COSMOS BRANDS INTERNATIONAL P. LTD, MUMBAI V. ITO 8(1)(2), MUMBAI

ITA 1177/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92795 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PERMANAND J
• Assessee Lawyers: LALCHAND CHAU DHARY

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , ! ..'(),*!,+ BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.1177/MUM/2011 ASSESSMENT YEAR: 2004-05 M/S COSMOS BRANDS INTERNATIONAL PVT. LTD. SUITE NO.701, 7 TH FLOOR, ARYSTON CENTER, OPP. J.W. MARIOTT JUHU TARA ROAD, JUHU, MUMBAI-400049 / VS. ITO 8(1)(2), AAYAKAR BHAVAN, MUMBAI-400020 / ASSESSEE / REVENUE P.A. NO. AABCC68556G ,- / ASSESSEE BY SHRI LALCHAND CHAUDHARY ,- / REVENUE BY SHRI PERMANAND J.-DR / DATE OF HEARING 03/06/2015 / DATE OF ORDER: 05/06/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 29/11/2010 OF THE LD. FIRST APPELLATE AUTHORI TY, ITA NO.1177/MUM/2011 M/S COSMOS BRANDS INTERNATIONAL PVT. LTD 2 MUMBAI, CONFIRMING PENALTY OF RS.,5,70,000/- IMPOSE D U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD, SHRI LALCHAND CHAUDHARY, LD. COUNSEL FOR THE ASSESS EE, AND SHRI PREMANAND J. LD. DR. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT THE QUAN TUM ADDITION WAS NOT APPEALED BY THE ASSESSEE DUE TO A LOSS CASE AND DISALLOWANCE MADE BY THE DEPARTMENT IS ON ESTIMATION BASIS. IT WAS ALSO PLEADED THAT DUE TO M ISTAKE OF THE COUNSEL NO APPEAL WAS FILED BY THE ASSESSEE. ON THE OTHER HAND, THE LD. DR, STRONGLY DEFENDED THE CONCL USION ARRIVED AT IN THE IMPUGNED ORDER BY ASSERTING THAT THE ASSESSEE DID NOT FURNISH BILLS OR VOUCHERS AND THE ASSESSING OFFICER DULY ANALYZED THE SALES AND EXPEN SES AND FURTHER THE ASSESSING OFFICER ONLY DISALLOWED UNVER IFIABLE EXPENSES. IT WAS ALSO PLEADED THAT THE ASSESSEE NE VER FURNISHED ANY EXPLANATION WITH REGARD TO NONPRODUCT ION OF EVIDENCES AT ANY STAGE INCLUDING ASSESSMENT STAGE A ND TILL THIS TRIBUNAL. OUR ATTENTION WAS INVITED TO PARA 1 .2 OF THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER/PENALTY ORDER, LEADING TO ADDITION/IMPOSITION OF PENALTY, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, WE NOTE THAT THE ASSESSEE IS A CLOSEL Y HELD ITA NO.1177/MUM/2011 M/S COSMOS BRANDS INTERNATIONAL PVT. LTD 3 COMPANY CARRYING ON THE BUSINESS OF TRADING IN COSM ETICS, PERFUMES, ETC AND ALSO IN THE FIELD OF BEAUTY PARLO R AND HAIR SALOON. THE ASSESSEE DECLARED LOSS OF RS.1,49,32,08 3/-. THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.10 LA KH ON ACCOUNT OF SALES AND BUSINESS PROMOTION EXPENSES, RS.3,30,000/- ON COMMISSION AND BROKERAGE EXPENSES AND RS.1,40,000/- ON COMMUNICATION EXPENSES INCLUDING EXCHANGE LOSS OF RS.65,163/-, THUS, THE TOTAL ADDIT ION WAS MADE TO THE TUNE OF RS.15,35,163/-. PENALTY PROCEE DINGS U/S 271(1)(C) OF THE ACT WERE INITIATED AGAINST THE ASSESSEE, NOTICE U/S 274 R.W.S 271(1)(C) OF THE ACT WAS SERVE D UPON THE ASSESSEE, FURTHER A SHOW CAUSE NOTICE WAS ALSO ISSUED ASKING THE ASSESSEE AS TO WHY PENALTY SHOULD NOT BE LEVIED. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION. THE ABNORMAL INCREASE IN THE EXPENSES WAS NOT EXPLAINED BY THE ASSESSEE. IT IS WORTH MENTIONING HERE THAT THE ASSESSEE DID NOT CHALLENGE THE QUANTUM ADDITION BY FILING AN APPEAL, MEANING THEREBY, THE ASSESSEE ACCEPTED THE ADDITION . IT IS FURTHER NOTED THAT EVEN IN SPITE OF VARIOUS NOTICES ISSUED EVEN BY THE OFFICE OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS), THE ASSESSEE NEITHER ATTENDED NOR FILED WRITTEN SUBMISSIONS. AS IS EVIDENT FROM PARA 1.2 OF THE IM PUGNED ORDER FINAL OPPORTUNITY WAS GRANTED TO THE ASSESSEE ON 14/10/2010 ON THAT ALSO THE ASSESSEE DID NOT ATTEND . FINALLY, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) ADJUDICATED THE APPEAL OF THE ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ADDI TIONS WERE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF IN FLATED SALES EXPENSES AND PAYMENT OF COMMISSION. EVEN DURI NG ITA NO.1177/MUM/2011 M/S COSMOS BRANDS INTERNATIONAL PVT. LTD 4 PENALTY PROCEEDINGS, NO REPLY WAS FILED BY THE ASSE SSEE AND FINALLY, THE LD. ASSESSING OFFICER ALSO DECIDED THE PENALTY PROCEEDINGS ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD. THERE IS UNCONTROVERTED FINDING IN PARA 2.3.1 OF TH E IMPUGNED ORDER THAT THE CASE OF THE ASSESSEE WAS FI XED FOR TWELVE TIMES AND ON SEVERAL OCCASION LAST CHANCE WA S MARKED ON THE NOTICE, IN SPITE OF THAT THE ASSESSEE DID NOT RESPOND. BEFORE US, THE ONLY PLEA RAISED BY THE ASS ESSEE IS THAT THE PENALTY HAS BEEN LEVIED ON THE BASIS OF ES TIMATION AND THERE IS NO FINDING OF CONCEALMENT. TOTALITY O F FACTS, CLEARLY INDICATES THAT THE ASSESSEE IS VERY NEGLIGE NT IN ITS APPROACH IN ATTENDING THE PROCEEDINGS, SPECIALLY BE FORE THE ASSESSING OFFICER AND ALSO THE BEFORE THE LD. COMMI SSIONER OF INCOME TAX (APPEALS). THE ASSESSEE NEITHER EXPLA INED THE REASONS FOR CLAIMING HUGE SALES AND BUSINESS PROMOT ION EXPENSES NOR WITH RESPECT TO COMMISSION AND BROKERA GE EXPENSES. THE ONUS IS UPON THE ASSESSEE TO EXPLAIN ITS CLAIM BUT THAT WAS NOT DONE. THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME RESULTING INTO CONCEALMENT OF INCOME AND EVADING THE DUE TAXES, THEREFORE, IN THE ABSENCE OF ANY SATISFACTORILY EXP LANATION FROM THE ASSESSEE, WE FIND NO INFIRMITY IN THE ORDE R OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE ASSE SSEE HAS NOT EXPLAINED THAT NEITHER THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF S UCH INCOME. IN THE ABSENCE OF ANY SUCH EXPLANATION, TH E STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. ITA NO.1177/MUM/2011 M/S COSMOS BRANDS INTERNATIONAL PVT. LTD 5 FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE S IDES AT THE CONCLUSION OF THE HEARING ON 03 ND JUNE 2015. SD/- SD/- ( N.K. BILLAI YA ) (JOGINDER SINGH) *! / ACCOUNTANT MEMBER ! / JUDICIAL MEMBER MUMBAI; DATED : 05/06/2015 F{X~{T? P.S / ,0 123241 / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#$ ! / THE RESPONDENT. 3. %$ %$ & ( ) / THE CIT, MUMBAI. 4. %$ %$ & / CIT(A)- , MUMBAI 5. ) *+$ ' , %$ $ - , / DR, ITAT, MUMBAI 6. +. / / GUARD FILE. / BY ORDER, #$) ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI