ASST CIT 19(1), MUMBAI V. DILIPKUMAR V. LAKHI, MUMBAI

ITA 2142/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4506 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JENARDHANAN
• Keywords: Transfer pricing; Search and seizure; International transaction; Reasonable cause
• Section: 273B; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER IT(TP)A NO.2142/MUM/2017 ASSESSMENT YEAR : 2011-12 ASSISTANT CIT 19(1), MUMBAI. VS. M/S. DILIPKUMAR V LAKHI, CC-8011-8012-8013, BHARAT DIAMOND BOURSE, BANDRA, MUMBAI 400 051 PAN AAGFD1262M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V JENARDHANAN RESPONDENT BY : SHRI SUBHASH S SHETTY DATE OF HEARING : 14 .0 6 .201 8 DATE OF PRONOUNCEMENT : 02 .0 8 .2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER, DATED 30.11.2016, PASSED BY THE CIT (A)- 55, MUMBAI, FOR THE ASSESSMENT YEAR 2011-12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER CIT(A) WAS CORRECT IN DELETING THE PENAL TY LEVIED U/S 271G BY HOLDING THAT THE ASSESSES HAD MADE SUBSTANTIAL COMPLIANCE, FAILING TO NOTE THAT UNDER TNMM ADOPTED BY THE ASSESSEE, THE P ROFIT OF THE INTERNATIONAL TRANSACTION HAS TO BE FURNISHED, WHER EAS THE ASSESSEE HAS ONLY FURNISHED THE ENTITY LEVEL MARGINS WHICH CONSI STS OF OVERALL PROFITS ON AE AND SIGNIFICANT NON-AE TRANSACTIONS. 2. WHETHER THE DECISION OF THE CIT(A) IS NOT VITIAT ED FOR THE REASON THAT THE CIT(A) HAS NOT GIVEN ANY FINDING ON HOW THE ASS ESSEE HAS COMPLIED WITH CLAUSE (D), (G),(H) AND (M) OF RULE 10D(1), TH AT HAVE BEEN SPECIFICALLY INVOKED BY THE TPO. IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 2 3. WHETHER THE CIT(A) WAS NOT INCORRECT IN STATING THAT THE TPO SHOULD HAVE ASKED FOR COPIES OF PROFIT AND LOSS ACCOUNTS A ND BALANCE SHEETS OF AE'S TO MAKE AN OVERALL COMPARISON WITH THE GROSS P ROFITABILITY LEVELS OF THE ASSESSEE WITH AE'S TO ASCERTAIN DIVERSION OF PR OFITS, IF ANY, IGNORING THE FINDING OF THE IT AT IN THE CASE OF AZTEC SOFTW ARE TECHNOLOGY SERVICES LTD VS ACIT(ITA NO 584/BANG/2006), IN WHIC H IT HAS BEEN HELD THAT THERE IN NO LEGAL REQUIREMENT FOR THE AO TO PR IMEFACIE DEMONSTRATE TAX AVOIDANCE BEFORE INVOKING THE PROVISIONS OF SEC TION 92 AND 92CA OF THE ACT. 4. THE LD. CIT(A) ERRED IN HOLDING THAT THERE WAS R EASONABLE CAUSE FOR NON-COMPLIANCE OF SEC.92D R/W RULE 10D(1) WITHOUT S PECIFYING THE CAUSE OF SUCH NONCOMPLIANCE OR DEMONSTRATING HOW THE SAME WAS REASONABLE. 5. THE. LD. CIT(A) ERRED IN DELETING THE PENALTY FOR T HE REASON THAT NO ADJUSTMENT WAS MADE TO THE ALP, FAILING TO NOTE THA T BY NOT PRODUCING THE MATERIAL DOCUMENTS NECESSARY TO DETERMINE THE A LP UNDER ANY OF THE PRESCRIBED METHODS U/S 92C(1), THE ASSESSES EFFECTIVELY PREVENTED THE TPO TO MAKE ANY DETERMINATION AS RECORDED BY THE TP O IN PARA 6 OF THE ORDER U/S 92CA(3). 6. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . 3. THE ONLY ISSUE RAISED BY THE REVENUE IN ALL THES E GROUNDS IS WITH RESPECT TO THE DELETION OF PENALTY IMPOSED BY THE A SSESSING OFFICER U/S. 271G OF THE ACT WITHOUT APPRECIATING THE FACT THAT UNDER TRANSACTIONAL NET MARGIN METHOD (TNMM) ADOPTED BY THE ASSESSEE, THE PROFIT O F INTERNATIONAL TRANSACTION HAS TO BE FURNISHED, WHEREAS THE ASSESS EE HAS ONLY FURNISHED THE ENTITY LEVEL MARGINS, WHICH CONSISTS OF OVERALL PRO FITS ON AE AND SIGNIFICANT NON-AE TRANSACTIONS. 4. THE FACTS IN BRIEF ARE THAT DURING THE YEAR UNDE R CONSIDERATION, THE ASSESSEE HAS A TURNOVER OF ` 636.14 CRORES OUT OF WHICH EXPORT SALES AMOUNTED TO ` 238.35 CRORES. THE SALE TRANSACTIONS WITH AE WERE ` 28.3 CRORES. THUS, ASSESSEES TURNOVER WITH AE ACCOUNTE D FOR 12% OF THE EXPORT SALE. THE ASSESSEE IN ITS TRANSFER PRICING STUDY REPORT HAS FOLLOWED TNMM METHOD FOR THE PURPOSE OF BENCHMARKING. THE OPERAT ING PROFIT/OPERATING IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 3 COST HAS BEEN USED AS PROFIT LEVEL INDICATOR (PLI). FOR THE PURPOSE OF COMPARISON, THE ASSESSEE HAS COMPARED ITS ENTITY LE VEL MARGINS (14.72%) WITH THAT OF COMPARABLE COMPANIES MARGIN (9.55%) AN D CLAIMED THAT THE TRANSACTIONS ARE AT ARMS LENGTH. THE ENTRY LEVEL MARGINS OF ASSESSEE INCLUDED ITS COMBINED PROFIT IN TRANSACTIONS WITH A ES AND NON-AES. THE TPO CALLED UPON THE ASSESSEE TO SUBMIT SEGMENTAL PROFIT ABILITY SEPARATELY FROM AE AND NON-AE SEGMENT. ACCORDINGLY, THE DETAILS HAD B EEN CALLED FOR BY THE TPO WITHIN THE MEANING OF SECTION 92D(3) OF THE INCOME TAX ACT, 1961. THE DETAILS ARE RELEVANT WITHIN THE PROVISIONS SUB CLAU SES (D), (G) AND (H) OF RULE 10D(1) OF THE I.T.RULES. THE ASSESSEE FAILED TO SU BMIT THE DETAILS AND, THEREFORE, TPO CAME TO THE CONCLUSION THAT IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271G OF THE I.T.ACT. HE THUS, LEVIED PENALTY O F ` 56,72,162/- BEING 2% OF THE INTERNATIONAL TRANSACTION WITH THE AE BY HOLDIN G AND OBSERVING AS UNDER: A)THE TPO HAS CALLED FOR SPECIFIC DETAILS WITHIN TH E MEANING OF SECTION 92D(3) OF INCOME TAX ACT, 1961. B)THE DETAILS WERE NOT FILED WITHIN 30 DAYS OR AT ANY TIME SUBSEQUENTLY. C)THE DETAILS WERE ESSENTIAL FOR BENCHMARKING THE T RANSACTION OF ASSESSEE WITH AE. D)THE ASSESSEE COULD ALSO NOT PROVIDE ANY ALTERNATE METHOD OF BENCHMARKING THE TRANSACTION BASED ON MATERIAL AVAI LABLE ON RECORD. E)IN THE ABSENCE OF MATERIAL THE TPO WAS FORCED TO ACCEPT THE TRANSACTIONS TO BE AT ARM'S LENGTH AFTER INITIATING PENALTY PROCEEDINGS UNDER SECTION 271G OF INCOME TAX ACT, 1961. 5. AGGRIEVED BY THE ORDER OF THE TPO, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A), WHO DELETED THE PENALTY BY OBSERVING AS UNDER: 13. I HAVE GONE THROUGH THE ABOVE AND FOUND THAT T HE FACTS OF THE ABOVE CASE LAWS ARE SIMILAR TO THE FACTS OF THE ASS ESSEE'S CASE. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT LEVY OF PENALTY U/S.271G OF THE I.T.ACT, 1961 IS NEITHER FAIR NOR REASONABLE AND TH EREFORE IT IS NOT JUSTIFIED IN FACTS OF THE CASE, VIZ., THE NATURE OF DIAMOND T RADE, SUBSTANTIAL IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 4 COMPLIANCE MADE BY THE ASSESSEE AND THE REASONABLE CAUSE SHOWED BY THE ASSESSEE AND ABOVE ALL, WHEN THERE IS NO ADJUST MENT MADE IN THE ALP. IN NUTSHELL, THE LEVY OF PENALTY OF RS.56,72,1 62/- UNDER SECTION 271G OF I.T.ACT, 1961 IS HEREBY DELETED. IN THIS RE GARD, RELIANCE IS ALSO PLACED ON FOLLOWING DECISIONS: 1) ITO V/S. NETS SOFT INDIA LTD. - 2013/35/TAXMANN.COM/579/MUMBAI ITAT 2) ACIT V/S. GILLETTE INDIA LTD. 2015/54/TAXMANN.COM/313/JAIPUR ITAT 14. IN VIEW OF THE FACT THAT LEVY OF PENALTY UNDER SECTION 271G OF I.T.ACT, 1961 IS ITSELF DELETED, OTHER OBJECTIONS R AISED BY THE ASSESSEE BEFORE THE TPO AND IN APPEAL ARE NOT CONSIDERED REL EVANT AND ARE NOT DISCUSSED. IN NUTSHELL, LEVY OF PENALTY UNDER SECTI ON 271G OF I.T.ACT, 1961 IS HEREBY DELETED. 6. THE LEARNED AR, AT THE OUTSET, SUBMITTED THAT TH E CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDIN ATE BENCH OF THE TRIBUNAL WITH IDENTICAL FACTS, VIDE ORDER DATED 25.10.2017, IN THE CASE OF ACIT VS. D NAVINCHANDRA EXPORTS PVT. LTD. IN ITA NO. 6304/MUM/ 2016 FOR A.Y. 2011-12, WHEREIN IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE LEARNED AR PRAYED IN VIEW OF THE SAID DECISION OF T HE CO-ORDINATE BENCH, THE ORDER OF THE CIT(A) BE CONFIRMED. 7. PER CONTRA, LEARNED DR RELIED ON THE ORDER OF TH E TPO AND GROUNDS OF APPEAL BEFORE US. 8. HAVING PERUSED THE MATERIAL ON RECORD AND AFTER HEARING BOTH THE PARTIES VIS--VIS THE DECISION OF THE CO-ORDINATE B ENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. D NAVINCHANDRA EXPORTS PVT. LTD. ( SUPRA), WE OBSERVE THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE BENCH IN FA VOUR OF THE ASSESSEE. THE OPERATIVE PART OF THE DECISION IS AS UNDER: 18. WE FIND THAT THE CIT(A) AFTER DELIBERATING AT LENGTH ON THE NATURE OF THE BUSINESS OF MANUFACTURING AND TRADING OF DIA MONDS, THEREIN CONCLUDED THAT IN THE BACKDROP OF THE INTRICACIES I NVOLVED IN THE SAID BUSINESS IT WAS PRACTICALLY DIFFICULT FOR THE ASSES SEE TO FURNISH THE IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 5 INFORMATION IN THE MANNER THE SAME WAS CALLED FOR B Y THE TPO. WE FIND THAT THE CIT(A) IN THE BACKDROP OF AN INDEPTH STUDY OF THE NATURE OF ACTIVITIES INVOLVED IN THE BUSINESS OF MANUFACTURIN G AND TRADING OF DIAMONDS, HAD IN A VERY WELL REASONED MANNER CULLED OUT THE PECULIAR NATURE OF THE TRADE OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT A CAREFUL PERUSAL OF THE VERY NATURE OF THE BUSINESS OF MANUFACTURING AND TRADING OF DIAMONDS THEREIN GLARINGLY REVEALS THAT CERTAIN INFORMATION WHICH WAS CALLED FOR BY THE TPO COULD NOT BE FURNIS HED BY THE ASSESSEE. WE FIND THAT THE CIT(A) HAD OBSERVED THAT AS THE AS SESSEE HAD PURCHASED A MIX OF IMPORTED ROUGH AND POLISHED DIAM ONDS FROM AES AND NON-AES, AND HAD ALSO SOLD/EXPORTED ROUGH AND POLIS HED DIAMONDS TO AES AS WELL AS THE NON-AES, THEREFORE, THE PROFIT & LOSS A/C OF THE ASSESSEE REFLECTED A MIXTURE OF PURCHASES AND SALES BOTH FROM THE AES AND THE NON-AES. WE ARE PERSUADED TO BE IN AGREEMEN T WITH THE VIEW OF THE CIT(A) THAT NOW WHEN THE ROUGH/POLISHED DIAMOND S WERE TRADED ON LOT WISE BASIS, THEREFORE, IT WAS DIFFICULT TO IDEN TIFY AND SAY WHETHER A POLISHED DIAMOND CAME OUT OF A PARTICULAR LOT OF RO UGH DIAMONDS OR THE OTHER AND/OR OUT OF THE POLISHED DIAMONDS PURCHASED LOCALLY BY THE ASSESSEE. WE FIND THAT THE EXPORT BILLS OF THE CUT AND POLISHED DIAMONDS EXPORTED TO THE AES AND THE NON-AES REVEALED THAT T HE DIAMONDS OF VARYING SIZE, QUALITY, COLOUR AND CARAT WEIGHT WERE EXPORTED AS WAS EVIDENT FROM THE PRICE PER CARAT CHARGED IN EACH BI LL, AND SIMILAR WOULD HAVE BEEN THE POSITION IN RESPECT OF CUT AND POLISH ED DIAMONDS PURCHASED AND SOLD LOCALLY AND/OR PURCHASED FROM AB ROAD BUT SOLD LOCALLY. WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE AFORESAID PECULIAR NATURE OF THE TRADE OF THE ASSESSEE, IT CO ULD SAFELY OR RATHER INESCAPABLY BE CONCLUDED THAT IT WAS EXTREMELY DIFF ICULT TO IDENTIFY WHICH ROUGH DIAMOND GOT CONVERTED INTO WHICH POLISHED DIA MOND, UNLESS THE SINGLE PIECE ROUGH DIAMOND HAPPENED TO BE OF EXCEPT IONALLY HIGH CARAT VALUE, THEREIN MAKING THE TRACING OUT AND IDENTIFIC ATION OF THE POLISHED DIAMOND PHYSICALLY POSSIBLE AND CONVENIENT. WE FIND THAT THE AFORESAID PRACTICAL DIFFICULTIES IN PROVIDING THE DETAILS BEI NG FACED BY THE INDUSTRY CAN BE WELL GATHERED FROM THE LETTER OF THE GJEPC T O THE CIT-TRANSFER PRICING, MUMBAI, WHEREIN THE AFORESAID ASPECTS INVO LVED IN THE DIAMOND MANUFACTURING BUSINESS WERE EXPLAINED. 19. WE FIND THAT THE ASSESSEE HAD IN THE BACKDROP OF THE VERY NATURE OF ITS BUSINESS, VIZ. MANUFACTURING OF DIAMONDS, HA D THOUGH EXPLAINED TO THE TPO THE PRACTICAL DIFFICULTY IN FURNISHING SEGM ENT WISE PROFIT &LOSS ACCOUNT OF THE AE SEGMENT AND THE NON-AE SEGMENT, H OWEVER, THE TPO INSISTED FOR THE SAME AND INVOKED RULE 10D OF THE I NCOME-TAX RULES, 1962, AND INSTEAD OF DETERMINING THE ARMS LENGTH PR ICE IN RESPECT OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH ITS AES, RATHER WENT AHEAD AND LEVIED PENALTY UNDER SEC. 271G IN THE HANDS OF THE ASSESSEE. WE ARE NOT IMPRESSED WITH THE MANNER IN WHICH THE ASSESSEE HAD PROCEEDED WITH THE MATTER AND IMPOSED PENALTY UNDER SEC. 271G IN THE HANDS OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT IN LIG HT OF THE AFORESAID IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 6 PRACTICAL DIFFICULTIES WHICH WERE BEING FACED BY TH E DIAMOND INDUSTRY, THE TPO SHOULD HAVE EXERCISED THE VIABLE OPTION OF DETE RMINING THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS OF T HE ASSESSEE, EITHER BY MAKING SOME COMPARISON OF REALISATION OF PRICES IN RESPECT OF EXPORT SALES TO AES AND NON-AES BY COMPARING PRICES OF DIA MONDS OF SIMILAR SIZE, QUALITY AND WEIGHT TO THE BEST EXTENT POSSIBL E, OR IN THE ALTERNATIVE COULD HAVE ASKED FOR THE COPIES OF THE PROFIT & LOS S ACCOUNTS AND THE BALANCE SHEETS OF THE AES IN ORDER TO MAKE AN OVERA LL COMPARISON WITH THE GROSS PROFITABILITY LEVELS OF THE ASSESSEE WITH ITS AES, WHICH WOULD HAD CLEARLY REVEALED DIVERSION OF PROFITS, IF ANY, BY THE ASSESSEE TO ITS AES. WE ARE FURTHER UNABLE TO COMPREHEND THAT AS TO ON WHAT BASIS THE TPO EXPECTED THE ASSESSEE TO HAVE CARRIED OUT THE B ENCHMARKING BY FOLLOWING CUP METHOD. WE ARE OF THE CONSIDERED VIEW THAT AS THE COMPARISON BY INTERNAL CUP METHOD COULD ONLY BE MAD E IF TWO LOTS OF DIAMONDS WERE SIMILAR IN SIZE, COLOUR, SHAPE AND CL ARITY, WHICH WE ARE AFRAID, AS OBSERVED BY US AT LENGTH HEREINABOVE, IN LIGHT OF THE PECULIAR NATURE OF THE TRADE OF THE ASSESSEE WOULD NOT BE PO SSIBLE. WE FIND OURSELVES TO BE IN AGREEMENT WITH THE CIT(A) THAT I F ONE LOT HAD DIAMONDS OF VARIETY OF SIZE, COLOUR, SHAPE AND CLAR ITY, THE PRICES WOULD VARY FROM DIAMOND TO DIAMOND AND LOT TO LOT, AND FU RTHER, NOW WHEN THE ENTIRE LOT OF DIAMONDS HAD A COMMON PRICE TAG PER C ARAT FOR THE WHOLE LOT, THEREFORE, IT WAS NOT POSSIBLE TO EVALUATE THE PRICE OF EACH DIAMOND. WE ALSO CANNOT BE OBLIVIOUS OF THE FACT THAT EVEN O THERWISE IN THE DIAMOND TRADE LINE, UNLESS A DIAMOND WOULD WEIGH HA LF CARAT OR MORE OR ONE CARAT OR MORE, THE SAME WOULD NOT BE PRICED SEP ARATELY IN THE BILL BECAUSE IT WAS NOT PRACTICAL TO PRICE DIAMONDS OF W EIGHTS OF LOWER THAN HALF CARAT OR ONE CARAT SEPARATELY WEIGHT WISE PER DIAMOND IN THE LOT. WE HAVE DELIBERATED ON THE AFORESAID PECULIAR FACTS IN VOLVED IN THE BUSINESS OF DIAMOND TRADING AND ARE OF THE CONSIDERED VIEW T HAT THE INSISTENCE OF THE TPO THAT THE ASSESSEE SHOULD HAVE FOLLOWED CUP METHOD WAS MISCONCEIVED AND IMPRACTICAL. WE ARE IN AGREEMENT W ITH THE CIT(A) THAT IF THE TPO WOULD HAD CARRIED OUT A COMPARISON OF TH E PROFIT & LOSS ACCOUNT AND BALANCE SHEETS OF THE AES, THE SAME WOU LD HAD REVEALED THE GROSS PROFIT MARGINS AND LEVELS OF PROFITABILITY EA RNED BY THE AES IN THEIR BUSINESSES, AND AS SUCH ANY ABNORMAL VARIATION IN T HEIR GROSS PROFITABILITY WOULD HAD REVEALED THE ABERRATIONS IN THE INTERNATI ONAL TRANSACTIONS. 20. WE FURTHER FIND THAT AS STANDS GATHERED FROM TH E RECORDS, THE NATURE AND LEVEL OF BUSINESS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD INCREASED ALMOST TWO FOLD. WE FIN D THAT WHILE FOR THE GROSS PROFITS OF THE ASSESSEE HAD ALSO INCREASED FR OM 7.42% FOR A.Y. 2010-11 TO 8.71% FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011-12, THE NET PROFIT HAD ALSO WITNESSED A GROWTH FROM 3.9 % IN THE IMMEDIATE PRECEDING YEAR TO 4.9% DURING THE YEAR UNDER CONSID ERATION. WE FURTHER FIND THAT AS OBSERVED BY THE CIT(A) THAT IN THE PRE CEDING YEAR, I.E A.Y. 2010-11 THE TPO DID NOT PROPOSE ANY ADJUSTMENT IN T HE ALP. WE ARE NOT INSPIRED BY THE FAULT FINDING APPROACH ADOPTED BY T HE TPO WITHOUT IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 7 UNDERSTANDING THE INTRICACIES OF THE DIAMOND MANUFA CTURE AND TRADING BUSINESS, AND ARE OF THE CONSIDERED VIEW THAT HE IN STEAD OF DETERMINING THE ARMS LENGTH PRICE BY ASKING FOR THE PROFIT & LO SS A/C AND BALANCE SHEETS OF THE AES AND COMPARING THE FINANCIAL RATIO S IN GENERAL, HAD RATHER HUSHED THROUGH THE MATTER AND IMPOSED PENALT Y UNDER SEC. 271G OF RS. 2,15,98,527/- ON THE ASSESSEE. WE ALSO FIND THAT THE ASSESSEE TO THE EXTENT POSSIBLE IN THE BACKDROP OF THE NATURE O F ITS TRADE HAD FURNISHED SEVERAL DETAILS ON SEVERAL OCCASIONS FROM TIME TO TIME WITH THE TPO. WE THUS ARE OF THE CONSIDERED VIEW THAT THE AS SESSEE HAD SUBSTANTIALLY COMPLIED WITH THE DIRECTIONS OF THE T PO AND PLACED ON HIS RECORD THE REQUISITE INFORMATION, TO THE EXTENT THE SAME WAS PRACTICALLY POSSIBLE IN LIGHT OF THE VERY NATURE OF ITS TRADE. WE THOUGH ARE NOT OBLIVIOUS OF THE FACT THAT THE ASSESSEE MAY NOT HAV E EFFECTED ABSOLUTE COMPLIANCE TO THE DIRECTIONS OF THE TPO AND FURNISH ED ALL THE REQUISITE DETAILS AS WERE CALLED FOR BY HIM ON ACCOUNT OF PRA CTICAL DIFFICULTIES AS HAD BEEN DELIBERATED BY US AT LENGTH HEREINABOVE, BUT H OWEVER, IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, WE ARE OF T HE CONSIDERED VIEW THAT THE FAILURE TO THE SAID EXTENT ON THE PART OF THE ASSESSEE TO COMPLY WITH THE DIRECT IONS OF THE TPO CAN SAFELY BE HELD TO BE BACKED BY A REASONABLE CAUSE, WHICH THUS WOULD BRING THE CASE O F THE ASSESSEE WITH THE SWEEP OF SEC. 273B OF THE ACT. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS FIND OURSELVES TO BE IN AGRE EMENT WITH THE VIEW TAKEN BY THE CIT(A,) AND FINDING NO REASON TO DISLO DGE HIS WELL REASONED ORDER, THEREFORE, UPHOLD THE SAME. WE THUS UPHOLD T HE ORDER OF THE CIT(A) AND THE RESULTANT DELETION OF THE PENALTY OF RS. 2,15,98,527/- IMPOSED BY THE TPO. 21.THE APPEAL OF THE REVENUE IS DISMISSED. 9. SINCE THE FACTS OF THE ASSESSEES CASE ARE MATER IALLY SAME WITH THE DECISION AS DISCUSSED HEREINABOVE. WE, THEREFORE, R ESPECTFULLY FOLLOWING THE SAID DECISION OF THE CO-ORDINATE BENCH, WHICH HAS B EEN RENDERED UNDER IDENTICAL FACTS AND CIRCUMSTANCES, WE ARE INCLINED TO UPHOLD THE DECISION OF THE LEARNED CIT(A) DELETING THE PENALTY. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.08 2018 SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 02.08.2018 SA IT(TP)A NO.2142/MUM/2017 M/S. DI;IPKUMAR V LAKHI 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, K BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI