RENU SANJAY LADHANI, MUMBAI V. DCIT CENTRAL CIRCLE-8(1), MUMBAI

ITA 2369/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0349 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTHILAKSHMI NAYAK SR AR
• Keywords: Bonafide belief; Revenue expenditure; TDS
• Section: 271(1)(c); 143(3); 27; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH MUM BAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.2369/MUM/2018 ( ASSESSMENT YEAR: 2013-14 ) RENU SANJAY LADHANI PLOT NO.52, 4 TH FLOOR UDAY APT, N.S.ROAD NO-4 VILE PARLE-W MUMBAI-400 057 VS. DCIT,CENTRAL CIRCLE-8(1) AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 PAN/GIR NO. A AUPLOO42R ( APPELLANT ) .. RESPONDENT ) REVENUE BY SMT.JYOTHILAKSHMI NAYAK, SR.AR (CIT) ASSESSEE BY NONE DATE OF HEARING 10/12/2019 DATE OF PRONOUNCEME NT 10 /12 /201 9 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)50, MUMBAI, DATED 28/12/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED ASSESSING OFFICER ERRED IN LEVY OF P ENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. ON DISALLOWA NCES MADE IN ASSESSMENT ORDER ON EXPENSES NOT ALLOWABLE U/S 37 O F INCOME TAX ACT. 2. THE ASSESSEE PRAY TO ADD, ALTER OR MODIFY ANY OF THE GROUND ON OR BEFORE THE DATE OF HEARING. ITA NO.2369/MUM/2018 RENU SANJAY LADHANI 2 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CA SE, THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE I.T .ACT, 1961, ON 26/12/2016 BY MAKING DISALLOWANCES OF INTEREST PAID ON STATUTORY DUES OF RS.1,61,468/-, ON THE GROUND THAT INTEREST PAID ON BELATED PAYMENT ON WORKS CONTRACT TAX, PROFESSIONAL TAX, MV AT AND TDS IS NOT DEDUCTABLE EXPENDITURE. THEREAFTER, THE LD. AO HAS INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T.ACT, 1 961 AND AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE L EVIED PENALTY OF RS.49,894/-, WHICH IS 100% OF TAX OUGHT TO BE EVAD ED U/S 271(1)(C) OF THE I.T.ACT, 1961, FOR FURNISHING INACCURATE PAR TICULARS OF INCOME. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E LD.CIT (A), BUT COULD NOT SUCCEED. THE LD.CIT(A), FOR DETAILED REAS ONS RECORDED IN HIS APPELLATE ORDER HAS CONFIRMED PENALTY LEVIED BY THE LD.AO, ON THE GROUND THAT EXPLANATION OFFERED BY THE ASSESSEE FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONAFIDE AND ACCORDINGL Y, EXPLANATION (1) TO SECTION 271 (1)(C) OF THE I.T.ACT, 1961 WOULD C OME INTO PLAY AND THE ASSESSEE WILL BE LIABLE FOR PENALTY. ACCORDINGL Y, CONFIRMED PENALTY LEVIED BY THE AO U/S 271(1)( C) OF THE ACT, AND DISMISSED APPEAL FILED BY THE ASSESSEE. AGGRIEVED BY THE LD.C IT(A) ORDER, THE ASSESEE IS IN APPEAL BEFORE US. 4. NONE APPEARED FOR THE ASSESEE. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE LD. AO HAS LEVIED PENALTY U/S 271(1)(C) OF THE I.T.ACT , 1961, IN RESPECT DISALLOWANCES OF INTEREST PAID ON LATE REMITTANCE O F TDS, WORKS CONTRACT TAX, VAT AND PROFESSIONAL TAX. ACCORDING T O THE LD. AO, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HE R INCOME, IN RESPECT OF ABOVE TWO ADDITIONS, WHICH WARRANTS PENA LTY U/S 271(1)(C) OF THE I.T.ACT, 1961. IT IS THE CLAIM OF THE ASSESS EE BEFORE THE LOWER ITA NO.2369/MUM/2018 RENU SANJAY LADHANI 3 AUTHORITIES THAT MERE MAKING A CLAIM WHICH IS NOT S UBSTANTIATED WOULD NOT AMOUNTS TO FURNISHING INACCURATE PARTICUL ARS OF INCOME. THE ASSESSEE, FURTHER CONTENDED THAT IT HAS FILED N ECESSARY DETAILS, IN RESPECT OF ALL THOSE ITEMS AND CLAIMED DEDUCTION S ON THE BONAFIDE BELIEF THAT INTEREST PAID ON LATE REMITTANCE OF TDS AND INTEREST PAID ON WORKS CONTRACTS AND VAT IS A REVENUE EXPENDITURE , WHICH COULD BE ALLOWED AS DEDUCTION, WHILE COMPUTING INCOME UND ER THE HEAD BUSINESS OR PROFESSION. 5. HAVING CONSIDERED ARGUMENTS OF THE LD. DR AND AL SO MATERIAL AVAILABLE ON RECORD, WE FIND THAT WHEN A CLAIM IS MADE REGARDING CERTAIN EXPENSES, BUT SUCH CLAIM WAS NOT ACCEPTED BY THE LD. AO WOULD NOT BE A GROUND FOR LEVYING CONCEALMEN T PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. FUR THER, THE CLAIM OF THE ASSESSEE THAT SAID EXPENDITURE IS DEDUCTABLE IS ALTHOUGH, REJECTED BY THE LD. AO, BUT HE DID NOT FIND ANY DEL EIBERATE ATTEMPT OF THE ASSESSEE TO EVADE PAYMENT TAX BY CLAIMING SAID DEDUCTION. THE AO HAS DISALLOWED ABOVE EXPENSES ONLY ON THE GROUND THAT SAID EXPENDITURE IS NOT ALLOWABLE AS DEDUCTION. BUT, OTH ERWISE THE FACTS WITH REGARD TO FURNISHING NECESSARY DETAILS, IN RES PECT OF THOSE EXPENDITURE IS NOT DISPUTED BY THE LD. AO EVEN DURI NG ASSESSMENT PROCEEDINGS. THEREFORE, WE ARE OF THE CONSIDERED VI EW THAT MAKING A CLAIM, WHICH IS NOT SUBSTANTIATED IS NOT A GROUND F OR LEVYING CONCEALMENT PENALTY U/S 271(1)(C) OF THE I.T.ACT, 1 961 AND HENCE, WE DIRECT THE LD.AO TO DELETE PENALTY LEVIED U/S 27 1(1)(C) OF THE I.T.ACT, 1961. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ITA NO.2369/MUM/2018 RENU SANJAY LADHANI 4 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 /12 /2019 SD/- (RAVISH SOOD) SD/- (G. MANJUNATHA) J UDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 10/12/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//