Mamta Silk Mills Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(3), Surat

ITA 2699/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85797 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER MAMTA SILK PVT. LTD, K-1286, SURAT TEXTILE MARKET, RING ROAD, SURAT PAN:AABCM5904D (APPELLANT) VS INCOME TAX OFFICER, WARD 1(3), SURAT (RESPONDENT) REVENUE BY: SHRI ROOP CHAND, SR. D.R. ASSESSEE BY: NILISHA SHAH, A.R. DATE OF HEARING : 04-03-2015 DATE OF PRONOUNCEMENT : 13-03- 2015 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-I, SURAT DATED 12-09-2011 FOR A.Y. 2007-08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. ITA NO. 2699/AHD/2011 ASSESSMENT YEAR 2007-08 I.T.A NO. 2699/AHD/2011 A.Y. 2007-08 PAGE NO MAMTA SILK MILLS PVT LTD VS. ITO 2 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF DYING AND PRINTING OF ART SILK CLOTH AND RESALE OF ART SILK CLOTH. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2007-08 ON 31-10-2007 SHOWING TOTAL INCOME AT RS. NIL. THE CASE WAS SELE CTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) VI DE ORDER DATED 24-12- 2009 AND THE TOTAL LOSS WAS DETERMINED AT RS. 53,70 ,202/-. WHILING FRAMING THE ASSESSMENT REMUNERATION PAID TO DIRECTORS TO TH E EXTENT OF RS. 4,80,000/- WAS DISALLOWED AND ADDED TO THE INCOME. ON THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF REMUNERATION TO DIREC TORS, AO VIDE PENALTY ORDER DATED 16-03-2011 LEVIED PENALTY OF RS. 1,22,9 74/- U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE AFORESAID PENALTY ORDER LEVIED BY AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DAT ED 12-09-2011 UPHELD THE PENALTY LEVIED ON THE DIRECTORS REMUNERATION. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), ASSSESSE IS NOW IN APPEA L AND HAS RAISED THE FOLLOWING GROUND:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED IN PARTLY CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN IMPOSING PENALTY U/S. 271(1)(C) OF THE IT ACT, BY SUSTAINING PENALTY ON THE ADDITION O F RS. 3,12,000/- MADE BY AO BY WAY OF DISALLOWANCE OF DIRECTORS REM UNERATION. 4. BEFORE US, AT THE OUTSET, LD. AR SUBMITTED THAT AGAINST THE QUANTUM ADDITION OF DISALLOWANCE OF DIRECTORS REMUNERATION NO APPEAL WAS PREFERRED BY ASSSESSEE IN VIEW OF CARRY FORWARD LOS SES. IT WAS FURTHER SUBMITTED THAT SIMILAR ADDITION WAS MADE BY AO IN A .Y. 2005-06 AND 2006- 07 AND AGAINST WHICH ASSESSEE HAD PREFERRED APPEAL BEFORE TRIBUNAL. TRIBUNAL VIDE ORDER DATED 25-10-2011 IN ITA NO. 240 5/AHD/2009 HAD RESTORED THE ISSUE TO THE FILE OF AO AND DIRECTED H IM TO RE-ADJUDICATE THE ADDITION AFRESH IN ACCORDANCE WITH LAW AND IN VIEW OF THE DIRECTIONS OF THE TRIBUNAL IN A.Y. 2005-06. SHE ALSO PLACED THE COPY OF THE AFORESAID ORDER. I.T.A NO. 2699/AHD/2011 A.Y. 2007-08 PAGE NO MAMTA SILK MILLS PVT LTD VS. ITO 3 LD AR ALSO SUBMITTED THAT ON IDENTICAL FACTS IN A.Y . 2005-06, THE PENALTY ON THE SIMILAR ADDITION MADE BY AO WAS RESTORED BY HON BLE TRIBUNAL TO AO. SHE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID ORDER IN ITA NO. 1966/AHD/20011 ORDER DATED 19-02-2015. LD. AR THERE FORE SUBMITTED THAT SINCE THE ISSUE IN THE YEAR IS IDENTICAL TO THAT OF EARLIER YEARS, THE ISSUE OF PENALTY BE SET ASIDE TO THE FILE OF AO. LD. DR ON THE OTHER HAND DID NOT SERIOUSLY OBJECT TO THE SUBMISSION MADE BY THE AR O F RESTORING THE ISSUE BACK TO AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED FACT THAT ADDITION ON ACC OUNT OF DIRECTORS REMUNERATION WAS MADE BY AO IN A.Y. 2007-08. IT IS ALSO A FACT THAT SIMILAR DISALLOWANCES WERE MADE IN EARLIER YEARS AN D AGAINST WHICH ASSESSEE HAD PREFERRED APPEALS BEFORE TRIBUNAL BUT NO APPEAL HAS BEEN PREFERRED FOR THE YEAR UNDER CONSIDERATION. THE CO- ORDINATE BENCH OF TRIBUNAL WHILE DECIDING THE ISSUE IN ITA NO. 2405/A HD/2009 FOR A.Y. 2006- 07 HAD REMITTED THE ISSUE TO THE FILE OF AO WITH TH E DIRECTIONS CONTAINED THEREIN. WE ALSO FIND THAT ON THE ISSUE OF PENALTY ON THE ADDITION MADE ON ACCOUNT OF DIRECTORS REMUNERATION IN A.Y. 2005-06 VIDE ORDER DATED 19-02- 2015 IN ITA NO. 1966/AHD/2011, THE ISSUE WAS REMITT ED TO THE FILE OF AO BY THE CO-ORDINATE BENCH OF TRIBUNAL. SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF A.Y. 2005-06 AND A.Y. 2006-07 AND SINCE THE MATTER WITH RESPECT TO QUANTUM AND PENALT Y ADDITION IN THOSE YEARS ARE BEFORE AO, WE ARE OF THE VIEW THAT SINCE THE ISSUE IN THE YEAR UNDER CONSIDERATION IS SIMILAR TO THAT OF EARLIER Y EARS, THE ISSUE OF PENALTY FOR THE YEAR UNDER CONSIDERATION BE REMITTED BEFORE AO. WE THEREFORE IN THE INTEREST OF JUSTICE RESTORE THE PENALTY MATTER TO AO AND DIRECT HIM TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AND A FTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. I.T.A NO. 2699/AHD/2011 A.Y. 2007-08 PAGE NO MAMTA SILK MILLS PVT LTD VS. ITO 4 6. IN THE RESULT, THIS GROUND OF ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. 7. THUS, THE APPEAL OF ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 13/03/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,