DCIT 10(2)(2), MUMBAI V. M. SURESH EXPORTS P.LTD, MUMBAI

ITA 1400/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7341 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 14-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Assessee Lawyers: B V JHAVERI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 1400/MUM/2016, A.Y. 2003-04 DCIT-10(2)(2), ROOM NO.216-A, AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020 ...... APPELLANT VS. M/S. SURESH EXPORTS PVT. LTD. G-38, GEM & JEWELLERY COMPLEX-II, SEEPZ, ANDHERI (EAST), MUMBAI 400 093 PAN: AAACD 5693D ...... RESPONDENT APPELLANT BY : SHRI T.A.KHAN RESPONDENT BY : SHRI B.V.JHAVERI DATE OF HEARING : 05/03/2018 DATE OF PRONOUNCEMENT : 27/04/2018 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST THE ORDER OF CIT(A)-17, MUMBAI DATED 18/12/2015, PERTAI NING TO THE ASSESSMENT YEAR 2003-04, WHICH IN TURN HAS ARISEN F ROM THE ORDER PASSED BY THE DCIT,8(2) MUMBAI DATED 26/03/2013 UND ER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT). 2 ITA NO. 1400/MUM/2016, A.Y. 2003-04 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER:- 1. 'ON THE FACTS AND IN THE' CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN CANCELLING THE PENALTY U /S.271 (L)(C) OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE HAD CLAIMED EXCESS DEDUCTION U/S.1OA OF THE ACT BY INFLATING EXEMPTED PROFITS WH ICH WAS BASED ON THE SPECIFIC INFORMATION RECEIVED FROM THE CUSTOMS DEPA RTMENT AND THEREBY, CONCEALED THE PARTICULARS OF ITS INCOME.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN CANCELLING THE PENALTY U /S.271(L)(C) OF THE ACT WITHOUT ANY CONSIDERATION OF ITS INTRINSIC MERITS AND SOLEL Y OWING TO THE FACT THAT THE CORRESPONDING PRIOR ORDER OF REASSESSMENT ITSELF ST ANDS CANCELLED IN ENTIRETY BY THE ORDER OF HON'BLE ITAT, MUMBAI, WITHOUT APPRE CIATING THAT THE PROVISIONS OF SECTION 292BB OF THE INCOME-TAX ACT, 1961 WOULD BE APPLICABLE TO ALL ASSESSMENT PROCEEDINGS PENDING AS ON 01.04.2 008.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY U/S.271(1)(C) OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE HAD FAILED TO REBUT THE PRESUMPTION IN EXPLANATION-1 OF SECTION 271(L)(C)OF THE ACT.' 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE IS A CLOSELY-HELD COMPANY ENGAGED IN THE MANUFACTURE AND EXPORT OF ST UDDED GOLD, JEWELLERY AND ITS MANUFACTURING FACILITY IS SITUATE D AT SEEPZ, ANDHERI(EAST) MUMBAI. THE ASSESSEE FILED ITS RETURN OF INCOME ON 27/11/2003, DECLARING A TOTAL INCOME OF RS.68,05,08 6/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT AND THE TOTAL INCOME WAS ASSESSED AT RS.68,81,280/- . THE ASSESSEE WAS A LLOWED DEDUCTION OF RS.6,05,46,762/- UNDER SECTION 10A OF THE ACT. SUBS EQUENTLY, THE ASSESSMENT WAS RE-OPENED AND COMPLETED UNDER SECTIO N. 143(3) R.W.S. 147 OF THE ACT DETERMINING TOTAL INCOME AT RS.1,73 ,58,930/-. IN THE REASSESSMENT, DEDUCTION UNDER SECTION 10A OF THE AC T WAS REDUCED TO THE EXTENT OF RS.1,18,12,796/- BEING THE DIFFERENCE BETWEEN EXPORT PROCEEDS OF RS.7,02,10,134/- AND FAIR VALUE OF GOOD S UNDER EXPORT OF 3 ITA NO. 1400/MUM/2016, A.Y. 2003-04 RS.5,83,97,338/- DETERMINED BY THE CUSTOMS AUTHORIT IES, IS CONSIDERED AS A PROFIT, WHICH IS NOT DERIVED FROM EXPORT OF AR TICLES OR THINGS AND, THEREFORE, NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT. PENALTY PROCEEDINGS UNDER SECTION UNDER SECTION 271 (1)(C) OF THE ACT HAS BEEN INITIATED FOR CONCEALMENT OF INCOME AND FO R FURNISHING INACCURATE PARTICULARS AND A PENALTY OF RS.38,50,5 36/- WAS IMPOSED ON THE ASSESSEE. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A) WHO CANCELLED THE PENALTY IMPOSED UNDER SECTION 2 71(1)(C) OF THE ACT. BEING AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEES APPEAL IN QUANTUM ASSESSMENT PROCEEDINGS HAS BEEN ANNULLED BY THE TRIBUNAL VID E ITS ORDER IN ITA NO. 6307/MUM/2011 DATED 23/09/2015, COPY OF WHICH IS PL ACED ON RECORD. IN VIEW OF THE ABOVE, THE LD. REPRESENTATIVE FOR TH E ASSESSEE PLEADED THAT THE ADDITIONS ON THE BASIS OF WHICH THE PENAL TY HAS BEEN LEVIED UNDER SECTION 271(1)(C) DO NOT SURVIVE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT OPP OSE THE FACTUAL MATRIX BROUGHT OUT BY THE LEARNED REPRESENTATIVE FO R THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE ASSESSMENT ON THE BASIS OF WHICH THE PENALTY PROCEE DINGS WERE INITIATED HAS BEEN SET-ASIDE BY THE TRIBUNAL VIDE I TS ORDER IN ITA NO. 6307/MUM/2011 DATED 23/09/2015. IN VIEW OF THE ABO VE, THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT DOES NOT SURVIVE AND THE ORDER OF CIT(A) IS HEREBY AFFIRMED. 4 ITA NO. 1400/MUM/2016, A.Y. 2003-04 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/ 2018. SD/- SD/- (SANDEEP GOSAIN) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 27/04/2018. VM, SR. P.S COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER ASSTT. REGISTRAR/SR.P.S I.T.A.T, MUMBAI