R.C. Sood & Co. Estate Pvt. Ltd., New Delhi v. DCIT, New Delhi

ITA 4350/DEL/2011 | 2004-2005
Pronouncement Date: 16-12-2011 | Result: Allowed

Appeal Details

RSA Number 435020114 RSA 2011
Assessee PAN AACCR2964D
Bench Delhi
Appeal Number ITA 4350/DEL/2011
Duration Of Justice 2 month(s) 16 day(s)
Appellant R.C. Sood & Co. Estate Pvt. Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 16-12-2011
Date Of Final Hearing 01-12-2011
Next Hearing Date 01-12-2011
Assessment Year 2004-2005
Appeal Filed On 30-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI A.N. PAHUJA ACCOUNTANT MEMBER I.T.A NOS. 4349 TO 4353/DEL/11 ASSTT. YEARS 2003-04 2004-05 2005-06 2006-07 2007-08 R.C. SOOD & CO. ESTATE PVT. LTD. S-1 AMERICAN PLAZA INTERNATIONAL TRADE TOWER NEHRU PLACE NEW DELHI 110 019 AACCR2964D VS. DCIT CIRCLE-6 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRADEEP DINODIA RESPONDENT BY: SHRI A.K. MONGA DR ORDER PER BENCH THE PRESENT FIVE APPEALS ARE DIRECTED AT THE INSTA NCE OF ASSESSEE AGAINST THE SEPARATE ORDERS OF EVEN DATE I .E. 4.8.2011 PASSED IN ASSTT. YEARS 2003-04 TO 2007-08 BY LD. CI T(A). THE COMMON GRIEVANCE OF THE ASSESSEE IN ALL THESE APPEA LS RELATES ITA NOS. 4349 TO 4353/DEL/11 2 TO CONFIRMATION OF PENALTY AMOUNTING TO `. 12 206/- ` 12 405/- `12 462/- ` 11 188/- AND ` 12 499/- IN ASSTT. YEARS 2003-04 TO 2007-08 RESPECTIVELY. 2. WE HAVE HEARD THE PARTIES AND WITH THEIR ASSISTA NCE PERUSED THE RECORD CAREFULLY. THE FACTS IN ALL THES E YEARS ARE COMMON. THEREFORE FOR THE FACILITY OF REFERENCE W E ARE TAKING UP THE FACTS FROM ASSTT. YEAR 2003-04. THE ASSESSE E IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE. A S EARCH AND SEIZURE OPERATION WAS CARRIED OUT ON EROS GROUP OF COMPANIES U/S 132 OF THE INCOME TAX ACT 1961 ON 14.11.2006. A NOTICE U/S 153A WAS SERVED UPON THE ASSESSEE. IN RESPONSE TO T HE STATUTORY NOTICE THE ASSESSEE HAS FURNISHED A LETT ER DATED 20.2.2008 CONTENDING THEREIN THAT IT HAS ALREADY FI LED RETURN OF INCOME DECLARING LOSS OF `. 30 196/- FOR ASSTT. YEA R 2003-04. AN ASSTT. ORDER WAS FRAMED U/S 153A READ WITH SECTION 143(3) ON 19.12.2008. LD. AO HAS DETERMINED THE INCOME OF ASS ESSEE AT NIL AND DISALLOWED THE CLAIM OF LOSS. HE WAS OF THE OPINION THAT ASSESSEE HAS NOT COMMENCED THE BUSINESS. THEREFORE THE EXPENSES DEBITED BY IT IN THE ACCOUNT ARE NOT ALLOW ABLE. ITA NOS. 4349 TO 4353/DEL/11 3 3. THE AO HAS INITIATED THE PENALTY PROCEEDINGS ON ACCOUNT OF DISALLOWANCE OF LOSS U/S 271(1) AND ISSUED A SH OW CAUSE NOTICE. IN RESPONSE TO THE NOTICE IT WAS CONTENDED BY THE ASSESSEE THAT THE COMPANY WAS INCORPORATED ON 9.8.2 002 BY ALLOTTING 10 000 EQUITY SHARES OF ` 10/- EACH FULLY PAID UP TO ITS PROMOTERS WITH THE OBJECT OF DOING THE BUSINESS OF REAL ESTATE BUILDERS COLONIZER AND DEVELOPER OF LAND AND FINAN CE. IT HAS SUBMITTED THAT EXPENSES OF `. 5 400/- WERE DEBITED TOWARDS AUDITORS REMUNERATION PRELIMINARY EXPENSES HAVE B EEN WRITTEN OFF AT 1/5 TH AMOUNTING TO ` 24 636/- AND BANK CHARGES OF ` 160/- WERE CLAIMED. THE AO WAS OF THE OPINION THAT THESE EXPENSES OUGHT TO HAVE BEEN CAPITALIZED OR AMORTIZE D BY THE ASSESSEE BECAUSE BUSINESS HAS NOT COMMENCED. THE CA SE OF THE ASSESSEE IS THAT IN ORDER TO MAINTAIN ITS STATU S AS A COMPANY IT IS SUPPOSED TO INCUR CERTAIN EXPENSES AN D IT HAS NOT CONCEALED THE PARTICULARS OF INCOME NOR IT HAS FURN ISHED ANY INACCURATE PARTICULARS. LD. AO DID NOT ACCEPT THE C ONTENTION OF ASSESSEE. HE IMPOSED A PENALTY OF ` 12 206/- IN ASS TT. YEAR 2003-04. ON SIMILAR LINE THE PENALTY OF ` 12 405/- ` 12 462/- ` ITA NOS. 4349 TO 4353/DEL/11 4 11 188/- ` 12 499/- HAS BEEN IMPOSED IN ASSTT. YEAR S 2004-05 TO 2007-08 RESPECTIVELY. 4. APPEAL TO THE LD. CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 5. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES WE ARE OF THE OPINION THAT ASSESSEE HAS FURNISHED AN E XPLANATION AS TO HOW IT HAS DEBITED CERTAIN EXPENSES IN THE A CCOUNTS. THE CONTENTION OF THE ASSESSEE IS THAT IN ORDER TO MAIN TAIN ITS CORPORATE STATUS IT IS BOUND TO INCUR CERTAIN EXPEN SES WHICH IS ADMISSIBLE ONE. THE EXPLANATION OF THE ASSESSEE WAS NOT HELD TO BE FALSE. WE DO NOT SEE ANY DELIBERATE ATTEMPT AT THE END OF ASSESSEE FOR EVADING OF TAX. THE ASSESSEE DID NOT C HALLENGE THE DISALLOWANCE OF LOSS BECAUSE THERE WAS NO PECUNIARY BENEFIT TO IT. THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE P ARTICULARS OR CONCEAL THE PARTICULARS. IT WAS UNDER AN IMPRESSION THAT SMALL REVENUE EXPENSES INCURRED ON ACCOUNT OF AUDITORS F EE BANK CHARGES ETC. WERE ALLOWABLE EXPENSES IN ORDER TO KE EP THE CORPORATE STATUS. IN VIEW OF THE ABOVE SITUATION W E ARE OF THE VIEW THAT IT IS NOT A CASE WHERE ASSESSEE DESERVES TO BE VISITED WITH PENALTY FOR CONCEALMENT OR FOR FURNISHING INAC CURATE ITA NOS. 4349 TO 4353/DEL/11 5 PARTICULARS. WE ALLOW ALL THE APPEALS OF ASSESSEE A ND DELETE THE PENALTY. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER 2011. SD/- SD/- [A.N. PAHUJA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT