ACIT 14(2)(2), MUMBAI V. NUTRINE CONFECTIONERY CO.LTD, MUMBAI

ITA 2107/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1726 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH I,MUM BAI BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2107/MUM/2015 FOR (ASSESSMENT YEAR : 2010-11 ) ACIT-14(2)(2), 432, AAYAKAR BHAVAN, 4 TH FLOOR, M.K. MARG, MUMBAI- 400020. VS. M/S NUTRINE CONFECTIONERY CO. LTD. PIROJSHA NAGAR, EASTERN EXPRESS HIGHWAY, VIKHROLI (EAST), MUMBAI-400079 PAN: AAACN4838N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI T.A. KHAN ( DR ) ASSESSEE BY : NONE DATE OF HEARING : 01.12.2016 DATE OF PRONOUNCEMENT : 09.12.2016 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THIS APPEAL BY ASSESSEE FILED U/S 253 OF THE INCOME -TAX ACT (ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEAL S) [FOR SHORT THE CIT(A)] 22, MUMBAI DATED 20.01.2015 FOR ASSESSMENT YEAR (AY) 20 10-11. THOUGH, THE REVENUE HAS RAISED AS MANY AS THREE GROUNDS OF APPEAL, HOWE VER, AS PER OUR CONSIDERED OPINION, THE ONLY SUBSTANTIAL GROUND OF APPEAL IS WHETHER THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE A CT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SELLING OF HARD BOILED SUGAR CONF ECTIONERY AND TOFFEES, FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 11.10.2010 DECL ARING TOTAL LOSS OF RS. 7,05,97,819/-. THE ASSESSMENT WAS COMPLETED U/S 143 (3) OF THE ACT ON 14.12.2011. IN THE ASSESSMENT, THE ASSESSING OFFICER (AO) MADE THE VARIOUS ADDITION/DISALLOWANCE CONSISTING (I) UNPAID LIABILITY OF RS. 12,45,053/- (II) BAD-DEBTS OF RS. 30,00,000/- (III) POOJA EXPENSES OF RS. 1,65,460/- AND (IV) INCOME UN -RECONCILED WITH FORM-26AS OF RS. 98,205/-. AFTER COMPLETION OF ASSESSMENT ORDER , THE AO ISSUED SHOW-CAUSE NOTICE 2 ITA NO. 2107/M/2015 M/S. NUTRINE CONFECTIONERY CO. LTD. DATED 27.10.2011 FOR INITIATING THE PENALTY PROCEED ING U/S 274 R.W.S. 271(1)(C) OF THE ACT. THE ASSESSEE CONTESTED THE PENALTY PROCEEDING AND FILED ITS REPLY DATED 26.06.2013 CONTENDING THEREIN THAT DISALLOWANCE IN THE ASSESSMENT ORDER ARE VERY SMALL AND ROUTINE DISALLOWANCE AND DO NOT TANTAMOUN T TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. THE ASSESSEE FURTHER RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CIT VS. RELIANCE PETROPRODUCTS PVT . LTD. 322 ITR 158. THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE PERSE DOES NOT AMOUNT TO CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY AO AND LEVIED THE MINI MUM PENALTY @ 100% OF THE INCOME SOUGHT TO BE EVADED. THE PENALTY WAS WORKED OUT AT RS. 15,32,513/- VIDE ITS ORDER DATED 28.06.2013. ON APPEAL BY ASSESSEE, THE PENALTY WAS DELETED BY LD. CIT(A). THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE BEFORE US WHEN THE CASE CAME UP FOR HEARING ON 01.12.2016 DESPITE WAITING FOR SUFFICIENT TIME. FRO M THE RECORD, WE HAVE NOTICED THAT THE ASSESSEE WAS DULY SERVED BY THE NOTICE OF HEARI NG OF APPEAL ON 10.04.2015. AS NONE-APPEARED BEFORE US DESPITE WAITING FOR SUFFICI ENT TIME, WE LEFT NO OPTION EXCEPT TO PROCEED FURTHER AND TO HEAR THE SUBMISSION OF LD . DR FOR REVENUE. THE LD. DR FOR REVENUE ARGUED THAT IN THE ASSESSMENT, THE AO MADE THE DISALLOWANCE OF UNPAID LIABILITY OF RS. 12,45,053/-, BAD-DEBTS OF RS. 30,0 0,000/-, POOJA EXPENSES OF RS. 1,65,460/- AND INCOME UN-RECONCILED AS PER AIR OF R S. 98,205/- AND THE AO LEVIED THE MINIMUM PENALTY FOR FURNISHING INACCURATE PARTI CULARS OF INCOME. IT WAS FURTHER ARGUED BY THE LD. DR FOR REVENUE THAT THE RATIO OF DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS (SUPRA) I S NOT APPLICABLE ON THE FACT OF THE PRESENT CASE. ON OUR SPECIFIC QUERY WITH REGARD TO THE FURTHER APPEAL, IF ANY FILED BY ASSESSEE IN QUANTUM ASSESSMENT BEFORE THE FIRST APP ELLATE AUTHORITY OR TRIBUNAL. THE LD. DR FOR THE REVENUE FAIRLY CONCEDED THAT HE IS U NAWARE, IF ANY FURTHER APPEAL WAS FILED BY THE ASSESSEE IN THE QUANTUM ASSESSMENT OR NOT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. WE HAVE SEEN THAT THE AO MADE VA RIOUS DISALLOWANCE AS REFERRED ABOVE. WE FURTHER NOTICED THAT THE DISALLOWANCES WE RE MADE BY AO FROM THE VARIOUS CLAIM BY THE ASSESSEE IN HIS RETURN OF INCOME. THE AO MADE THE DISALLOWANCE ON THE 3 ITA NO. 2107/M/2015 M/S. NUTRINE CONFECTIONERY CO. LTD. BASIS OF INFORMATION DISCLOSED AND THE DOCUMENT FIL ED IN SUPPORT OF RETURN OF INCOME. THE LD. CIT(A) WHILE APPRECIATING THE FACTS AND THE CONTENTION RAISED BEFORE HIM REGARDING VARIOUS DISALLOWANCE OBSERVED THAT (I) UN PAID LIABILITY, THE ASSESSEE HAD HIMSELF INFORMED THE AO THAT THIS AMOUNT IS WITH RE GARD TO BONUS AND LEAVE ENCASEMENT OF RS. 22,19,158/- DISCUSSED IN THE AUDI T REPORT IN THE RETURN OF INCOME ERRONEOUSLY ADDED RS. 9,74,105/- INSTEAD OF RS. 22, 19,158/-. THE ASSESSEE HIMSELF INFORMED THE AO AND OFFERED THE BALANCE AMOUNT DURI NG THE ASSESSMENT PROCEEDING. HENCE, THE ASSESSEE HAD NOT CONCEALED ANY INCOME NO R FILED INACCURATE PARTICULAR OF INCOME. FOR SECOND DISALLOWANCE/ISSUE FOR POOJA EXP ENSES, THE AO HAS NOT POINTED OUT WHETHER THERE WAS ANY CONCEALMENT OR INACCURATE PARTICULAR. MOREOVER, WE HAVE SEEN THAT ASSESSEE HAD CLAIMED AN AMOUNT OF RS. 2,2 1,566/- ON ACCOUNT OF POOJA EXPENSES AND MADE SUO MOTO DISALLOWANCE OF RS. 56,1 06/-. THE AO FURTHER DISALLOWED THE REMAINING BALANCE AMOUNT OF RS. 1,65 ,460/-. THUS, THERE IS NO CONCEALMENT OR INACCURATE PARTICULAR. WITH REGARD T O THE DISALLOWANCE OF BAD-DEBTS, THE LD. CIT(A) OBSERVED THAT ISSUE OF BAD-DEBTS IS A DEBATABLE ISSUE, AND RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN TRF LTD. V S. CIT 323 ITR 397. AND WITH REGARD TO FOURTH ISSUE REGARDING NON-RECONCILIATION OF ITS DETAILS, THE LD. CIT(A) OBSERVED THAT IT WAS A MISTAKE OF ANDHRA BANK AND I NTEREST DOES NOT PERTAINS TO THE ASSESSEE AND THE ASSESSEE CANNOT BE PENALIZED FOR T HE MISTAKE IN FORM-26AS OF THIRD PARTY AND GRANTED THE RELIEF ON THE BASIS OF DECISI ON OF HONBLE SUPREME COURT IN CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA). WE FIN D THAT THE LD. CIT(A) PASSED A REASONED ORDER AFTER CONSIDERING THE ENTIRE FACT AN D VARIOUS DECISION OF HONBLE APEX COURT AND DOES NOT REQUIRE ANY INTERFERENCE AT OUR END. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DECEMBER, 2016. SD/- SD/- (D.KARUNAKARA RAO) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 09/12/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4 ITA NO. 2107/M/2015 M/S. NUTRINE CONFECTIONERY CO. LTD. BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/