M/s. SUKH HOTELS MOTELS P. LTD., MUMBAI V. DCIT Rg. - 8(3), MUMBAI

ITA 1815/MUM/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49518 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-06-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 01-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M. JAGTAP, A.M. AND SHRI V. DURGA RAO , J.M. ITA NO. 1815/MUM/2007 ASSESSMENT YEAR: 2001-02 SUKH HOTELS PVT. LTD., APPELLANT 5, KINGS INTERNATIONAL HOUSE, JUHU TERA ROAD, JUHU, MUMBAI 400 049. (PAN AABCS1117J) VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDENT RANGE 8(3), MUMBAI. APPELLANT BY : MR. M. SUBRAMANIAN RESPONDENT BY : MR. G.P. TRIVEDI . ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)- XXIX, MUMBAI, PASSED ON 30/11/2006 FOR T HE ASSESSMENT YEAR 2001-02. 2. THE GROUND RAISED IN THIS APPEAL IS AGAINST THE ACTION OF THE CIT(A) IN SUSTAINING THE PENALTY U/S 271(1)(C) OF T HE ACT OF RS. 2,11,440/-. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF HOTEL & RESTA URANT AT MUMBAI IN THE NAME AND STYLE OF FOUR SEASONS FILED ITS R ETURN OF INCOME ON 31/10/2001 DECLARING TOTAL INCOME OF RS. 34,37,673/ -, WHICH WAS PROCESSED U/S 143(3) OF THE ACT DETERMINING TOTAL I NCOME AT RS. 69,37,673/-. A SURVEY ACTION WAS CARRIED OUT ON 23 /02/2001. DURING ITA NO. 1815/M/2010 SUKH HOTEL PVT. LTD. 2 THE COURSE OF SURVEY PROCEEDING, ASSESSEE DECLARED ADDITIONAL INCOME OF RS. 80,00,000/- SPREAD OVER FOUR YEARS OVER AND ABOVE DECLARED IN THE RETURN OF INCOME. THE AO NOTICED THAT THE ASSES SEE FURNISHED ITS REGULAR P&L A/C CONSISTING OF INFLATED EXPENSES AND EXPENSES DEBITED TO P&L A/C WERE THE INFLATED ONES AS PER THE LEDGER MAINTAINED BY THE ASSESSEE. HE FURTHER NOTED THAT ALTHOUGH THE RETURN WAS FILED SUBSEQUENT TO SURVEY, THE ASSESSEE HAD NOT OFFERED THE DECLARED AMOUNT FOR TAXATION. THE CLAIM OF THE ASESSSEE BEFO RE THE AO WAS THAT RS. 35.00 LAKH WAS INCLUDED IN THE TOTAL INCOME. HO WEVER, IT WAS FOUND THAT THE SAME IS NOT REFLECTED. THEREFORE, TH E AO MADE ADDITION OF RS. 35.00 LAKHS. ON APPEAL, THE CIT(A) ALLOWED T HE PART RELIEF AMOUNTING TO RS. 29,65,253/- AND SUSTAINED ADDITION OF RS. 5,34,747/- ON ACCOUNT DECLARATION MADE BY THE ASESS SEE DURING THE SURVEY PROCEEDINGS STATING THAT DURING THE YEAR EVE N AFTER SURVEY THE SALES PROMOTION EXPENSES MADE IN THE EARLIER YEARS AND DISALLOWANCE MADE IN RESPECT THEREOF, ASSESSEE HAD SUBSTANTIALLY INCREASED SALES PROMOTION EXPENSES DURING THE YEAR UNDER CONSIDERAT ION WHICH WERE NOT SUPPORTED BY PROPER EVIDENCE; THEREFORE IT APPE ARS THAT ASSESSEE HAD INFLATED SALES PROMOTION EXPENSES WHICH WERE NO T SUPPORTED BY EVIDENCE. 4. THEREAFTER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAD FURNIS HED INACCURATE PARTICULARS OF ITS INCOME AND LEVIED A PENALTY OF R S. 2,11,490/-. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE PENALTY LEVIED ON THE GROU ND THAT THE AO HAD MADE THE ADDITIONS/DISALLOWANCES AFTER GIVING P ROPER REASONING IN THE ASSESSMENT ORDER AND THE SAME HAVE BEEN CONF IRMED BY THE CIT(A) THOUGH PARTLY ONLY, I HOLD THAT THE ADDITION S/DISALLOWANCES CONFIRMED BY THE CIT(A) REPRESENT INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS WERE FILED BY THE ASESSSEE. STILL, AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 1815/M/2010 SUKH HOTEL PVT. LTD. 3 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE PRODUCED ALL THE RELEVANT DOCUMENTS BE FORE THE CIT(A) AND THE CIT(A) WAS CONVINCED ABOUT THE ADDITIONAL I NCOME BEING DISCLOSED AND DELETED THE ADDITION OF RS. 29,65,253 /- OUT OF THE ADDITION MADE BY THE AO OF RS. 35,00,000/- AND SUST AINED THE ADDITION OF RS. 5,34,747/- UNDER THE HEAD SALES PR OMOTION IN THE ABSENCE OF SUPPORTING EVIDENCE. IT IS SUBMITTED THA T EVEN THE ITAT CONFIRMED THE ADDITION IN THE QUANTUM APPEAL WHEN T HE ASSESSEE FAILED TO PRODUCE EVIDENCES IN SUPPORT OF ITS CLAIM . THE LEARNED COUNSEL CONTENDED THAT WHEN THE ASSESSEE FAILED TO PRODUCE EVIDENCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. 6. ON THE OTHER HAND, THE LEARNED DR HAS RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE ASSESSEE FAILE D TO PRODUCE PROPER EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE CIT(A) AS WELL AS BEFORE THE CITAT, THEREFORE, THE ADDITION OF RS. 5,34,747/- ON ACCOUNT OF SALES PROMOTION SUSTAINED BY THE ASESSSEE WAS CONFIRMED B Y THE ITAT. WE ARE OF THE VIEW THAT FAILURE TO FILE EVIDENCE IN SU PPORT OF CLAIM, CANNOT LEAD TO CONCEALMENT OF INCOME OR FURNISHING OF INAC CURATE PARTICULARS OF INCOME. THEREFORE, AFTER CONSIDERING THE FACTS O F THE CASE UNDER CONSIDERATION, WE SET ASIDE THE ORDER OF THE CIT(A) AND CANCEL THE PENALTY OF RS. 2,11,490/- LEVIED BY THE AO U/S 271( 1)(C) OF THE ACT. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS A LLOWED. ITA NO. 1815/M/2010 SUKH HOTEL PVT. LTD. 4 8. IN THE RESULT, APPEAL OF THE ASESSSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JULY, 2011. SD/- SD/- (P.M. JAGTAP) (V. DURG A RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 15 TH JULY, 2011 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, E BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.