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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
1 Penalty-Anupam Texfeb/JDM Builders and Deverlpers ITA Nos.535 & 536 of 2017
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER And SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No. 535/Ind/2017 A.Y. 2010-11
M/s. Anupam Texfab Pvt. Ltd., Burhanpur PAN – AAICA 7806 P :: Appellant
Vs
ACIT-Khandwa :: Respondent
ITA No. 536/Ind/2017 A.Y. 2010-11
M/s. JDM Builders & Developers Pvt. Ltd., Burhanpur PAN – AAMCS 9359 P :: Appellant
Vs
ACIT-Khandwa :: Respondent
Assessees by Shri Pankaj Shah, CA Department by Shri P.K. Mitra, Sr. DR Date of hearing 09.10.2018 Date of pronouncement 23.10.2018
O R D E R Per Shri Kul Bharat, JM
2 Penalty-Anupam Texfeb/JDM Builders and Deverlpers ITA Nos.535 & 536 of 2017
Both these above appeals are filed by the above assessees
against the orders of ld. CIT(A)-II, Indore dated 27.4.2017 challenging
the confirmation of penalty at Rs.60,000/- & Rs.80,000/-, respectively,
imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act.
ITA No.535/Ind/2017 in case of Anupam Texfab P. Ltd.
Facts, in brief, are that the assessee is a private limited co. and
has income from interest during the year under consideration. During
survey action, the assessee surrendered Rs.40 lacs on account of
unexplained share application money and the same was considered as
other income in the P & L account and on this declared income, certain
expenses of Rs.1,55,324/- were claimed as deductions which were set
off from the income declared. However, the Assessing Officer disallowed
the same and imposed the penalty at Rs.60,000/- on account of
furnishing inaccurate particulars of income and ld. CIT(A) also confirmed
the penalty on the ground that the set off was not intention of the
Legislature.
Before us, learned Counsel for the assessee submitted that the
year under consideration is prior to insertion to section 115BBE in the
I.T. Act and based on certain judicial pronouncements, the said
allowance of expenses from declared income was permissible. He relied
on the following judicial pronouncements in favour of his plea:
3 Penalty-Anupam Texfeb/JDM Builders and Deverlpers ITA Nos.535 & 536 of 2017
i. DCIT vs. Radhey Developers India Ltd.; 329 ITR 1 (Guj)
ii. Satish Kumar Goyal; ITA No.143/Against/2014.
Thus, he submitted that no penalty can be sustained when the claim is
supported by judicial pronouncements and also when debatable
claim/divergent views exist between different judicial authorities on an
issue.
On the other hand, ld. Sr. DR supported the orders of the Revenue
Authorities.
We have heard both the parties and perused the orders of lower
authorities. We find that in the impugned order, the ld. CIT(A) has
himself noted that section 115BBE was not in existence at that point of
time. In the case of Satish Kumar Goyal (supra), the ITAT, Agra Bench
has allowed business loss set off against deemed income u/s 68 holding
amended Section 115BBE as prospective. However, divergent views of
various judicial authorities exist on this issue. Thus, the issue has
become debatable and therefore, in principle, the ld. CIT(A) should have
deleted the penalty. Accordingly, we direct the Assessing Officer to
delete the penalty.
In result, the appeal of the assessee is allowed.
4 Penalty-Anupam Texfeb/JDM Builders and Deverlpers ITA Nos.535 & 536 of 2017
ITA No.536/Ind/2017 in case of JDM Builders & Developers P. Ltd.
Both the parties submitted that the facts and circumstances are
identical to that of Anupam Texfab P. Ltd. and the decision taken in the
case of Anupam Texfab P. Ltd. will prevail in the case of present
assessee too. Thus, following the above order in the case of Anupam
Texfab P. Ltd., we direct the Assessing Officer to delete the penalty of
Rs.80,000/- in the present appeal too. Accordingly, this appeal of the
assessee is also allowed.
Finally, both the appeals filed by the respective assessees are
allowed.
Order was pronounced in the open court on 23.10.2018.
Sd/- Sd/- ( MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated : 23.10.2018 !vyas! Copy to: Appellant/Respondent/CIT(A)/Pr.CIT/DR, Indore