METRO EXPORTS P.LTD, MUMBAI V. ACIT CIR 6(3), MUMBAI

ITA 1666/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8809 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 04-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: VIPUL B JOSHI
• Keywords: Depreciation
• Section: 14A; 27

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D.MANMOHAN (VP) AND SHRI RAJENDRA SING H(AM) ITA NO.1666/M/2010 ASSESSMENT YEAR 2004-05 M/S. METRO EXPORTERS PVT. LTD. THE ACIT RANGE 6(3 ), KAKAD CHAMBERS, 132 DR.A.B.ROAD AAYAKAR BHAVAN WORLI, MUMBAI 400 018. M.K.ROAD, MUMBAI 400 020. PAN : AABCM0349J APPELLANT RESPONDENT ASSESSEE BY : SHRI VIPUL B.JOSHI REVENUE BY : SHRI S.K.SINGH O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 22.10.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2004-0 5. THE ONLY DISPUTE RAISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING LEVYING OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E AO IN THE ASSESSMENT OF INCOME HAD MADE ADDITIONS ON ACCOUNT OF PRIOR PERIO D EXPENSES (RS.3,32,671/- ); CLUB ENTRANCE FEES (RS.1,37,500/-); DEPRECIATION ON CARS (RS.6,47,794/-); AND DISALLOWANCE OF INTEREST UNDER SECTION 14A (RS. 7,48,906/-). THE AO HAD ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C) AND LEVIED PENALTY @ 100% OF TAX SOUGHT TO BE EVADED AMOUNTING TO RS.6,6 9,740/- IN RESPECT OF THE AFORESAID FOUR ADDITIONS. IN APPEAL CIT(A) CONFIRM ED THE PENALTY ONLY IN 2 RESPECT OF ADDITION ON ACCOUNT OF DISALLOWANCE OF I NTEREST UNDER SECTION 14A OF THE INCOME-TAX ACT AND DELETED THE PENALTY IN RESPE CT OF THE OTHER THREE ADDITIONS. AGGRIEVED BY THE SAID DECISION THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST UNDER SECTION 14A OF TH E I.T.ACT HAS BEEN SET ASIDE BY THE TRIBUNAL IN ITA NO.2027/M/2008 AND THE ISSUE HAS BEEN RESTORED TO THE FILE OF AO FOR FRESH DECISION IN THE LIGHT OF JUDGM ENT OF HONBLE HIGH COURT OF MUMBAI IN CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. (328 ITR 81). AS THE ADDITION UNDER SECTION 14A HAS BEEN SET ASIDE AND I SSUE HAS BEEN RESTORED TO AO, PENALTY LEVIED UNDER SECTION 271(1)(C) CANNOT S URVIVE. HOWEVER THE AO WILL FREE TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IN THE FRESH ASSESSMENT IF REQUIRED AS PER LAW. 3. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. 4. THE ORDER WAS PRONOUNCED IN OPEN COURT ON 19.01. 2011. SD/- SD/- ( D. MANMOHAN) (RAJENDR A SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATE : 19.01.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR B BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK 3