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Delhi High CourtIndian Cases

Cit vs H.M.A. Udyog (P) Ltd. on 1 August 2006

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Delhi High Court
Cit vs H.M.A. Udyog (P) Ltd. on 1 August, 2006
Equivalent citations: (2007)211CTR(DEL)543
Bench: Madan B. Lokur, Vipin Sanghi
1. The revenue is aggrieved by an order dated 13-12-2005 passed by the Income Tax Appellate Tribunal, Delhi Bench SMC in ITA No. 5571/Delhi/2004 for the assessment year 1995-96.

2. The assessed was earlier in the business of advertisement activities of various cigarette products and also concerned with garment manufacturing and sale. During the previous year relevant to the assessment year in question, the assessed started a business of restaurants and film distributorship and carried out extensive repairs in his commercial premises.

3. The assessed claimed the expenditure as a revenue expenditure but the assessing officer was of the view that this represented a capital expenditure and, therefore, made the requisite addition. Penalty proceedings were also initiated against the assessed under Section 271(1)(c) of the Income tax Act.

4. The view of the assessing officer on merits of the case was upheld by the Commissioner (Appeals) as well as by the Tribunal.

5. In so far as the penalty proceedings are concerned, the matter ultimately came up before the Tribunal and by the impugned order, the Tribunal was of the view that the question whether the expenditure incurred by the assessed was a revenue expenditure or a capital expenditure was a debatable issue and even if it was ultimately decided against the assessed, it could not be said that the assessed had attempted to conceal the particulars of his income or furnish inaccurate particulars so as to attract the penal provisions of Section 271(l)(c).

6. After hearing learned Counsel for the parties, we are of the view that there is no question of the assessed having attempted to conceal the particulars of his income, which is not even in the case of the revenue. So far as furnishing of inaccurate particulars are concerned, it is quite clear that the assessed had furnished all relevant particulars of his income but only claimed it to be a revenue expenditure while according to the department, the expenditure incurred was of a capital nature. This was, as rightly held by the Tribunal, a debatable issue and would not amount to furnishing of inaccurate particulars so as to attract penalty proceedings.

7. Under the circumstances, we are of the view that no substantial question of law arises for our consideration.

8. Dismissed.