Shri Dinesh Surendra Dalal, Ahmedabad V. The Income tax Officer,Ward-10(2), Ahmedabad

ITA 2800/AHD/2012

• Counselvise Citation: 280020514 RSA 2012
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: G C PIPARA
• Keywords: Business income; Reasonable cause

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.2800/AHD/2012 [ASSTT.YEAR : 2008-2009] DINESH SURENDRA DALAL PROP: PRITI CLEARING AGENCY 803, SUYAJAN, OPP: PRESIDENT HOTEL NAVRANGPURA, AHMEDABAD. PAN : AAUPD 7805 L /VS. ITO, WARD-10(2) AHMEDABAD. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : SHRI G.C. PIPARA . + , #/ REVENUE BY : SHRI D.K. MISHRA, SR.DR / + *01/ DATE OF HEARING : 5 TH DECEMBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 10-1-2014 #5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-2009 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XVI, AHMED ABAD DATED 10.9.2012. 2. THE ONLY ISSUE IN THIS APPEAL IS REGARDING PENAL TY IMPOSED UNDER SECTION 271B OF THE ACT OF ` 67,508/- BY THE AO AND CONFIRMED BY THE CIT(A). ITA NO.2800/AHD/2012 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS A CLEARING AND FORWARDING AGENT AND HAS COMMISSION INCOME OF ` 13,90,967/- DURING THE RELEVANT PERIOD. HE SUBMITT ED THAT THE AO HAS TAKEN THIS INCOME FROM C&F BUSINESS AS PROFESSIONAL RECEIPTS OF THE ASSESSEE, ALTHOUGH THE SAME IS BUSINESS INCOME OF T HE ASSESSEE AS HELD BY HONBLE BOMBAY HIGH COURT IN COMMISSIONER OF INCOME -TAX V. JIVANLAL LALLOOBHAI AND CO., 206 ITR 548. HE SUBMITTED THA T EVEN OTHERWISE, THE ASSESSEE HAS REASONABLE CAUSE, AS IT WAS UNDER BONA FIDE BELIEF THAT THE C&F INCOME BEING BUSINESS INCOME, THE AUDIT IS NOT REQUIRED. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARN ED COUNSEL OF THE ASSESSEE. HE SUBMITTED THAT THE ENTIRE RECEIPTS OF THE ASSESSEE HAS TO BE CONSIDERED FOR THE APPLICABILITY OF PROVISION OF ST ATUTORY AUDIT UNDER SECTION 44AB OF THE ACT, AS THE SAME HAS BEARING ON THE PROFIT &LOSS OF AN ENTITY. HE REFERRED TO THE RELEVANT PORTIONS OF THE APPELLATE ORDER PASSED BY THE CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). THE BASIC FACTS OF THE CASE ARE NOT IN DISPUTE. THE AO HIMSELF HAS ADMITTED IN PARA-2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CLEARING AND FORWARDING AGENT AT AIRPORT FOR AIR CARGO. IN THE CASE OF C&F AGENT, I T IS WELL SETTLED THAT IT IS THE ONLY COMMISSION INCOME WHICH HAS TO BE CONSIDER ED FOR THE PURPOSE OF APPLICABILITY OF AUDIT PROVISIONS PROVIDED UNDER SECTION 44AB OF THE ACT AND NOT THE ENTIRE RECEIPTS AS OBSERVED BY THE CIT(A). OTHER ISSUE RAISED BY THE AO THAT THIS RECEIPT OF C&F AGENT ARE PROFESSIONAL RECEIPTS, THE SAME, IN MY VIEW, ARE DEVOID OF ANY MERIT. NAT URE OF THE BUSINESS OF C&F IS ESSENTIALLY THAT OF BUSINESS, WHICH REQUIRES NO SPECIFIC OR SPECIALIZED PROFESSIONAL QUALIFICATION AND THE NAT URE IS THAT OF BUSINESS ITA NO.2800/AHD/2012 ACTIVITY ONLY. THE INSTITUTE OF CHARTERED ACCOUNTA NTS OF INDIA HAS CLARIFIED THAT IN RESPECT OF TURNOVER IN THE CASE O F CLEARING AND FORWARDING AGENTS, IT EXCLUDES REIMBURSEMENT OF EXPENSES. IN T HIS VIEW OF THE MATTER, I HOLD THAT THE PENALTY UNDER SECTION 271B OF THE A CT WAS WRONGLY IMPOSED ON THE ASSESSEE, WHICH IS ACCORDINGLY CANCE LLED AND THE GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD