DCIT 1(3)(2), MUMBAI V. SUMITOMO CHEMICAL INDIA P.LTD, MUMBAI

ITA 293/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3594 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 12-01-2015
• Court: TRIBUNAL
• Assessee Lawyers: RADHIKA THAKKAR; APLESH GANDHI
• Section: 37(1); 37

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NOS.292 & 293/MUM/2015 ASSESSMENT YEARS: 2004-05 & 2005-06 DCIT-1(3)(2), ROOM NO.564, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S SUMITOMO CHEMICAL INDIA PVT. LTD. 7 TH FLOOR, MOTI MAHAL, 195 J. TATA ROAD, CHURCHGATE, MUMBAI-400020 ( / REVENUE) ( !' # /ASSESSEE) PAN. NO . AAECS3750L / REVENUE BY SHRI B.D. NAIK !' # / ASSESSEE BY MS. RADHIKA THAKKAR & SHRI APLESH GANDHI $ % & # ' / DATE OF HEARING : 22/08/2016 & # ' / DATE OF ORDER: 06/09/2016 ITA NO.292 & 293/MUM/2015 M/S SUMITOMO CHEMICAL INDIA PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE, AGGRIEVED BY THE IMPUGNED ORDER BOTH DATED 22/10/2014 OF THE LD. FIR ST APPELLATE AUTHORITY, MUMBAI. IN THESE APPEALS, THE REVENUE HAS CHALLENGED DELETION OF PENALTY IMPOSED U/S 271( 1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), BEI NG A & P SUBSIDY PAID TO GODREJ SARALEE LTD. WITHOUT DISCUSS ING THE FACTS AMOUNTING TO RS.45 LAKHS AND FURTHER RS.35 LA KHS BEING COMMISSION PAID TO SUMITOMO CORPORATION INDIA PVT. LTD. AND ALSO CANCELLING PENALTY ON THE AMOUNT OF RS.82, 33,041/-, FOR ASSESSMENT YEAR 2004-05 AND IDENTICALLY RS.30 L AKHS, RS.25,47,937/- FOR ASSESSMENT YEAR 2005-06. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, MS. RADHIKA THAKKAR ALONG WITH SHRI ALPESH GANDHI, AT THE OUTSET, CLAIMED THAT SO FAR AS, THE DISALLOWANCE OF RS.45 LAKHS ON ADVERTISEMENT AND PROMOTIONAL EXPENDITURE U/S 37 (1) OF THE ACT IS CONCERNED, THE LD. COMMISSIONER OF INCOM E TAX (APPEAL) DELETED THE PENALTY AND THE TRIBUNAL ALSO DECIDED IN FAVOUR OF THE ASSESSEE. SO FAR AS, DISALLOWANCE OF COMMISSION, AMOUNTING TO RS.35 LAKHS, AND RS.82,33, 041/- PAID TO SUMITOMO CORPORATION INDIA PVT. LTD. AND TO KARAMCHAND APPLIANCES PVT. LTD., RESPECTIVELY, IS C ONCERNED, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (AP PEAL) WAS SET ASIDE TO THE ASSESSING OFFICER WITH A DIRECTION TO FACTUALLY EXAMINE THE MATTER. ON THE OTHER HAND, THE LD. DR, SHRI B.D. ITA NO.292 & 293/MUM/2015 M/S SUMITOMO CHEMICAL INDIA PVT. LTD. 3 NAIK, DID NOT CONTROVERT THE ASSERTION MADE BY THE LD. COUNSEL FOR THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERI NG THE ABOVE FACTUAL MATRIX SO FAR AS DELETING THE PENALTY WITH RESPECT TO DISALLOWANCE OF ADVERTISEMENT AND PROMOT IONAL EXPENDITURE U/S 37(1) OF THE ACT AMOUNTING TO RS.45 LAKHS IS CONCERNED, WE AFFIRM THE STAND OF THE LD. COMMISSIO NER OF INCOME TAX (APPEAL) AS THE TRIBUNAL HAS AFFIRMED HI S STAND, CONSEQUENTLY, DELETION OF PENALTY ON THIS ISSUE BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS AFFIRMED. 2.2. SO FAR AS, DISALLOWANCE OF COMMISSION PAID TO M/S SUMITOMO CORPORATION INDIA PVT. LTD., AMOUNTING TO RS.35 LAKHS AND TO SHRI KARAMCHAND APPLIANCES LTD. AMOUNT ING TO RS.82,33,041/-, CONSIDERING THE FACTS, THE ISSUE WA S RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTI ON TO MAKE PROPER ENQUIRIES, REGARDING PAYMENT OF COMMISSION B Y THE ASSESSEE AND TO RECORD A DEFINITE FINDING, THUS, ON BOTH THIS COUNT, THE PENALTY IS ALSO RESTORED TO THE FILE OF THE LD. ASSESSING OFFICER AND TAKE A VIEW, IN ACCORDANCE WI TH LAW ON THE BASIS OF OUTCOME OF THE REMAND PROCEEDINGS AS C ONTAINED IN PARA-8 OF THE ORDER DATED 03/02/2016 (ITA NO.135 3 AND 1354/MUM/2012). CONSEQUENTLY, ON BOTH THESE ADDITIO NS, THE ISSUE OF PENALTY IS REMANDED BACK TO THE FILE O F THE ASSESSING OFFICER, THUS, ALLOWED FOR STATISTICAL PU RPOSES. ITA NO.292 & 293/MUM/2015 M/S SUMITOMO CHEMICAL INDIA PVT. LTD. 4 3. SO FAR AS, ITA NO.293/MUM/2015, ASSESSMENT YEAR 2005-06, IS CONCERNED, THE DISALLOWANCE OF ADVERTISEMENT AND PROMOTIONAL EXPENDITURE U/S 37(1) OF THE ACT WITH RESPECT TO THE AMOUNT OF RS.30 LAKHS, THE PENALTY IS DIRECTED TO BE DELETED AND WE AFFIRM THE STAND OF T HE LD. COMMISSIONER OF INCOME TAX (APPEAL) AS THE TRIBUNAL HAS DECIDED IN FAVOUR OF THE ASSESSEE. 3.1. SO FAR AS, THE DISALLOWANCE OF COMMISSION PAI D TO SUMITOMO CORPORATION INDIA PVT. LTD., AMOUNTING TO RS.25,47,937/- IS CONCERNED, THE MATTER WAS RESTORE D TO THE ASSESSING OFFICER BY THE TRIBUNAL, THEREFORE, THE P ENALTY IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO TAKE A VIEW ON THE BASIS OF OUTCOME OF THE DIRECTION OF THE TRIBUNAL AS CONTAINED IN PAGE-8 (P ARA-25), THEREFORE, ON THIS COUNT, THE ISSUE IS RESTORED TO THE FILE OF THE LD. ASSESSING OFFICER, CONSEQUENTLY, ALLOWED FOR ST ATISTICAL PURPOSES. FINALLY, BOTH THESE APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 22/08/2016. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ) DATED : 06/09/2016 ITA NO.292 & 293/MUM/2015 M/S SUMITOMO CHEMICAL INDIA PVT. LTD. 5 F{X~{T? P.S / %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1# ( *+ ) / THE CIT (TDS), MUMBAI. 4. 0 0 $ 1# / CIT(A)-14, MUMBAI 5. 34 .# , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI