bench Delhi
Appeal Number ITA 371/DEL/2009
Duration Of Justice 2 year(s) 1 month(s) 23 day(s)
Appellant M/s Kabis Shines Pvt. Ltd, New Delhi
Respondent ITO Ward-5 (1), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 23-03-2011
Date Of Final Hearing 22-03-2011
Next Hearing Date 22-03-2011
Assessment Year 1996-1997
Appeal Filed On 30-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH NEW DELHI BENCH NEW DELHI BENCH NEW DELHI BENCH D DD D BEFORE SHRI R. P. TOLANI JUDICIAL MEMBER AND SHRI A K GARODIA ACCOUTANT MEMBER ITA NO. 371 /DEL/2009 (ASSESSMENT YEAR 1996-97) M/S. KABIS SHINES PVT. LTD. VS. I.T.O. WARD 5(1 ) C-631 NEW FRIENDS COLONY NEW DELHI NEW DELHI (APPELLANTS) (RESPONDENTS) PAN / GIR NO. 1268K APPELLANT BY: SHRI ARUN KISHOR C.A. RESPONDENT BY: MS. ANUSHA KHURANA SR. DR ORDER ORDER ORDER ORDER PER A. K. GARODIA AM: PER A. K. GARODIA AM: PER A. K. GARODIA AM: PER A. K. GARODIA AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD./ CIT(A) VIII NEW DELHI DATED 14.112008 FOR THE ASSESSMENT YEAR 1996-97. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF LD. CIT(A) VIII DT. 14 TH NOVEMBER 2008 U/S 271(1)(C) OF THE ACT CONFIRMING THE PENALTY OF ` 18 LACS IS I LLEGAL UNJUST AND OPPOSED TO FACTS. 2) I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE NO PENALTY U/S 271(1)(C) IS ATTRACTED IN VIEW OF NO DELIBERATE WILLFUL AND CONSCIOUS DEFAULT OF THE AP PELLANT. II) THAT ON MERITS AND FACTS OF THE CASE NO ADDITIO N TO TRADING ACCOUNT IS SUSTAINABLE AS WELL AS NOTIONAL INTEREST FOR INTEREST FREE ADVANCES IS NOT MAINTAIN ABLE. PENALTY OF ` 18 LACS BE DELETED. 3) THAT WITHOUT PREJUDICE TO THE ABOVE CONTENTION IN CASE OF LOSS PENALTY U/S 271(1)(C) OF THE ACT IS NOT AT TRACTED. 4) THAT WITHOUT PREJUDICE TO THE ABOVE CONTENTIONS THE ORDER OF PENALTY IS BARRED BY LIMITATION. 5) THAT THE PENALTY OF ` 18 LACS BE DELETED. 2) THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME DECLARING LOSS OF ` 9 40 309/- AND THE AS SESSMENT WAS COMPLETED U/S 144 ON 24.03.1999 AT ` 3 87 38 998/-. ON APPEAL I.T.A.NO. 371/DEL/2009 2 CIT(A) SET ASIDE THE ASSESSMENT ORDER VIDE ORDER DA TED 27.03.2000 WITH THE DIRECTION TO THE ASSESSING OFFICER TO FRAM E THE ASSESSMENT DE NOVO. IN PURSUANCE THERETO ORDER U/S 143(3)/25 0 WAS PASSED ON 28.03.2002 ON TOTAL INCOME OF ` 28 63 690/-. AGAIN ST THIS ASSESSMENT ORDER AGAIN THE ASSESSEE PREFERRED AN A PPEAL BEFORE CIT(A) WHICH WAS DISMISSED. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND IT IS NOTED BY THE CIT(A) I N PARA 3.1 OF HIS ORDER THAT THIS APPEAL WAS DISMISSED BY THE TRIBUNA L VIDE ORDER DATED 15.09.2006 AS UNADMITTED FOR WANT OF PROSECUT ION BY THE ASSESSEE. IN THE MEANTIME THE ASSESSING OFFICER I NITIATED PENALTY PROCEEDINGS AND AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE THE ASSESSING OFFICER PASSED THE PENALTY ORDER ON 2 6.09.2007 AND IMPOSED PENALTY OF ` 18 LACS. THIS PENALTY WAS IMP OSED REGARDING ADDITION MADE BY THE ASSESSING OFFICER OF ` 15 LACS AND ` 23.04 LACS TOTAL ` 38.04 LACS. AGAINST THE PENALTY ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) BUT WITHOUT SUCCESS AND NOW THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. IT IS SUBMITTED BY THE LD. A.R. FOR THE ASSESSEE THAT AFTER PASSING THE IMPUGNED ORDER BY LD. CIT(A) ON 14.11.2 008 THE TRIBUNAL HAS DECIDED THE APPEAL OF THE ASSESSEE IN QUANTUM PROCEEDINGS AS PER I.T.A. NO. 2067/DEL/2003 DATED 2 8.04.2009 AND IN THE SAID ORDER THE TRIBUNAL HAS DELETED ONE ADD ITION OF ` 23.04 LACS. IT IS ALSO POINTED OUT THAT THE OTHER ADDITI ON OF ` 15 LACS WAS UPHELD BY THE TRIBUNAL BUT AT THE SAME TIME IT WAS DIRECTED BY THE TRIBUNAL THAT THE DEDUCTION HAS TO BE ALLOWED TO TH E ASSESSEE ON ACCOUNT OF DEPRECIATION ALLOWABLE AS PER LAW. IT I S ALSO SUBMITTED THAT THEREAFTER THE ASSESSING OFFICER HAS PASSED T HE APPEAL EFFECT ORDER ON 19.08.2010 U/S 254/143(3) OF THE INCOME TAX ACT 1961 AND IN THE SAME THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE AT ` 15 LACS UNDER HT HEAD PROFITS OF BUSINESS AND THEREAFTER ALLOWED DEPRECIATION TO THE ASSESSEE TO THE EXTENT OF ` 22 57 233/- AS PER THE TRIBUNAL DIRECTION AND ULTIM ATELY ASSESSED THE I.T.A.NO. 371/DEL/2009 3 INCOME OF THE ASSESSEE AT A NET LOSS OF ` 7 57 233 /- AS AGAINST THE LOSS DECLARED BY THE ASSESSEE IN ITS RETURN OF INCO ME AT ` 9 40 309/-. IT IS SUBMITTED THAT UNDER THIS FACTUAL POSITION N O PENALTY IS LEVIABLE. 4. LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. ITS HAS BEEN NOTED BY THE LD. CIT(A) IN THE IMPUGNED ORDER THAT QUANTUM APPEAL OF THE ASSESSEE WAS DISMISSED B Y THE TRIBUNAL AS UNADMITTED FOR WANT OF PROSECUTION BY THE ASSESS EE BUT SUBSEQUENTLY THE TRIBUNAL HAS DECIDED THE QUANTUM APPEAL OF THE ASSESSEE ON 28.04.2009 IN I.T.A. NO. 2067/DEL/2003. I IT SEEMS THAT THE EARLIER TRIBUNAL ORDER HAS BEEN RECALLED AND TH EREAFTER THE APPEAL OF THE ASSESSEE WAS DECIDED AFTER HEARING BO TH THE SIDES. IN THIS TRIBUNAL ORDER DATED 28.04.2009 THE TRIBUNAL HAS DELETED ONE ADDITION OF ` 23.04 LACS. THE TRIBUNAL HAS UPHELD THE OTHER ADDITION OF ` 15 LACS BUT IT IS ALSO HELD BY THE TRIBUNAL TH AT DEPRECIATION ALLOWABLE AS PER LAW SHOULD BE ALLOWED AND REDUCED FROM THE SAME. IT WAS ALSO HELD THAT IF THE DEPRECIATION SO ALLOW ABLE AS PER LAW EXCEEDS THIS AMOUNT OF ` 15 LACS THE ASSESSEE IS E NTITLED OF CARRY FORWARD OF LOSS TO THAT EXTENT. APPEAL EFFECT ORDE R HAS BEEN PASSED BY THE ASSESSING OFFICER ON 18.08.2010 AS PER WHICH HE HAS ASSESSED THE INCOME OF THE ASSESSEE AT NIL AFTER ALLOWING BENEFIT OF DEPRECIATION AND CARRY FORWARD OF UNABSORBED DEPREC IATION HAS BEEN ALLOWED AT ` 7 57 233/-. HENCE THE POSITION WHICH EMERGES BEFORE US IS THAT ULTIMATE INCOME ASSESSED IN THE PRESENT YEAR IS AT A LOSS OF ` 7 57 233/- AS AGAINST LOSS DECLARED BY THE ASS ESSEE IN THE RETURN OF INCOME FILED BUT AT ` 9 40 309/-. THIS DIFFEREN CE IS ALSO FOR THIS REASON THAT INCOME OF THE ASSESSEE WAS ESTIMATED B Y THE ASSESSING OFFICER AT ` 15 LACS BEING 10% OF THE TOTAL TURNOVE R OF THE ASSESSEE ESTIMATED BY HIM AT ` 1.5 CRORES BECAUSE THE BOOKS OF ACCOUNTS I.T.A.NO. 371/DEL/2009 4 WERE REJECTED BY THE ASSESSING OFFICER. HENCE WE FIND THAT THE SMALL ADDITION ULTIMATELY UPHELD BY THE TRIBUNAL OF ` 1 83 076/- (9 40 309 7 57 233) IS ON ACCOUNT OF ESTIMATION O F GROSS PROFIT BY THE ASSESSING OFFICER BY REJECTING THE BOOKS OF ACC OUNT AND THIS GP HAS BEEN ESTIMATED @ 10% OF TOTAL TURNOVER WHICH WA S ALSO ESTIMATED BY THE ASSESSING OFFICER AT ` 1.5 CRORES. HENCE IT IS SEEN THAT THE ULTIMATE ADDITION IS ON THE BASIS OF ESTIM ATION ONLY AND THE SAME IS AROUND 19.5% OF THE LOSS DECLARED BY THE AS SESSEE OF ` 9 04 309/-. CONSIDERING THE TOTAL FACTS OF THE PRE SENT CASE WE ARE OF THE CONSIDERED OPINION THAT NO CASE HAS BEEN MAD E OUT OF CONCEALMENT OF INCOME BECAUSE ADDITION ULTIMATELY C ONFIRMED IS ONLY ON ESTIMATE BASIS AND HENCE WE FEEL THAT PENA LTY IN THE FACTS OF THE PRESENT CASE IS NOT JUSTIFIED. WE THEREFORE DELETE THE SAME. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . 7. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH 2011. SD./- SD./- ( R. P. TOLANI) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND MARCH 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI