ARCH BUILDERS & LAND DEVELOPERS P.LTD, MUMBAI V. ITO 9(1)(1), MUMBAI

ITA 3185/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1265 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 1999-2000
• Appeal Filed On: 05-05-2016
• Court: TRIBUNAL
• Department Lawyers: MRS BEENA SANTOSH
• Assessee Lawyers: AJAY R SINGH; R V SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.3185/M/2016 (AY 1999 - 2000) M/S. ARCH BUILDERS & LAND DEVELOPERS P LTD., B - 35/36, MANGALAM, MATHURDAS ROAD, KANDIVALI (W), MUMBAI 400067. / VS. ITO - 9(1)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AAACA6906A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AJAY R SINGH & MR. R.V. SHAH / RESPONDENT BY : MRS. BEENA SANTOSH, DR / DATE OF HEARING : 10.04 .2017 / DATE OF PRONOUNCEMENT : 21 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 5.5.2016 IS AGAINST THE ORDER OF THE CIT (A) - 20, MUMBAI DATED 14.01.2016 FOR THE ASSESSMENT YEAR 1999 - 2000 IN CONNECTION WITH THE PENALTY ORDER OF THE AO U/S 271(1)(C) OF THE ACT. 2. REFERRING TO THE FACTS, LD AR SUBM ITTED THAT THE ASSESSEE CLAIMED PROVISION FOR GENERAL EXPENSES AMOUNTING TO RS. 27.74 LAKHS. IN THE FIRST ROUND OF THE PROCEEDINGS, AO DISALLOWED THE ASSESSEES CLAIM AND MADE THE ADDITION. IN THE FIRST APPELLATE PROCEEDINGS, CIT (A) ENHANCED THE ASSESSM ENT AND ESTIMATED THE INCOME OF THE ASSESSEE @ 10% OF THE TURNOVER. IN THE SECOND APPELLATE PROCEEDINGS, THE TRIBUNAL REMANDED THE WHOLE ISSUE TO THE FILE OF THE AO. IN THE SECOND ROUND OF THE ASSESSMENT PROCEEDINGS, AO REPEATED THE ABOVE ADDITION AND TH E SAME WAS CONFIRMED BY THE CIT (A) THIS TIME. THUS, THE ADDITION IS NOW ATTAINED THE FINALITY. FURTHER, AO INITIATED THE PENALTY PROCEEDINGS AND LEVIED THE PENALTY OF RS. 9,70,924/ - ON THE SAID ADDITION OF RS. 27,74,068/ - . CIT (A) CONFIRMED THE SAME AN D THEREFORE, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 2 3. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, LD AR SUBMITTED THAT THE ASSESSEES CLAIM OF PROVISION FOR EXPENSES IS A GENUINE CLAIM AND THERE IS INACCURACY OF PARTICULARS OF INCOME. REFERRING TO THE EXTENT OF EXPENDITURE OUT OF THE SAID PROVISIONS, LD AR SUBMITTED THAT ASSESSEE SPEND RS. 27.54 LAKH S OUT OF RS. 27.74 LAKHS (ROUNDED OF). BALANCE OF UNSPENT PROVISION IS OFFERED TO TAX IN THE SUCCEEDING ASSESSMENT YEAR. ACCORDING TO THE LD AR, ASSESSEE DISCLOSED EVERY DETAIL IN THE RETURN OF INCOME AND THEREFORE, THERE IS NO CASE FOR CONCEALMENT. 4. AFTER H E ARING THE ARGUMENTS OF LD REPRESENTATIVES OF BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RE LEVANT MATERIAL PLACED BEFORE THE TRIBUNAL , I AM OF THE OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF CONCEALMEN T PENALTY. HUGE AMOUNT OF LITIGATION IS EVIDENT IN THE MULTIPLE ROUNDS OF ASSESSMENT. AS SUCH, AO HAS TAKEN A VIEW, WHICH IS DIFFERENT FROM THAT OF THAT OF THE ASSESSEE. ALL THE DETAILS ARE DISCLOSED IN THE RETURN OF INCOME. IT IS A SETTLED LEGAL PROPO SITION THAT SOME PROVISIONS CREATED WITH PERFECTION IN FIGURES CAN BE ALLOWED. IN THE INSTANT CASE, ASSESSEE SPENT AN AMOUNT OF RS. 27.54 LAKHS AGAINST THE PROVISIONS OF RS. 27.74 LAKHS. IT IS VERY CLOSE THEREFORE, IN MY CONSIDERED VIEW, THE PENALTY LEVI ED BY THE AO IS REQUIRED TO BE DISMISSED. I ORDER ACCORDINGLY. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 2 1 S T APRIL, 2017. S D / - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 21.04.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 3 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI