Asstt.CIT,Cir-1, Aurangabad, V. Purna Sahakari Sakhar Karkhana Ltd.,

ITA 1314/PUN/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7436 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-03-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE
• Assessee Lawyers: S N DOSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI SHAILENDRA KUMAR YA DAV J UDICIAL MEMBER AND SHRI D. KARUNAKARA RAO A CCOUNTANT M EMBER ITA NO. 13 14 /PN/ 20 1 0 ( ASSTT. YEAR : 200 3 - 04 ) ACIT, CIRCLE - 1 , APPELLANT AUR ANGABAD VS. PURNA SAHAKARI SAKHAR KARKHANA LTD., RESPONDENT AT POST BASMATHNAGAR, TQ. BASMATHNAGAR, DIST. HINGOLI PAN : AAAAP0899B APP ELLANT BY : SHRI ABHAY DAMLE RESPONDENT BY : SHRI S.N. DOSHI ORDER PER D KARUNAKARA R AO AM THIS IS AN APPEAL FILED BY THE REVENUE ARISING OUT OF THE ORDER OF CIT(A) AURANGABAD DATED 27.08.2010 . GROUNDS RAISED READ AS UNDER : 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) AURANGABAD WAS JUSTIFIED IN DELETI NG THE PENALTY OF RS. 19,56,138/ - LEVIED BY THE AO. 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE PRESUMPTION OF THE CIT(A) AURANGABAD THAT THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME FURNISHED BY THE ASSESSEE ON ACCOUNT OF PROV IDENT FUND AND EARLIER YEAR EXPENSES IS CORRECT IN VIEW OF THE JUDGMENT OF HONBLE HIGH COURT DELHI IN THE CASE OF CIT VS. ZOOM COMMUNICATIONS PVT. LTD. (2010 TIOL/361 - HC - DEL - IT). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF TH E AO BE RESTORED AND THAT OF THE CIT(A) BE VACATED. 2. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ISSUE RAISED BY THE REVENUE RELATES TO THE LEVY PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT IN RESPECT OF THE ADDITIONS MADE BY THE AO ON ACCOUNTS OF (I) PROVIDENT FUND PAYMENTS AND (II) PRIOR PERIOD EXPENDITURE. CIT(A) DELETED THE SAID PENALTY AFTER APPRECIATING THE SUBMISSIONS OF THE ASSESSEE. IN THIS REGARD, LD. COUNSEL FILED A WRITTEN SUBMISSION, RELEVANT PARAS READ AS UNDER : 1. EMPLOYEES PROVIDENT FUND HAS BEEN PAID IN THE RELEVANT FINANCIAL YEAR ITSELF. SEE CHART ENCLOSED AT PAGE NO. 3. ITA 1314 /PN/ 2010 PURNA SAHAKARI SAKHAR KARKHANA LTD.,, ( A.Y. 2003 - 04 ) . 2 THEREFORE THE DISALLOWANCE ITSELF WAS NOT CALLED FOR. REFER SUPREME COURT CASE OF M/S. ALOM EXTRUSIONS 359 ITR 306. THIS CHART AND SUBMISSION WAS FILED BEFORE THE ASSESSING OFFICER. HOWEVER THE ABOVE SUPREME COURT JUDGMENT WAS NOT REFERRED TO BEFORE THE ASSESSING OFFICER, CIT(A) AND ITAT AS AT THAT TIME THIS JUDGMENT WAS NOT AVAILABLE. 2. PRIOR PERIOD EXPENDITURE OF RS.11,75 ,373/ - : - THE DETAILS OF THESE EXPENSES ARE SHOWN ON PAGE NO. 4 OF THE ASSESSMENT ORDER. (ENCLOSED AT PAGE NO. 9 TO 13). THE EXPENSES MENTIONED AT SERIAL NOS. 1,2,4,5,9 AND 10 ARE PERTAINING TO THE FINANCIAL YEAR 2002 - 03 (A.Y. 2003 - 04). THEREFORE THESE I TEMS CANNOT BE TREATED AS PRIOR PERIOD EXPENDITURES - TOTAL RS. 662886/ - AS REGARDS THE REMAINING ITEMS OF EXPENDITURES, KINDLY REFER ITEM NO. 7 WHICH IS FOR ADVOCATES AND LEGAL FEES FOR RS.3,80,165/ - . THOUGH THESE WERE INCURRED IN THE YEAR 1993 - 94, A T THAT TIME THESE WERE SHOWN AS ADVANCES. IN THE FINANCIAL YEAR 2002 - 03 WE COULD GET THE BILLS AND ON THE BASIS OF THOSE BILLS NECESSARY ENTRIES HAVE BEEN PASSED. THEREFORE THIS EXPENDITURE ALSO CANNOT BE TREATED AS PRIOR PERIOD EXPENDITURE - RS.380165/ - AS REGARDS OTHER EXPENDITURES ARE CONCERNED THERE IS NO DISPUTE ABOUT THEIR GENUINENESS AND THE CLAIM IS DENIED ONLY BECAUSE IT IS RELATING TO EARLIER YEARS. SUBMITTED THAT THESE ITEMS CANNOT BE CONSIDERED AS EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. RS.132272/ - . THE LD. CIT(A) HAS VERY RIGHTLY RELIED ON THE JUDGMENT OF SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158. AS PER THE ASSESSEES COUNSEL, THE RELEVANT DETAILS WERE DISCLOSED NOT ONLY IN THE RETURN OF INCOME BUT ALSO IN THE ANNEXURES IE AUDIT REPORT FILED IN ACCORDANCE WITH SECTION 44 AB OF THE ACT. FROM THE ABOVE, IT IS EVIDENT THAT THE AMOUNTS IN QUESTION ARE NOT ONLY DISCLOSED IN THE AUDIT REPORT AND THE SAME HAVE TO BE ALLOWED ON M ERITS IN FAVOUR OF THE ASSESSEE FOR THE REASONS MENTIONED ABOVE. AS PER THE COUNSEL, THE SAID AMOUNTS DO NOT ATTRACT PENALTY AS THERE IS NO CONCEALMENT AND ASSESSEE HAS RIGHTLY DECLARED RELEVANT INFORMATION IN THE RECORD BEFORE THE A.O. THE LD. D.R. R ELIED ON THE ORDER OF THE A.O. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AND ABOVE REFERRED WRITTEN SUBMISSIONS OF THE ASSESSEE. IT IS A FACT THAT BOTH ITA 1314 /PN/ 2010 PURNA SAHAKARI SAKHAR KARKHANA LTD.,, ( A.Y. 2003 - 04 ) . 3 THESE AMOUNTS WERE BORNE ON RECORD IN THE FORM OF AUDIT REPORT BEFORE THE A.O AS ANNEXURES TO THE RETURN OF INCOME WHICH IS A BASE MATERIAL AS PER THE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS (SUPRA). OTHERWISE, THE IMPUGNED P.F. AMOUNTS WERE ALREADY PAID BY THE ASSESSEE BEFORE THE DUE DATE FOR FILIN G THE RETURN OF INCOME, IN WHICH CASE, CLAIM OF THE ASSESSEE IS ALLOWABLE AS PER THE RATIO IN THE CASE OF ALOM EXTRUSIONS (SUPRA). REGARDING PRIOR PERIOD EXPENDITURE, WE HAVE CONSIDERED THE APPLICABILITY OF THE APPEX COURT JUDGMENT IN THE CASE OF RELIA NCE PETRO PRODUCTS, 322 ITR 158. AS SUCH THERE IS LOT OF DISPUTE RELATING TO THE ALLOWABILITY OF THE CLAIM OF PRIOR PERIOD EXPENSES. CONSIDERING THE ABOVE DISCLOS URES OF THE ASSESSEE AND THE AP EX COURT JUDGMENTS ARE THE COMPARABLE FACTS, WE ARE OF THE OPI NION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. THEREFORE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN OPEN COU RT ON 25TH MARCH , 201 1 SD/ - SD/ - ( SHAILENDRA KUMAR YADAV ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED THE 25TH MARCH , 201 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLANT 2. THE RESPONDENT 3. THE CIT(A) - AURANGABAD 4. THE CIT - AURANGABAD 5. THE D.R. ITAT A BENCH 6. GUARD FILE BY ORDER ASSISTA NT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE