Bhelsia Design Cluster, CHENNAI V. ITO, Trichy

ITA 2735/CHNY/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5057 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-08-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN ACIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI . , ! , $ % BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.2735/MDS/2014 $! ! /ASSESSMENT YEAR: 2007-08 M/S.BHELSIA DESIGN CLUSTER, EC-99, DEVELOPED PLOT ESTATE, THUVAKUDI, TRICHY-620 015. VS. THE INCOME TAX OFFICER, WARD IV(1), TRICHY. [PAN: AAGFB 8931 P ] ( ' /APPELLANT) ( ()' /RESPONDENT) ' * / APPELLANT BY : MR.S.SRIDHAR, ADV. ()' * /RESPONDENT BY : MR.N.MADHAVAN, ACIT * /DATE OF HEARING : 08.01.2018 * /DATE OF PRONOUNCEMENT : 08.01.2018 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.2735/MDS/2014 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S), TIRUCHIRAPALLI, IN ITA NO.110/10-11/CIT(A)/TRY. DATED 21.05.2014 AGAIN ST THE CONFIRMATION OF THE PENALTY LEVIED U/S.271(1)(D) OF THE ACT FOR THE AY 2007-08. 2. THE APPEAL IS DELAYED BY 70 DAYS. NECESSARY AFF IDAVIT HAS BEEN FILED. THE AFFIDAVIT HAS NOT BEEN SHOWN TO BE WRON G OR FALSE. ITA NO.2735/MDS/2014 :- 2 -: CONSEQUENTLY, THE DELAY IS CONDONED AND THE APPEAL DISPOSED OFF ON MERITS. 3. SHRI N.MADHAVAN, ACIT REPRESENTED ON BEHALF OF T HE REVENUE AND SHRI S.SRIDHAR, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. 4. IT WAS SUBMITTED BY THE LD.AR THAT IN THE COURSE OF ASSESSMENT, IT WAS NOTICED THAT THE ASSESSEE HAD INCURRED EXPENDIT URE ON ACCOUNT OF HOSPITALITY AND GIFTS IN RESPECT OF A MEETING HELD IN A HOTEL. IT WAS A SUBMISSION THAT IN THE COURSE OF ASSESSMENT, THE AS SESSEE HAD SPECIFICALLY AGREED TO THE ADDITION ON THE GROUND THAT THE SAME WAS AN OMISSION OR AN ERROR WITH NO OTHER INTENT. IT WAS A SUBMISSION TH AT THE PENALTY U/S.271(1)(D) OF THE ACT CAME TO BE INITIATED AND L EVIED ON THE ASSESSEE. THE ASSESSEE HAD SUBMITTED IN THE COURSE OF PENALTY PROCEEDINGS THAT IT WAS ONLY A TECHNICAL MISTAKE OR AN ERROR AND THAT P ENALTY WAS NOT LIABLE TO BE LEVIED ON THE ASSESSEE. IT WAS A SUBMISSION THA T THE SUBMISSIONS OF THE ASSESSEE ARE REJECTED AND PENALTY LEVIED. IT W AS A SUBMISSION THAT ON APPEAL, THE LD.CIT(A) HAD ALSO CONFIRMED THE LEVY. IT WAS A SUBMISSION THAT THIS WAS A MISTAKE ON THE PART OF THE ASSESSEE AND THAT ALL FACTS WERE PLACED BEFORE THE AO. IT WAS A SUBMISSION THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PRICE WATE R HOUSE COOPERS PVT. LTD. V. CIT REPORTED IN [2012] 348 ITR 306, PENALTY AS LEVIED MAY BE CANCELLED. ITA NO.2735/MDS/2014 :- 3 -: 5. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS RECORDED THE EXPENSES ON ACCOUNT OF THE HOSPITALITY AND GIFTS WAS INCURRED I N RELATION TO THE MEETING HELD IN A HOTEL AND THAT THE GIFTS REPRESENTED THE VALUE OF GOLD AND SILVER COINS PRESENTED AS A TOKEN OF MEMENTOS TO VARIOUS P ERSONS. THE FACT THAT THE AO HAS RECORDED THAT THE GIFTS WERE PRESENTED A S TOKEN OF MEMENTOS TO VARIOUS PERSONS AND NOT TO THE EMPLOYEES OF THE ASSESSEE CLEARLY SHOWS THAT THE WHOLE AMOUNT CANNOT BE BROUGHT UNDER THE F RINGE BENEFIT. THIS BEING SO, CONSIDERING THE FACT THAT THE DETAILS OF THE EXPENDITURE HAD ALREADY BEEN MADE AVAILABLE IN THE ACCOUNTS OF THE ASSESSEE, IT CAN FAIRLY BE CONCLUDED THAT THE NON-INCLUSION OF THE SAME FOR THE PURPOSE OF FRINGE BENEFIT COMPUTATION IS AN OVERSIGHT BY MISTAKE AND NOT A CONTUMACIOUS CONDUCT. THIS BEING SO, APPLYING THE PRINCIPLES LA ID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF PRICE WATER HOUSE COOP ERS PVT. LTD. REFERRED TO SUPRA, THE PENALTY AS LEVIED ON THE ASSESSEE STA NDS DELETED. ITA NO.2735/MDS/2014 :- 4 -: 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 08, 2018, AT CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER ( ! ) (GEORGE MATHAN) $ /JUDICIAL MEMBER /CHENNAI, 1 /DATED: JANUARY 08, 2018. TLN * ($23 43 /COPY TO: 1. ' /APPELLANT 4. 5 /CIT 2. ()' /RESPONDENT 5. 3 ($$ /DR 3. 5 ( ) /CIT(A) 6. ! /GF