Raj Kumar Gupta, Delhi v. ITO, New Delhi

ITA 887/DEL/2013 | 2002-2003
Pronouncement Date: 28-11-2014 | Result: Allowed

Appeal Details

RSA Number 88720114 RSA 2013
Assessee PAN AECPG7801H
Bench Delhi
Appeal Number ITA 887/DEL/2013
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant Raj Kumar Gupta, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 28-11-2014
Date Of Final Hearing 13-11-2014
Next Hearing Date 13-11-2014
Assessment Year 2002-2003
Appeal Filed On 13-02-2013
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 DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL VICE BEFORE SHRI G.D. AGRAWAL VICE BEFORE SHRI G.D. AGRAWAL VICE BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 886/DEL/2013 887/DEL/2013 & 888/DEL/2013 886/DEL/2013 887/DEL/2013 & 888/DEL/2013 886/DEL/2013 887/DEL/2013 & 888/DEL/2013 886/DEL/2013 887/DEL/2013 & 888/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2000 2000 2000 2000 - -- - 01 2002 01 2002 01 2002 01 2002 - -- - 03 & 2004 03 & 2004 03 & 2004 03 & 2004 - -- - 05 0505 05 SHRI RAJ SHRI RAJ SHRI RAJ SHRI RAJ KUMAR GUPTA KUMAR GUPTA KUMAR GUPTA KUMAR GUPTA PROP. ASA RAM MUKAND LAL PROP. ASA RAM MUKAND LAL PROP. ASA RAM MUKAND LAL PROP. ASA RAM MUKAND LAL 5583 NAYA BAZAR 5583 NAYA BAZAR 5583 NAYA BAZAR 5583 NAYA BAZAR DELHI DELHI DELHI DELHI 110 006. 110 006. 110 006. 110 006. PAN : AECPG7801H. PAN : AECPG7801H. PAN : AECPG7801H. PAN : AECPG7801H. VS. VS. VS. VS. INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -28(3) 28(3) 28(3) 28(3) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANUPAM TRIPATHI ADVOCATE. RESPONDENT BY : SHRI VIKRAM SAHAY SR.DR. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL VP PER G.D. AGRAWAL VP PER G.D. AGRAWAL VP PER G.D. AGRAWAL VP : :: : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXV NEW DELHI DATED 27 TH DECEMBER 2012 FOR THE AY 2000-01 2002-03 & 2004-05. 2. THE ONLY GROUND RAISED IN ALL THESE THREE APPEAL S IS AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCO ME-TAX ACT 1961 AS UNDER:- ASSESSMENT YEAR AMOUNT 2000-01 `2 64 555/- 2002-03 `3 00 651/- 2004-05 `4 90 543/- 3. AT THE TIME OF HEARING BEFORE US IT IS STATED B Y THE LEARNED COUNSEL THAT THE ASSESSEE IS AN INDIVIDUAL WHO DERI VES INCOME FROM TRADING IN FOOD GRAINS AND RICE. APART FROM HIS PR OPRIETORSHIP BUSINESS HE IS HAVING SHAREHOLDING IN M/S A.M. OVERSEAS PVT. LTD. WHICH WAS MORE THAN 20%. THE ASSESSING OFFICER WAS OF THE OP INION THAT ITA-886 TO 888/DEL/2013 2 ASSESSEE HAD TAKEN LOANS FROM THE ABOVE COMPANY WHI CH WAS ALSO HAVING RESERVES AND SURPLUS. THEREFORE THE ASSESS ING OFFICER ARRIVED AT THE CONCLUSION THAT THE LOAN RECEIVED FROM M/S A .M. OVERSEAS PVT.LTD. WAS DEEMED DIVIDEND WITHIN THE MEANING OF SECTION 2(22)(E). THE ASSESSEE CHALLENGED THE ORDER OF THE ASSESSING OFFICER BEFORE THE CIT(A) AS WELL AS ITAT AND LOST AT BOTH THE PLACES. THE ASSESSEE ALSO FILED APPEAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT WHICH ALSO DISMISSED THE ASSESSEES APPEAL HOLDING THAT NO SUB STANTIAL QUESTION OF LAW ARISES. HE SUBMITTED THAT THE ASSESSING OFF ICER ALSO LEVIED PENALTY UNDER SECTION 271(1)(C) FOR ALL THE THREE Y EARS WHICH IS SUSTAINED BY THE LEARNED CIT(A). HE STATED THAT TH ERE WAS NO CONCEALMENT BY THE ASSESSEE. ALL NECESSARY FACTS W ERE DULY DISCLOSED BY THE ASSESSEE WHICH HAVE NOT BEEN FOUND TO BE INC ORRECT OR FALSE. THAT MERELY BECAUSE THE ASSESSING OFFICER WAS OF TH E OPINION THAT THE LOAN FROM M/S A.M. OVERSEAS PVT.LTD. IS LIABLE TO B E ASSESSED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) CANNOT AMOU NT TO CONCEALMENT OF INCOME BY THE ASSESSEE. IN SUPPORT OF THIS CONTENTION HE RELIED UPON THE DECISION OF HONBLE APEX COURT I N THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. (2010) 322 ITR 158 (SC). 4. LEARNED DR ON THE OTHER HAND STATED THAT THE A SSESSEE HAS NOT DISCLOSED THE DIVIDEND INCOME WHICH WAS CLEARLY CHA RGEABLE UNDER SECTION 2(22)(E). THUS THE ASSESSEE FAILED TO DIS CLOSE A PARTICULAR SOURCE OF INCOME. THE CLAIM OF THE ASSESSEE HAD NO T BEEN ACCEPTED BY THE CIT(A) ITAT AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT THEREFORE IT CANNOT BE SAID THAT THE ISSUE OF CHARGEABILITY O F LOAN AS DEEMED DIVIDEND WAS A DEBATABLE ISSUE. HE THEREFORE STA TED THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C) SHOULD BE SUSTAINED. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) THEIR LORD SHIPS HELD AS UNDER:- ITA-886 TO 888/DEL/2013 3 WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE R ETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 6. THOUGH THE ABOVE DECISION WAS WITH REFERENCE TO THE CLAIM OF ANY EXPENDITURE OR CLAIM OF ANY ALLOWANCE HOWEVER IN OUR OPINION THE RATIO OF THE ABOVE DECISION WOULD BE APPLICABLE TO THE CASE UNDER APPEAL BEFORE US SO AS TO ARRIVE TO THE CONCLUSION WHETHER THE ASSESSEE FURNISHED ANY INACCURATE PARTICULARS OF IN COME OR CONCEALED ANY INCOME. IN THE ABOVE MENTIONED CASE THEIR LOR DSHIPS HAVE INTERPRETED THE WORDS FURNISHING OF INACCURATE PAR TICULARS AND HAVE ARRIVED AT THE CONCLUSION THAT WHEN THE PARTICULARS FURNISHED BY THE ASSESSEE ARE FOUND TO BE INACCURATE NOT EXACT OR C ORRECT THEN ONLY THE ASSESSEE WOULD BE SAID TO HAVE FURNISHED INACCU RATE PARTICULARS OF INCOME. IN THIS CASE THERE IS NO ALLEGATION FROM THE SIDE OF THE DEPARTMENT THAT THE PARTICULARS FURNISHED BY THE AS SESSEE WERE EITHER INACCURATE OR INCORRECT. THE CONTENTION OF THE LEA RNED DR THAT THE ASSESSEE FAILED TO DISCLOSE THE INCOME IS ALSO NOT CORRECT BECAUSE THE ASSESSEE HAD RECEIVED THE LOAN FROM THE COMPANY IN WHICH HE WAS THE SHAREHOLDER. IT IS ONLY BECAUSE OF THE DEEMING PRO VISIONS OF SECTION 2(22)(E) THE LOAN WAS DEEMED TO BE DIVIDEND. HERE ALSO THE ASSESSEES CONTENTION WAS THAT HE DOES NOT FALL WIT HIN THE AMBIT OF SECTION 2(22)(E) BECAUSE THE LOAN WAS ADVANCED IN T HE NORMAL COURSE OF BUSINESS BY THE COMPANY AND SECTION 2(22) ITSELF PROVIDES AN EXCEPTION THAT WHERE THE LOAN IS ADVANCED IN THE NO RMAL COURSE OF BUSINESS THE SAME IS NOT TO BE TREATED AS DEEMED D IVIDEND. FROM A ITA-886 TO 888/DEL/2013 4 PERUSAL OF THE ORDER OF THE ITAT WE FIND THAT THE ITAT EXAMINED THIS ASPECT AND HAS FOUND THAT THE COMPANY HAS ADVANCED LOAN TO SO MANY PERSONS INCLUDING THE ASSESSEE BUT DID NOT ACCEPT T HE ASSESSEES CONTENTION THAT IT WAS THE LOAN IN THE NORMAL COURS E OF BUSINESS BECAUSE ON MOST OF THE LOANS INTEREST WAS NOT CHAR GED. ON THE TOTALITY OF THESE FACTS WE ARE OF THE OPINION THAT THE ISSUE OF ASSESSABILITY OF LOAN AND ADVANCE AS DEEMED DIVIDEN D WAS A DEBATABLE ISSUE. THE ASSESSEE HAS DISCLOSED ALL PRIMARY FACT S WHICH HAVE NOT BEEN FOUND TO BE FALSE AND MERELY BECAUSE THE LOAN FROM THE COMPANY WAS TREATED AS DEEMED DIVIDEND UNDER SECTION 2(22)( E) THE ASSESSEE CANNOT BE SAID TO HAVE EITHER CONCEALED INCOME OR F URNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY THE PENALTY LEVIED UNDER SECTION 271(1)(C) IS CANCELLED FOR ALL THE YEARS. 7. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE A LLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER 2014. SD/- SD/- ( (( ( I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.11.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI RAJ KUMAR GUPT SHRI RAJ KUMAR GUPT SHRI RAJ KUMAR GUPT SHRI RAJ KUMAR GUPTA A A A PROP. ASA RAM MUKAND LAL PROP. ASA RAM MUKAND LAL PROP. ASA RAM MUKAND LAL PROP. ASA RAM MUKAND LAL 5583 NAYA BAZAR DELHI 5583 NAYA BAZAR DELHI 5583 NAYA BAZAR DELHI 5583 NAYA BAZAR DELHI 110 006. 110 006. 110 006. 110 006. 2. RESPONDENT : INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -28(3) NEW DELHI. 28(3) NEW DELHI. 28(3) NEW DELHI. 28(3) NEW DELHI. 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR