M/s. Oriole Exports Pvt. Ltd., New Delhi v. ACIT, New Delhi

ITA 4564/DEL/2009 | 1999-2000
Pronouncement Date: 31-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 456420114 RSA 2009
Bench Delhi
Appeal Number ITA 4564/DEL/2009
Duration Of Justice 5 month(s) 28 day(s)
Appellant M/s. Oriole Exports Pvt. Ltd., New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 31-05-2010
Date Of Final Hearing 17-12-2015
Next Hearing Date 17-12-2015
Assessment Year 1999-2000
Appeal Filed On 03-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI N.K. SAINI AM & SMT. BEENA A. PILLAI JM ITA NO.4564/DEL/2009 ASSESSMENT YEAR : 1999-2000 ORIOLE EXPORTS PVT. LTD. 75-E HIMALAYA HOUSE KG MARG NEW DELHI. VS. ACIT CIRCLE-13(1) NEW DELHI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI P.N. MONGA & SHRI MANU MONGA ADVOCATES. DEPARTMENT BY : S HRI V.R. SONBHADRA SR. DR DATE OF HEARING : 1 7 .12 . 2015 DATE OF PRONOUNCEMENT : 19 . 02 .201 6 ORDER PER BEENA A. PILLAI JM: THE PRESENT PENALTY APPEAL ARISES FROM THE ORDER PA SSED BY THE CIT(A)-XVI NEW DELHI ON 16.9.2009 IN RELATION TO THE ASSESSMENT YEAR 1999-2000 ON THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE A PPELLANT COMPANY'S CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XVI NEW DELHI ERRED IN LAW IN CONFIRMIN G THE ORDER OF THE ASSESSING OFFICER CIRCLE 13(1) NEW DELHI IN L EVYING A PENALTY OF RS. 5 00 000/- BY INVOKING THE PROVISION OF SECT ION 271 (1)(C ) OF THE INCOME TAX ACT 1961. ITA NO.518/DEL/2013 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E APPELLANT COMPANY'S CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XVI NEW DELHI ERRED IN LAW IN CONFIRMIN G THE ORDER OF THE ASSESSING OFFICER CIRCLE 13(1 ) IN LEVYING PEN ALTY ON RS. 9 39 429/- REPRESENTING SHORT TERM CAPITAL GAIN ON EQUITY SHARES ASSESSED AS SUCH THOUGH THE ISSUE HAD BEEN SET ASID E BY THE HON'BLE ITAT DELHI WITH THE DIRECTIONS TO SET OFF THE GAIN AGAINST THE LONG TERM CAPITAL LOSS OF RS 26 86 939/- FOR TH E ASSESSMENT YEAR 1998-99 IN TERMS OF SECTION 74 OF THE INCOME T AX ACT 1961 FOR THE REASONS STATED IN THE IMPUGNED ORDER. 3. THAT THE LEARNED CIT(A) FAILED TO CONSIDER AND APPRECIATE THAT THERE IS NO ADDITION ON ACCOUNT OF PROFIT ON SALE O F SHARES AMOUNTING TO RS. 9 39 429/ WHICH ONLY ON ACCOUNT OF DIFFERENCE OF OPINION HAS BEEN ASSESSED AS 'CAPITAL GAINS' AS AGA INST UNDER HEAD 'BUSINESS INCOME' DISCLOSED BY THE APPELLANT. 2. THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR HAD FILED ITS RETURN OF INCOME ON 23.12.1999 AND ON THE BASIS H AS ADOPTED WHILE COMPUTING AND FILING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997-98 AND 1998-99. THE ASSESSEE HAD CLAIMED A SUM OF RS.6 17 014/- BEING EXPENSES ON SECURITY GUARDS AGA INST THE GROSS PROPERTY INCOME OF RS.87 32 160/- AND THEREAFTER A DEDUCTION FOR HOUSE TAX AND DEDUCTION U/S 24 OF THE ACT WAS CLAI MED. THE LD. AO VIDE ORDER U/S 143(3) DATED 31.1.2000 ACCEPTED THE PLEA OF THE ASSESSEE BUT DISALLOWED THE CLAIM OF SECURITY EXP ENSES. ON APPEAL BEFORE THE LD.CIT(A) HE UPHELD THE ADDITION MADE B Y THE LD. AO. AGGRIEVED BY THE ORDER OF THE LD.CIT(A) THE ASSESS EE PREFERRED AN ITA NO.518/DEL/2013 3 APPEAL BEFORE THE TRIBUNAL. THIS TRIBUNAL UPHELD TH E ADDITION MADE BY THE AO. 3. ACCORDINGLY THE LD. AO INITIATED PENALTY PROCEEDIN GS AND LEVIED A PENALTY OF RS.5 LAC BY INVOKING THE PROVI SIONS OF SECTION 271(1)(C) OF THE ACT. BEFORE THE AUTHORITIES BELOW THE ASSESSEE HAD ARGUED THAT AT THE TIME OF ASSESSMENT PROCEEDINGS THE AO HAS NOT RECORDED SATISFACTION FOR LEVYING THE PENALTY. THE PLEA OF NOT RECORDING OF SATISFACTION WAS RAISED BEFORE THE LD. CIT(A) BY THE ASSESSEE AND THE SAME WAS RAISED BEFORE THIS TRIBUN AL IN ITA NO.4564/DEL/2009. HOWEVER THE TRIBUNAL HAD NOT RE CORDED ITS OPINION ON THE ISSUE OF SATISFACTION BY THE LD. AO BEFORE INITIATING THE PENALTY U/S.271(1) (C ). 4. THE ASSESSEE PREFERRED AN MA BEFORE THIS TRIBUNAL AGAINST THE ORDER DATED 31.05.2010 OF THE TRIBUNAL IN ITA NO.45 64/DEL/2009 WHEREIN IT WAS SUBMITTED THAT THE ASSESSEE HAD ARGU ED ON THE LEGAL ISSUE OF SATISFACTION NOT BEING RECORDED BY THE AO BEFORE INITIATING THE PENALTY U/S.271(1) (C ). THIS TRIBUNAL KEEPIN G IN VIEW THE ENTIRE CONSPECTUS OF THE CASE PARTICULARLY THAT T HE ISSUE RAISED BY THE ASSESSEE BEING PURELY LEGAL RECALLED THE ORDER DATED 31 ST MAY ITA NO.518/DEL/2013 4 2010 FOR THE LIMITED PURPOSE OF ADJUDICATING GROUND NO.1 RAISED BY THE ASSESSEE. 5. BEFORE US THE APPEAL HAS BEEN FIXED FOR THE LIMITED PURPOSES TO EXPRESS OUR OPINION IN RESPECT OF WHETHER SATISFA CTION HAS BEEN RECORDED BY THE AO DURING THE ASSESSMENT PROCEEDING S IN RESPECT OF THE ADDITION MADE BY HIM FOR THE PURPOSES OF INITI ATING PENALTY U/S.271(1) (C ). 6. FROM PERUSAL OF THE ASSESSMENT ORDER DATED 18.3.200 2 IT IS OBSERVED THAT THE ASSESSEE HAD CLAIMED EXEMPTION OF THE SECURITY DEPOSIT WHICH WAS TO BE REFUNDED BACK TO THE TENANT AFTER A MINIMUM PERIOD OF THREE YEARS. THIS SECURITY DEPOS IT WAS TAKEN FROM THE TENANTS TO MAINTAIN AND KEEP THE BUILDING SAFE FROM DAMAGES. THE ASSESSEE REDUCED THE AMOUNT OF SECURI TY DEPOSIT FROM THE GROSS AMOUNT OF RENT TAKEN TO ARRIVE AT TH E ANNUAL VALUE. HOWEVER THE LD.AO TREATED THE SAME AS A PART OF GRO SS ANNUAL VALUE. 7. THERE IS ONLY A CHANGE IN THE MANNER IN WHICH TH E SECURITY DEPOSIT HAS BEEN TREATED BY THE LD.AO. IT IS ALSO O BSERVED THAT THE LD.AO HAS NOT RECORDED ANY SATISFACTION IN RESPECT OF INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT. FURTHER FROM TH E ORDER OF THE PENALTY PASSED BY THE AO ON 30.7.2007 IT DOES NOT APPEAR IN ANY ITA NO.518/DEL/2013 5 MANNER WHATSOEVER THAT THE ASSESSEE HAS CONCEALED A NY INCOME OR FILED ANY INACCURATE PARTICULARS OF INCOME IN ITS R ETURN. MERE DISALLOWANCE OF SECURITY DEPOSIT CLAIMED BY ASSESSE E AS A DEDUCTION WOULD NOT AMOUNT TO FILING OF WRONG PARTICULARS. 8. IT IS VERY CLEAR THAT THE SATISFACTION OF THE TAX A UTHORITY IS A CONDITION PRECEDENT WHICH MUST BE DISCERNIBLE FROM THE ORDER OF THE ASSESSMENT. FURTHER SUCH SATISFACTION MUST BE BAS ED ON SOME MATERIAL ON RECORD AND THERE MUST BE A CLEAR FINDIN G ABOUT THE CHARGE OF THE PENALTY. IT IS INCUMBENT UPON THE AO TO STATE WHETHER THE PENALTY IS BEING LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN TH E ABSENCE OF ANY SUCH FINDING THE PENALTY ORDER PASSED BY THE LD. A O IS BAD IN LAW. 9. IN VIEW OF THE ABOVE FINDINGS WE ARE OF THE CONSID ERED OPINION THAT THERE IS NO SATISFACTION THAT HAS BEEN RECORDE D BY THE LD. AO FOR INITIATING PENALTY IN RESPECT OF THE ADDITIONS MADE BY HIM IN THE ORIGINAL ASSESSMENT ORDER. 10. WE ARE THEREFORE INCLINED TO ALLOW THE ONLY GROUN D OF APPEAL IN RESPECT OF THE SATISFACTION BEING NOT RECORDED B Y THE LD. AO TO THE ITA NO.518/DEL/2013 6 FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY THE ASSESSEES APPEAL STANDS ALLOWED. 11. IN THE RESULT THE LEGAL GROUND RAISED BY THE ASSES SEE STANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 19.02.201 6 SD/- SD/- [ N.K. SAINI ] [ BEENA A. PILLAI ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 19.02.2016 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT AR ITAT NEW DELHI. ITA NO.518/DEL/2013 7 DATE 1. DRAFT DICTATED ON 28.12.2015 2. DRAFT PLACED BEFORE THE AUTHOR 29.12.2015 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR.PS/PS 19.02.2016 5. FILE SENT TO THE BENCH CLERK 19.02.2016 6. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 7. DATE ON WHICH FILE GOES TO THE AR 8. DATE OF DISPATCH OF ORDER.