M/s. Priya Blue Industries Pvt. Ltd., Bhavnagar V. The Asstt. Commissioner of Income Tax, Circle-1, Bhavnagar

ITA 2397/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6328 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Gift
• Section: 271(1)(c); 40A(3); 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. PRIYA BLUE INDUSTRIES PVT. LTD. 1563/A, ASHIRWAD, RUPANI SARDARNAGAR ROAD, BHAVNAGAR PAN: AABCP2808B (APPELLANT) VS THE ACIT , CIRCLE - 1 , BHAVNAGAR (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: SHRI P.B. PARMAR , A.R. DATE OF HEARING : 24 - 09 - 2 019 DATE OF PRONOUNCEMENT : 21 - 10 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2011 - 12 , ARI SES FROM ORDER OF THE CIT(A) - 6, AHMEDABAD DATED 1 6 - 08 - 2 017 , IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS FILED AGAINST T HE DECISION OF LD. CIT(A) IN CONFIRMING THE PENALTY OF RS. 1 , 67 , 517/ - LEVIED U/S. 271(1)(C) OF THE ACT. I T A NO . 2397 / A HD/20 17 A SS ESSMENT YEAR 2011 - 12 I.T.A NO. 2 3 97 /AHD/20 17 A.Y. 2011 - 12 PAGE NO M/S. PRIYA BLUE INDUSTRIES PVT. LTD. VS. ACIT 2 3. THE FACT IN BRIEF IS THAT RETURN OF IN COME DECLARING TOTAL INCOME OF R S. 2 , 55 , 34 , 610/ - WAS FILED ON 2 0 TH SEP, 2011 AND THE CASE WAS SUBJECT TO SCRUT INY ASSESSMENT . THE ORDER U/S. 143(3) OF THE ACT WAS PASSED ON 14 TH MARCH, 2014 DETERMINING TOTAL INCOME AT RS. 3 , 92 , 81 , 029/ - . THE ASSESSING OFFICER HAS INITIATED P ENALTY PROCEEDINGS ON THE FOLLOWING ADDITIONS . DISALLOWANCE OF AMOUNT PRIOR PERIOD BRO KERAGE AND COMMISSION 2,71,344/ - INTEREST ON LATE PAYMENT OF CENTRAL EXCISE U/S 37 6,480/ - GIFT AND PRESENTATION EXPENSES 1,78,476/ - PRIOR PERIOD CONSULTANCY EXPENSES 19000 LABOUR WELFARE EXPENSES U/S 40A(3) 29,000/ - TOTAL 5,04,300/ - THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS SUSTAINED THE ABOVE CITED ADDITIONS AMOUNTING TO RS. 5 , 04 , 300/ - . DURING THE COURSE OF PENALTY PROCEEDINGS, T HE ASSESSEE HAS EXPLAINED THAT IT HAS FURNISHED THE COMPLETE PARTICULARS OF ALL THE FIVE CATEGORIES OF EXPENSES. THE DETAILED SUBMISSION OF THE ASSESSEE IS PRODUCED AT PAGE NO. 2 TO 4 OF THE PENALT Y ORDER PASSED U/S. 271(1)(C) OF THE ACT. T HE ASSESSING OFFICER HAS NOT AGREED WITH T H E EXPLANATION AND STATED THAT ASSESSEE HAS FUR NISHED INACCURATE PARTICULARS OF INCOME AND LD. CIT(A) HAS ALSO DISMISSED THE APPEAL OF THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 1 , 67 , 517/ - AT 100% OF CONCEALED INCOME OF RS. 5 , 04 , 300/ - ON ACCOUNT OF DISALLOWANCE OF VARIOUS EXPENSES AS CITED ABOVE IN THIS ORDER . I.T.A NO. 2 3 97 /AHD/20 17 A.Y. 2011 - 12 PAGE NO M/S. PRIYA BLUE INDUSTRIES PVT. LTD. VS. ACIT 3 4. AGGRIEVED AGAINST THE DECISION OF ASSESSING OFFICER, THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS MADE ADDITION S ON DISALLOWANCE OF FOLLOWING EXPENSE S . DISALLOWANCE OF AMOUNT PRIOR PERIOD BROKERAGE AND COMMISSION 2,71,344/ - INTEREST ON LATE PAYME NT OF CENTRAL EXCISE U/S 37 6,480/ - GIFT AND PRESENTATION EXPENSES 1,78,476/ - PRIOR PERIOD CONSULTANCY EXPENSES 19,000/ - LABOUR WELFARE EXPENSES U/S 40A(3) 29,000/ - TOTAL 5,04,300/ - IN RESPECT OF PRIOR PERIOD BROKERAGE AND COMMI SSION OF RS. 2 71344/ - , T HE ASSESS EE EXPLAINED THAT IT HAS MADE PROVISION FOR BROKERAGE DURING THE YEAR UNDER CONSIDERATION BECAUSE THE PAYMENT OF BROKERAGE AND COMMISSION WAS RECEIVED BY T H E ASSESSEE COMPANY DURING THE NEXT FINANCIAL YEAR . I N RESPECT O F DISALLOWANCE OF EXPENSES OF GIFT AND PRESENTATION, T HE ASSESSEE SUBMITTED THAT GIFT PARTICULARS WERE DISTRIBUTED FOR MAINTAINING GOOD COMMERCIAL RE LATIONSHIP FOR THE REQUIREMENT OF BUSINESS. REGARDING INTEREST ON LATE PAYMENT TO THE CENTRAL EXCISE AUTH ORITY TO THE AMOU NT OF RS. 6480, THE ASSESSEE EXPLAINED THAT IT HAS PAID THE INTEREST ON DELAYED PAYMENT ON ACCOUNT OF RECTIFICATION OF THE MISTAKE AND THERE WAS NO CONCEALMENT OF I.T.A NO. 2 3 97 /AHD/20 17 A.Y. 2011 - 12 PAGE NO M/S. PRIYA BLUE INDUSTRIES PVT. LTD. VS. ACIT 4 PARTICULARS OF IN COME. REGARDING DISALLOWANCE OF PRIOR PERIOD CONSULTANCY S ERVICES O F RS. 19,000/ - , THE ASSESSEE SUBMITT ED THAT IT HAS PAID CONSULTANCY FEES OF RS. 380 0 0 / - PERTAINING TO F.Y. 2009 - 10 AND F.Y. 2010 - 11 DURING THE YEAR UNDER CONSIDERATION AFTER DEDUCTION OF TAX AT SOURCE OF RS. 38 00/ - . THE ASSESSEE EXPLAINED THAT O UT OF AFORESAID PAYMENT AN AMOUNT OF RS. 19000/ - W AS PERTAINED TO F.Y. 2009 - 10 AND ITS CONTENTION OF APPLI CABILITY OF PROVISION OF SECTION 4 0(A)(IA) WAS REJECTED BY THE ASSESSING OFFICER. REGARDING LABOUR WELFARE EXPENSES OF RS. 29,000/ - , THE ASSESSEE HAS EXPLAINED THAT THIS AMOUNT WAS DISALLOWED U/S. 40A(3) AND THERE WAS NO CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS. AFTER CONSIDERING THE FOREGOING FACTS AND NATURE OF EXPENSES , WE FIND THAT IT IS CLEAR FROM THE SUBMISSION OF THE ASSESS EE T HAT THE ASSESSEE HAS DISCLOSED A PPOSITE P ARTICULARS OF ABOVE REFERRED VARIOUS EXPENSES AND THE CIRCUMSTANCES UNDER WHICH THESE EXPENSES WERE INCURRED. AFTER CONSIDERING THE SE MATERIAL FACTS AND NATURE OF EXPENSES AND THE CIRCUMSTANCES UNDER WHICH THE IMPUGNED EXPENSES W ERE INCURRED , WE DO NOT FIND ANY SUBSTANCE IN THE DECISION OF THE LD. CIT(A) THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. TH EREFORE, WE DELETE THE IMPUGNED PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 21 - 10 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A NO. 2 3 97 /AHD/20 17 A.Y. 2011 - 12 PAGE NO M/S. PRIYA BLUE INDUSTRIES PVT. LTD. VS. ACIT 5 AHMEDABAD : DATED 21 /10 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,