The ITO, S.K. Ward-3, Sabarkantha V. M/s. Adarsh Auto Centre, Sabarkantha

ITA 1156/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9057 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO.1156/AHD/2014 (ASSESSMENT YEAR:2007-08) THE INCOME-TAX OFFICER, SABARKANTHA WARD-3, HIMATNAGAR APPELLANT VS. M/S. ADARSH AUTO CENTRE, 8, MOTIPURA, HIMATNAGAR, DIST: SABARKANTHA 383001 RESPONDENT PAN: AAHFA2095A /BY REVENUE : SHRI JAMES KURIAN, SR. D.R. /BY ASSESSEE : NONE /DATE OF HEARING : 06.03.2017 /DATE OF PRONOUNCEMENT : 07.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2007-08 A RISES AGAINST CIT(A)-VIII, AHMEDABADS ORDER DATED 31.01.2014 PAS SED IN APPEAL NO. CIT(A)-VIII/ITO S.K. WD-3/08/12-13, DELETING PENALT Y OF RS.10,70,720/- AS IMPOSED BY THE ASSESSING OFFICER IN ORDER DATED 19. 03.2012, IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHE ST. IT IS ACCORDINGLY PROCEEDED EX PARTE. ITA NO. 1156/AHD/2014 ( ITO VS. M/S. ADARSH AUTO CE NTRE) A.Y. 2007-08 - 2 - 2. THE REVENUES SOLE SUBSTANTIVE GROUND SEEKS TO R EVIVE THE ABOVESTATED SECTION 271(1)(C) PENALTY OF RS.10,70,720/- AS IMPO SED BY THE ASSESSING OFFICER AND DELETED IN COURSE OF THE LOWER APPELLAT E PROCEEDINGS. THE INSTANT CASE FILE REVEALS THAT THE ASSESSING OFFICER HAD FR AMED A REGULAR ASSESSMENT ON 21.12.2009 INTER ALIA DISALLOWING VARIOUS EXPENS ES OF SALES COMMISSION, TRACTOR SALES REMUNERATION, CUSTOMER AWARENESS, DEM ONSTRATION AND FUEL OF RS.11.5LACS, RS.7LACS, RS.5,71,200/-, RS.3,06,863/- & RS.4,45,925/-; RESPECTIVELY. HE FURTHER INITIATED THE IMPUGNED PE NALTY PROCEEDINGS ALLEGING FURNISHING OF INACCURATE PARTICULARS AND CONCEALMEN T OF INCOME. 3. THE INSTANT CASE FILE REVEALS THAT THE ASSESSEE PREFERRED A QUANTUM APPEAL. THE CIT(A) CONFIRMED ALL THE ABOVESTATED D ISALLOWANCES/ADDITIONS IN HIS ORDER DATED 22.03.2010 EXCEPT TO THE EXTENT OF SALARY EXPENSES OF RS.64000/- AS MADE BY THE ASSESSING OFFICER. THE A SSESSEE THEN FILED ITA NO.2145/AHD/2010. THE ASSESSING OFFICER TOOK UP TH E IMPUGNED PENALTY PROCEEDINGS IN THE MEAN TIME. HE QUOTED ALL THE AB OVESTATED QUANTUM DISALLOWANCES TO CONCLUDE THAT THE ASSESSEES ACT A ND CONDUCT THEREIN CAME WITHIN THE FOUR CORNERS OF CONCEALMENT OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME U/S.271(1)(C) OF T HE ACT TO LEVY THE PENALTY IN QUESTION AMOUNTING TO RS.10,70,719/- IN ORDER DA TED 19.03.2012. WE NOTICE THAT A CO-ORDINATE BENCH ON THE OTHER HAND R EMITTED THE TWO QUANTUM DISALLOWANCES OF TRACTOR SALES REMUNERATION AND CUS TOMER AWARENESS EXPENSES MADE FOR NON DEDUCTION OF TDS U/S.40(A)(IA) OF THE ACT BACK TO THE CIT(A) BY OBSERVING THAT THE ASSESSEES CONTENTION OF NON DEDUCTIBILITY OF TDS DESERVED TO BE DECIDED AFRESH. LEARNED CO-ORDINATE BENCH THEREAFTER RESTRICTED THE REMAINING THREE DISALLOWANCES (SUPRA ) TO THAT IN EXCESS OF 2.11%, 0.17% & 0.13%; RESPECTIVELY AS COMPARED TO T HE CORRESPONDING FIGURES IN THE PRECEDING TWO ASSESSMENT YEARS. IT IS IN THIS BACKDROP OF FACTS THAT THE LEARNED CIT(A) HAS DELETED THE IMPUGNED PE NALTY BY OBSERVING THAT ASSESSEES CASE IS VERY WELL COVERED AS PER HONBLE APEX COURTS DECISION IN ITA NO. 1156/AHD/2014 ( ITO VS. M/S. ADARSH AUTO CE NTRE) A.Y. 2007-08 - 3 - RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC) H OLDING THAT QUANTUM AND PENALTY ARE SEPARATE PROCEEDINGS WHEREIN EACH AND E VERY DISALLOWANCE/ADDITION MADE IN CASE OF FORMER DOES N OT LEAD TO IPSO FACTO IMPOSITION OF LATTER PENAL ACTION. ALL THIS LEAVES THE REVENUE AGGRIEVED. 4. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E STRONGLY SEEKING TO REVIVE ASSESSING OFFICERS ACTION IMPOSING THE P ENALTY IN QUESTION. IT HAS ALREADY COME ON RECORD THAT THE ABOVESTATED PENALTY PERTAINS TO FIVE DIFFERENT ISSUES OF VARIOUS DISALLOWANCES/ADDITIONS. TWO OF THEM ARE OF TRACTOR SALE REMUNERATION AND CUSTOMER AWARENESS EXPENDITURE INV OLVING SUMS OF RS.7LACS AND RS.5,71,200/-. THE ASSESSING OFFICER DISALLOWED THE SAME U/S.40(A)(IA) OF THE ACT SINCE THE ASSESSEE HAD NOT DEDUCTED TDS THEREUPON. THIS IS NOT THE REVENUES CASE THAT ASSESSEE HAD NO T ACTUALLY INCURRED THE ABOVE STATED EXPENSES SO AS TO DISPUTE THE GENUINEN ESS OF THE CLAIM. IT FURTHER TRANSPIRES THAT THE ASSESSEE ON THE OTHER HAND SOUG HT TO JUSTIFY ITS STAND THAT THE ABOVE REIMBURSEMENT WERE NOT LIABLE FOR TDS DED UCTION. IT HAS ALSO COME ON RECORD THAT THE SAME ULTIMATELY STOOD REMIT TED BACK TO THE CIT(A) (SUPRA). IT IS THUS CLEAR THAT THE ASSESSEES INST ANT TWO CLAIMS NEITHER AMOUNT TO CONCEALMENT NOR FURNISHING OF INACCURATE PARTICU LARS OF INCOME SO AS TO BE PENALIZED U/S.271(1)(C) OF THE ACT. 5. WE NOW ADVERT TO THE REMAINING THREE QUANTUM ISS UES OF SALES COMMISSION, DEMONSTRATION AND FUEL EXPENSES (SUPRA) . WE REITERATE THAT THIS TRIBUNAL IN ASSESSEES QUANTUM APPEAL (SUPRA) HAS A LREADY RESTRICTED THE SAME TO THAT FALLING EXCESSIVE THEN THE ONCE DECLARED IN TWO PRECEDING ASSESSMENT YEARS. THIS MAKES IT AMPLY CLEAR THAT THE ASSESSEE HAS SUCCEEDED IN PRINCIPLE IN SO FAR AS ITS THREE EXPENSES CLAIMS ARE CONCERNE D. WE AGAIN DEEM IT APPROPRIATE TO OBSERVE THAT HONBLE APEX COURTS DE CISION HEREINABOVE HAS ALREADY DRAWN A DISTINCTION BETWEEN QUANTUM AND PEN ALTY PROCEEDINGS. WE RELY UPON THE SAME TO CONCLUDE THAT THESE FIVE ABOV E STATED HEADS OF EXPENSES ITA NO. 1156/AHD/2014 ( ITO VS. M/S. ADARSH AUTO CE NTRE) A.Y. 2007-08 - 4 - ARE ASSESSEES GENUINE CLAIM WHICH COULD NEITHER HE LD TO BE CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS THE REOF U/S.271(1)(C) OF THE ACT. WE ACCORDINGLY CONCLUDE THAT THE CIT(A) HAS R IGHTLY REVERSED ASSESSING OFFICERS ACTION IN IMPOSING THE ABOVESTA TED PENALTY. 6. THIS REVENUES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 07 TH DAY OF MARCH, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 07/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0