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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH, AHMEDABAD
ITA No. 19/Ahd/2015 DCIT vs. DB Corporaiton Ltd Assessment year: 2008-09 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD [Coram: Pramod Kumar AM and Rajpal Yadav JM] ITA No. 19/Ahd/2015 Assessment year: 2008-09 DCIT .......…………......Appellant Circle-1(1)(2) Ahmedabad Vs. M/s DB Corporation Ltd .......................Respondent 280, Sarkhej Gandhinagar Highway, Nr. YMCA Club, Makarba, Ahmedabad – 380 051 PAN : AACCM 5772 G] Appearances by: Mudit Nagpal for the appellant Dhinal Shah for the respondent Date of concluding the hearing : 21.09.2017 Date of pronouncing the order : 25.09.2017 O R D E R Per Pramod Kumar, AM: 1. The Revenue is in appeal before the Tribunal against the order of the learned CIT(A)-XVI, Ahmedabad dated 03.11.2014 passed for Assessment Year 2008-09.
The grievance of the Revenue is that the learned CIT(A) has erred in deleting the penalty of Rs.42,06,389/- imposed by the Assessing Officer under Section 271(1)(c) of the Act.
With the assistance of the learned representatives, we have gone through the record carefully. It emerges out from the record that the assessee has filed its return of income on 27.09.2008 declaring total income at Rs.1,46,59,19,321/-. An assessment order was passed under Section 143(3) of the Act on 21.12.2010. The Assessing Officer has made an addition of Rs.1,23,72,972/- representing the alleged expenditure for increase in authorized share capital. Apart from this one addition, there were other additions made by the Assessing Officer. The dispute with regard to determination of taxable income ultimately travelled to the Tribunal. The Tribunal vide order dated 23.03.2017, passed in ITA No.2373/Ahd/2011, has set aside the issue regarding the addition of Rs.1,23,72,972/-. The Assessing Officer has initiated the penalty proceedings under Section 271(1)(c) of the Act and ultimately observed that the assessee has furnished inaccurate particulars of income with regard to the
ITA No. 19/Ahd/2015 DCIT vs. DB Corporaiton Ltd Assessment year: 2008-09 Page 2 of 3 claim of Rs.1,23,72,972/-. He imposed the penalty of Rs.42,06,389/- under Section 271(1)(c) of the Act on 12.03.2013.
On appeal, ld. CIT(A) has observed that if the expenditure was incurred for the purpose of issue of bonus shares, then expenditure will be admissible to the assessee. The stand of the assessee was that it has not incurred these expenditure for increase in the authorized share capital; rather, these were incurred for issue of bonus shares. Considering this aspect, the learned CIT(A) has deleted the penalty.
Before us, at the very outset, learned counsel for the assessee submitted that while giving effect to the order of the ITAT, learned Assessing Officer has deleted the addition of Rs.1,23,72,972/-. He placed on record the order of the Assessing Officer dated 17.07.2017, vide which order of the ITAT has been given effect. The relevant computation reads as under:-
“Order giving effect to ITAT’s order Consequent to the order of Hon’ble ITAT bearing ITA No.2373/Ahd/2011 dated 23.03.2017, the total income of the assessee is recomputed as under:- Total income assessed as per order u/s 143(3) Rs.1,49,06,07,466/- of the Act Less : relief granted by the Hon’ble ITAT on account of (1) Deletion of addition made on account of disallowance of depreciation Rs.49,62,875/- (2) Addition of stamp duty charges set aside to file of AO Rs.1,23,72,972/- Rs. 1,73,35,847/- Total assessed income Rs.1,47,32,71,619/- Rounded off Rs.1,47,32,71,620/-” 6. Section 271(1)(c) of the Act has a direct bearing on the controversy and, therefore, it is salutary upon us to take note of the relevant provisions of section 271(1)(c) along with Explanation 1 which read as under: "271. Failure to furnish returns, comply with notices, concealment of income, etc. (1). If the Assessing Officer or the Commissioner (Appeals) or the CIT in the course of any proceedings under this Act, is satisfied that any person (a) and (b)******** (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. He may direct that such person shall pay by way of penalty. (i) and (Income-tax Officer,)******** (iii) in the cases referred to in Clause (c) or Clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not
ITA No. 19/Ahd/2015 DCIT vs. DB Corporaiton Ltd Assessment year: 2008-09 Page 3 of 3 exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefit the furnishing of inaccurate particulars of such income or fringe benefits: Explanation 1.- Where in respect of any facts material to the computation of the total income of any person under this Act, (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner(Appeals) or the CIT to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of Clause (c) of this sub- section, be deemed to represent the income in respect of which particulars have been concealed". 7. Sub-clause (iii) of Section 271(1)(c) of the Act provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable by him, which shall not be less than, but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income. In the case on hand, when the quantum addition itself has been deleted by the Assessing Officer while giving effect to ITAT’s order, the penalty imposed on such addition does not survive. In view of above, we do not find any infirmity in the order of ld. CIT(A) in deleting the impugned penalty and, accordingly, the appeal of the Revenue is dismissed. 8. In the result, appeal of the Revenue is dismissed. Pronounced in the open court today on the 25th day of September, 2017.
Sd/- Sd/- Rajpal Yadav Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 25th day of September, 2017 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad�