AMEER TRADING CORPORATION LTD, MUMBAI V. ITO 2(1)(1), MUMBAI

ITA 1636/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9827 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN

Judgement Text

ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S PANNU , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO .1636 /MUM/2016 ( / ASSESSMENT YEAR: 200 8 - 0 9) AMEER TRADING CORPORATION LTD., 3 10 - B, VEER SAVARKAR MARG, DADAR (WEST), MUMBAI - 400 0 28 / VS. ITO 2( 1 )(1), AAYKA R BHAWAN, M.K ROAD, MUMBAI 400 020 ./ ./ PAN/GIR NO. AABC A0761A ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI. V. JUSTIN / DATE OF HEARING : 0 6 .0 7 .2017 / DATE OF PRONOUNCEMENT : 26 .0 7 .2017 / O R D E R PER RAVISH SOOD, J UDICIAL MEMBER : THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) FOR A.Y. 200 8 - 0 9 , DATED 10 . 12 .201 5 , WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(C) OF THE INCOME - TAX ACT, 1961 (FOR SHORT ACT), DATED. 28.03.2013 . T HE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, T HE LEARN ED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 2 ERRED IN CONFIRMING THE PENALTY OF RS. 85,340/ - LEVIED U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961. HE OUGHT NOT TO HAVE DONE SO. 2. YOUR APPELLANTS CRAVE TO ADD, TO AMEND, ALTER THE FOREGOING GR OUNDS OF APPEAL A ND TO TAKE ADDITIONAL GROUND, IF NEED BE. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF PROVIDING OFFICE ASSISTANT SERVICES HAD E - FILED ITS RETURN OF INCOME ON 24.09.2008, DECLARING TOTAL INCOME OF RS. (2,94,999/ - ). THAT THE CASE OF THE ASS ESSEE WAS TAKEN UP FOR SCRUTINY ASSESSMENT. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O WHILE DELIBERATING ON THE DETAILS OF THE SUNDRY CREDITORS OF THE ASSESSEE COMPANY, THEREIN OBSERVED THAT AN AMOUNT OF RS. 2,76,180/ - WHICH STOOD DEPO SITED IN THE BANK ACCOUNT OF THE ASSESSEE, WAS FOUND TO BE QUANTIFIED UNDER THE HEAD SUSPENSE ACCOUNT. THE ASSESSEE ON BEING CALLED UPON BY THE A.O TO PUT FORTH AN EXPLANATION AS REGARDS THE SAME, THEREIN VIDE ITS LETTER DATED 18.10.2010 SUBMITTED THAT T HE AS THE AFORESAID AMOUNT WHICH WAS FOUND DEPOSITED IN ITS BANK ACCOUNT WAS UNIDENTIFIABLE AND THE SOURCE OF THE SAME COULD NOT BE TRACED, THEREFORE , THE SAME HAD BEEN CATEGORIZED UNDER THE HEAD SUSPENSE ACCOUNT. THE A.O HOWEVER NOT FINDING FAVOR WITH T HE EXPLANATION OF THE ASSESSEE, THEREIN TREATED THE SAME AS THE LATTERS UNEXPLAINED INCOME AND ADDED IT TO ITS RETURNED INCOME. THE A.O WHILE CULMINATING THE ASSESSMENT PROCEEDINGS ALSO INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) IN THE HANDS OF T HE ASSESSEE FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE ASSAILED THE AFORESAID ADDITION BEFORE THE CIT(A), WHO VIDE HIS ORDER DATED. 16.08.2011 CONFIRMED THE SAME. ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 3 3. THE A.O AFTER BEING IN RECEIPT OF THE ORDER OF THE CIT(A) THEREIN ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE, THEREIN CALLING UPON IT TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE IMPOSED ON AS REGARDS THE AMOUNT OF RS. 2,76,180/ - PARKED IN THE SUSPENSE ACCOUNT . THE ASSESSEE REITERATED THE SUBMISSIONS MADE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IN CONTEXT OF THE REASON AND THE CIRCUMSTANCES WHICH HAD LED TO SHOWING OF THE AFORESAID AMOUNT UNDER THE HEAD SUSPENSE ACCOUNT. THE ASSESSEE FURTHER SUBMITTED BEFORE THE A.O THAT AS THE AFORESAID AMOU NT HAD DULY BEEN SHOWN IN THE BOOKS OF ACCOUNTS AND IT HAD NEVER BEEN THE INTENTION OF THE ASSESSEE TO CONCEAL OR FURNISH INACCURATE PARTICULARS IN RESPECT OF THE AMOUNT UNDER CONSIDERATION, THEREFORE , NO PENALTY UNDER SEC. 271(1)(C) WAS LIABLE TO BE IMP OSED IN ITS HANDS. THE SAID EXPLANATION OF THE ASSESSEE HOWEVER DID NOT FIND FAVOR WITH THE A.O, WHO VIDE HIS ORDER DATED. 28.03.2013 IMPOSED A PENALTY OF RS. 85,340/ - ON THE ASSESSEE. 4. THE ASSESSEE CARRIED THE ORDER OF THE A.O IMPOSING PENALTY UNDER SEC. 271(1)(C) BEFORE THE CIT(A). THE ASSESSEE BY DWELLING ON THE REASONS AND CIRCUMSTANCES LEADING TO PARKING OF THE AMOUNT OF RS. 2,76,180/ - IN THE SUSPENSE A/C , THEREIN DEMONSTRATED HIS BONAFIDES AND IN THE BACKDROP OF THE SAME THEREIN AVERRED THAT N O PENALTY UNDER SEC. 271(1)(C) WAS CALLED FOR IN ITS HANDS. THE ASSESSEE FURTHER SUBMITTED THAT AS THE AFORESAID AMOUNT OF RS. 2,76,180/ - (SUPRA) WAS DEPOSITED IN ITS BANK ACCOUNT ON 12.04.2006, I.E IN THE F.Y. 2006 - 07, THEREFORE THE SAME COULD NOT BE ASSES SED AS ITS INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2008 - 09, AND RESULTANTLY NO PENALTY UNDER SEC. 271(1)(C) COULD BE IMPOSED IN THE HANDS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2008 - 09. THAT IT WAS FURTHER AVERRED BY THE ASSESSEE THAT AS THE AFORESAID AMOUNT OF RS. ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 4 2,76,180/ - (SUPRA) HAD BEEN OFFERED AS INCOME BY TRANSFERRING THE SAME TO THE PROFIT & LOSS A/C IN F.Y. 2010 - 11, THEREFORE THE SAID FACTUM IN ITSELF SUBSTANTIATED THE BONAFIDES OF THE ASSESSEE, AND THUS NO PENA LTY IN RESPECT OF THE SAID AMOUNT WAS LIABLE TO IMPOSED IN THE HANDS OF THE ASSESSEE. THE CONTENTIONS OF THE ASSESSEE HOWEVER DID NOT FIND FAVOR WITH THE CIT(A), WHO UPHELD THE PENALTY IMPOSED BY THE A.O AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT( A) SUSTAINING THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C), HAD THUS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT DESPITE HAVING BEEN PUT TO NOTICE AS REGARDS THE DATE OF HEARING OF APPEAL, NO ONE HAD PUT UP AN APPEARANCE ON BEHALF OF THE A SSESSEE, THEREFORE WE ARE CONSTRAINED TO PROCEED WITH THE APPEAL AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) , PERUSING THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAIL ABLE ON RECORD. THE LD. D.R RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND THEREIN SUBMITTED THAT IN THE BACKDROP OF THE FACTS OF THE CASE , THE A.O HAD RIGHTLY IMPOSED PENALTY U/S 271(1)(C) IN THE HANDS OF THE ASSESSEE, WHICH AFTER THOROUGH DELIBERATIONS HAD BEEN UPHELD BY THE CIT(A). IT WAS THUS AVERRED BY THE LD. D.R THAT THE APPEAL OF THE ASSESSEE BEING DEVOID OF ANY FORCE WAS THUS LIABLE TO BE DISMISSED. 6. WE HAVE HEARD THE LD. D.R AND GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE. WE FIND THAT IT REMAINS AS A MATTER OF FACT THAT THE ADDITION OF RS. 2,76,180/ - (SUPRA) MADE BY THE A.O AS REGARDS THE AMOUNT THAT WAS PARKED IN THE SUSPENSE ACCOUNT BY THE ASSESSEE , HAD BEEN UPHELD BY THE CIT(A) . WE ARE CONSCIOUS OF THE FACT THAT PENALTY PROCEEDINGS ARE NOTHING SHORT OF QUASI CRIMINAL PROCEEDINGS, AND ALSO NOT OBLIVIOUS OF THE FACT THAT ASSESSMENT PROCEEDINGS ARE ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 5 SEPARATE AND DISTINCT FROM THE PENALTY PROCEEDINGS, AND THUS MERELY BECAUSE AN ADDITION HAD BEEN MADE IN THE HANDS OF AN ASSESSEE , CANNOT AUTOMATICA L LY LEAD TO LEVY OF PENALTY UNDER SEC. 271(1)(C) . WE THUS IN THE BACKDROP OF THE AFORESAID SETTLED POSITION OF LAW, THUS PROCEED WITH THE ADJUDICATION OF THE VALIDITY OF THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) IN THE HANDS OF THE ASSESSEE. WE FIND FROM THE RECORDS THAT THE ASSESSEE WHILE ASSAILING THE LEVY OF PENALTY HAD SUBMITTED BEFORE THE CIT(A) THAT AS THE AMOUNT OF RS. 2,76, 180/ - (SUPRA) WAS DEPOSITED IN ITS BANK ACCOUNT ON 12.04.2006, I.E IN THE F.Y. 2006 - 07, THEREFORE , THE SAME COULD NOT BE ASSESSED AS ITS INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2008 - 09, AND RESULTANTLY NO PENALTY UNDER SEC. 271(1)(C) IN RESPECT O F THE SAID AMOUNT COULD VALIDLY BE IMPOSED DURING THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2008 - 09. WE THOUGH FOR THE LIMITED PURPOSE OF ADJUDICATING THE VALIDITY OF THE PENALTY IMPOSED UNDER SEC. 271(1)(C), FIND SUBSTANTIAL FORCE IN THE AFORESAID CONTENTIO N OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE SETTLED POSITION OF LAW AS HAD BEEN OBSERVED BY US HEREINABOVE, AS ASSESSMENT PROCEEDINGS ARE SEPARATE AND DISTINCT FROM PENALTY PROCEEDINGS, THEREFORE, NOW WHEN THE AFORESAID AMO UNT OF RS. 2,76,180/ - (SUPRA) WAS TO BE HELD AS THE UNEXPLAINED MONEY OF THE ASSESSEE UNDER SEC. 69, THEN THE SAME AS PER THE SAID CLEARLY WORDED STATUTORY PROVISION COULD ONLY BE RELATED TO AND HELD AS THE INCOME OF THE ASSESSEE FOR THE YEAR IN WHICH TH E INVESTMENT IS FOUND TO HAVE BEEN MADE BY THE ASSESSEE . WE THUS CIRCUMSCRIBING OUR OBSERVATIONS SOLELY FOR THE PURPOSE OF ADJUDICATION OF THE PRESENT APPEAL, ARE THUS OF THE CONSIDERED VIEW THAT ON THE BASIS OF THE AFORESAID MATERIAL FACT ITSELF, WHICH WE FIND HAD THOUGH CATEGORICALLY BEEN RAISED BY THE ASSESSEE BEFORE THE CIT(A), BUT HAD NOT BEEN ADVERTED TO BY THE LATTER, NO PENALTY UNDER SEC. 271(1)(C) COULD BE JUSTIFIED IN RESPECT OF THE AMOUNT OF RS. 2,76,180/ - (SUPRA) ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 6 DURING THE YEAR UNDER CONSIDERATI ON, VIZ. A.Y. 2008 - 09. THAT AS WE HAVE QUASHED THE LEVY OF PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) ON THE BASIS OF OUR AFORESAID OBSERVATIONS, WE THEREFORE REFRAIN FROM ADVERTING TO THE OTHER CONTENTIONS RAISED BY THE ASSESSEE BEFORE THE LOWER AUTH ORITIES WHILE ASSAILING THE VALIDITY OF THE PENALTY IMPOSED. WE THUS SET ASIDE THE ORDER OF THE CIT(A) AND QUASH THE PENALTY OF RS. 85,340/ - IMPOSED IN THE HANDS OF THE ASSESSEE UNDER SEC. 271(1)(C). 7 . THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 26 /07/2017 SD/ - SD/ - (G.S PANNU) (RAVISH SOOD) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 26 .07 .2017 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / D.R, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI ITA NO. 1636/MUM/2016 - AMEER TRADING CORPORATION LTD. 7