Thermax Babcock & Wilcox Limited, Pune V. Assistant Commissioner of Income-tax, Circle - 10, Pune

ITA 2052/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9221 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 29-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: SANJAY BHARE
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.2052/PUN/2017 / ASSESSMENT YEAR : 2004-05 THERMAX BABCOCK & WILCOX LIMITED, 14, MUMBAI PUNE ROAD, WAKDEWADI, PUNE-411003. PAN : AAACT3908K ....... / APPELLANT / V/S. ACIT, CIRCLE-10, PUNE. / RESPONDENT ASSESSEE BY : SHRI SANJAY BHARE REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 30.09.2019 / DATE OF PRONOUNCEMENT : 01.10.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-6, PUNE DATED 22.05.2017 FOR THE ASSESSMENT YEAR 2004-05. 2. THE SOLITARY ISSUE RAISED IN THE APPEAL RELATES TO THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN CONNECTION WITH THE DISALLOWANCE OF RS.66,25,000/-. 3. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PENALTY WAS LEVIED IN CONNECTION WITH THE DISALLOWANCE OF THE COMMISSION PAYMENTS AMOUNTING TO RS.66,25,000/-. IN THIS REGARD, LD. COUNSEL BROUGHT OUR ATTENTION TO THE ORDER OF THE TRIBUNAL ON MERITS VIDE ITA NO.402/PUN/2013 2 ITA NO.2052/PUN/2017 ALONG WITH C.O. NO.22/PUN2014 AND OTHERS DATED 05.09.2019 AND SUBMITTED THAT THE CONTENTS OF PARA 16 AND ITS SUB-PARAGRAPHS ARE RELEVANT. REFERRING TO THE SAID PARA 16 OF THE ORDER OF THE TRIBUNAL (SUPRA), LD. COUNSEL SUBMITTED THAT THE PAYMENTS, MADE I.E. RS.36,25,000/- TO AYOKIFABRICON PVT. LTD., PUNE AND RS.30,00,000/- TO M/S NEW BOMBAY ISPAT UDYOG, MUMBAI, ARE FOUND ALLOWABLE AT THE END OF THE PROCEEDINGS BEFORE THE TRIBUNAL. FOR THE SAKE OF COMPLETENESS, THE RELEVANT LINES OF SUB-PARA 16.3 OF THE ORDER OF THE TRIBUNAL (SUPRA) ARE EXTRACTED HEREUNDER :- 16.3 THE REASONS FOR DISALLOWING COMMISSION IS PURELY ON SURMISES AND CONJECTURES. THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE ARE ERRONEOUS AND HENCE, LIABLE TO BE REJECTED. WE HOLD AND DIRECT ACCORDINGLY. THE PAYMENT OF COMMISSION TO M/S. AYOKI FABRICATION PVT. LTD. AND M/S. NEW BOMBAY ISPAT UDYOG LTD. IS ALLOWED. THUS, GROUND NO.3 OF THE CROSS OBJECTIONS FILED BY THE ASSESSEE IS ALLOWED. 4. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND ALSO THE ORDER OF THE TRIBUNAL (SUPRA) ON MERITS. FROM THE ABOVE EXTRACTED LINES OF THE ORDER OF THE TRIBUNAL (SUPRA), IT IS EVIDENT THAT THE DISALLOWANCE OF RS.66,25,000/-, THE COMMISSION PAYMENT MADE TO COUPLE OF COMPANIES (SUPRA), ARE FOUND EVENTUALLY ALLOWABLE BY THE TRIBUNAL. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE ON MERITS BY THE TRIBUNAL, WE ARE OF THE OPINION THAT THE PENALTY ORDER HAS NO LEGS TO STAND. THE PENALTY IS 3 ITA NO.2052/PUN/2017 UNSUSTAINABLE IN LAW. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 01 ST DAY OF OCTOBER, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 01 ST OCTOBER, 2019 SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-6, PUNE. 4. THE PR. CIT-5, PUNE. 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.