M/s. Flexican Bellows & Hoses Pvt. Ltd., Baroda V. The ACIT, Circle-1(2), Vadodara

ITA 2152/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5945 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 21-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. FLEXICAN BELLOWS & HOSES PVT. LTD. 283, GIDC ESTATE, MAKARPURA, BARODA - 390010 PAN: AAACF2871M (APPELLANT) VS THE ACIT, CIRCLE - 1(2), AAYKAR BHAWAN, RACE COURSE CIRCLE, VADODARA - 390007 (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 18 - 01 - 2 018 DATE OF PRONOUNCEMENT : 07 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2005 - 06, ARISES FROM ORDER OF THE CIT(A) - VIII, AHM EDABAD DATED 27 - 02 - 2009 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL: - 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - 1, VADODARA ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), BARODA ('THE AO') IN LEVYING PENALTY TO THE EXTENT OF RS. 2,90,573/ - U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT'). I T A NO . 2152 / A HD/20 15 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 2152 /AHD/20 15 A.Y. 2009 - 10 PAGE NO M/S. FLEXICAN BELLOWS & HOSES PVT. LTD. VS. ACIT 2 3. IN THIS CASE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT AFTER MAKING ADDITION OF RS. 8 , 49 , 877/ - U/S. 40A (2)(B) OF THE ACT. THE ASSESSING OFFICER HAS MADE ADDITI ON ON COMMISSION PAYMENTS O F RS. 4 , 16 , 759/ - TO MRS. D.S. JANI AND RS . 4 , 33 , 118/ - TO SHRI S.R. JANI (HUF) AS THE ASSESSEE HAD FAILED TO ESTABLISH THAT THESE TWO PERSONS HAD ACTUALLY RENDERED ANY SERVICES TO THE ASSESSEE COMPANY FOR WHICH COMMISSION S WERE PAID . THE QUANTUM ADDITION WAS SUSTAINED BY LD. CIT(A). CONSEQUENTLY , THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 2 , 90 , 573/ - FOR FURNISH ING INACCURATE PARTICULARS THEREBY CONCEALING THE INCOME AS IT HAS FAILED TO SUBSTANTIATE THE GENUINENESS OF THE COMMISSION PAYMENT S MADE TO THE PERSONS COVERED U/S. 40A(2)(B) OF THE ACT. 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE EH LD. CIT(A). T HE LD. CIT(A) HAS SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS FILED APPLICATION OF ADJOURNMENT ON THE GROUND THAT AUTHORIZED REPRESENTATIVE IS ABROAD. THE APPLICATION OF THE ADJOURNMENT OF THE ASSESSEE WAS REJECTED. THE ASSESSEE HAS ALSO FURNISHED PAPER BOOK ON 10 TH NOV, 2017 CONTAINING ACKNOWLEDGEMENT OF RETURN OF INCO ME, ANNU AL FINANCE STATEMENT , TAX AUDIT REPORT , COPY OF NOTICE U/S. 142(1), WRITTEN SUBMISSION BEFORE LD. CIT(A) ETC. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF LD. CIT(A). 5. AFTER PERUSAL OF MATERIAL ON RECORD CAREFULLY , WE HAVE NOTICED THAT ASSESSEE WAS ASKED TO PROVE GENUINENESS OF THE COMMISSION PAYMENT S MAD E TO THE PERSONS COVERED U/S. 40A(2)(B) OF T HE ACT. IN THIS CONNECTION, HE WAS SPECIFICALLY ASKED TO FURNISH DETAIL S OF SERVICES RENDERED BY THESE PERSONS. HOW EVER, THE ASSESSEE HAS GIVEN GENERAL REPLY THAT THE WIFE OF I.T.A NO. 2152 /AHD/20 15 A.Y. 2009 - 10 PAGE NO M/S. FLEXICAN BELLOWS & HOSES PVT. LTD. VS. ACIT 3 THE DIRECTOR AND DIRECTOR HIMSELF HAS ASSISTED THE ASSESSEE COMPANY THROUGH THEIR DIRECTOR IN OBTAINING LARGE VOLUME OF ORDER S FROM THE PRESTIGIOUS COMPANIES. IN THIS CONNECTION, THERE WAS NO EVI DENCE ON RECORD TO SUBSTANTIATE THAT HE HAS OB TAINED THESE ORDERS. SIMILARLY , IN T H E CASE OF HIS WIFE ALSO, T HERE WAS NO SUPPORTING RELEVANT MATERIAL DEMONSTRATING THAT SHE HAS RENDERED THE SERVICES FOR WHICH THE COMMISSION WAS PAID TO HER. A T SECOND STAGE BEFORE THE LD. CIT(A) T HE ASSESSEE ALSO FAILED TO PROVE THE SERVICES RENDERED BY THESE TWO PERSONS TO WHOM THE COMMISSION S WERE PAID BY T H E ASSESSEE COMPANY. IN SPITE OF PROVIDING AMPLE OPPORTUNITIES TH E ASSESSEE HAS FAILED TO GENERATE ANY EVIDENCES TO SUBSTANTIATE THOSE ORDERS RECEIVED FROM VARIOUS COMPANIES WERE DUE TO THE EFFORTS MADE BY THESE TWO PERSONS. EVEN , THE ASSESSEE HAS NOT FURNISHED ANY CONFIRMATION FROM THE SALE PARTIES TO DEMONSTRATE THAT SALES WERE MATERIALIZED THROUGH THOSE TWO PERS ONS TO WHOM THE COMMISSION PAYMENTS WERE MADE. AFTER CONSIDERING THESE FACTS AND FINDINGS AND JUDICIAL PRONOUNCEMENTS ELABORATED IN THE ORDER OF THE LD. CIT(A), WE OBSERVED THAT ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME IN RESPECT OF I TS CLAIM O F COMMISSION OF RS. 8, 49 , 877/ - . THEREFORE , WE JUSTIFY T HE DECISION OF THE LD. CIT(A) IN SUSTAINING THE PENALTY OF RS. 2,90,573/ - LEVIED BY THE ASSESSING OFFICER . ACCORDINGLY , THE APPEAL OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF T HE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 07 - 03 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A NO. 2152 /AHD/20 15 A.Y. 2009 - 10 PAGE NO M/S. FLEXICAN BELLOWS & HOSES PVT. LTD. VS. ACIT 4 AHMEDABAD : DATED 0 7 /03 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,