KPMG, MUMBAI V. JTCIT 11(2), MUMBAI

ITA 2401/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71278 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-09-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 11-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: SHEETAL JAIN; PRASHAND MAHESHWARI

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND SANJAY ARORA (AM) . . , , & ./I.T.A. NO.2401/MUM/2012 ( / ASSESSMENT YEAR:2004-05) KPMG LODHA EXCELUS, 1 ST FLOOR, APOLLO MILLS COMPOUND, N.M.JOSHI MARG, MAHALAXMI, MUMBAI-400011 / VS. ASSTT. COMMISSIONER OF INCOME TAX, 11(2), AYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ./ ./PAN/GIR NO. : AAAFK1415H ( / APPELLANT) .. ( / RESPONDENT) / APPELLANT BY : SHRI PRASHAND MAHESHWARI AND MS.SHEETAL JAIN. /RESPONDENT BY : SHRI SURENDRA KUMAR ' / DATE OF HEARING : 26.9.2013 ' /DATE OF PRONOUNCEMENT : 26.9.2013 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT Y EAR 2004-05 AGAINST ORDER DATED 31.1.2012 OF LD CIT(A)-3, MUMBAI IN CONFIRM ING THE LEVY OF PENALTY UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961(THE ACT) IN RESPECT OF (A) DISALLOWANCE MADE U/S 40(A)(I) OF THE ACT FOR PROFESSIONAL FEES OF RS.1,38,41,163/- PAID TO KPMG DUBAI, UAE, SOLE PROPRIETORSHIP OF MR. VIJAY MAL HOTRA AND (B) DISALLOWANCE U/S 40(A)(I) OF THE ACT FOR REIMBURSEMENT OF EXPENSES OF RS.7,27,627/- TO KPMG DUBAI, UAE, A SOLE PROPRIETORSHIP OF MR.VIJAY MALHOTRA. 2. AT THE TIME OF HEARING, LD. AR SUBMITTED THAT TH E ITAT IN THE QUANTUM APPEAL FILED BY THE ASSESSEE BEING ITA NO.2497/MUM/2009 ALONG WITH THE APPEAL FILED BY THE DEPARTMENT BEING ITA NO.1820/MUM/2009 VIDE ITS OR DER DATED 22.2.2013 DECIDED THE ITA NO.2401/MUM/2012 2 AFORESAID ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDIN G THAT NO TDS WAS DEDUCTIBLE IN RESPECT OF ABOVE PAYMENTS TO MR.VIJAY MALHOTRA AMO UNTING TO RS. RS.1,38,41,163/- AND ALSO RS.7,27,627/- AND REFERRED PARAS 15 AND 17 OF THE SAID ORDER TO SUBSTANTIATE HIS SUBMISSIONS. 3. LD. DR HAS NOT DISPUTED THE ABOVE FACTS. 4. IN VIEW OF ABOVE SUBMISSIONS OF LD. REPRESENTAT IVES OF THE PARTIES AND CONSIDERING THE FACT THAT THE TRIBUNAL VIDE ITS ORD ER DATED 22.2.2013 HAS HELD THAT NO TDS WAS DEDUCTIBLE U/S 195 OF THE ACT IN RESPECT O F AFORESAID PAYMENTS MADE BY ASSESSEE TO MR.VIJAY MALHOTRA, THE DISALLOWANCE MAD E BY AUTHORITIES BELLOW U/S 40(A)(I) OF THE ACT DO NOT SURVIVE AND ACCORDINGLY LEVY OF P ENALTY ON ACCOUNT OF AFORESAID DISALLOWANCE IS NOT MAINTAINABLE. SINCE QUANTUM IN RESPECT OF WHICH THE PENALTY HAS BEEN LEVIED HAS BEEN SET ASIDE/DELETED, PENALTY L EVIED ON THE BASIS OF QUANTUM WHICH IS NO MORE IN EXISTENCE, WOULD NOT SURVIVE AND PEN ALTY IS DELETED. IN THIS REGARD, WE ALSO ARE SUPPORTED BY THE DECISION OF MUMBAI BEN CH OF TRIBUNAL IN THE CASE OF DOWELL STEEL P.LTD V/S ITO IN ITA NO.439/MUM/201 2 DATED 31.1.2013 AND ALSO THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN TH E CASE OF CIT V/S COSMOPOLITAN TRADING CORPORATION (2005) 274 ITR 640(RAJ). HENCE , GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE ALLOWED BY REVERSING THE ORDERS OF A UTHORITIES BELOW. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE PARTIES AND AFTER CONCLUSION OF HEARIN G ON 26TH SEPTEMBER, 2013 ( * + 26TH SEPTEMBER, 2013 SD SD ( /SANJAY ARORA) ( . . 1 /B.R.MITTAL) / ACCOUNTANT MEMBER ( / JUDICIAL MEMBER MUMBAI; . . ./ SRL , SR. PS ITA NO.2401/MUM/2012 3 * +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 2 ( ) / THE CIT(A)- 4. 2 / CIT 5. 3 5 , ' 5 , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , / ITAT, MUMBAI