M/s. Ambarwadikar & Company, Aurangabad V. Assistant Commissioner of Income-tax, Circle - 3, Aurangabad

ITA 2805/PUN/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2125 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-06-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 271(1)(c); 143(3); 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NO.2805/PUN/2017 / ASSESSMENT YEAR : 2007-08 M/S. AMBARWADIKAR & COMPANY, GUT NO.103, BEED BYE PASS ROAD, DEOLAI, AURANGABAD-431010. PAN : AAHFA6223A ....... / APPELLANT / V/S. ACIT, CIRCLE- 3, AURANGABAD. / RESPONDENT ASSESSEE BY : SHRI M. K. KULKARNI REVENUE BY : SHRI VITTHAL BHOSALE / DATE OF HEARING : 17.06.2021 / DATE OF PRONOUNCEMENT : 24.06.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- 2, AURANGABAD (CIT(A) FOR SHORT) DATED 27.10.2017 FOR THE ASSESSMENT YEAR 2007-08 LEVYING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. BRIEFLY, THE FACTS OF THE CASE ARE AS UNDER :- THE APPELLANT IS A FIRM CONSTITUTED UNDER PARTNERSHIP ACT. IT IS ENGAGED IN THE BUSINESS OF ACQUISITION OF GOVERNMENT CONTRACT. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED ON 31.10.2007 DECLARING TOTAL INCOME OF RS.1,06,54,558/-. THE SAID RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT ACCEPTING THE RETURNED INCOME. SUBSEQUENTLY, ON 2 ITA NO.2805/PUN/2017 VERIFICATION OF RECORD, IT IS FOUND THAT THE APPELLANT FIRM TOOK LOAN FROM TATA MOTORS FINANCE LTD. OF RS.4,95,412/- AND PAID INTEREST ON THE SAME AND NO TAX WAS DEDUCTED THEREON. ACCORDINGLY, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 27.03.2014 AND THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER VIDE ORDER DATED 30.03.2015 PASSED U/S 143(3) R.W.S. 147 OF THE ACT AFTER MAKING THE FOLLOWING TWO ADDITIONS :- (I) ADDITION BASED ON THE ENTRIES IN A DIARY WHICH ARE UNRECORDED IN THE REGULAR BOOKS OF ACCOUNT AGGREGATING TO RS.21,07,120/- (20% OF RS.1,05,35,600/-). (II) ADDITION OF RS.4,95,413/- ON ACCOUNT OF INTEREST PAID TO TATA MOTORS FINANCE LTD. 3. BEING AGGRIEVED, AN APPEAL WAS FILED BEFORE THE LD. CIT(A). DURING THE COURSE OF PROCEEDINGS BEFORE THE LD. CIT(A), HE FORMED THE OPINION THAT THE AMOUNTS MENTIONED IN THE DIARY, THE ENTIRE SUM SHOULD BE ASSESSED TAX INSTEAD OF 24% OF AGGREGATE AMOUNTS MENTIONED. ACCORDINGLY, HE ISSUED A SHOW-CAUSE NOTICE FOR THE ENHANCEMENT. IN RESPONSE TO THE SAID SHOW-CAUSE NOTICE, IT WAS EXPLAINED THAT THE ENTRIES IN THE DIARY DOES NOT INDICATE THAT IT WAS RECEIPT OF INCUR BUT IT WAS EXPENDITURE. HOWEVER, REJECTING THE CONTENTION OF THE EXPLANATION OF THE APPELLANT, THE LD. CIT(A) ENHANCED THE ADDITION AND ISSUED A SHOW-CAUSE NOTICE FOR LEVYING OF PENALTY. ACCORDINGLY, PENALTY WAS LEVIED BY LD. CIT(A) VIDE IMPUGNED ORDER DATED 27.10.2017 U/S 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED, THE APPELLANT IS BEFORE US IN THE PRESENT APPEAL. 5. THE LD. AR SUBMITTED THAT THIS TRIBUNAL IN THE QUANTUM APPEAL OF THE ASSESSEE IN ITA NO.2070/PUN/2017 ORDER DATED 27.05.2021 HAD SET-ASIDE 3 ITA NO.2805/PUN/2017 THE ISSUE OF ADDITION OF ENHANCEMENT TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, IT IS PRAYED THAT THE ORDER OF PENALTY ALSO BE SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, LD. SR. DR HAS NO OBJECTION TO REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFICER. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, WE ARE OF CONSIDERED OPINION THAT THE MATTER REQUIRES REMAND TO THE FILE OF THE ASSESSING OFFICER SINCE THE ISSUE OF ADDITION RESTORED TO THE FILE OF THE ASSESSING OFFICER IN THE QUANTUM APPEAL. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 24 TH DAY OF JUNE, 2021. SD/- SD/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 24 TH JUNE, 2021. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-2, AURANGABAD. 4. THE PR. CIT-2, AURANGABAD. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.