M/S RANGEELA EXPORTS , Mumbai V. ACIT CIRCLE 17 (3), Mumbai

ITA 1276/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2796 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 06-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI R.C. SHARMA (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER) ITA NO. 1276/MUM/2019 ASSESSMENT YEAR: 2013-14 M/S RANGEELA EXPORTS, 252/258, 4 TH FLOOR, RANGEELA HOUSE, ZAVERI HOUSE, ZAVERI BAZAR, MUMBAI-400002. VS. ACIT-17(3), ROOM NO. 137, AAYAKARBHAVAN, M.K. ROAD, MUMBAI-400020. PAN NO. AADFR4227K APPELLANT RESPOND ENT ASSESSEE BY : NONE REVENUE BY : MR. MOHAMMED RIZWAN, DR DATE OF HEARING : 04/03/2020 DATE OF PRONOUNCEMENT: 04/03/2020 ORDER PER PAWAN SINGH, JUDICIAL MEMBER; THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(A)-28, MUMBAI DATED 20.12.2018 FOR ASSESSMENT YEAR 2013-14 . THE LD. CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER IN LEVYING THE PENALTY UNDER SECTION 271(1)(C). THE ASSESSEE HAS RAISED THE FOLLOWING GR OUND OF APPEAL: 1. THE LD. AO ERRED IN LEVYING PENALTY OF RS.1,01,565/ - UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSE SSMENT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE IS SHOWING SUNDRY M/S RANGEELA EXPORTS ITA NO. 1276/MUM/2019 2 CREDITOR FROM 3 PARTIES WHICH ARE OUTSTANDING MORE THAN 3 YEARS. THE ASSESSING OFFICER TREATED THE SAID SUNDRY CREDITOR AS INCOME OF ASSESSEE U/S 41(1) ON ACCOUNT OF CESSATION OF LIABILITY. THE ASS ESSING OFFICER FURTHER NOTED THAT THE ASSESSEE RECEIVED INTEREST OF RS.64,452/- ON ACCOUNT OF INCOME TAX REFUND BUT THE SAME HAS NOT OFFERED FOR INCOME TAX. THE ASSESSING OFFICER ALSO MADE ADDITION OF SAID INTEREST INCOME WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3) ON 19.01.2016. THE ASSESSING O FFICER INITIATED PENALTY UNDER SECTION 271(1)(C), NOTICE UNDER SECTION 271(1 )(C) DATED 30.01.2016 WAS SERVED UPON THE ASSESSEE. THE ASSESSEE FILED ITS RE PLY ON 07.07.2016. IN REPLY, THE ASSESSEE CONTENDED THAT HE HAS NO INTENTION TO CONCEAL THE INCOME OR TO FURNISH INACCURATE PARTICULAR OF INCOME. THE ASSESS EE HAS SHOWN ALL THE CREDITORS IN HIS RETURN OF INCOME AND HAD NO INTENT ION TO HIDE ANY PARTICULAR AND DID NOT ANY NET PARTICULARS OF INCOME FOR INTER EST INCOME. THE ASSESSEE CONTENDED THAT HE WAS NOT AWARE ABOUT THE INTEREST INCOME EARNING RECEIVED ON ACCOUNT OF REFUND. HOWEVER, THE ASSESSEE HAS DIS CLOSED WHOLE AMOUNT IN THE BOOKS OF ACCOUNT AND HAD NO INTENTION TO HIDE A NY SOURCE. THE ASSESSE ALSO RELIED UPON THE DECISION OF HONBLE APEX COURT IN CIT V. RELIANCE PETROPRODUCTS PVT . LTD (2010) 322 ITR 158(SC). THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER BY TAKING VIEW THAT ASSESSEE FAIL TO VOLUNTARY OFFER THE INCOME ON WHICH ADDITIONS WERE MADE. THE ASSESSING OFFICER BY INVOKING EXPLANATION 1 OF SECTION 271(1)(C) LEVIED THE PENAL TY @ 100% OF TAX SOUGHT TO BE EVADED. THE ASSESSING OFFICER WORKED OUT THE PEN ALTY OF RS.1,01.565. 3. ON APPEAL BEFORE LEARNED COMMISSIONER (APPEALS), THE ACTION OF ASSESSING OFFICER WAS AFFIRMED. THUS FURTHER AGGRIE VED THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE US. M/S RANGEELA EXPORTS ITA NO. 1276/MUM/2019 3 4. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE SERVICE OF NOTICE THROUGH RPAD. NO APPLICATION FOR ADJOURNMENT IS FIL ED ON BEHALF OF THE ASSESSEE PERUSAL OF RECORD REVEALS THAT AUTHORITY L ETTER OF CA SHRI VIMAL PUNAMIA IS AVAILABLE ON RECORD. WE HAVE HEARD THE SUBMISSIONS OF THE LD DR FOR THE REVENUE AND PERUSED THE RECORD. THE LD. DR FOR THE REVENUE SUPP ORTED THE ORDER OF ASSESSING OFFICER. THE LD. DR FURTHER SUBMITS THAT DURING THE ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE IS SHOW ING SUNDRY CREDITOR FROM 3 PARTIES OF TOTAL OF RS.2,64,239/-. THE OUTSTANDING OF SUNDRY CREDITORS WERE FOR MORE THAN 3 YEARS. THE ASSESSING OFFICER DISALLOWED THE SAME SUNDRY CREDITOR AND TREATED THE SAME INCOME ON ACCOUNT OF CESSATION OF LIABILITY UNDER SECTION 41. ON ADDITION, THE LD. DR SUBMITS THAT IT WAS REC EIVED INTEREST INCOME OF RS.64,452/- ON ACCOUNT OF INCOME TAX REFUND BUT THE SAME HAS NOT BEEN OFFERED BY ASSESSEE FOR TAXATION. THE ASSESSING OFF ICER AFTER ISSUING SHOW CAUSE NOTICE AND CONSIDERING THE REPLYING DISALLOWA NCE MADE ADDITION ON ACCOUNT OF INTEREST INCOME. THE ASSESSING OFFICER L EVIED PENALTY OF BOTH THE ADDITIONS. THE ASSESSEE ON SHOW CAUSE NOTICE FAILED TO OFFER THE FRAME EXPLANATION BEFORE THE ASSESSING OFFICER. THE ASSES SING OFFICER TREATED THE LEVIED PENALTY ON BOTH THE ADDITION. BEFORE TRIBUNAL, THE ASSESSEE HAS NOT FURNISHED AN Y DOCUMENTARY EVIDENCE OR SUBMISSION TO SUBSTANTIATE WHETHER THE ASSESSEE HAS NOT SHOWN ANY REASONABLE EXPLANATION OR NOT LEVYING THE PENAL TY. 5. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE FOR WHILE M/S RANGEELA EXPORTS ITA NO. 1276/MUM/2019 4 PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER MADE TWO ADDITIONS NUMBER ONE ADDITION UNDER SECTION 41(1) OF RS.2,64, 239/- AND ADDITION ON ACCOUNT OF INTEREST INCOME ON INCOME TAX REFUND. TH ERE IS NO MATERIAL ON RECORD TO SHOW THAT ANY FURTHER APPEAL WAS FILED BY ASSESSEE BEFORE FIRST APPELLATE AUTHORITY. THE ASSESSING OFFICER LEVIED P ENALTY @ 100% OF TAX SOUGHT TO BE EVADED. BEFORE THE LD. CIT(A) CONFIRM THE PENALTY THAT THE ASSESSEE HAS NOT VOLUNTARILY OFFERED THE RESPECTIVE AMOUNT FOR TAXATION. THE ASSESSEE WAS IN KNOW OF THE FACT THAT SUNDRY CREDIT OR OUTSTANDING AND TREATED THE SAME AS INCOME OF ASSESSEE UNDER SECTION 41(1) OF THE ACT. FURTHER, ON THE INTEREST INCOME, THE LD. CIT(A) CONCLUDED THAT INTE REST INCOME ON INCOME TAX REFUND IS CLEARLY TAXABLE YET THE SAME WAS NOT OFFE RED IN THE RETURN OF INCOME. BEFORE US, NEITHER THE ASSESSEE HAS COME FORWARD NO R FILED ANY WRITTEN SUBMISSION OR ANY DOCUMENTARY EVIDENCE TO SHOW REAS ONABLE EXPLANATION ABOUT NOT OCCURRING INCOME ADDED BY ASSESSING OFFIC ER IN THE ASSESSMENT. IN ABSENCE OF ANY MATERIAL BEFORE US WE AFFIRM THE ORD ER OF THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH 2020 SD/- SD/- (R.C. SHARMA) (PAWA N SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI; DATED: 04.03.2020. RAHUL SHARMA, SR. P.S. M/S RANGEELA EXPORTS ITA NO. 1276/MUM/2019 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) ITAT, MUMBAI