LARSEM & TOUBRO LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 1941/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88290 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 26-11-2014
• Assessment Year: 1994-1995
• Appeal Filed On: 09-03-2011
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: J D MISTRI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.1941/M/2011 ( / ASSESSMENT YEAR: 1994 - 1995 ) LARSEN & TURBO LIMITED, TAXATION DEPARTMENT, L&T HOUSE, N.M. MARG, BALLARD ESTATE, MUMBAI 400 001. / VS. DCIT, CIRCLE 2(2), R.NO.577, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. ./ PAN : AAACL0140P ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI J.D. MISTRI / RESPONDENT BY : SHRI PREMANAND J - DR / DATE OF HEARING : 5.2.2015 / DATE OF PRONOUNCEMENT : 5 .2.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 9.3.2011 IS AGAINST THE ORDER OF THE CIT (A) - 5, MUMBAI DATED 13.1.2011. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING EFFECTIVE GROUND WHICH READS AS UNDER: THE LD CIT (A) ERRED ON FACT AND IN LAW IN CONFIRMING THE LEVY OF PENALTY BY ASSESSING OFFICER IN RESPECT OF COMMISSION DISALLOWED IN THE ASSESSMENT. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN ITA NOS. 3256, 3257 AND 3258/M/2010 FOR THE AYS 1991 - 92, 1992 - 93 AND 1993 - 94 AND MENTIONED THAT THE IDENTICAL DISALLOWANCE WAS MADE BY THE CONCERNED ASSESSING OFFICER IN THE SAID ASSESSMENT YEARS ON THE SAME ISSUE OF COMMISSION PAYMENTS AND THE PENALTIES WERE ALSO LEVIED U/S 271(1)(C) OF THE ACT. THE MATTER TRAVELLED TO THE TRIBUNAL AND THE ASSESSEE GOT RELIEF FOR ALL THE THREE AYS AND THE APPEALS OF THE ASSESSEE WERE ALSO ALLOWED. THE TRIBUNAL DELETED THE PENALTIES LEVIED IN THE THREE AYS ON THE GROUND OF DISCLOS URE OF DETAILS OF COMMISSION. WHILE GIVING ITS DECISION, THE ITAT RELIED ON THE JUDGMENT OF THE APEX 2 COURT IN THE CASE OF RELIANCE PETRO - PRODUCTS P LTD 322 ITR 158 (SC). THE MATTERS FINALLY TRAVELLED TO THE HONBLE HIGH COURT ON THESE AYS THE HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL VIDE PARA 3 AND 4 OF ITS ORDER IN ITA NOS.424, 425 AND 483 OF 2012, DATED 10.07.2014. CONSIDERING THE IMPORTANCE OF THE SAID PARAS 3 AND 4 OF THE HIGH COURT DECISION, THE SAME ARE EXTRACTED AS UNDER: 3. IMPOSITION OF P ENALTY UNDER SECTION 271(1)(C) OF THE IT ACT HAS BEEN SET ASIDE BY THE TRIBUNAL IN ALL THESE MATTERS ON THE FINDINGS OF FACT THAT MERELY BECAUSE THE ASSESSEE RAISED A CLAIM WHICH WAS EVENTUALLY DISALLOWED, DOES NOT MEAN THAT INGREDIENTS OF CLAUSE ARE SAT ISFIED OR FULFILLED SO AS TO JUSTIFY IMPOSITION OF PENALTY. 4. IN DOING SO, THE TRIBUNAL MERELY FOLLOWED THE DICTUM OF THE HONBLE SUPREME COURT IN SEVERAL DECISIONS AND IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETRO - PRODUCTS PVT LTD REPORTED IN 322 ITR 158 (SC). THE PENALTY HAS BEEN THEREFORE RIGHTLY DELETED. 3. CONSIDERING THE ABOVE BINDING DECISION OF THE HONBLE HIGH COURT ON THE SAME ISSUE OF EXCISABILITY OF PENALTY U/S 271(1)(C) OF THE ACT ON THE DISALLOWANCE OF COMMISSION PAYMENTS, W E ARE OF THE OPINION THAT THE PENALTY LEVIED IN THE INSTANT CASE IS NOT SUSTAINABLE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 0 5 T H FEBRUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 5 .2.2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. DR ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 3