Deep Karan Jaie, New Delhi v. ITO, New Delhi

ITA 70/DEL/2011 | 2006-2007
Pronouncement Date: 15-07-2011 | Result: Allowed

Appeal Details

RSA Number 7020114 RSA 2011
Assessee PAN AAIPJ3539P
Bench Delhi
Appeal Number ITA 70/DEL/2011
Duration Of Justice 6 month(s) 8 day(s)
Appellant Deep Karan Jaie, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 15-07-2011
Date Of Final Hearing 23-06-2011
Next Hearing Date 23-06-2011
Assessment Year 2006-2007
Appeal Filed On 06-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A. NO.70/D/2011 ASSESSMENT YEAR: 2006-07 DEEP KARAN JAIE C/O JOY AUTO VS. INCOME TAX OFFI CER CENTRE 28-29 PRITHVIRAJ MARKET WARD 31(2) NEAR KHAN MARKET NEW DELHI NEW DELHI PAN NO.AAIPJ 3539 P PAN NO.AAIPJ 3539 P PAN NO.AAIPJ 3539 P PAN NO.AAIPJ 3539 P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATYEN SETHI ADVOCATE RESPONDENT BY : MS. Y. KAKKAR SR. DR ORDER PER RAJPAL YADAV: JM: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(A) DATED 30 TH SEPTEMBER 2010 PASSED FOR ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL TAK EN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF I TAT RULES THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NA TURE. IN BRIEF THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNE D CIT(A) HAS ERRED IN CONFIRMING THE IMPOSITION OF PENALTY A MOUNTING TO `7 55 429/- US/ 271(1)(C). 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME ON 22.12.2006 DECLARING AN INC OME OF `3 04 000/-. THE ASSESSEE WAS CARRYING ON BUSINESS OF 70-2011-DKJ 2 TRADING IN ALL KINDS OF AUTO PARTS UNDER THE NAME A ND STYLE OF M/S JOY AUTO CENTRE. DURING THE COURSE OF ASSESSME NT PROCEEDING THE ASSESSING OFFICER FOUND SUNDRY CRED IT BALANCE SHOWN IN THE BALANCE SHEET. A SUM OF `21 7 7 507/- WAS SHOWN AGAINST THE NAME OF M/S PIONEAR CAR ACCES SORIES. THE LEARNED ASSESSING OFFICER DIRECTED THE ASSESSEE TO FILE A CONFIRMATION FROM THIS CONCERN. THE ASSESSEE COULD NOT FILE THE CONFIRMATION AND ULTIMATELY SURRENDERED THE AMO UNT VIDE LETTER-DATED 14.11.2008. THE ASSESSEE CONTEND ED THAT HE HAD PURCHASED TYRES FROM M/S PIONEAR CAR ACCESSO RIES. THAT CONCERN HAD SUPPLIED OLD AND DEFECTIVE TYRES WHICH WERE NOT SALABLE IN THE MARKET. AN ISSUE AROSE AND ASSESSEE DID NOT MAKE THE PAYMENT. THE STOCK OF TYRES WAS L YING WITH THE ASSESSEE. HE HAS BEEN SHOWING THE CREDIT BALAN CE OF M/S PIONEAR CAR ACCESSORIES CONTINUOUSLY FROM ASSES SMENT YEAR 1997-98. IN ORDER TO BUY PEACE OF MIND COUPL ED WITH THE NON CO-OPERATIVE ATTITUDE OF M/S PIONEAR CAR AC CESSORIES ASSESSEE HAS OFFERED THIS AMOUNT FOR TAX IN THIS AS SESSMENT YEAR. LEARNED ASSESSING OFFICER HAS INITIATED THE PENALTY PROCEEDINGS AGAINST THE ASSESSEE. 3. IN RESPONSE TO THE SHOW CAUSE NOTICE RECEIVED U/ S 274 READ WITH SECTION 271(1)(C) IT WAS CONTENDED BY TH E ASSESSEE THAT GENUINENESS OF THIS AMOUNT COULD BE EXAMINED BY THE ASSESSING OFFICER IN THE YEAR OF IN TRODUCTION OF THE AMOUNT. RIGHT FROM 1997-98 ASSESSEE HAS BE EN 70-2011-DKJ 3 SHOWING THIS CREDIT BALANCE IN THE BALANCE SHEET I T WAS SUBMITTED ALONGWITH THE RETURN. UPTO ASSESSMENT YE AR 2005-06 ASSESSING OFFICER HAS NEVER DOUBTED ABOUT THE OUTSTANDING LIABILITY. THIS YEAR ASSESSEE HAS SHOW N IT IN THE BALANCE SHEET. HE HAS NOT WRITTEN OFF THE AMOUNT A ND /THE LIABILITY HAS NOT CEASED BUT IN THE ABSENCE OF CONF IRMATION AND FOR WANT OF PEACE OF MIND HE HAS OFFERED THIS AMOUNT FOR TAX. THERE CANNOT BE ANY ELEMENT OF FURNISHING INACCURATE PARTICULAR OR CONCEALMENT OF INCOME. HA D THE ASSESSEE HAS NOT OFFERED THIS AMOUNT FOR TAX? IT W OULD NOT HAVE BEEN TAXED IN THIS YEAR BECAUSE IT IS AN OLD BALANCE WHOSE GENUINENESS COULD BE EXAMINED IN THE FIRST YE AR WHEN IT WAS INTRODUCED. THE LEARNED ASSESSING OFFICER D ID NOT ACCEPT THE CONTENTION OF ASSESSEE AND IMPOSED THE P ENALTY. 4. AN APPEAL TO THE CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 5. BEFORE US LEARNED COUNSEL FOR THE ASSESSEE REIT ERATED HIS CONTENTION AS WERE RAISED BEFORE THE REVENUE AU THORITIES BELOW. FOR BUTTERING THE CONTENTION HE RELIED UPO N THE ORDER OF ITAT IN THE CASE OF VARDHMAN OVERSEAS LTD. VS. ACIT REPORTED IN 24 SOT 393. HE ALSO RELIED UPON THE OR DER OF AHMEDABAD BENCH C IN THE CASE OF ALIDHARA TEXPRO ENGINEERS (P) LTD. REPORTED IN (2011) 43 SOT 1 (AHD .) ON THE STRENGTH OF THESE TWO DECISIONS IT WAS CONTENDED T HAT TILL 70-2011-DKJ 4 DATE THE ASSESSEE HAS BEEN ACKNOWLEDGING LIABILITI ES IN THE BALANCE SHEET AS WELL AS IN BOOKS OF ACCOUNT THUS THERE WAS NO CESSATION OR REMISSION OF LIABILITY. LEARNED CO UNSEL POINTED OUT THAT HAD THE ASSESSEE HAD NOT OFFERED T HIS AMOUNT THEN IT COULD NOT HAVE BEEN INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE U/S 41(1) OF THE INCOME-TAX ACT. HE FURTHER SUBMITTED THAT BOTH THESE ORDERS OF THE ITA T ARE BASED ON THE JUDGMENT OF HONBLE SUPREME COURT IN T HE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. (1999) 236 ITR PAGE 518 AND CIT VS. KESARIA TEA CO. LTD. (2002) 254 ITR 434. HE FURTHER CONTENDED THAT THERE IS NOTHING WITH THE AS SESSING OFFICER IN SUPPORT OF HIS CONCLUSION THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS MERELY ON THE SURRENDERED INCOME PENA LTY CANNOT BE IMPOSED. HE MADE A REFERRED TO THE REFER ENCE TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ASHOK TAKER REPORTED IN 170 TAXMAN 471. IN THI S DECISION ASSESSEE HAD VOLUNTARILY SURRENDERED INCO ME TO BUY PEACE. LEARNED ASSESSING OFFICER HAS VISITED T HE ASSESSEE WITH PENALTY ALSO. THE PENALTY WAS DELETE D BY THE CIT(A) AND THE ORDER WAS UPHELD BY THE ITAT. IT WA S HELD THAT THERE MUST BE SOME OTHER MATERIAL BESIDE THE F ACTUM OF SURRENDER OF INCOME BY THE ASSESSEE TO SHOW THAT TH E INCOME WAS CONCEALED INCOME. LEARNED COUNSEL FOR T HE ASSESSEE MADE REFERENCES TO PAGE NOS.25 31 & 37 FO R 70-2011-DKJ 5 DEMONSTRATING THE FACT THAT IN THE PAST THIS AMOUNT WAS SHOWN IN THE BALANCE SHEET. 6. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF CIT(A). SHE POINTED OUT THAT HAD THE ASSESSING OFFICER NOT ASKED FOR CONFIRMATION ASSESSEE WOULD NOT HAVE SURRENDERED THIS AMOUNT. IT INDICATES THAT LIABILI TY WAS ALREADY CEASED AND ASSESSEE SHOULD HAVE INCLUDED TH IS AMOUNT IN THE RETURN. 7. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. ADMITTEDLY ASSESSEE HAS BEEN RECOGNIZING HIS LIABILITY TO PAY THIS AMOUNT TO M/S PIONEAR CAR ACCESSORIES. HE HAS BEEN SHOWING THIS IN THE BALAN CE SHEET CONTINUOUSLY. THE AMOUNT HAS NOT BEEN WRITTEN OFF IN THE ACCOUNT. THUS AS PER THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. (SUPRA) AS WELL AS CIT VS. KESARIA TEA CO. LTD. (SUPRA) IT CA NNOT BE HELD THAT LIABILITY HAS BEEN REMITTED OR CEASED. WHEN A SSESSEE HAS FILED THE RETURN IT WAS EXISTING. HE HAS OFFE RED THIS AMOUNT FOR TAX IN ORDER TO AVOID THE LITIGATION. T HIS STEP CANNOT BE CONSTRUED THAT ASSESSEE HAS FURNISHED INA CCURATE PARTICULARS OR CONCEALED THE INCOME. HAD THE ASSES SEE NOT SURRENDERED THIS AMOUNT PROBABLY IT COULD HOW NOT B EEN ADDED U/S 41(1) OF THE INCOME-TAX ACT. THE OTHER S ECTION UNDER WHICH IT COULD BE ADDED IS SECTION 68 ON ACCO UNT OF 70-2011-DKJ 6 UNEXPLAINED CREDIT BUT THEN THAT ADDITION COULD BE IN THE FIRST YEAR WHEN THIS AMOUNT WAS INTRODUCED IN THE B OOKS. TAKING INTO CONSIDERATION ALL THESE FACTS AND CIRCU MSTANCES WE ARE OF THE VIEW THAT THIS IS NOT THE CASE WHERE ASSESSEE SHOULD BE VISITED WITH PENALTY U/S 271(1)(C). WE A LLOW THE APPEAL OF THE ASSESSEE AND DELETE THE PENALTY. 8. IN RESULT APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 15.07.2011. SD/- SD/- ( K.G. BANSAL ) ( RAJPAL YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBE R DT.15.07.2011. NS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. THE CIT 4. THE CIT (A) NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY BY ORDER (ITAT NEW DELHI).