M/s. Kamron Laboratories Ltd., Mehsana V. The Dy.CIT.,Mehsana Circle, Mehsana

ITA 3013/AHD/2011

• Counselvise Citation: 301320514 RSA 2011
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 02-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: D P SONI
• Keywords: Gift; Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.A. NO.3013/AHD/2011 A. Y. 2006-07 M/S KAMRON LABORATORIES LTD. 737, RAKANPUR VILLAGE SOLA-SANTEJ ROAD, KALOL MEHSANA-382721 PAN-AABCK2012L APPELLANT VS. THE DCIT, MEHSANA CIRCLE MEHSANA RESPONDENT DEPARTMENT BY : SHRI C.K. MISHRA, SR. D.R. ASSESSEE BY : SHRI D.P. SONI, A.R. DATE OF HEARING : 03.07.2012 DATE OF PRONOUNCEMENT 13.07.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A), GANDHINAGAR, AHMEDABAD DATED 01.10.2011 CONFIRMING THE PENALTY I MPOSED BY THE A.O. U/S 271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASS ESSMENT PROCEEDINGS THE A.O. FOUND THAT THE ASSESSEE HAD CLAIMED THE EXPEND ITURE OF RS.1,33,679/- ON ACCOUNT OF GIFT TO DOCTORS. THE ASSESSEE WAS ASKED TO GIVE A NOTE ON HOW THIS I.T.A. NO.3013/AHD/2011 A. Y. 2006-07 2 EXPENDITURE CAN BE TREATED AS BUSINESS EXPENDITURE. THE CONTENTION OF THE ASSESSEE WAS THAT EVERY EXPENDITURE INCURRED ON PUR CHASE OF PRESENTATION ARTICLES WHICH HAS BEEN GIVEN TO THE DOCTORS IS EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND EACH AN D EVERY EXPENDITURE IS DEDUCTIBLE IN THE COMPUTATION OF TOTAL INCOME. IT WAS FURTHER SUBMITTED THAT BUSINESS CAN BE SUBSTANTIALLY GENERATED WITH THE AS SISTANCE OF DOCTORS BECAUSE THE BUSINESS DEPENDS ON THE PRESCRIPTION OF THE DOCTORS . THIS EXPLANATION WAS NOT ACCEPTABLE TO THE A.O. AND THEREFORE, THE A.O. DISA LLOWED THIS CLAIM OF EXPENDITURE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS WERE ALSO INITIATED. AFTER THE ADDITION WAS CONFIRMED BY LD. CIT(A) THE PENALTY WAS IMPOSED BEING 100% OF TAX SOUGHT TO BE EVADED ON ADDITION O F RS.1,33,679/-. AFTER TAKING INTO CONSIDERATION THE REPLY OF THE ASSESSEE, IN AP PEAL, THIS PENALTY HAS BEEN CONFIRMED BY LD. CIT(A). FURTHER AGGRIEVED, NOW TH E ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSE SSEE SUBMITTED THAT THOUGH THE ADDITION OF RS.1,33,679/- HAS BEEN SOUGH T CONFIRMED UP TO HONBLE ITAT, THE PENALTY IS NOT LEVIABLE AS DURING THE ASS ESSMENT PROCEEDINGS ALL THE DETAILS IN SUPPORT OF ITS CLAIM OF EXPENDITURE IN R ESPECT OF GIFT GIVEN TO DOCTORS HAS BEEN FURNISHED AND THEREFORE, IT CANNOT BE SAID THA T THERE WAS ANY CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE OR INACCURATE PA RTICULARS OF INCOME WERE FURNISHED BY THE ASSESSEE. PLACING RELIANCE ON THE DECISION OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. REPORTED IN (2010) 322 ITR 1 58 (SC) IT WAS PRAYED THAT SINCE ALL THE DETAILS IN RESPECT OF GIFTS AMOUNTING TO RS.1,33,679/- WAS ALREADY ON I.T.A. NO.3013/AHD/2011 A. Y. 2006-07 3 RECORD, THEREFORE, THE PENALTY U/S 271(1)(C) IS NOT TO BE LEVIED. LD. D.R. ON THE OTHER HAND, VEHEMENTLY SUPPORTED THE ORDER PASSED B Y THE LOWER AUTHORITIES. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THAT DURING THE ASSESSMENT PROCEEDINGS ALL THE RELE VANT DETAILS IN SUPPORT OF HIS CLAIM OF EXPENDITURE INCURRED ON GIFT GIVEN TO DOCT ORS AMOUNTING TO RS.1,33,679/- WERE FURNISHED BY THE ASSESSEE. THUS, THE EXPLANAT ION OFFERED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM OF EXPENDITURE IN RESPECT OF G IFT TO DOCTORS WAS DULY SUBSTANTIATED BY SUCH DETAILS. THE EXPLANATION OF THE ASSESSEE, BEING BONAFIDE IN NATURE, THE EXPLANATION-1 TO SECTION 271(1)(C) OF T HE ACT IS NOT ATTRACTED TO THE FACTS OF THIS CASE AND THEREFORE, PENALTY FOR CONCE ALMENT U/S 271(1)(C) IS NOT LEVIABLE. THE PENALTY, SO IMPOSED BY THE A.O. AND SUSTAINED BY LD. CIT(A) IS, THEREFORE, DELETED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 13.07.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER N.K. CHAUDHARY, SR. P.S. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ) / ' * ! , '# +