TEXFAB ENGINEERS (INDIA) P. LTD, MUMBAI V. ACIT 2(3), MUMBAI

ITA 3189/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48643 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VANDANA SAGAR
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI T.R. SOOD T.R. SOOD T.R. SOOD T.R. SOOD (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 3189/MUM/2010 ASSESSMENT YEAR-2006-07 TEXFAB ENGINEERS (INDIA) PVT. LTD., 312, SHREYAS CHAMBERS, 175-DR. D.N. ROAD, FORT, MUMBAI-400 001 PAN-AAACT 1924H VS. THE ACIT - 2(3), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: MRS. VANDANA SAGAR O R D E R O R D E R O R D E R O R D E R PER ASHA VIJAYARAGHAVAN (JM) PER ASHA VIJAYARAGHAVAN (JM) PER ASHA VIJAYARAGHAVAN (JM) PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 18.01.2010 PASSED BY THE LD. CIT(A)-6 FOR THE ASSESSMENT YEAR 2006-07. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THEREFORE WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND DISPOSE OF THE MAT TER EX PARTE ON MERITS. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TEXTILE PROCESSING MACHINERY. THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 27-11-2006 DECLARING BOOK PROFIT OF RS.26, 83,380/-. ASSESSMENT WAS COMPLETED U/S.143(3) OF THE IT ACT ON 04-0 8-2008 ASSESSING AN INCOME OF RS.27,53,260/-. PENALTY PROCEEDIN GS U/S. 271(1)(C) WERE INITIATED AND NOTICE U/S.274 R.W.S. 2 71 (1)(C) WAS ISSUED. ITA NO. 3189/M/2010 2 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD SCRUTINIZED THE CLAIMS OF THE ASSESSEE AND MA DE THE FOLLOWING DISALLOWANCE:- A)ADDITION ON ACCOUNT OF DIFFERENCE IN INTEREST INCO ME- RS.28,926/- B)ADDITION ON ACCOUNT OF DIFFERENCE IN CLOSING BALAN CE WITH M/S. CRK ENGINEERING WORKS - RS.20,594/- C)DISALLOWANCE OF MISCELLANEOUS EXPENSES - R S.20,594/- TOTAL DISALLOWANCES -RS.69,520/- 5. A SHOW CAUSE NOTICE DATED 04/08/2008 WAS ISSUED TO TH E ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY U/S. 271(1)(C) OF THE ACT SHOULD BE LEVIED FOR FURNISHING INACCURATE PARTICULA RS OF INCOME. THE ASSESSEE VIDE ITS SUBMISSIONS DATED 09/02/2009 AND SUBMITTED ON 12/02/2009 HAVE ITS REPLY TO THE SAME. . 6. THE ACIT-2(3) MUMBAI IMPOSED PENALTY ON ADDITION ON ACCOUNT OF DIFFERENCE IN CLOSING BALANCE. BESIDES OTHER PENALTIES IMPOSED WERE WITH REFERENCE TO ADDITION ON ACCOUNT OF DIFFERENCE IN INTEREST INCOME AND DISALLOWANCES OF MISCELLANEOUS EXPENSES. 7. ON APPEAL BEFORE THE LD. CIT(A), THE CIT(A) HELD AS FOLLOWS: REGARDING THE ADDITION ON ACCOUNT OF DIFFERENCE IN THE CLOSING BALANCE WITH M/S. C.R.K. ENGINEERING WORKS, IT IS NOTED THAT INFORMATION WAS CALLED FOR BY THE ASSESSING OFFICER FROM THIS PARTY BY THE ISSUE OF NOTICES U/S. 133(6) OF THE ACT. ALSO, THE APPELLANT COULD NOT EXPLAIN THE REASONS FOR A DIFFERE NCE IN THE CLOSING BALANCE OF THIS PARTY. THE APPELLANT HAS ALSO NOT TRIED TO RECONCILE THE DIFFERENCE IN THE CLOSING BALANCE WITH THIS PARTY EITHER DURING THE PENALTY PROCEEDINGS OR DURING THE APPELLANT PROCEEDINGS. THE CONTENTION OF THE APPELLANT THAT T HE SAID PARTY WAS A REGULAR CUSTOMER AND THERE WERE NO DISPUTES OR TH AT THE TAXES LEVIED BY THE ASSESSING OFFICER HAD BEEN FULLY PAID DO NOT SUPPORT THE CASE OF THE APPELLANT. HENCE, THE LEVY O F PENALTY U/S. 271(1)(C) WITH REFERENCE TO THIS ADDITION IS SUSTAINED. ITA NO. 3189/M/2010 3 8. REGARDING THE LEVY OF PENALTY IN RESPECT OF DISALL OWANCE OF `. 20,000/- ON ADHOC BASIS OUT OF MISCELLANEOUS EXPENSES AN D WITH RESPECT TO THE PENALTY DUE TO DIFFERENCE IN INTEREST INCOME, THE LD. CIT(A) DELETED THE PENALTIES AND SUSTAINED ONLY THE P ENALTY WITH REFERENCE TO THE ADDITION OF `. 20,594/- ON ACCOUNT OF DIFFERENCE IN THE CLOSING BALANCE OF M/S. C.R.K. ENGINEERING WORKS. 9. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. BEFORE TH E LD. CIT(A) THE AR OF THE ASSESSEE SUBMITTED THAT M/S. C.R.K. ENGINEE RING WORKS WAS A REGULAR CUSTOMER OF THE ASSESSEE AND THERE WAS NO D ISPUTES WITH THEM IN BUSINESS TRANSACTIONS. FURTHER, THE TAXES LEVIED BY THE ASSESSING OFFICER IN THE ORDER U/S. 143(3) DT. 4.8.2008 HAD ALREADY BEEN PAID BY THE ASSESSEE AND THE ASSESSEE HAD NOT PREFERRE D AN APPEAL AGAINST THE SAID ORDER TO BUY PEACE. THE AR FU RTHER STATED BEFORE THE LD. CIT(A) THAT THERE WAS NO LOSS OF REVENU E AND THIS DID NOT AMOUNT TO ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. 10. WE DELETE THE PENALTY TAKING INTO CONSIDERATION THE SMALLNESS OF THE AMOUNT INVOLVED AND THE FACT THAT THERE IS NO LO SS OF REVENUE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 27 TH DAY OF APRIL, 2011 SD/- SD/- (T.R. SOOD) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 27 TH APRIL, 2011 RJ ITA NO. 3189/M/2010 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR J BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 3189/M/2010 5 DATE INITIALS 1 DRAFT DICTATED ON: 21 .0 4. 2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 2 5 .0 4 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10. DATE OF DISPATCH OF ORDER: _________ ______