The ACIT, Circle-3(2), Ahmedabad V. M/s. Stitchwell Garments, Ahmedabad

ITA 1537/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6005 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 09-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Section: 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NOS. 1537 & 1538/AHD/2016 (ASSESSMEN T YEARS: 2007-08 & 2008-09) ACIT, CIRCLE 3(2), AHMEDABAD APPELLANT VS. M/S. STITCHWELL GARMENTS, 2011/B, PHASE IV, GIDC ESTATE, VATVA, AHMEDABAD RESPONDENT PAN: AAJFS0523P /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /BY ASSESSEE : SHRI M. K. PATEL, A.R. /DATE OF HEARING : 26.02.2018 /DATE OF PRONOUNCEMENT : 28.02.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO REVENUES APPEALS FOR ASSESSMENT YEARS 20 07-08 AND 2008-09 ARISE AGAINST THE CIT(A)-3, AHMEDABADS SEPARATE OR DERS; BOTH DATED 13.04.2016, IN CASE NOS. CIT(A)-3/CIR.3(2)/40/15-16 & CIT(A)-3/CIR .3(2)/39/15-16, REVERSING ASSESSING OFFICERS ACTION IMPOSING THE PENALTIES I N QUESTION OF RS.19,25,500/- AND RS.14,67,970/-; RESPECTIVELY, IN PROCEEDINGS U/S. 2 71(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE FORMER YEARS P ENALTY AMOUNTING TO RS.19,25,500/- PERTAINS TO TWO QUANTUM ISSUES OF SE CTION 40(A)(IA) AND PRIOR PERIOD ITA NOS. 1537 & 1538/AHD/16 [ACIT VS. M/S. STITCHWE LL GARMENTS ] A.YS. 2007-08 & 2008-09 - 2 - EXPENDITURE DISALLOWANCE(S) AMOUNTING TO RS.60,53,8 60/- AND RS.1,77,527/- WHEREAS THE LATTER ASSESSMENT YEARS AS MANY ISSUES ARE SIMILAR QUA SECTION 40(A)(IA) DISALLOWANCE OF RS.43,84,160/- AND SALARY PAYMENTS OF RS.3,66,527/-; RESPECTIVELY. IT IS EVIDENT THAT THE FORMER COMMON ISSUE ALREADY STANDS REMITTED BACK TO THE ASSESSING OFFICER IN A CO-ORDINATE BENC HS QUANTUM ORDER DATED 31.01.2017 IN ASSESSEES APPEALS ITA NOS. 2559 & 25 60/AHD/2013 FOR CARRYING OUT NECESSARY VERIFICATION AS TO WHETHER THE PAYEE(S) S TANDS ASSESSED QUA THE CORRESPONDING INCOME OR NOT AS PER SECTION 40(A)(IA ) 2 ND PROVISO R.W.S. 201(1) OF THE ACT. BOTH PARTIES ARE THEREFORE AD IDEM THAT WE OU GHT TO FOLLOW THE SAME COURSE OF ACTION IN THE INSTANT PENALTY PROCEEDINGS AS WELL S O FAR AS IT PERTAINS TO SECTION 40(A)(IA) DISALLOWANCE. WE THUS ACCEPT REVENUES A RGUMENTS IN BOTH THESE APPEALS AND THE CORRESPONDING ISSUE OF CONSEQUENTIAL PENALT Y ARISING FROM SECTION 40(A)(IA) DISALLOWANCE IS THUS RESTORED BACK TO THE FILE OF A SSESSING OFFICER TO BE DECIDED AFTER FINALIZING THE NECESSARY CONSEQUENTIAL ASSESS MENT(S). 3. WE NOW ADVERT TO THE LATTER ISSUE OF PRIOR PERIO D EXPENDITURE DISALLOWANCE OF RS.1,77,527/- PERTAINING TO COMMISSION PAYMENTS. T HERE IS NO DISPUTE THAT THE ASSESSEE HAD NOT CONTESTED THE SAME IN ITS QUANTUM APPEAL KEEP IN MIND THE SMALLNESS OF THE AMOUNT INVOLVED THEREIN. IT HAS F URTHER COME ON RECORD THAT IT CHOSE TO RAISE THE IMPUGNED CLAIM ON THE BASIS OF T DS REMISSION. WE THUS OBSERVE THAT THE SAID TDS REMAIN COUPLED WITH ALL THE SURRO UNDING FACTS AND CIRCUMSTANCES MAKES IT CLEAR THAT IT IS NOT A CASE ALTOGETHER A F ALSE CLAIM. WE THUS EXPRESS OUR AGREEMENT WITH LEARNED CIT(A)S CONCLUSION THAT THE SAME DOES NOT AMOUNT TO AN INSTANCE OF FURNISHING INACCURATE PARTICULARS OF IN COME AS PER HONBLE APEX COURTS DECISION IN CIT VS. RELIANCE PETROPRODUCTS 322 ITR 158(SC) THAT EACH AND EVERY QUANTUM DISALLOWANCE DOES NOT NECESSARILY ATTRACT S ECTION 271(1)(C) PENAL PROVISION. THE CIT(A)S QUA THE SAID FINDINGS IN F ORMER ASSESSMENT YEAR 2007-08 ARE THUS CONFIRMED. REVENUES APPEAL ITA NO.1537/A HD/2016 FOR ASSESSMENT YEAR 2007-08 IS THUS PARTLY ACCEPTED FOR STATISTICAL PUR POSES. 4. THIS LEAVES US WITH THE REMAINING ISSUE OF CORRE CTNESS OF THE IMPUGNED PENALTY RELEVANT TO SALARY EXPENDITURE DISALLOWANCE AMOUNTING TO RS.3,66,527/- IN ITA NOS. 1537 & 1538/AHD/16 [ACIT VS. M/S. STITCHWE LL GARMENTS ] A.YS. 2007-08 & 2008-09 - 3 - LATTER ASSESSMENT YEAR 2008-09. IT EMERGES FROM TH E TRIBUNALS QUANTUM ORDER (SUPRA) THAT THE SAID CO-ORDINATE BENCH HAS ALREADY DELETED THE SAME. WE THUS CONCLUDE THAT THE IMPUGNED PENALTY QUA THE INSTANT ISSUE HAS NO LEGS TO STAND. THE REVENUES LATTER APPEAL ITA NO.1538/AHD/2016 ALSO P ARTLY ACCEPTED FOR STATISTICAL PURPOSES. 5. THESE TWO REVENUES APPEALS ARE PARTLY ALLOWED F OR STATISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS T HE 28 TH DAY OF FEBRUARY, 2018.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 28/02/2018 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