G.V. Puntambekar & Sons Pvt. Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 1(2), Pune

ITA 2948/PUN/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9231 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NO.2924/PUN/2017 / ASSESSMENT YEAR : 2013-14 DCIT, CIRCLE-1(2), PUNE VS. G.V. PUNTAMBEKAR & SONS PVT. LTD., 555, NARAYAN PETH, PUNE 411 030 PAN : AAACG6706A APPELLANT RESPONDENT . / ITA NOS.2947 & 2948/PUN/2017 / ASSESSMENT YEAR : 2013-14 G.V. PUNTAMBEKAR & SONS PVT. LTD., 555, NARAYAN PETH, PUNE 411 030 PAN : AAACG6706A VS. DCIT, CIRCLE-1(2), PUNE APPELLANT RESPONDENT CROSS OBJECTION NO.09/PUN/2021 ARISING OUT OF ITA NO.2924/PUN/2017 / ASSESSMENT YEAR : 2013-14 G.V. PUNTAMBEKAR & SONS PVT. LTD., C/O. RAMES H SHARADCHANDRA PUNTAMBEKAR, 93, GREEN PARK, SAHAKARNAGAR, PUNE -411009 PAN : AAACG6706A VS. DCIT, CIRCLE-1(2), PUNE APPELLANT RESPONDENT ASSESSEE BY SHRI M.K. KULKARNI REVENUE BY SHRI DEEPAK GARG DATE OF HEARING 03-08-2021 DATE OF PRONOUNCEMENT 04-08-2021 ITA NOS.2924, 2947, 2948/PUN/2017 & CO NO.09/PUN/2021 G.V. PUNTAMBEKAR & SONS PVT. LTD., 2 / ORDER PER R.S.SYAL, VP : THIS BATCH OF FOUR APPEALS HAS TWO APPEALS AND ONE CRO SS OBJECTION IN QUANTUM PROCEEDINGS ARISING FROM THE ORDER P ASSED BY THE CIT(A)-1, PUNE ON 13-09-2017 IN RELATION TO THE ASSESS MENT YEAR 2013-14 AND THE LAST APPEAL IS AGAINST THE CONFIRMATION OF PENALTY U/S.271(1)(B) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) FOR THE SAME ASSESSMENT YEAR. 2. BRIEFLY STATED, THE FACTS OF THE QUANTUM APPEALS ARE THAT TH E ASSESSEE FILED ITS RETURN DECLARING LOSS OF RS.2,48,40,695/ -. THE CASE WAS PICKED UP FOR SCRUTINY. SEVERAL NOTICES WERE SENT TO TH E ASSESSEE BUT THE ASSESSEE DID NOT RESPOND. A FINAL SHOW CAUSE NOTIC E WAS ISSUED REQUIRING THE ASSESSEE TO APPEAR IN PERSON AND FUR NISH DETAILS OF VARIOUS EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT AMOUNTING TO RS.10,38,10,831/-. THE ASSESSEE APPEARED AND FILED WRITTEN SUBMISSIONS BUT DID NOT FURNISH ANY BILLS/VOUCHERS RELATING TO THE EXPENSES. ANOTHER OPPORTUNITY WAS GRANTED. THE ASSESSE E APPEARED IN THE NEXT OPPORTUNITY ALSO BUT COULD NOT PRODUCE THE BILLS AND VOUCHERS. THE ASSESSING OFFICER (AO) ADDED BACK TOTAL O F EXPENSES AMOUNTING TO RS.10.38 CRORE. THE LD. CIT(A) OBSERVED TH AT THE EXPENSES INCLUDED A SUM OF RS.5.67 CRORE PERTAINING TO INTE REST PAID ITA NOS.2924, 2947, 2948/PUN/2017 & CO NO.09/PUN/2021 G.V. PUNTAMBEKAR & SONS PVT. LTD., 3 TO OTHERS, WHICH IN HIS OPINION COULD NOT HAVE BEEN DISA LLOWED. AS REGARDS THE REMAINING EXPENSES OF RS.4.61 CRORE, THE LD . CIT(A) SUSTAINED THE ADDITION @10% OF TOTAL EXPENSES AMOUNTING TO RS.46,15,496/-. WHEREAS THE REVENUE HAS FILED AN APPE AL AGAINST THE DELETION OF ADDITION, THE ASSESSEE HAS FILED CROSS APPEAL AND ALSO CROSS OBJECTION AGAINST THE CONFIRMATION OF ADDITION TO THE ABOVE EXTENT . 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND G ONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE A SSESSEE CLAIMED TOTAL EXPENSES OF RS.10.38 CRORE. THESE EXPENS ES INCLUDE SALARY AND WAGES; INSURANCE; POWER AND FUEL; RENT; REPAIR; SA LES PROMOTION; ADVERTISEMENT; TRAVELLING; CONVEYANCE; TELEPHONE; OTHER EXPENSES AND INTEREST PAID TO OTHERS. DESPITE SEVERAL OPPORTUNITIES GIVEN BY THE AO, THE ASSESSEE THOUGH APPEARED IN PERSON ON TWO OCCASIONS BUT DID NOT FURNISH ANY SUPPORTIN G BILLS/VOUCHERS. THE LD. CIT(A) HAS DELETED THE ADDITION OF R S.5.67 CRORE TOWARDS INTEREST BY OBSERVING THAT THE SAME CANNOT BE DISALLOWED WITHOUT PROPER VERIFICATION. THIS OBSERVATION OF THE LD. CIT(A) IS NOT CORRECT INASMUCH AS IT WAS THE ASSESSEE WHO DID NOT FURNISH ANY DETAILS OF THE EXPENSES INCLUDING INTEREST PAID TO OTHERS. THERE CAN BE SEVERAL REASONS FOR THE DISALLOWANCE OF INTER EST. WHEN THE AO REQUIRED THE ASSESSEE TO FURNISH THE RELEVANT DETAILS, IT WAS THE ITA NOS.2924, 2947, 2948/PUN/2017 & CO NO.09/PUN/2021 G.V. PUNTAMBEKAR & SONS PVT. LTD., 4 ASSESSEE WHO WAS AT FAULT. THE LD. AR SUBMITTED THAT THE AS SESSEE HAD TO SHIFT ITS BUSINESS PREMISES BECAUSE IT WAS REQUIRED TO SURRENDER UNDER LOCK AND KEY TO THE BANK. NO DOUBT, THE ASSESSEE PUT IN ITS APPEARANCE TWICE BEFORE THE AO BUT DID NOT FURNISH BOOKS O F ACCOUNT WHICH COULD HAVE ENABLED THE AO TO EXAMINE AND VERIFY THE D ETAILS. AT THE SAME TIME, THE AO IN SUCH CIRCUMSTANCES SHOULD HAVE FOUND OUT A REASONABLE AMOUNT OF DEDUCTIBLE EXPENSES ON A CERTAIN PARAMETER RATHER THAN DISALLOWING THE ENTIRE EXPENSE. IN SUC H A SITUATION, NEITHER THE AO WAS JUSTIFIED IN MAKING TOTAL DISALLOWANCE OF EXPENSES NOR THE LD. CIT(A) WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT NO INTEREST DISALLOWANCE COULD BE MADE WITHOUT PROPER VERIFICATION AND FURTHER DELETING DISALLOWANCE BY 90% O F THE REMAINING EXPENSES. ON A PERTINENT QUERY, THE LD. AR SUBM ITTED THAT THE BOOKS OF ACCOUNT AND VOUCHERS, WHICH WERE EARLIER U NDER LOCK AND KEY OF THE BANK, ARE NOW AVAILABLE AND CAN BE PRODU CED BEFORE THE AO. UNDER SUCH CIRCUMSTANCES, WE SET-ASIDE THE IMPUG NED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO FOR FRAMING THE A SSESSMENT AFRESH AS PER LAW AFTER ALLOWING REASONABLE OPPORTUNITY OF H EARING TO THE ASSESSEE. NEEDLESS TO SAY, THE ASSESSEE WILL BE AT LIBER TY TO LEAD ANY EVIDENCE IN SUPPORT OF ITS CLAIM. ITA NOS.2924, 2947, 2948/PUN/2017 & CO NO.09/PUN/2021 G.V. PUNTAMBEKAR & SONS PVT. LTD., 5 4. IN THE RESULT, THE QUANTUM APPEALS INCLUDING THE CROSS OBJE CTION ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2948/PUN/2017 : 5. AS REGARDS THE PENALTY U/S.271(1)(B) OF THE ACT, WE F IND THAT THE AO IMPOSED PENALTY OF RS.10,000/- ON ACCOUNT OF FAILURE OF THE ASSESSEE TO PUT IN ANY APPEARANCE AND FURNISHING THE NE CESSARY EVIDENCE. WE HAVE NOTICED ABOVE THAT THE PREMISES OF THE A SSESSEE WAS UNDER LOCK AND KEY OF THE BANK. DESPITE THAT, THE AS SESSEE PUT IN ITS APPEARANCE TWICE BEFORE THE AO DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THE EVIDENCE COULD NOT BE FURNISHED BECAUSE IT WAS NOT AVAILABLE AT THE MATERIAL TIME. CONSIDERING THE ENTIRETY OF THE FA CTS AND CIRCUMSTANCES OF THE CASE, WE ARE SATISFIED THAT NO P ENALTY U/S.271(1)(B) CAN BE IMPOSED BECAUSE THERE WAS A REA SONABLE CAUSE IN TERMS OF SECTION 273B OF THE ACT FOR NOT PRODUCING THE E VIDENCE. 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH AUGUST, 2021. SD/- SD/- ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 04 TH AUGUST, 2021 ITA NOS.2924, 2947, 2948/PUN/2017 & CO NO.09/PUN/2021 G.V. PUNTAMBEKAR & SONS PVT. LTD., 6 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE CIT(A)-1, PUNE 3. THE PR.CIT-1, PUNE 4. 5. DR, ITAT, B BENCH, PUNE / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 03-08-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 04-08-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *