MOHD SALIM HALIM SHAIKH, MUMBAI V. DCIT 22(1), MUMBAI

ITA 2988/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7719 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 30-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , , , , ! BEFORE SHRI RAJENDRA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.2988/MUM/2014 ( '# $# / ASSESSMENT YEAR:2007-08) MOHAMED SALIM HALIM SHAIKH SHOP NO.3, BLDG. NO.6A, LBS MARG, GHATKOPAR MUMBAI 400086 / VS. ASSTT. COMMISSIONER OF INCOME TAX 22(1) MUMBAI ./ ./PAN/GIR NO. : AANPS9866B ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 24.03.2017 /DATE OF PRONOUNCEMENT: 29.03.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 28.02.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2007-08 IN WHICH THE PENALTY LEVIED BY THE ASSE SSING OFFICER HAS BEEN CONFIRMED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ASSESSEE BY : NONE REVENUE BY: SHRI RAJGURU M. V. ITA NO.2988/M/2014 A.Y.2007-08 2 1. THE AUTHORITIES BELOW HAVE ERRED IN LEVYING / C ONFIRMING LEVY OF PENALTY UNDER SECTION 271(4)(C). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ASSESSING THE TOTAL INCOME TO THE TUNE OF RS .13,69,680/- ON 15.11.2007. SUBSEQUENTLY, REVISED RETURN WAS FILED ON 07.12.2007 DECLARING TOTAL INCOME TO THE TUNE OF RS.50,99,430/ -. THE ASSESSEE WAS A PROPRIETOR OF M/S. BOMBAY GOLDEN ROADLINES ENGAGED IN THE TRANSPORT BUSINESS. DURING THE YEAR, THE ASSESSEE HAS SHOWN GROSS FREIGHT INCOME RECEIVED AT RS.3,43,40,887/- AND HAS DECLARED A NET PROFIT OF 3.94%. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FAI LED TO COMPLY WITH THE NOTICES AND LETTERS ISSUED AND THE ASSESSMENT WAS C OMPLETED 144 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD D EBITED THE FOLLOWING EXPENSES TO TRADING AND P & L ACCOUNT AS UNDER:- TRANSPORT CHARGES RS.1,63,61,545/- PETROL, DIESEL & OIL RS. 66,08,754/- TYRE REPLACEMENT RS. 14,58,660/- VEHICLE REPAIRS & MAINTENANCE RS. 21,98,958/- WAGES RS. 23,84,320/- CONVEYANCE RS. 1,19,216/- SALARIES RS. 9,38,235/- POSTAGE & TELEPHONE RS. 1,28,691/- OFFICE MAINTENANCE RS. 49,560/- RS. 3,02,47,939/- 4. THE ASSESSEE WAS ASKED TO GIVE PARTYWISE AND MON THWISE DETAILS OF EXPENSES INDICATING NAME AND COMPLETE ADDRESS. SIN CE NO DETAILS WERE FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEED INGS, THEREFORE, THE ITA NO.2988/M/2014 A.Y.2007-08 3 GENUINENESS OF THE EXPENSES WERE NOT PROVED. NAME AND ADDRESS OF THE PARTIES WERE NOT PRODUCED. IN VIEW OF THE SAID CIR CUMSTANCES 12% OF RS.3,02,47,939/- I.E. RS.36,29,753/- WAS ADDED TO T HE INCOME OF THE ASSESSEE. DEDUCTION U/S.80-C CLAIMED TO THE TUNE O F RS.1,00,000/- WAS ALSO REJECTED IN THE ABSENCE OF SUPPORTIVE DOCUMENTS. T HEREAFTER, THE ASSESSEE FILED AN APPEAL AND FURNISHED THE ADDITIONAL EVIDEN CE. AT THE TIME OF REMAND PROCEEDING THE ASSESSEE PRODUCED BILLS OF TH E TRANSPORT EXPENSES ONLY TO THE TUNE OF RS.66,25,633/- OUT OF RS.1,63,6 1,545/- AND CLAIMED THAT THE BALANCE BILLS WERE DESTROYED BY WHITE ANTS. NO BILLS WERE PRODUCED IN RESPECT OF PETROL DIESEL AND OIL EXPENSES AS THE PA YMENTS WERE MADE IN CASH. OUT OF THE TYRE REPLACEMENT EXPENSES THE ASS ESSEE COULD PRODUCE BILLS TO THE TUNE OF RS.4,96,000/- OUT OF RS.14,58, 000/-, 50% OF BILLS WERE PRODUCED IN RESPECT OF WAGES AND CONVEYANCE, ONLY 1 /3 RD BILLS RELATING TO VEHICLE REPAIRS WERE PRODUCED. THE CIT(A) SUSTAINE D 10% OF THE EXPENSES AS UNDER:- TRANSPORT CHARGES RS. 10,11,707/- PETROL, DIESEL & OIL RS. 4,35,875/- TYRE REPLACEMENT RS. 92,122/- VEHICLE EXPENSES RS. 1,13,747/- WAGES RS. 2,38,432/- RS. 18,91,883/- 5. THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF THE PENALTY UNDER ISSUE NO.1. THE LEARNED REPRESENTATIVE OF TH E ASSESSEE HAS PLEADED THAT THE INCOME OF THE ASSESSEE WAS ASSESSE D ON THE BASIS OF ESTIMATION BECAUSE IN SUPPORT OF THE CLAIM OF EXPEN SES THE ASSESSEE FAILED TO PRODUCE SOME EVIDENCE THEREFORE IN THE SA ID CIRCUMSTANCES ITA NO.2988/M/2014 A.Y.2007-08 4 NO PENALTY IS LEVIABLE IN VIEW OF THE LAW SETTLED B Y THE HONBLE HIGH COURT OF DELHI DATED 25.01.2010 IN CASE TITLED AS C IT VS. AERO TRADERS P. LIMITED. ON THE OTHER HAND, LEARNED DE PARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE UPON THE ORDER P ASSED BY THE CIT(A). BY GIVING CAREFUL THOUGHTS TO THE CONTENTI ON RAISED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSED T HE RECORD CAREFULLY, IT CAME INTO THE NOTICE THAT THE ASSESSEE HAS CLAIM ED THE FOLLOWING EXPENSES IN THE TRADING AND PROFIT & LOSS ACCOUNT A S UNDER:- TRANSPORT CHARGES RS.1,63,61,545/- PETROL, DIESEL & OIL RS. 66,08,754/- TYRE REPLACEMENT RS. 14,58,660/- VEHICLE REPAIRS & MAINTENANCE RS. 21,98,958/- WAGES RS. 23,84,320/- CONVEYANCE RS. 1,19,216/- SALARIES RS. 9,38,235/- POSTAGE & TELEPHONE RS. 1,28,691/- OFFICE MAINTENANCE RS. 49,560/- RS. 3,02,47,939/- 6. HOWEVER, AT THE TIME OF ASSESSMENT BEFORE THE AS SESSING AUTHORITY THE ASSESSEE FAILED TO PRODUCE THE EVIDEN CE IN SUPPORT OF HIS CLAIM. THE ASSESSING OFFICER ASSESSED THE INCOME @ 12% OF RS.3,02,47,939/- I.E. RS.36,29,753/-. DEDUCTION U/ S.80-C OF THE ACT TO THE TUNE OF RS.1,00,000/- WAS ALSO REJECTED. THERE AFTER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO REDUCED THE TAX LIABILITY AS THE ASSESSE SUCCEEDED TO FURNISH SOME DETAILS IN SUPPOR T OF THEIR CLAIMS. THE CIT(A) ASSESSED THE TAX LIABILITY TO THE TUNE O F RS.18,91,883/- ITA NO.2988/M/2014 A.Y.2007-08 5 WHICH WAS @ 10% OF THE EXPENSES ON DIFFERENT ACCOUN TS SUCH AS TRANSPORTATION CHARGES, PETROL, DIESEL AND OIL, TYR E REPLACEMENT, VEHICLE EXPENSES AND WAGES. NOW IT IS NOT IN DISPUTE THAT THE ASSESSMENT OF THE ASSESSEE WAS FINALIZED ON THE BASIS OF THE ESTI MATION AS THE ASSESSEE FAILED TO PRODUCE SOME EVIDENCES IN SUPPOR T OF HIS CLAIM OF EXPENSES. NO PENALTY IS LEVIABEL IN VIEW OF THE LA W SETTLED BY THE HONBLE HIGH COURT OF DELHI DATED 25.01.2010 IN CAS E TITLED AS CIT VS. AERO TRADERS P. LIMITED WHEREIN IT IS HELD THAT NO PENALTY IS LEVIABLE WHEN THE ASSESSMENT WAS FINALIZED ON THE B ASIS OF ESTIMATION. MOREOVER, REJECTION OF THE CLAIM BY THE AUTHORITY N OWHERE ATTRACT THE PENALTY IN VIEW OF THE LAW SETTLED BY BOMBAY HIGH C OURT IN THE CASE OF CIT VS. RELIANCE UTILITIES AND POWER LTD. (2009) 313 ITR 340. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND LAW MENTIONED ABOVE, WE ARE OF THE VIEW THAT THE PENALTY IS NOT L IABLE TO BE SUSTAINABLE IN THE EYES OF LAW. ACCORDINGLY, WE DE LETE THE PENALTY AND DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AGAINS T THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2017 . SD/- SD/- (RAJENDRA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 29 TH #$ , 2017 MP ITA NO.2988/M/2014 A.Y.2007-08 6 & '$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. , , , , / DR, ITAT, MUMBAI 6. + -$ / GUARD FILE. / BY ORDER, ! ! //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI