Dr. Pradeep Sehgal, Kanpur V. Astt. Commissioner of Income Tax-5, Kanpur

ITA 271/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4768 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.270 & 271/LKW/2015 ASSESSMENT YEARS 2008-09 & 2009-10 ASSTT COMMISSIONER OF INCOME TAX, CIRCLE-5, 15/295-A, CIVIL LINES, KANPUR- 208 001 VS DR. PRADEEP SEHGAL, C/O DEEPAK KAPOOR, 117/H-1/380, PANDU NAGAR, KANPUR 208 005 PAN ACBPS 5182 N SHRI PRADEEP MEHROTRA, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 19/01/2016 DATE OF HEARING 03 /02/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. 1. BOTH THESE APPEALS ARE FILED BY ASSESSEE AND THE SE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A)-II, KANPUR FOR AY S 2008-09 & 2009-10. SINCE THE COMMON ISSUE IS INVOLVED IN BOTH THESE APPEALS, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 270/LKW/2015 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAI ON FACTS AND CIRCUMSTANCES OF THE CASE, T HE COMMISSIONER OF I TAX (APPEALS) ERRED IN UPHOLDING THE PENALTY L EVIED BY 2 ASSESSING OFFICER U/S 271(I)(C) OF THE INCOME TAX A CT, 1961 WITHOUT APPRECIATING THE FACT THAT THE EXPENSES/ CL AIMS DISALLOWED WERE SUO MOTTO OFFERED BY THE APPELLANT AND ADMITTED THE MISTAKE ON BEING POINTED BY THE AO. 2 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN UPHOLDING THE PENAL TY LEVIED BY THE AO WITHOUT APPRECIATING THE TACT THAT ADDITIONS OF EXPENSES WERE MADE ON ESTIMATION BASIS AND THE SAME WERE PAR TIALLY ALLOWED IN THE FIRST APPEAL BEFORE CIT(A) IN HIS AP PEAL ORDER. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE OF THE CASE CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY AO WITHOU T APPRECIATING THE FACT THAT THE EXPENSES CLAIMED BY APPELLANT WERE BONAFIDE EXPENSES. 4. THAT THE ORDER PASSED BY THE LD CIT(A) BEING ERRONE OUS IN LAW AND ON FACTS DESERVES TO BE VACATED. 5. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF TH E GROUND OF APPEAL OR TAKE ADDITIONAL GROUND DURING PENDENCY OF APPEAL. ITA NO. 270/LKW/2015 2.1 THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1- THAT ON FACTS AND CIRCUMSTANCES OF THE CASE C IT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN UPHOLDING THE PENALTY L EVIED BY THE AO WITHOUT APPRECIATING THE FACT THAT ADDITIONS OF EXP ENSES WERE MADE ON ESTIMATION BASIS AND THE SAME WERE PARTIALL Y ALLOWED IN THE FIRST APPEAL BEFORE CIT(A) IN HIS APPEAL ORDER. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE OF THE CASE CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY AO WITHOU T APPRECIATING THE FACT THAT THE EXPENSES CLAIMED BY APPELLANT WER E BONAFIDE EXPENSES. 3. THAT THE ORDER PASSED BY THE LD. CIT(A) BEING ER RONEOUS IN LAW AND ON FACTS DESERVES TO BE VACATED. 3 4. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUND OF APPEAL OR TAKE ADDITIONAL GROUND DURING PENDENCY OF APPEAL. 3. IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT THE PENALTY IN THE FACTS OF THE PRESENT CASE IS NOT JUSTIFIED BECAUSE THE DI SALLOWANCES MADE BY THE ASSESSING OFFICER ARE EITHER ON ESTIMATE BASIS OR O N THE BASIS THAT NO PAYMENT WAS MADE BY THE ASSESSEE BUT THE ASSESSING OFFICER HAS NOT CONSIDERED THIS ASPECT THAT THE ASSESSEE IS FOLLOWING MERCANTILE BA SIS OF ACCOUNTING AND NOT CASH BASIS OF ACCOUNTING. 4. LD. DR OF THE REVENUE SUPPORTED THE ORDERS OF AU THORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IN ASSESSMENT YEAR 2008-09, ONE OF THE DISALLOWANCES MADE BY THE ASSESSING OFFICER IS 20% OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD REPAIRS AND MAINTENANCE ON THIS BASIS THAT THE ASSESSEE HAS NOT PRODUCED BI LLS AND VOUCHERS. IN THE SAME YEAR, DISALLOWANCE OF RS.5,618/- UNDER THE HEA D LEGAL FEES AND RS.11,236/- UNDER THE HEAD AUDIT FEES WERE MADE BY THE ASSESSING OFFICER ON THIS BASIS THAT THESE WERE SIMPLY PROVISIONS BECAUS E THE ASSESSEE COULD NOT FURNISH ANY PROOF OF ITS PAYMENTS. SIMILARLY AN AMO UNT OF RS.14,800/- CLAIMED BY THE ASSESSEE UNDER THE HEAD INVERTER MAINTENANCE WAS DISALLOWED BY THE ASSESSING OFFICER ON THIS BASIS THAT THE ASSESSEE F AILED TO PRODUCE BILLS AND VOUCHERS. SIMILARLY ANOTHER DISALLOWANCE OF RS.40,3 95/- WAS MADE BY THE ASSESSING OFFICER UNDER THE HEAD PRINTING AND STATI ONARY WITH THE SAME OBSERVATION THAT THE ASSESSEE FAILED TO PRODUCE BIL LS AND VOUCHERS. HE ALSO MADE DISALLOWANCE OF RS.13,920/- OUT OF VEHICLE RUN NING & MAINTENANCE EXPENSES OF RS.83,520/- ON THE BASIS THAT THERE IS POSSIBILITY OF USE OF CAR FOR PERSONAL PURPOSES. SIMILARLY IN ASSESSMENT YEAR 200 9-10, DISALLOWANCE OF RS.47,796/- WAS MADE UNDER THE HEAD REPAIRS AND MAI NTENANCE ON THE BASIS OF SOME ALLEGATION THAT THE ASSESSEE COULD NOT PRODUCE BILLS AND VOUCHERS AND 4 OTHER DISALLOWANCES MADE IN THIS YEAR ARE ALSO ON T HIS ALLEGATION THAT THE ASSESSEE COULD NOT PRODUCE BILLS AND VOUCHERS OR TH ERE MAY BE PERSONAL USE OF VEHICLES OR NO EVIDENCE OF PAYMENT OF AUDIT FEES ET C. HENCE, IT IS SEEN THAT IN BOTH THE YEARS, VARIOUS DISALLOWANCES WERE MADE BY THE ASSESSING OFFICER EITHER ON THIS BASIS THAT THE ASSESSEE COULD NOT PR ODUCE BILLS AND VOUCHERS OR ON THIS BASIS THAT THERE MAY BE PERSONAL USE OF VEH ICLES OR ON THIS BASIS THAT THE ASSESSEE IS FAILED TO PRODUCE EVIDENCE OF PAYME NT OF AUDIT FEES AND LEGAL CHARGES ETC. UNDER THESE FACTS, THE DISALLOWANCES M AY BE PROPER BUT IT CANNOT BE CONCLUDED THAT THERE WAS ANY CONCEALMENT OF INCO ME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THEREFORE, IN OUR CONSIDERED OPINION, PENALTY UNDER THESE FACTS IS NOT JUSTIFIED. HENCE W E DELETE THE PENALTY IN BOTH THE YEARS. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A.K . GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 03/02/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR