ABDUL HAMID HAJI ABDUL KARIM SHAIKH, MUMBAI V. ASST CIT 25(3), MUMBAI

ITA 2013/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93025 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 143(3); 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO. 2013/MUM/2013 / ASSESSMENT YEAR 2003-04 MR.ABDUL HAMID HAJI ABDUL KARIM SHAIKH, UNIVERSAL TRADE CONSULTANT, OFFICE NO.68, ASHOKA SHOPPING CENTER, GT HOSPITAL COMPLEX, LT MARG, MUMBAI 400 051. / VS. THE ASSTT. COMMISSIONER OF INCOME TAX -25(3), C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI 400 051. ! ./ ./ PAN/GIR NO. : AAEPS 5727K ( !$ / APPELLANT ) .. ( %&!$ / RESPONDENT ) APPELLANT BY SHRI JITENDRA JAIN RESPONDENT BY : ASGHAR ZAIN ( ) * / DATE OF HEARING : 23/06/2015 ( ) * / DATE OF PRONOUNCEMENT : 23/06/2015 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-35, MUMBAI DATED 28/12/2012 FOR ASSESSMENT YEAR 2003-04. GROUNDS OF APPEAL READ AS UNDER: THE COMMISSIONER OF INCOME TAX (APPEALS)-35 [HEREI N REFERRED TO AS CIT(A)] ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.4,50,000/- (CORRECT FIGURE RS.1,35,000/-)U/S.271(1)(C) OF THE I.T. ACT BEING 100% OF TAX SOUGHT TO BE EVADED. . / ITA NO. 2013/MUM/2013 / ASSESSMENT YEAR 2003-04 2 YOUR APPELLANT SUBMITS THAT ON FACTS AND CIRCUMSTAN CES OF THE CASE THERE IS NEITHER CONCEALMENT OF ANY INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME SO AS TO JUSTIFY LEVY OF PENALTY, HENCE THE AO SHALL BE DIRECTED TO DELETE THE PENALTY LEVIED U/S. 271(1)(C) OF THE I.T. ACT. 2. THE IMPUGNED ASSESSMENT ORDER IN PURSUANCE T O WHICH IMPUGNED CONCEALMENT PENALTY HAS BEEN LEVIED IS DATED 28/12/ 2007, PASSED UNDER SECTION 143(3) R.W. SECTION 263 OF THE INCOME TAX ACT, 1961 (THE ACT). WHILE GIVING EFFECT TO THE DIRECTION OF LD. CIT U/S. 263 AN ADDITION OF RS.48,23,000/- WAS MADE OF SERVICE CHARGES, WHICH WAS SUBJECT M ATTER OF APPEAL BEFORE LD. CIT(A), WHO SUSTAINED THE ADDITION AND FURTHER APPE AL WAS FILED BEFORE THE TRIBUNAL WHICH WAS DECIDED VIDE ORDER DATED 5/9/201 2 IN ITA NO.5565/MUM/2009, COPY OF THE ORDER IS FILED AT PAG ES 41 TO 49 OF THE PAPER BOOK. THE TRIBUNAL UPHELD THE ADDITION TO THE EXTE NT OF RS.4,50,000/- AND THE CONCLUSION OF THE TRIBUNAL AS FOUND IN PARA 22 TO 2 5 ARE AS UNDER: 22. THE DISALLOWANCE IS WITH REGARD TO SERVICE CHA RGES AGGREGATING TO RS. 48,23,000 AS THERE WAS NO SPECIFIC SERVICE THAT HAS BEEN RENDERED BY THE ASSESSEE. DURING THE COURSE OF HEARING, THE AR SUBM ITTED THAT COMPLETE BREAK UP OF THE IMPUGNED AMOUNT HAD BEEN PLACED BEFORE THE R EVENUE AUTHORITY (THE CHART HAD BEEN PLACED IN THE APB). AT THE TIME OF HEARING , THE AR PLACED BEFORE US A SUPPLEMENTARY CHART. ACCORDINGLY, THE ARS COMMENTS ON EACH OF THE PARTIES HAVE BEEN SEEN FROM THE PAPERS ALREADY FILED EARLIER. WE FIND THAT THE IMPUGNED DISALLOWANCE IS OUT OF THE TOTAL OF RS. 68,24,154, OF WHICH THESE AMOUNTS REMAINED PAYABLE AS ON 31.03.2003. WE ALSO FIND THA T THE ASSESSEE HAD PLACED ADDITIONAL EVIDENCE, WHICH WAS REMANDED TO THE AO F OR HIS COMMENTS, AND DURING THE REMAND PROCEEDINGS, THE ASSESSEE WAS ABL E TO FILE CONFIRMATIONS AND AFFIDAVITS OF ITS VENDORS. OF THE ENTIRE DETAIL FIL ED, WE FIND THAT PARTIES AT SERIAL NOS. 11, 12 & 13 NO DETAIL HAD BEEN FORTHCOMING, AS THE PARTIES WERE NOT TRACEABLE. THEREFORE, THESE ARE TO BE TAKEN AGAINST THE ASSESSEE, BUT PARTY AT SR. NO. 11, I.E. ANANT RASAL, WE FIND, NEITHER THERE WA S A SUMMON NOR THE AO CALLED HIM OTHERWISE, CANNOT BE DOUBTED BY US AT THIS STAG E, THEREFORE, WE GIVE THIS PARTY OUR BENEFIT OF DOUBT AND TREAT IT AS GENUINE. WE, THEREFORE, DISALLOW A TOTAL OF RS. 4,50,000, I.E. PAYMENTS TO RAKESH PAREKH AT RS. 2,00,000 AND DAKSHESH PAREKH AT RS. 2,50,000 AS DISALLOWABLE. 23. IN THE RESULT, WE ALLOW RELIEF OF RS. 43,73,00 0 (RS. 48,23,000 RS. 4,50,000). 24. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT( A) AND DIRECT THE A.O. TO ALLOW RS. 43,73,000. THE GROUND IS, PARTLY ALLOWED. 25. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. . / ITA NO. 2013/MUM/2013 / ASSESSMENT YEAR 2003-04 3 2.1 IT IS IN THESE CIRCUMSTANCES LD. CIT(A) HAS UP HELD THE LEVY OF CONCEALMENT PENALTY ON THE ADDITION OF RS.4,50,000/ - WHICH WAS SUSTAINED BY THE AFOREMENTIONED ORDER OF THE TRIBUNAL. 3. DURING THE COURSE OF HEARING LD. AR DREW OUR ATTENTION TO THE CHART SHOWING THE PAYMENTS OF SERVICES CHARGES PAID TO 1 7 PARTIES AND COPY OF THIS CHART IS FILED AT PAGE 32 TO 34 OF THE PAPER BOOK. THERE ARE 16 PARTIES. IT WAS SUBMITTED THAT THE PARTIES IN RESPECT OF WHICH DISA LLOWANCE HAS BEEN SUSTAINED ARE LISTED AT SL. NO.12 & 13. IT WAS SUBMITTED THA T UNDER SIMILAR FACTS AND CIRCUMSTANCES WITH REGARD TO PARTY STATED AT SL. NO.11 THE ADDITION WAS DELETED. THUS, IT WAS PLEADED BY LD. AR THAT LEVY OF PENALTY IN RESPECT OF SUSTAINED DISALLOWANCE OF RS. 4.50 LACS SHOULD BE DELETED. IT WAS SUBMITTED THAT ASSESSEE HAD FURNISHED NOT ONLY THE ADDRESS OF BOTH THE PARTIES BUT ALSO THE PAN. IT WAS SUBMITTED THAT DUE TO LAPSE OF TIM E THE PARTIES HAD LEFT THE ADDRESS AND THEREFORE, ASSESSEE COULD NOT SUBMIT FU RTHER PROOF TO SUBSTANTIATE HIS CLAIM REGARDING PAYMENT OF SERVICE CHARGES. IT WAS SUBMITTED THAT OUT OF TOTAL EXPENSES OF RS.68,24,154/- PAID AS SERVICE CH ARGES, ONLY TO THE EXTENT OF RS.4.50 LACS THE ASSESSEE COULD NOT PROVE THE PAYM ENT BY PRODUCING THE TWO PARTIES WHO HAD LEFT THE ADDRESSES DUE TO LAPS OF TIME. THUS, IT WAS SUBMITTED THAT LEVY OF PENALTY SHOULD BE CANCELLED. 3.1 IT WAS ALSO POINTED OUT THAT WHILE UPHOLDING T HE PENALTY TO THE EXTENT OF RS.4.50 LACS, LD. CIT(A) HAS WRONGLY MENTIONED THE FIGURE AS THE SAID AMOUNT REPRESENT THE SUSTAINED ADDITION AND NOT THE QUANT UM OF PENALTY WHICH WILL BE A SUM OF RS.1,35,000/-. IT WAS ALTERNATIVELY PL EADED THAT IF THE LEVY OF PENALTY IS UPHELD THEN THE QUANTUM OF THE SAME SHO ULD BE CORRECTED TO RS.1,35,000/-. . / ITA NO. 2013/MUM/2013 / ASSESSMENT YEAR 2003-04 4 4, ON THE OTHER HAND, LD. DR RELYING UPON THE ORDER PASSED BY LD. CIT(A). IT WAS PLEADED THAT PENALTY HAS RIGHTLY BEEN CONFIR MED BY LD. CIT(A) AND HIS ORDER SHOULD BE CONFIRMED. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. FOR THE SAKE OF COMPLETENESS OF FACTS, ENTRIES POINTED OUT BY LD. AR FROM THE CHART IN RESPECT OF PARTIES STATED AT S L. NO.11,12 & 13 ARE REPRODUCED BELOW. S.N O NAME & PARTY OF PARTY WITH PAN SERVICE CHARGES (RS.) AOS OBSERVA- TIONS CIT(A)S OBSERVA- TIONS APPELLANTS REMARK 11 ANANT RASAL, TUMBEY PADA ROAD, PIPE LINE, BHANDUP(W), MUMBAI 400078 PAN 1,90,000 NO FINDING BY AO NO. FINDING BY LD. CIT(A) 1, THE PARTY LEFT PRESENT RESIDENTIAL ADDRESS AND NOT TRACEABLE 12 RAKESH PAREKH NEAR RAILWAY LINE, BEHIND MILITARY CAMP MALAD (E), MUMBAI PAN: AKLPP4278L 2,00,000 SUMMON ISSUED BUT NOT SERVED ON THE PARTY NO FINDING BY CIT(A) 1. THE PARTY LEFT THE PRESENT RESIDENTIAL ADDRESS AND NOT TRACEABLE. 13 DAKSHESH PAREKH NEAR RAILWAY LINE, BEHIND MILITARY CAMP MALAD (E), MUMBAI PAN: AKLPP4278L 2,50,000 NO FINDING BY AO NO FINDING BY CIT(A) 1. THE PARTY LEFT THE PRESENT RESIDENTIAL ADDRESS AND NOT TRACEABLE 5.1 THE PARTIES IN RESPECT OF WHICH ADDITION HAS BE EN SUSTAINED ARE STATED AT SL. NO.12 & 13. THE ASSESSEE HAD GIVEN THE ADDRESS AS WELL AS PAN OF BOTH THE PARTIES. THE AO DID NOT MENTION ABOUT THE EFFORTS DONE BY HIM TO TRACE OUT THESE PARTIES FROM PAN. THE ADDITION IN THE CASE OF RAKESH PAREKH HAS BEEN CONFIRMED ON THE GROUND THAT SUMMONS ISSUED TO THE SAID PARTY WERE NOT SERVED AND IN THE SECOND CASE I.E. IN THE CASE OF D AKSHESH PARIKH NO ENQUIRY HAS BEEN MADE. IT IS IN THESE CIRCUMSTANCES THE ADDITION HAS BEEN SUSTAINED. . / ITA NO. 2013/MUM/2013 / ASSESSMENT YEAR 2003-04 5 ACCORDING TO THE NATURE OF BUSINESS OF THE ASSESSEE , THESE SERVICE CHARGES HAVE BEEN PAID TO OTHER PARTIES ALSO IN REGARD TO WHICH ADDITION HAVE BEEN DELETED. NON-CONFIRMATION BY THE PARTY MAY BE A GROUND FOR UPHOLDING THE ADDITION, BUT SO FAR AS IT RELATES TO LEVY OF CONCE ALMENT PENALTY, IF THE PARTICULARS HAVE BEEN GIVEN BY THE ASSESSEE THEN W ITHOUT CONTRADICTING THOSE PARTICULARS, THE PENALTY CANNOT BE SUSTAINED SIMPLY ON THE GROUND THAT EITHER NOTICE COULD NOT BE SERVED UPON THE PAYEE OR ASSES SEE REMAIN UNABLE TO PRODUCE THE APPROPRIATE PROOF REGARDING PAYMENT OF THE SERVICE CHARGES. IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT ON OUR REC ORD BY THE AO, WE ARE OF THE OPINION THAT IT WILL BE UNJUSTIFIED TO LEVY CON CEALMENT PENALTY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY WE DEL ETED THE PENALTY AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/06/2015 ( 0 1 2 23/06/2015 ( SD/- SD/- ( / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 1 DATED 23/06/2015 / COPY OF THE ORDER FORWARDED TO : 1. !$ / THE APPELLANT 2. %&!$ / THE RESPONDENT. 3. 4) ( ) / THE CIT(A)- 4. 4) / CIT 5. 56 %)78 , * 78 , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. / BY ORDER, & 5) %) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS