Income Tax Appellate Tribunal - Delhi
Sushila Milk Specialities Pvt. Ltd., ... vs Department Of Income Tax on 14 January, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH "G" DELHI)
BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN
ITA NO. 4079(Del)2010
Assessment year: 2004-05
Dy.Commissioner of I. Tax, M/s. Sushila Milk Specialities Pvt. Ltd.,
Cent. Cir.18, New Delhi. V. 216-217, Joshi Road, Karol Bagh,
New Delhi.
(Appellant) (Respondent)
Appellant by: Shri Kishore B. DR
Respondent by: Shri K. Sampath, Advocate
ORDER
PER A.D. JAIN, J.M.
This is Department's appeal for the assessment year 2004-05, taking the following grounds:-
"1. Whether, on the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the penalty of ` 3,21,399/- imposed by the AO u/s 271(1)(c) of the Income Tax Act, 1961.
2. Whether, on the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that making of a claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars."
2 ITA 4079(Del)2010
2. The facts are that the assessee returned an income of ` 3,83,130/- for the year under consideration. Against this, total income was assessed at ` 13,77,810/-, making disallowance of foreign travelling expenses of ` 8,01,799/-. The ld. CIT(A) reduced the disallowance of ` 8,01,799/- to ` 7,14,863/-, allowing a relief of ` 86,936/- to the assessee. The assessee did not prefer any further appeal in order to avoid prolonged litigation.
3. In the penalty proceedings, the assessee submitted, inter alia, that the assessee had neither concealed any particulars of its income, nor had it furnished any inaccurate particulars thereof; that the disallowance had been made on account of difference of opinion regarding allowing or disallowing foreign travelling expenses claimed by the assessee; that the assessee had furnished complete details along with supporting evidence and had explained the necessity for incurrence of the foreign travelling expenses; that such explanation, however, had not found favour with the AO and the ld. CIT(A) accepted the explanation in part; that no penalty can be imposed for difference in the income returned and the income assessed due to disallowance of claim made by the assessee; that it was not established that the assessee had any intention to conceal the particulars of its income or to furnish inaccurate particulars thereof and so, no concealment penalty could be levied.
3 ITA 4079(Del)2010
4. The AO, however, observed that the assessee was evidently in default in view of the provisions of section 271(1)(c) of the I.T. Act and had concealed the particulars of its income or had furnished inaccurate particulars of such income to the extent of ` 8,95,885/- in respect of the addition made by the AO which had been subsequently confirmed by the ld. CIT(A); that the assessee had not preferred any further appeal before the ITAT, which implied that the additions made by the AO were genuine and undisputed; that the assessment records showed that there was no reasonable cause existing at the time of filing of the return which could prefer the assessee from revealing accurate particulars of its income and the assessee was also unable to furnish any evidence to the contrary; and that as such, concealment penalty of ` 3,21,399/- was leviable.
5. By virtue of the impugned order, the ld. CIT(A) cancelled the penalty levied.
6. Aggrieved, the Department is in appeal.
7. The learned DR has contended that the ld. CIT(A) has erred in deleting the penalty of ` 3,21,399/- imposed by the AO u/s 271(1)(c) of the I.T. Act on the assessee; and that the ld. CIT(A) has erred in holding that making of a claim which is not sustainable in law by itself will not amount 4 ITA 4079(Del)2010 to furnishing of inaccurate particulars. Reliance has been placed on "CIT v. Zoom Communications Pvt. Ltd." 327 ITR 510(Del).
8. The learned counsel for the assessee, on the other hand, has placed strong reliance on the impugned order. He has reiterated that no concealment of income or of furnishing of inaccurate particulars of income at the hands of the assessee stands established and, therefore, the ld. CIT(A) has correctly cancelled the penalty wrongly levied. Reliance has been placed on "CIT v. Reliance Petro Products Pvt. Ltd." 322 ITR 158 (SC).
9. We have heard the parties and have perused the material on record, We find no error whatsoever in the order of the ld. CIT(A). The disallowance had been made on account of difference of opinion regarding allowance or disallowance of foreign travelling expenses claimed by the assessee. Undisputedly, the assessee had furnished complete details along with supporting evidence before the AO. The necessity for incurrence of the expenses had been explained. It was only that such explanation did not find favour with the AO and such explanation was accepted in part by the ld. CIT(A). In "CIT v. Bacardi Martini India Ltd." 288 ITR 588(Del), it has been held that no intention to conceal income can be imputed on the assessee merely because there is a difference of opinion regarding allowance or disallowance between the assessee and the AO, pertaining to certain 5 ITA 4079(Del)2010 expenditure claimed. In "Balaji Vegetable Products Pvt. Ltd. v. CIT" 290 ITR 172(Karnataka), it has been held that mere refusal by the revenue to accept the claim of the assessee for deduction and treating it as income cannot mean intention of the assessee to conceal income.
10. Further, in "Reliance Petro Products Pvt. Ltd."(supra), it has been held that where no information given in the return is found to be incorrect, making an incorrect claim does not amount to concealment of particulars of income; that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee; and that such a claim made in the return cannot amount to furnishing inaccurate particulars.
11. Reliance by the Department on "Zoom Communications Pvt. Ltd."(supra), is of no aid to the Department. Therein, on facts, it was held that where the claim for deduction is not bona fide, it amounted to concealment of income. It is not so herein. Moreover, "Zoom Communications Pvt. Ltd."(supra), has not been shown to be at variance with "Reliance Petro Products Pvt. Ltd."(supra). Still further, "Reliance Petro Products Pvt. Ltd."(supra), is a decision rendered by the Hon'ble Supreme Court.
6 ITA 4079(Del)2010
12. The ld. CIT(A), while cancelling the penalty in question, has noted, inter alia, that there is no finding of the AO that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. As rightly observed by the ld. CIT(A), mere making of a claim which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee, particularly when the assessee had furnished all the details of its expenditure as well as income in the return of income and they were not found to be incorrect, nor could they be viewed as a concealment of income by the assessee. Further, in the assessment order, the AO has, inter alia, observed that:-
"...............However, in view of the facts and circumstances of the case, it is evident that the assessee is in default in view of the provisions of section 271(1)(c) of the I.T. Act and has concealed the particulars of his income or furnished inaccurate particulars of such income....... to the extent of ` 8,95,885/- in respect of the addition made by the AO and which has been subsequently confirmed by the CIT(A)". (emphasis supplied)
13. The order of the ld. CIT(A) has, thus, not been shown to be erroneous and it is hereby confirmed. The grievance raised by the Department by way of ground Nos. 1&2 is, therefore, rejected.
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14. In the result, the appeal filed by the Department is dismissed.
Order pronounced in the open court on 14.01.2011.
Sd/- sd/-
(K.D. Ranjan) (A.D. Jain)
Accountant Member Judicial Member
Dated: 14.01.2011
*RM
copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
True copy
By order
Deputy Registrar