BUCON ENGINEERS & INFRASTRUCTURE PRIVATE LIMITED, MUMBAI V. DCIT CENTRAL CIRCLE-8(1), MUMBAI

ITA 2368/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4841 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S ABI RAMA KARTIKEYAN
• Keywords: Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2368/M/2018 ASSESSMENT YEAR: 2013-14 M/S. BUCON ENGINEERS & INFRASTRUCTURE PVT. LTD., 108-A, SHYAM KAMAL, TEJPAL ROAD, VILE PARLE EAST, MUMBAI PAN: AADCB5365P VS. DCIT CENTRAL CIRCLE-8(1), AAYAKAR BHAVAN, MUMBAI - 400020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI S. ABIRAMA KARTIKEYAN, D.R. DATE OF HEARING : 10.07.2019 DATE OF PRONOUNCEMENT : 09.08.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 16.02.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF PENALTY OF RS.63,520/- BY LD. CIT(A ) AS LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. 3. THE ASSESSEE DID NOT APPEAR AT THE TIME OF HEARI NG NOR ANY ADJOURNMENT APPLICATION WAS FILED. WE ARE THEREFO RE DECIDING ITA NO.2368/M/2018 M/S. BUCON ENGINEERS & INFRASTRUCTURE PVT. LTD. 2 THE APPEAL EX-PARTE AFTER HEARING THE LD. D.R. AFTE R TAKING INTO ACCOUNT THE MERITS OF THE CASE. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS F RAMED UNDER SECTION 143(3) OF THE ACT ON 01.03.2016 AT RS.1,81,40,090/- AS AGAINST THE RETURN OF INCOME OF RS.1,79,44,310/- THEREBY MAKING AN ADDITION OF RS.1 ,95,777/- COMPRISING VARIOUS CLAIMS OF THE ASSESSEE IN THE PR OFIT AND LOSS ACCOUNT SUCH AS LATE PAYMENT OF CHARGES OF CREDIT CARD PAYMENT OF RS.986/- PENALTY OF INTEREST OF SECURED LOANS RS .6,443/-, PENALTY ON WORKS CONTRACT TAX RS.1,16,000/- INTERE ST ON M-VAT RS.954/- INTEREST ON PROFESSIONAL TAX OF RS.505/- A ND INTEREST ON SERVICE TAX RS.70,889/-. THE PENALTY PROCEEDINGS W ERE INITIATED BY ISSUING NOTICE UNDER SECTION 274 READ WITH SECTI ON 271(1)(C) OF THE ACT ON 01.03.2016 AND ASSESSEE WAS ASKED TO TAX AS TO WHY THE PENALTY SHOULD NOT BE IMPOSED WHICH WAS REP LIED BY THE ASSESSEE VIDE LETTER DATED 12.08.2016 AND 11.08.201 6 BY SUBMITTING THAT THE DISALLOWANCES WERE MAINLY ON AC COUNT OF INTEREST WHICH WERE ALLOWABLE EXPENDITURES. HOWEV ER, IN VIEW OF THE PETTY NATURE OF ADDITION THE QUANTUM APPEAL WAS NOT FILED. THE ASSESSEE SUBMITTED THAT NO FACTS WERE CONCEALED NOR ANY INACCURATE PARTICULARS OF INCOME WERE FURNISHED. T HE FACTUAL POSITION WITH REGARD TO THESE CLAIMS OF INTEREST WA S DULY SHOWN AND REFLECTED IN THE BOOKS OF ACCOUNTS. THE EXPLAN ATION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO AND THE AO CONCLUDED THAT THE ASSESSEE HAS COMMITTED TO DEFAULT WITHIN T HE MEANING OF SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATI ON 1 AND ACCORDINGLY LEVIED A PENALTY OF RS.63,520/- BEING 1 00% OF THE TAX SOUGHT TO BE EVADED. ITA NO.2368/M/2018 M/S. BUCON ENGINEERS & INFRASTRUCTURE PVT. LTD. 3 5. THE LD. CIT(A) UPHELD THE ORDER IMPOSING PENALTY BY HOLDING THAT THE ACCEPTANCE OF THE ADDITION AND NON FILING OF APPEAL WILL NOT EXONERATE THE ASSESSEE FROM THE PEN AL PROVISION AS ENVISAGED UNDER SECTION 271(1)(C) OF THE ACT AND THEREAFTER FOLLOWING VARIOUS DECISIONS SUCH AS CIT VS. ZOOM COMMUNICATION PVT. LTD. (2010) 327 ITR 510 (DEL H C) & UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2007) 2 95 ITR 244 (SC) HELD THAT THE ASSESSEE HAS MADE INCORRECT CLAI M FOR WHICH IT HAD OFFERED NO PLAUSIBLE EXPLANATION AND THUS EXPLA NATION 1 TO SECTION 271(1)(C) WOULD COME INTO PLAY AND THUS JUS TIFIED THE ADDITION. 6. AFTER HEARING THE LD. D.R. AND PERUSING THE MATE RIAL ON RECORD, WE OBSERVE THAT THE ASSESSEE HAS CLAIMED IN TEREST OF RS.1,95,777/- ON VARIOUS COUNTS AS STATED HEREINABO VE. THE ASSESSEE HAS NOT CHALLENGED THE ADDITION DUE TO THE SMALL NATURE OF THE ADDITION AND THUS THERE IS NO APPEAL FILED B EFORE THE HIGHER AUTHORITIES AGAINST THIS ADDITION. THE LD. CIT(A) SUSTAINED THE ADDITION ONLY ON THE GROUND THAT ASSE SSEE HAS MADE CLAIM IN THE BOOKS OF ACCOUNTS FOR WHICH IT HA D NOT OFFERED ANY EXPLANATION WHICH IS BONAFIDE AND THUS JUSTIFIE D THE LEVY OF PENALTY. HOWEVER, AFTER PERUSAL OF THE FACTS ON RE CORD, WE OBSERVE THAT ASSESSEE HAS MADE FULL DISCLOSURE OF T HE CLAIM OF INTEREST IN THE BOOKS OF ACCOUNTS AND IN THE SAID C ASE THE PENALTY IS NOT IMPOSABLE UNDER THE ACT. WE FURTHE R OBSERVE THAT THAT THE ASSESSEE HAS OFFERED SUFFICIENT EXPLA NATION IN SUPPORT OF HIS CLAIM. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE APEX COURT IN THE CA SE OF CIT VS. RELIANCE PETRO PRODUCT (2010) 322 ITR 158 (SC) IN W HICH THE HONBLE SUPREME COURT HAS HELD THAT EVEN IF THE ASS ESSEE HAS ITA NO.2368/M/2018 M/S. BUCON ENGINEERS & INFRASTRUCTURE PVT. LTD. 4 MADE INCORRECT CLAIM IN THE BOOKS OF ACCOUNTS, WHIC H MAY BE WRONG OR NOT ACCEPTABLE BY THE REVENUE WOULD NOT I TSELF ATTRACT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN THE PRESENT CASE ALSO THE ASSESSEE HAS MADE A CLAIM WHICH IS DU LY REFLECTED IN THE BOOKS OF THE ACCOUNTS AND MERE DISALLOWANCE BY THE REVENUE WOULD NOT ATTRACT PENAL PROVISIONS .ACCORDI NGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.08.2019. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 09.08.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.