SUPREME COMMUNICATIONS LTD., MUMBAI V. ITO 7 (2) (4), MUMBAI

ITA 2785/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5554 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2785/M/2016 ASSESSMENT YEAR: 2010-11 M/S. SUPREME COMMUNICATIONS LTD., SHOP NO.2, SECTOR 21, PLOT NOO.302, NERUL EAST, NAVI MUMBAI 400 708 PAN: AAACS 9792A VS. INCOME TAX OFFICER 7(2)- 4, ROOM NO.618, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI V. JUSTIN, D.R. DATE OF HEARING : 21.06.2018 DATE OF PRONOUNCEMENT : 24.07.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 28.01.2016 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED CIT(APPEALS) WAS NOT JUSTIFIED IN C ONFIRMING THE LEVY OF THE PENALTY OF RS.61,93,425/- U/S 271(1)(C) OF THE ACT. HE HAS FAILED TO APPRECIATE THAT THE SAID PENALTY WAS NOT LEVIABLE AT ALL. THE APPELLANT CRAVES LEAVE TO ADD TO, TO ALTER OR T O AMEND THE ABOVE GROUND OF APPEAL. ITA NO.2785/M/2016 M/S. SUPREME COMMUNICATIONS LTD. 2 3. AT THE OUTSET, WE WOULD LIKE TO MENTION THAT NEIT HER THE ASSESSEE NOR THE AUTHORISED REPRESENTATIVE OF THE A SSESSEE APPEARED DURING TO ATTEND THE HEARING WHEN THE CASE WAS CALLED UP FOR HEARING. WE FURTHER NOTICE THAT IN T HE PREVIOUS HEARING ON 03.05.2018 THE ASSESSEE DID NOT APPEAR BE FORE THE BENCH AND THUS THE CASE WAS ADJOURNED TO TODAY. WE ARE, THEREFORE, DISPOSING OF THE APPEAL AFTER CONSIDERIN G THE MERIT AND HEARING THE LD. D.R. ON THE ISSUE IN ABSENCE OF T HE ASSESSEE. 4. THE ONLY ISSUE RAISED IN THE GROUND OF APPEAL IS AGAINST THE CONFIRMATION OF PENALTY OF RS.61,93,425/- BY LD . CIT(A) AS IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE AC T. 5. THE FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS F RAMED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 20 .12.2012 MAKING AN ADDITION TO THE TOTAL INCOME OF THE ASSES SEE TOWARDS CESSATION OF LIABILITY UNDER SECTION 41(1) AMOUNTING TO RS.1,82,21,317/- AND AFTER SETTING OFF THE BROUGHT F ORWARD LOSSES, THE TOTAL INCOME WAS COMPUTED AT NIL. THERE AFTER, THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE VIDE LETTER D ATED 19.06.2013 AS TO WHY THE PENALTY UNDER SECTION 271(1) (C) SHOULD NOT BE IMPOSED WHICH WAS REPLIED BY THE ASSE SSEE BY SUBMITTING THAT THE ASSESSEE COMPANY HAS MADE ONE T IME SETTLEMENT WITH INTERNATIONAL ASSET RECONSTRUCTION COMPANY PVT. LTD. (IARC) WHO HAD TAKEN OVER THE LOAN PORTFOL IO FROM BANK OF BARODA. UNDER THE SAID SCHEME, AFTER OBTAINI NG NO DUE CERTIFICATE FROM THE SAID COMPANY THE AMOUNT WH ICH WAS DETERMINED TO BE NOT PAYABLE BY THE ASSESSEE WAS TR ANSFERRED ITA NO.2785/M/2016 M/S. SUPREME COMMUNICATIONS LTD. 3 TO CAPITAL RESERVE ACCOUNT IN THE BOOKS OF ACCOUNTS OF THE COMPANY AND THUS THE PROVISIONS OF SECTION 41(1) AN D 28(4) OF THE ACT WERE NOT APPLICABLE AND ACCORDINGLY NO PENA LTY WAS IMPOSABLE AS THE ASSESSEE MADE FULLY AND TRULY MADE THE DISCLOSURE IN THE ACCOUNTS. HOWEVER, THE REPLY OF T HE ASSESSEE DID NOT FIND FAVOUR WITH THE AO AND HE IMPOSED A PE NALTY OF 100% OF THE TAX SOUGHT TO BE EVADED AT RS.61,93,425/ -. 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DISM ISSED THE APPEAL OF THE ASSESSEE BY OBSERVING THAT THE CA SE LAWS RELIED UPON BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS WHEREAS IN THE PRESENT CASE THE LIABILITY HAS CEASE D TO BE PAYABLE ON ONE TIME SETTLEMENT OF THE CASE OF THE A SSESSEE. THE LOAN WAS BORROWED BY THE ASSESSEE FOR THE PURPO SE OF TRADING AND THIS WAS DULY ACCEPTED BY THE ASSESSEE AS RECORDED BY THE AO IN PARA 3 OF THE PENALTY ORDER B Y STATING THAT THE ASSESSEE HAS GIVEN NO OBJECTION TO THE ADD ITION BEING MADE UNDER SECTION 41(1) OF THE ACT AS THE SAME PER TAINED TO INTEREST COMPONENT LIABILITY EXTINGUISHED UPON ONE TIME SETTLEMENT WITH THE IARC. WE OBSERVE FROM THE PERUS AL OF THE ORDER OF LD. CIT(A) THAT THERE IS NO INFIRMITY IN TH E SAID ORDER AS THE SAME IS PASSED AFTER CONSIDERING ALL THE FAC TS OF THE CASE AND DISTINGUISHING THE DECISION RELIED UPON BY THE ASSESSEE. MOREOVER, THERE IS NO MATERIAL BROUGHT BE FORE US TO CONTROVERTING THE FINDING AS RECORDED BY LD. CIT(A). WE, THEREFORE, ARE INCLINED TO AFFIRM THE ORDER OF LD. CIT(A). ITA NO.2785/M/2016 M/S. SUPREME COMMUNICATIONS LTD. 4 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.07.2018. SD/- SD/- (C.N. PRASAD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 24.07.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.