M/s. Shreem Industries, Ahmedabad V. The Income tax Officer,Ward-10(3), Ahmedabad

ITA 155/AHD/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67948 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 21-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: S N DIVETIA
• Keywords: Difference of opinion; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.155/AHD/2011 A.Y. 2001-02 SHREEM INDUSTIRES, 3, 2 ND FLOOR, JADHAV CHAMBERS ASHRAM ROAD, AHMEDABAD. PAN: AAHFS 2225C VS ITO, WARD 10(3). AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.L. KUREEL, SR.D.R. ASSESSEE(S) BY : SHRI S.N. DIVETIA / DATE OF HEARING : 18/11/2013 / DATE OF PRONOUNCEMENT: 22/11/2013 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M AN ORDER OF THE LEARNED CIT(APPEALS)-XVI, AHMEDABAD, DATED 26/12/20 08 AGAINST THE CONFIRMATION OF PENALTY LEVIED U/S. 271(1)(C) OF IT ACT OF RS.41,810/-. 2. AT THE OUTSET, WE HAVE NOTED THAT THIS APPEAL WA S BELATEDLY FILED BY 681 DAYS. IN THIS CONNECTION, LEARNED AR, MR. S.N. DIVETIA HAS INFORMED THAT EARLIER INADVERTENTLY GROUNDS WERE WRONGLY RAI SED AND THAT FACT WAS DULY NOTED BY RESPECTED ITAT B BENCH AHMEDABAD IN ITA NO.744/AHD/2009 FOR A.Y. 2001-02, ORDER DATED 10.12 .2010 AND THEREUPON IT WAS SUGGESTED THAT THE DELAY COULD BE CONDONED. RELEVANT PARAGRAPH 2 OF THE SAID ORDER IS REPRODUCED BELOW: ITA NO.155/ AHD/2011 SHREEM INDUSTRIES MEHSANA VS. ITO AHMEDABAD. FOR A.Y. 2001-02 - 2 - DURING THE COURSE OF HEARING IT WAS POINTED OUT TH E APPEAL IS NOT MAINTAINABLE AB INITIO AS IT HAS BEEN FILED IN RESP ECT OF QUANTUM ADDITIONS WHEREAS APPELLATE ORDER AGITATED AGAINST IS IN RESP ECT OF PENALTY. THE LD. AR FAIRLY ADMITTED THAT BY MISTAKE GROUNDS PERTAINING TO QUANTUM ADDITIONS HAVE BEEN CREPT INTO THE APPEAL MEMO. HE SUBMITTED TO FI LE A FRESH APPEAL WITH THE PRAYER THAT DELAY SHOULD BE CONDONED. IN OUR VIEW, DELAY IN FILING FRESH APPEAL WOULD BE CONSIDERED AT THE APPROPRIATE TIME BUT APPARENTLY ASSESSEE HAD INTENDED TO FILE APPEAL IN TIME WHICH HAS BEEN ACTUALLY SO FILED BUT FOR THE REASON THAT ORDER APPEALED AGAINST IS NOT AGITATED, IT BECOMES NON- MAINTAINABLE AB INITIO. WE ACCORDINGLY DISMISS THIS APPEAL AND ALLOW TO FILE FRESH APPEAL WITH SYMPATHETIC CONSIDERATION FOR CON DONATION OF DELAY. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISS ED. 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT ONCE A RESPECTED CO-ORDINAT E BENCH HAS EXPRESSED AN OPINION; WHILE DISMISSING THAT APPEAL AS NON MAINTAINABLE, THAT A FRESH APPEAL COULD BE FILED AND THE DELAY CO ULD BE CONDONED, THEREFORE, UNDER SUCH CIRCUMSTANCES WE HEREBY CONDO NE THE DELAY AND ADMIT THIS APPEAL FOR ADJUDICATION. 4. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3), DATED 26.03.2004 AND THE PENALT Y ORDER U/S. 271(1)(C), DATED 27.03.2006 WERE THAT THE ASSESSEE FIRM IS IN THE BUSINESS OF MANUFACTURING OF DYES AND CHEMICALS. THE IMPUGNED P ENALTY WAS LEVIED IN RESPECT OF FOREIGN TOUR EXPENDITURE WHICH WAS DI SALLOWED BY THE AO OF RS.1,80,996/-. HOWEVER, THE SAME WAS RESTRICTED BY LEARNED CIT(A) TO RS.90,498/-. PENALTY HAS ALSO BEEN LEVIED IN RESPEC T OF INTEREST EXPENDITURE DISALLOWANCE OF RS.72,334/-. LEARNED CI T(A) HAS RESTRICTED THE SAID DISALLOWANCE TO RS.16,167/-. 5. THE DETAILS OF THE FOREIGN TOUR EXPENDITURE WAS STATED TO BE AS UNDER: TICKET EXP. FOR SHRI M.R. SHAH RS. 45,998/- ITA NO.155/ AHD/2011 SHREEM INDUSTRIES MEHSANA VS. ITO AHMEDABAD. FOR A.Y. 2001-02 - 3 - TICKET EXP. FOR SMT. AVANI M. SHAH (WIFE OF SHRI M.R. SHAH) RS. 45,998/- EXCHANGE OF 2000 US $ FOR EXPENSES RS. 89,000/- RS.1,80,996/- 5.2 THE REASON FOR IMPUGNED DISALLOWANCE WAS THE EX PENDITURE INCURRED ON THE TRAVEL OF THE WIFE. ON ONE HAND, TH E ASSESSEE HAS CLAIMED THAT SMT. SHAH HAD QUALIFICATION AND EXPERIENCE IN SECRETARIAL FIELD HENCE HER TRAVEL WAS CONNECTED WITH THE BUSINESS OF THE A SSESSEE, HOWEVER, ON THE OTHER HAND THE REVENUE DEPARTMENT HAD REJECTED THE SAID CLAIM. BUT ONE THING IS UNDISPUTED THAT THERE WAS DIVERGENT OP INION IN RESPECT OF THE QUANTUM OF ADDITION BECAUSE THE AO HAD DISALLOWED T HE TOTAL AMOUNT. HOWEVER, LEARNED CIT(A) HAS RESTRICTED THE SAME UP TO THE 50% OF THE EXPENDITURE. 5.3 LIKEWISE, IN RESPECT OF DISALLOWANCE OF INTERE ST A PART RELIEF WAS GRANTED BY LEARNED CIT(A) BECAUSE THE ASSESSEE HAS GIVEN AN EXPLANATION THAT THE INTEREST FREE ADVANCES WERE NOT OUT OF THE CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS. 5.4 IN THE LIGHT OF THE ABOVE DISCUSSION, IT IS APP ARENT THAT IN RESPECT OF BOTH THE DISALLOWANCES THE ASSESSEE HAS FURNISHED T HE DETAILS WHICH WERE VERY MUCH PART OF THE ASSESSMENT RECORD. THEREFORE, THIS IS NOT THE CASE THAT THE FACTS WERE CONCEALED BY THE ASSESSEE. AS F AR AS THE FURNISHING OF INACCURATE PARTICULARS IS CONCERNED, WE HAVE BEEN I NFORMED THAT THE ASSESSEE HAS OFFERED EXPLANATION WHICH WAS NOT FOUN D TO BE FALSE BY THE REVENUE DEPARTMENT. IN SUPPORT OF THIS CONTENTION, THE ASSESSESSS ARGUMENT WAS THAT AS PER EXPLANATION-1 TO SECTION 2 71(1)(C), THE ASSESSEE HAS OFFERED AN EXPLANATION WHICH WAS DULY SUBSTANTI ATED BY THE EVIDENCES ITA NO.155/ AHD/2011 SHREEM INDUSTRIES MEHSANA VS. ITO AHMEDABAD. FOR A.Y. 2001-02 - 4 - AND THAT EXPLANATION WAS BONA FIDE AS FAR AS THE AS SESSEE WAS CONCERNED, THEREFORE, IN A SITUATION WHEN ALL THE MATERIAL FAC TS WERE DISCLOSED BY THE ASSESSEE FOR THE PURPOSE OF THE COMPUTATION OF THE TOTAL INCOME BUT THERE WAS DIFFERENCE OF OPINION THEN THE PENALTY U/S. 271 (1)(C) SHOULD NOT HAVE BEEN IMPOSED. WE HEREBY APPROVE THE ABOVE EXPLANATI ON OF THE ASSESSEE AND REVERSE THE FINDINGS OF LEARNED CIT(A). INSTEAD OF PART RELIEF FOR LEVY OF PENALTY AS GRANTED BY LEARNED CIT(A), THE ASSESS EE IS ENTITLED FOR FULL RELIEF; HENCE, THE PENALTY LEVIED U/S.271(1)(C) IS HEREBY DELETED. THE GROUNDS ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (ANIL CHATURVEDI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 22/11/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD