S.H.A.M.K. INTERNATIONAL P.LTD, MUMBAI V. ITO 9(3)(1), MUMBAI

CO 166/MUM/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9294 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 29-01-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 22-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: G L PURSNANY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NOS. 1410, 1411 & 1413/MUM/2011 ASSESSMENT YEARS: 2000-01, 2001-02, 2002-03 ITO -9(3)(1) MUMBAI-. VS. SHAMK INTERNATIONAL PVT. LTD. SUITE 101, GOLDEN WALLS, PLOT NO. 581, 18 TH ROAD, KHAR (W) MUMBAI. 400 052 (APPELLANT) (RESPONDENT) C.O. 164, 165 & 166/MUM/2013 (ARISING OUT OF ITA NOS. 1410, 1411 & 1413/MUM/2011 ) ASSESSMENT YEARS: 2000-01, 2001-02, 2002-03 SHAMK INTERNATIONAL PVT. LTD. SUITE 101, GOLDEN WALLS, PLOT NO. 581, 18 TH ROAD, KHAR (W) MUMBAI. 400 052 VS. ITO -9(3)(1) MUMBAI-. (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AABCM 9688 A ASSESSEE BY : SHRI G.L. PURSNANY REVENUE BY : SHRI PITAMBAR DAS DATE OF HEARING : 29.01.2014 DATE OF PRONOUNCEMENT : 31.01.2014 O R D E R PER BENCH THESE APPEALS AND CROSS OBJECTIONS FILED BY THE REV ENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE LD.CIT(A) -2 0, MUMBAI DATED 02.12.2010 FOR THE ASSESSMENT YEARS 2000-01, 2001-02 & THE ORDER D ATED 03.12.2010 FOR THE ASSESSMENT YEAR 2002-03, DELETING THE PENALTIES LEV IED BY THE AO UNDER SECTION ITA NOS. 1410, 1411 & 1413/MUM/2011 C.O. NOS. 164, 165 & 166/MUM/2013 SHAMK INTERNATIONAL PVT. LTD. ASSESSMENT YEARS: 2000-01, 2001-02, 2002-03 2 271(1)(C) OF THE INCOME TAX ACT. SINCE IDENTICAL IS SUES ARE INVOLVED IN ALL THESE APPEALS AND CROSS OBJECTIONS, THE SAME ARE HEARD TO GETHER AND DISPOSED OFF THIS COMMON ORDER. 2. THE RELEVANT FACTS ARE THAT DURING THE ASSESSMEN T YEARS UNDER CONSIDERATION, VARIOUS ADDITIONS ON ACCOUNT OF AD HOC DISALLOWANCE OF CREDIT CARD EXPENSES, AD HOC DISALLOWANCE OF TELEPHONE EXPENSES, DISALLOWANCE OF DONATION AND ESTIMATED PROFIT OF RECEIPTS OF TURNOVER HAVE BEEN MADE BY THE AO. C ONSEQUENTLY IN THE PENALTY PROCEEDINGS, THE AO LEVIED PENALTIES ON THE RESPECT IVE ADDITIONS MADE BY HIM BY INVOKING SECTION 271(1)(C) OF ACT. ON APPEAL, THE L D.CIT(A) DELETED THE PENALTIES BY RELYING ON THE DECISIONS OF THE HONBLE APEX COURT IN THE CASES OF CIT VS. ATUL MOHAN BINDAL (317 ITR 1) AND IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158) . AGGRIEVED BY THE IMPUGNED DECISIONS, THE REVENUE IS IN BEFORE US. ON THE OTHER HAND, THE ASSESSEE HAS FILED THE C ROSS OBJECTIONS CLAIMING THAT IN THE QUANTUM APPEAL, THE ASSESSEE HAS BEEN GIVEN REL IEF BY THE TRIBUNAL AND ONLY A PORTION OF AD HOC DISALLOWANCES HAVE BEEN CONFIRMED BY THE TRIBUNAL AND HENCE THE DELETION OF PENALTIES ARE JUSTIFIED. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS PERTINENT TO NOTE THAT FOR THE ASSESSMENT YEAR 2000 -01, IN THE QUANTUM APPEAL, OUT OF THE TOTAL DISALLOWANCES OF RS.14,92,441/-, THE T RIBUNAL HAS GIVEN RELIEF OF RS.13,92,441/- TO THE ASSESSEE VIDE ORDER DATED 06. 08.2011 IN ITA NO. 6756/MUM/2008. ONLY THE REMAINING BALANCE OF RS.1,0 0,000/-, COMPRISING OF AD HOC DISALLOWANCES OUT OF EXPENSES DULY DECLARED BY THE ASSESSEE IN P&L ACCOUNT HAS BEEN CONFIRMED BY THE TRIBUNAL. FOR THE ASSESSMENT YEAR 2001-02, OUT OF THE TOTAL DISALLOWANCES OF RS.25,89,709/-, THE TRIBUNAL HAS G IVEN RELIEF OF RS.24,64,709/- TO THE ASSESSEE AND REMAINING BALANCE OF RS.1,25,000/- COMPRISING OF AD HOC DISALLOWANCES OUT OF EXPENSES DULY DECLARED BY THE ASSESSEE IN P&L ACCOUNT HAS BEEN CONFIRMED BY THE TRIBUNAL. FOR THE ASSESSMENT YEAR 2002-03, OUT OF TOTAL DISALLOWANCES OF RS.17,57,189/-, THE TRIBUNAL HAS G IVEN A RELIEF OF RS.16,32,189/- VIDE ORDER DATED 06.08.2012 IN ITA NO. 6758/MUM/200 8 AND THE REMAINING BALANCE OF RS.1,25,000/- COMPRISES OF AD HOC DISALLOWANCES OUT OF EXPENSES DULY DECLARED BY THE ASSESSEE IN P&L ACCOUNT HAS BEEN CONFIRMED BY T HE TRIBUNAL. WHEN THE FACT ITA NOS. 1410, 1411 & 1413/MUM/2011 C.O. NOS. 164, 165 & 166/MUM/2013 SHAMK INTERNATIONAL PVT. LTD. ASSESSMENT YEARS: 2000-01, 2001-02, 2002-03 3 BEING SO, WE ARE OF THE CONSIDERED VIEW THAT WHEN I N THE QUANTUM PROCEEDINGS, THE TRIBUNAL HAS DELETED VARIOUS ADDITIONS, THERE REMAI NS NO BASIS FOR CONFIRMING ANY PENALTY ON SUCH ADDITIONS. AS REGARDS THE REMAINING BALANCES ON WHICH THE PENALTIES ARE LEVIED, IT IS PERTINENT TO MENTION THAT THE TRI BUNAL HAS SUSTAINED THE ADDITIONS ONLY PERTAINING TO THE AD HOC DISALLOWANCES IN RESP ECT OF CERTAIN EXPENSES AND THE SAME CANNOT BE THE BASIS FOR THE LEVY OF PENALTY SI NCE THE SAID EXPENSES HAVE BEEN DULY DECLARED BY THE ASSESSEE IN THE P&L ACCOUNT WH ICH DO NOT ATTRACT THE PROVISIONS OF SECTION 271(1)(C). ACCORDINGLY, WE DO NOT FIND A NY INFIRMITY IN THE ORDERS OF THE LD.CIT(A) DELETING THE PENALTIES LEVIED BY THE AO. 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 1 ST DAY OF JANUARY, 2014. SD/- SD/- (P. M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.01.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR H BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.