M/s. K.K. Jewels Pvt.Ltd., Surat V. The Addl. CIT, TDS Range, Surat

ITA 2122/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94704 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER ./ ITA NO. 2122/AHD/2014 / A.Y. 2008-09 M/S. K. K. JEWELS PVT. LTD., PLOT NO.254-B, SURAT SEZ, SACHIN GIDC, SURAT PAN : AAGFK 4620 G VS ADDL. COMMISSIONER OF INCOME-TAX, TDS RANGE, SURAT (APPELLANT) (RESPONDENT) BY APPELLANT : NONE BY RESPONDENT : SHRI PRADIPKUMAR MAJUMDAR, SR. DR. / DATE OF HEARING : 14/10/2015 /DATE OF PRONOUNCEMENT: 04/11/2015 / O R D E R PER SHRI S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 , ARISES FROM ORDER DATED 10.04.2014 PASSED BY THE CIT(A)-IV, SUR AT IN CASE NO.CAS- IV/15/13-14, IN PROCEEDINGS U/S. 271C OF THE INCOME -TAX ACT, IN SHORT THE ACT. 2. THE SOLE SUBSTANTIVE GROUND RAISED IN THIS APPE AL CHALLENGES SECTION 271C PENALTY OF RS.47,012/- IMPOSED BY THE ASSESSING OFFICER IN ORDER DATED 06.03.2013 AND AFFIRMED IN THE LOWER AP PELLATE PROCEEDINGS. CASE CALLED TWICE. NONE APPEARED AT ASSESSEES BEH EST. REGISTRY HAS ALREADY SERVED HEARING NOTICE. WE ACCORDINGLY PROC EED EX-PARTE AGAINST ASSESSEE. 3. THIS ASSESSEE-COMPANY MANUFACTURES AND SELLS DIA MOND/COLOUR STONE STUDDED GOLD JEWELRY. IT FILED ITS RETURN ON 30.09.2008 DECLARING NIL INCOME. THE ASSESSING OFFICER NOTICED IN THE C OURSE OF SCRUTINY THAT ITA NO. 2122/AHD/2014 K K JEWELS PVT LTD VS. ACIT A.Y. 2008-09 - 2 - THE ASSESSEE HAS PAID EXHIBITION EXPENSES TO THE GE M AND JEWELLERY EXPORT PROMOTION COUNCIL, REED ELSEVIER AND THE FIR ST ENTITY AGAIN OF RS.68,062/-, RS.1,68,160/- AND AGAIN RS.68,062/-, R ESPECTIVELY WITHOUT DEDUCTING TDS. HE FRAMED ASSESSMENT ON 23.12.2010 DISALLOWING THE ABOVE SAID EXPENDITURE OF RS.3,04,284/- ON ACCOUNT OF NON-DEDUCTION OF TDS. HE INITIATED IMPUGNED PENALTY PROCEEDINGS U/ 271C OF THE ACT. THE ASSESSEE DOES NOT SEEM TO HAVE FILED AN APPEAL. QUANTUM PROCEEDINGS ACCORDINGLY ATTAINED FINALITY. 4. THE ASSESSING OFFICER TOOK UP PENALTY PROCEEDING S. THE ASSESSEE PLEADED THAT ALL THE ABOVE SAID EXHIBITION EXPENDIT URE STOOD PAID AS ON 31.03.2008. AND THEREFORE, SECTION 40(A)(IA) DISAL LOWANCE DID NOT APPLY IN ITS CASE. IT AVERRED THAT THE IMPUGNED PENALTY COULD NOT BE INVOKED IN ABSENCE OF ANY MALAFIDE INTENTION ON ITS PART. THE ASSESSING OFFICER EXTRACTED SECTION 194J OF THE ACT IN PENALTY ORDER. HE OBSERVED THAT IMPUGNED EXHIBITION EXPENDITURE CAME WITHIN THE DEF INITION OF PROFESSIONAL SERVICES UNDER THE ABOVE SAID STATUTOR Y PROVISION. HE NEGATED ASSESSEES PLEA THAT ITS AUDITOR HAD ADVISE D AGAINST DEDUCTING TDS. ALL THIS RESULTED IN THE IMPUGNED PENALTY OF RS.47,012/- BEING LEVIED IN ASSESSEES CASE. THE CIT(A) UPHOLDS ASSE SSING OFFICERS ACTION. 5. WE HAVE HEARD THE REVENUE AND PERUSED THE CASE F ILE. RELEVANT FACTS NARRATED HEREINABOVE ARE NOT REPEATED FOR THE SAKE OF BREVITY. THERE IS NO DISPUTE ABOUT THE TRITE PROPOSITION OF LAW THAT ASSESSMENT AND PENALTY ARE TWO SEPARATE PROCEEDINGS. EACH AND EVERY DISALLOWANCE/ADDITION DOES NOT LEAD TO AUTOMATIC IM POSITION OF PENALTY. THE ASSESSEE IN THIS CASE HAS NOT DEDUCTE D TDS ON ABOVE SAID EXHIBITION EXPENSES. THE ASSESSING OFFICER TREATS THE SAME AS FEE FOR ITA NO. 2122/AHD/2014 K K JEWELS PVT LTD VS. ACIT A.Y. 2008-09 - 3 - PROFESSIONAL SERVICES U/S 194J OF THE ACT. WHEN WE EXAMINE THE FACTS OF THE INSTANT CASE INVOLVING EXHIBITION EXPENSES, IT IS TO BE SEEN THAT NONE OF THE SPECIFIC INSTANCES OF LEGAL, MEDICAL, ENGINE ERING OR ARCHITECTURAL PROFESSION, ACCOUNTANCY PROFESSION, TECHNICAL CONS ULTANCY, INTERIOR DECORATION OR ADVERTISING ETC. COVERS ASSESSEES EX HIBITION EXPENSES IN QUESTION. THIS IS NOT THE REVENUES CASE MADE OUT IN THE PENALTY ORDER THAT ASSESSEES EXHIBITION EXPENSES WAS MEANT FOR I TS ADVERTISEMENT. NOR DO WE FIND ANY SUCH MATERIAL FROM THE CASE FILE THAT ASSESSEE HAS INCURRED THE IMPUGNED EXPENDITURE FOR ADVERTISING I TS PRODUCT. IT IS MADE CLEAR THAT SECTION 271C IS A PENAL PROVISION I N A TAX STATUTE TO BE STRICTLY CONSTRUED. WE ADOPT THIS REASONING AND DEL ETE THE IMPUGNED PENALTY OF RS.47,012/- U/S 271C IMPOSED BY THE LOWE R AUTHORITIES. 6. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 4 TH NOVEMBER , 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 04/11/2015 *BT ! ' / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $% & / CONCERNED CIT 4. & ( ) / THE CIT(A 5. )*+' % , % , $ / DR, ITAT, AHMEDABAD 6. +/0 / GUARD FILE. TRUE COPY / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD