The DCITGNR Circle,, Gandhinagar v. M/s. Horn Ok Please Transport Ltd.,, Gandhinagar

ITA 452/AHD/2011 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 45220514 RSA 2011
Assessee PAN AAACV6344H
Bench Ahmedabad
Appeal Number ITA 452/AHD/2011
Duration Of Justice 5 month(s) 4 day(s)
Appellant The DCITGNR Circle,, Gandhinagar
Respondent M/s. Horn Ok Please Transport Ltd.,, Gandhinagar
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 22-07-2011
Date Of Final Hearing 01-07-2011
Next Hearing Date 01-07-2011
Assessment Year 2005-2006
Appeal Filed On 17-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) ITA NO.452/AHD/2011 [ASSTT. YEAR : 2005-2006] DY.COMMISSIONER OF IT GANDHINAGAR. VS. HORN OK PLEASE TRANSPORT LTD. 80/394 IOC ROAD CHANDKHEDA DIST. GANDHINAGAR. PAN : AAACV 6344 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAKAR SHARMA REVENUE BY : SHRI GS.SURYABANSHI O R D E R PER G.D. AGARWAL VICE-PRESIDENT : THIS IS REVENUES APPEAL AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GANDHINAGAR DATED 22.11.2010 ARISING OUT OF THE ORDER OF THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1 961. 2. IN THIS APPEAL THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CIT(A) IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.7 09 557/-. 3. THE FACTS OF THE CASE ARE THAT THE AO IMPOSED PE NALTY UNDER SECTION 271(1)(C) ON THE FOLLOWING EXPENSES SUSTAIN ED BY THE CIT(A) AND CONFIRMED BY THE ITAT: I) SHORTAGE EXPENSES : RS.3 39 078/- II) TANKER DIESEL EXPENSES : RS.6 00 000/- III) TRANSPORT EXPENSES : RS.10 00 000/- THE CIT(A) CANCELLED THE PENALTY WITH THE FOLLOWING OBSERVATIONS: ITA NO.452/AHD/2011 -2- 6. I HAVE CONSIDERED THE CONTENTIONS OF THE APPELL ANT AS WELL AS THE PENALTY ORDER. THE FOLLOWING OBSERVATIONS ARE MADE WITH RESPECT TO THE FACTS OF THE CASE: THE PENALTY HAS BEEN LEVIED ON THE DISALLOWANCE OF EXPENSES CLAIMED UNDER THREE HEADS ON ESTIMATE BASIS. THE CONCEALMENT OF INCOME HAS NOT BEEN PROVED CONCL USIVELY TO ANY EXTENT IN ANY OF ANY OF THE DISALLOWANCES A ND ADDITIONS HAVE BEEN CONFIRMED BY THE CIT APPEALS ON AD HOC BASIS WHICH CAN BE TREATED AS AN ESTIMATE BASED ON POSSIBILITIES/PROBABILITIES ONLY. THE CIT APPEALS IN THE QUANTUM PROCEEDINGS AND ALSO REDUCED THE DISALLOWAN CE AS ORIGINALLY MADE ON ACCOUNT OF EXPENSES CLAIMED UNDE R TANKER DIESEL AND TRANSPORT EXPENSES. THE THIRD DISALLOWANCE MADE WAS FROM SHORTAGES CLAIMED AND TH E AO HIMSELF HAD ACCEPTED 50% OF THE EXPENSES CLAIMED BA SED ON THE ASSESSEES EXPLANATION. IN THE PENALTY PROCEEDINGS EXPLANATIONS TO THE QUE RIES RAISED WERE GIVEN WHICH WERE CONSIDERED WHILE DECI DING THE QUANTUM OF DISALLOWANCE. THE EXPLANATIONS WERE NOT PROVED TO BE EITHER BOGUS OR FALSE. IT IS A FACT THAT PENALTY WAS INITIATED FOR FURNISH ING INACCURATE PARTICULARS OF INCOME WHILE IT WAS LEVIE D UNDER EXPLANATION 1 FOR CONCEALING THE PARTICULARS OF IN COME. THEREFORE CONSIDERING THE ABOVE IT IS HELD THAT T HE AO HAS NOT BEEN ABLE TO PROVE THAT THE CONDITIONS OF EXPLANATI ON 1 TO THE SECTION ARE SATISFIED THE DISALLOWANCES ARE BEST A S ESTIMATE BASED ON PROBABILITIES AND ON AD HOC BASIS CONCEALMENT O F PARTICULARS HAS NOT BEEN CONCLUSIVELY PROVED FOR EVEN PART OF T HE EXPENSES CLAIMED. THEREFORE IT IS HELD TO BE NOT A FIT CAS E FOR LEVY OF PENALTY UNDER SECTION 271(1)(C); NEITHER UNDER THE MAIN CLA USE NOR IN CONJUNCTION WITH EXPLANATION 1 AND THEREFORE THE PENALTY LEVIED IS DIRECTED TO BE DELETED AND APPEAL OF THE ASSESSEE I S ALLOWED. 4. AT THE TIME OF HEARING BEFORE US THE LEARNED CO UNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS FURNISHED ALL THE REQUIRED DETAILS AND OFFERED EXPLANATION DURING THE ASSESSMENT PROCE EDINGS WHICH WERE ITA NO.452/AHD/2011 -3- NOT FOUND TO BE FALSE OR BOGUS. THE ADDITIONS WERE MADE BY THE AO PURELY ON THE BASIS OF ESTIMATE WHICH WERE REDUCED IN APPEAL. THAT THE DISALLOWANCE OF EXPENSES ON ESTIMATED BASIS DOES NO T AMOUNT TO CONCEALMENT OF INCOME FOR WHICH PENALTY UNDER SECTI ON 271(1)(C) CANNOT BE LEVIED. THE LEARNED COUNSEL ALSO RELIED ON THE DECISION IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 1 58 (SC) TO SUPPORT ITS CLAIM THAT INCORRECT CLAIM DOES NOT TANTAMOUNT TO FURNISHING IN ACCURATE PARTICULARS. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AO. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND NO JUSTIFICATION FOR OUR INTERF ERENCE IN THE ORDER OF THE CIT(A). IT IS A CASE WHERE THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF ESTIMATED DISALLOWANCE OF EXPENSES WHICH WAS PARTL Y REDUCED BY THE CIT/ITAT. NO SPECIFIC ITEM OF EXPENDITURE WAS HELD TO BE BOGUS OR NON- GENUINE. WE FIND THAT THE CASE OF THE ASSESSEE ALSO GETS SUPPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD.(SUPRA) WHEREIN THE HONBLE SUPREME COURT HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS ' USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY O F FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSE SSEE TO PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGI NATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE ITA NO.452/AHD/2011 -4- PARTICULARS. (EMPHASIS ADDED) THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULAR S ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRAC T PENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT 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 ERRONEOU S OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 2 71(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RE TURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. FROM THE ABOVE IT IS EVIDENT THAT THEIR LORDSHIPS H AVE CLEARLY LAID DOWN THAT MERELY AN INCORRECT CLAIM WAS MADE BY THE ASSE SSEE IT WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS SO AS TO MAKE THE ASSESSEE LIABLE FOR PENALTY UNDER SECTION 271(1)(C) . THEREFORE IN SUCH SITUATION NO PENALTY CAN BE LEVIED UNDER SECTION 27 1(1)(C). IN VIEW OF THE ABOVE WE RESPECTFULLY FOLLOWING THE DECISION OF TH E HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS LTD. (SUPRA) UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 22 ND JULY 2011 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : -07-2011