DCIT, UDAIPUR v. M/s. G.R. Agarwal Builders & Developers, UDAIPUR

ITA 90/JODH/2014 | 2004-2005
Pronouncement Date: 25-04-2014 | Result: Dismissed

Appeal Details

RSA Number 9023314 RSA 2014
Assessee PAN AAACG5306N
Bench Jodhpur
Appeal Number ITA 90/JODH/2014
Duration Of Justice 2 month(s) 4 day(s)
Appellant DCIT, UDAIPUR
Respondent M/s. G.R. Agarwal Builders & Developers, UDAIPUR
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 24-04-2014
Assessment Year 2004-2005
Appeal Filed On 20-02-2014
Judgment Text
IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K. SAINI ACCOUNTANT MEMBER. ITA NOS.88 TO 92/JODH/2014 (A.YS. 2002-03 TO 2006-07) DCIT CENTRAL CIRCLE-1 VS. M/S. G.R. AGRAWAL BUILDERS & UDAIPUR. DEVELOPERS LTD. (PRESENTLY KNOW AS M/S. G.R. INFRA PROJECTS LTD.) 80-SHAHI COMPLEX SECTOR-11 HIRAN MANGRI UDAIPUR. PAN NO. AAACG 5306 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEVENDRA MEHTA & SHRI NEERAJ BHANDARI. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 24/04/2014. DATE OF PRONOUNCEMENT : 25/04/2014. O R D E R PER BENCH THESE FIVE APPEALS FILED BY THE DEPARTMENT ARE DIR ECTED AGAINST THE SEPARATE ORDERS EACH DATED 02/12/2013 OF LD. CIT(A) JAIPUR. SINCE THE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS WHICH WERE HEARD TOGETHER 2 SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATE D ORDER FOR THE SAKE OF BREVITY AND CONVENIENCE. 2 IN ALL THESE APPEALS THE ONLY ISSUE RELATES TO TH E DELETION OF PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1 )(C) OF THE I.T. ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT ). FIRST WE WILL DEAL WITH I.T.A.NO. 88/JODH/2014. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) (C) JAIPUR HAS ERRED IN DELETING THE PENALTY OF RS. 1 6 7 663/- LEVIED U/S 271(1)(C) DESPITE THE FACT THAT THE PENALTY IS LEVI ED ON THE ADDITION OF RS. 4 69 643/- MADE ON ACCOUNT OF INFLATION OF EXP ENSES IN ROAD CONTRACT BUSINESS BY THE ASSESSEE MADE IN THE ASSES SMENT ORDER DATED 29/12/2008 U/S 153A R.W.S. 143(3) AGAINST WHI CH NO APPEAL WAS FILED BEFORE LD. CIT(A) (C) AS CLEAR FROM APPE LLATE ORDER DATED 20/05/2009. B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) (C) JAIPUR HAS ERRED IN RELYING UPON ITAT ORDER DATED 3 1/07/2013 FOR A.Y. 2007-08 FOR DELETING THE PENALTY U/S 271(1)(C) LEVI ED FOR A.Y. 2002-03 THOUGH THE FACT IS THAT IN A.Y. 2002-03 THE ASSESSE E ACCEPTED THE ADDITION OF RS. 4 69 643/- ON WHICH PENALTY WAS LEV IED AND NEVER FILED ANY APPEAL FOR A.Y. 2002-03. C. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. 3. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE O NLY GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL RELATES TO THE DELETI ON OF PENALTY OF RS. 1 67 663/- LEVIED BY THE ASSESSING OFFICER UNDE R SECTION 271(1)(C) OF THE ACT. 3 4. FACTS OF THE CASE IN BRIEF ARE THAT THE SEARCH A ND SEIZURE OPERATIONS WERE CARRIED OUT ON 07/02/2007 AT THE RE SIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE. THEREAFTER A N OTICE UNDER SECTION 153A OF THE ACT WAS ISSUED ON 19/11/2007. IN COMPL IANCE TO THE SAID NOTICE THE ASSESSEE FILED RETURN OF INCOME DECLAR ING AN INCOME OF RS. 1 27 91 780/- ON 28/03/2008 HOWEVER ASSESSMEN T WAS COMPLETED AT A TOTAL INCOME OF RS. 1 87 61 420/- VIDE ASSESSMENT ORDER DATED 29/12/2008. THE ASSESSED INCOME INCLUDED THE ADDIT ION OF RS. 55 LAC AS ACCOMMODATION ENTRIES RS. 13 75 343/- AS INFLATION OF EXPENDITURE AND RS. 4 69 643/- AS READJUSTMENT OF SEGMENT WISE PROF IT AND LOSS ACCOUNT TO DETERMINE THE TRUE PROFITS OF ELIGIBLE BUSINESS TH EREFORE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WER E INITIATED. THE ASSESSING OFFICER OBSERVED THAT ALL THE ADDITIONS E XCEPT THE ADDITION OF RS. 4 69 643/- MADE ON ACCOUNT OF READJUSTMENT OF S EGMENT WISE PROFIT AND LOSS ACCOUNT TO DETERMINE THE TRUE PROFIT OF TH E ELIGIBLE BUSINESS WERE DELETED BY THE ITAT AS WELL AS THE LD. CIT(A). THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESS EE FOR THE FOLLOWING REASONS:- I) DURING THE ASSESSMENT PROCEEDINGS IT WAS ESTA BLISHED THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF TAXABL E INCOME AND ADDITION WAS BASED ON FACTS WHICH WERE APPARENT FRO M THE RECORDS SINCE THE ASSESSEE HAD NOT DISCLOSED THEM INTENTION ALLY. 4 II) BEFORE THE APPELLATE AUTHORITY THE ASSESSEE HA D NOT AGITATED THIS ADDITION WHICH IMPLIED THAT THE ASSESSEE WAS FULLY AWARE ABOUT THE CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF ITS TOTAL INCOME. III) DURING THE ASSESSMENT PROCEEDINGS THE ASSESSE E WAS ASKED TO SUBMIT BREAKUP OF EXPENSES CHARGED TO THE MAIN BUSINESS AN D THE TWO BOT PROJECTS. EXPLANATION/DETAILS WERE FURNISHED AND I T WAS ADMITTED THAT NO SEPARATE ACCOUNT HAD BEEN MAINTAINED FOR THESE D IFFERENT TYPE OF WORK AND IT WAS FOUND THAT THE ASSESSEE CLAIMED LOW ER EXPENSES IN ELIGIBLE BUSINESS AND THE SAME WAS REALLOCATED AND ADDITION IN THIS REGARD WAS MADE. THE ASSESSING OFFICER ACCORDINGLY HELD THE ASSES SEE GUILTY OF CONCEALMENT AND PENALTY OF RS. 1 67 663/- WAS IMPOS ED UNDER SECTION 271(1)(C) OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND MADE THE WRITTEN SUBMISSIONS WHICH ARE REPRODUC ED IN PARA 4.3 AT PAGES 3 TO 14 OF THE IMPUGNED ORDER FOR THE COST O F REPETITION THE SAME ARE NOT REPRODUCED HEREIN. THE LD. CIT(A) AFTER CO NSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSE SSEE DID NOT FILE ANY APPEAL FOR THE ADDITION OF RS. 4 69 434/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF REALLOCATION OF SEGMENT WISE PROFIT A ND LOSS ACCOUNT. HE FURTHER OBSERVED THAT PENALTY WAS IMPOSED ON THE SA ME ISSUE IN THE CASE OF ASSESSEE FOR THE A.Y. 2007-08 AND THE MATTER CAM E UP FOR ADJUDICATION BEFORE THE ITAT JODHPUR BENCH WHO VIDE THEIR ORDE R DATED 31/07/2013 5 IN I.T.A.NO. 52/JODH/2013 HAD GRANTED RELIEF TO TH E ASSESSEE FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. THE LD. CIT(A) POINTED OUT THAT THE ITAT AFFIRMED THE ORDER OF LD. CIT(A) IN TOTO WHEREIN IT WAS OBSERVED AS UNDER:- ON CAREFUL CONSIDERATION OF ALL THESE FACTS IT IS NOTED THAT IN RESPECT OF SUCH CLAIM ALL DETAILS HAVE BEEN FURNISHED BY THE APPELL ANT. THE DETAILS OF ALLOCATION OF EXPENSES INCLUDING THE BASIS OF ALLOC ATION BETWEEN THE TWO SEGMENTS OF BUSINESS HAVE ALSO BEEN GIVEN. HOWEVER THE AO DID NOT ACCEPT SUCH BASIS AND BY ADOPTING DIFFERENT METHODOLOGY AT TRIBUTED EXPENSES OF RS. 85 302/- TO THE ELIGIBLE BUSINESS AND ACCORDING LY MADE ADDITION OF RS. 85 302/-. I AM OF THE OPINION THAT SUCH CLAIM OF T HE ASSESSEE WAS BONA FIDE CLAIM BASED ON PROFESSIONAL LEGAL ADVICE INCLUDING PAST HISTORY AND SIMPLY BECAUSE THE AO DID NOT ACCEPT SUCH BASIS OF ALLOCAT ION AND BY ADOPTING A DIFFERENT METHODOLOGY DISALLOWED PARTICULAR EXPENSE S THE SAME CANNOT IN ITSELF CONSTITUTE FURNISHING OF INACCURATE PARTICUL ARS OR CONCEALMENT OF INCOME. DEFINITELY IT WAS AN ISSUE OF DEBATABLE NA TURE AND THERE CAN BE MORE THAN TWO OPINION ON THE SAME. THE HON'BLE APE X COURT IN THE CASE OF CIT VS. RELIANCE PETRO CHEMICAL PVT. LTD. 189 TAXMA N 322 HAS ALSO LAID DOWN THAT IF A BONA FIDE CLAIM IS MADE BY THE ASSES SEE WHICH IS NOT ACCEPTED OR ACCEPTABLE TO THE AO IT CANNOT ATTRACT PENALTY U/S 271(1)(C) OF IT ACT. THE LD. CIT(A) ACCORDINGLY DELETED THE PENALTY L EVIED BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL . 6 . LEARNED D.R. REITERATED THE OBSERVATIONS MADE BY THE ASSESSING OFFICER AND STRONGLY SUPPORTED THE PENALTY ORDER DA TED 21/03/2011. 7 . IN HIS RIVAL SUBMISSIONS LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND STRONGLY 6 SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). IT WAS FURTHER STATED THAT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED ONLY ON THIS BASIS THAT THE ADDITION WAS MADE BY THE ASS ESSING OFFICER CONSIDERING THE CLAIM FOR EXPENSES AS WRONG AND ACC ORDINGLY CLAIM FOR DEDUCTION UNDER SECTION 80IA OF THE ACT WAS FOUND T O BE WRONG. IT WAS FURTHER STATED THAT THE ISSUE NOW IS SETTLED BY THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (2010) 322 ITR 158 AND PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS N OT LEVIABLE IN SUCH TYPE OF CASES. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE ASSESSING OFF ICER OBTAINED THE DETAILS OF THE EXPENSES ON WORK WISE BASIS AND FOUND THAT V ARIOUS EXPENSES WERE APPORTIONED BY THE ASSESSEE IN THE RATIO OF 80 : 20 BETWEEN CONSTRUCTION WORK AND BOT (BUILD OPERATE AND TRANSPORT) WORK. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAD NOT APPLIED THI S RATIO EVENLY TO THE EXPENSES AND SOME OF THE EXPENSES HAD BEEN CLAIMED BY THE ASSESSEE TO ITS SWEET WILL TO THE BUSINESS FOR MORE BENEFICIAL TO IT. THE ASSESSING OFFICER INCREASED THE PROFIT WHICH WAS ELIGIBLE FO R DEDUCTION UNDER SECTION 80IA OF THE ACT BY RS. 4 69 643/-. THE ASS ESSING OFFICER 7 FACCORDINGLY HELD THAT THE ASSESSEE FURNISHED INAC CURATE PARTICULARS OF ITS TAXABLE INCOME AND LEVIED PENALTY UNDER SECTION 271 (1)(C) OF THE ACT. IN THE PRESENT CASE IT APPEARS THAT THE CLAIM OF THE A SSESSEE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT WAS NOT ACCEPTED BY T HE ASSESSING OFFICER AND THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED BY CONSIDERING THE CLAIM AS WRONG. 9 . ON A SIMILAR ISSUE THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (SUPRA) HELD AS UNDER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1) (C) O F THE INCOME-TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT T HERE 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 MA DE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCO RRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING IN ACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PE NALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENA LTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULA RS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RE TURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE T HE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH P ARTICULARS ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCU RATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAIL 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 8 NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN C ANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 10 . IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUP REME COURT IN THE AFORESAID REFERRED TO CASE WE ARE OF THE VIEW THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER ON THE BASIS OF WRONG CLAIM U NDER SECTION 80IA OF THE ACT WAS NOT JUSTIFIED AND THE LD. CIT(A) RIGHTL Y DELETED THE SAME. 11 . IN ALL OTHER APPEALS I.E. I.T.A.NOS. 89 TO 92/JOD H/2014 THE FACTS ARE IDENTICAL AND EVEN THE RIVAL CONTENTIONS WERE S IMILAR THEREFORE OUR FINDINGS GIVEN IN FORMER PART OF THIS ORDER IN RESP ECT OF I.T.A.NO. 88/JODH/2014 SHALL APPLY MUTATIS-MUTANDIS. ACCORDI NGLY WE HELD THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALT Y LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE AC T FOR THE A.YS. 2003-04 TO 2006-07. 12. IN THE RESULT APPEALS OF THE DEPARTMENT ARE DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 25 TH APRIL 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH APRIL 2014. 9 VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR ITAT JODHPUR.