M/s. National Transport Service, Baroda V. The Income tax Officer,Ward-5(3), Baroda

ITA 3220/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6497 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Keywords: Corroborative evidences
• Section: 271(1)(c); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER AND SHRI D. C. AGARWAL, ACCOUNTANT MEMBER I.T.A. NO. 3220/ AHD/2009 (ASSESSMENT YEAR 2006-07) M/S. NATIONAL TRANSPORT SERVICES BESIDES JAIN TEMPLE, NEAR SADHNA CINEMA, SULTANPURA, VADODARA VS. ITO, WARD 5(3), BARODA PAN/GIR NO. :AACFN7187R (APPELLANT) .. (RESPONDENT) APPELLANT BY: WRITTEN SUBMISSION RESPONDENT BY: J P JANGID, SR. D.R. O R D E R PER SHRI D. C. AGARWAL, AM:- THIS IS THE APPEAL BY THE ASSESSEE AGAINST CONFIRM ATION OF THE PENALTY OF RS.65,122/- U/S 271(1)(C) OF THE ACT. THE GROUN D RAISED BY THE ASSESSEE IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE A WELL AS IN LAW, THE LD. CIT(A)-V, BARODA WAS ERRED IN CONFIRMING PENALTY U/ S 271(1)(C) ON INTEREST PAYMENT OF RS.65,122/- TO SUNDRAM FINANCE EVEN THOUGH THE SAME IS GENUINE PAYMENT. 2. THE FACTS RELATING TO THE LEVY OF PENALTY ARE TH AT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRANSPO RTATION. THE RETURN FOR THE ASSESSMENT YEAR 2006-07 WAS FILED ON 26.12.2006 ON AN INCOME OF I.T.A.NO. 3220/AHD/2009 2 RS.3,34,524/-. ASSESSMENT WAS FINALIZED ON 24.11.2 008 ON AN INCOME OF RS.9,95,070/- WHEREIN FOLLOWING ADDITIONS WERE MADE : I) DISALLOWANCE U/S 45(A)(IA) OUT OF CARTING CHARG ES RS.4,38,720/- II) DISALLOWANCE OF INTEREST U/S 40(A)(IA) RS.65 ,122/- III) EXCESS PAYMENT OF REMUNERATION TO THE PARTNER S RS. 96,740/- 3. IT SEEMS THAT ALL THE THREE ADDITIONS BECAME FIN AL AFTER BEING CONTESTED BEFORE LD. CIT(A). THE A.O. HAD INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). IT SEEMS THAT NO EXPLANATION WAS FURNIS HED ON THE GROUND THAT ITS APPEAL BEFORE CIT(A) IS PENDING. THE A.O. CONSIDER ED THAT ASSESSEE HAS CONCEALED AND FURNISHED INACCURATE PARTICULARS OF I NCOME TO THE EXTENT OF RS.3,60,338/- AND PROCEEDED TO LEVY OF PENALTY OF R S.1,21,290/- U/S 271(1)(C) OF THE ACT. 4. LD. CIT(A) CONFIRMED THE PENALTY ONLY IN RESPECT OF ADDITION FOR DISALLOWING THE INTEREST U/S 40(A)(IA) OF RS.65,122 /- AND DELETED THE PENALTY IN RESPECT OF OTHER ADDITIONS. THE FACTS RELATING TO THIS ADDITION ARE THAT THE ASSESSEE CLAIMED THE PAYMENT OF INTEREST TO M/S. SU NDRAM FINANCE LTD. THE A.O. REQUIRED THE ASSESSEE TO FILE DETAILS OF SUCH PAYMENT ALONG WITH SUPPORTING EVIDENCE. HOWEVER, THE ASSESSEE DID NOT FILE ANY DETAIL AND ACCORDINGLY, THE CLAIM OF INTEREST WAS DISALLOWED. THE LD. CIT(A) HAD CONFIRMED THE LEVY OF PENALTY FOR THE SAME REASON T HAT THE ASSESSEE FAILED TO FURNISH EVIDENCE. 5. BEFORE US, THE ASSESSEE HAD FILED WRITTEN SUBMIS SIONS. WE HAVE HEARD LD. D.R. ALSO. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR SUSTAINING THE PENALTY EVEN IN RESPECT OF THIS ADDITION. FIRSTLY, THE A.O. HAS NOT CORRECTLY WORKED OUT AS TO HOW HE HAS CHOSEN A SUM OF RS.3,60 ,338/- WHEREAS IN THE BODY OF THE PENALTY ORDER, HE IS SPEAKING OF INITIA TION OF PENALTY IN RESPECT OF THREE ITEMS AS MENTIONED ABOVE. IN PARTICULAR, HE HAS MENTIONED ADDITION OF I.T.A.NO. 3220/AHD/2009 3 RS.65,122/- AGAINST DISALLOWANCE OF INTEREST U/S 40 (A)(IA) WHEREAS, IN THE BODY OF THE ASSESSMENT ORDER, DISALLOWANCE OF INTER EST PAID TO SUNDRAM FINANCE LTD. IS MADE U/S.36 / U/S.37. THERE IS NO INVOKING OF SECTION 40(A)(IA) IN THE ASSESSMENT ORDER, THOUGH SO MENTIO NED IN THE PENALTY ORDER. EVEN OTHERWISE, ASSESSEE HAS SUBMITTED COPY OF LEDG ER ACCOUNT OF M/S. SUNDRAM FINANCE LTD. WHEREIN PAYMENT OF INTEREST TO THIS PARTY HAS BEEN SHOWN. DEPARTMENT HAS NOT DOUBTED ABOUT PURCHASE O F TRUCKS THROUGH FINANCE ARRANGED FROM M/S. SUNDRAM FINANCE LTD. AND ACCORDINGLY, CLAIM OF INTEREST TO THIS PARTY IS ALLOWABLE. FURTHER, IT I S ALSO MENTIONED BY THE ASSESSEE IN THE EXPLANATION THAT PAYMENT TO M/S. SU NDRAM FINANCE LTD. HAS BEEN MADE THROUGH ACCOUNT PAYEE CHEQUES. NO CASE HAS BEEN MADE OUT BY THE A.O. THAT PAYMENT OF INTEREST WAS ANYWAY WRONG, OR NO SUCH INTEREST WAS PAID TO M/S. SUNDRAM FINANCE LTD., MERELY BECAUSE A SSESSEE DID NOT PREFER TO FILE AN APPEAL AGAINST THIS ADDITION, IT WILL NO T LEAD TO THE CONCLUSION THAT ADDITION REPRESENTS CONCEALED INCOME. THE A.O. HAS ALSO NOT MENTIONED THAT ANY INGREDIENT OF SECTION 271(1)(C) IS APPLICABLE I N RESPECT OF THIS ADDITION. HONBLE APEX COURT IN CIT VS RELIANCE PETRO PRODUCT S LTD. (2010) 322 ITR 158 HELD THAT PENALTY U/S 271(1)(C) CANNOT BE LEVIE D IF THE CLAIM MADE BY THE ASSESSEE HAS NOT BEEN SUSTAINED. WE ACCORDINGLY, C ANCEL THE LEVY OF PENALTY AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 2011. SD./- SD./- (D. K. TYAGI) (D. C. AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27 TH MAY, 2011 SP I.T.A.NO. 3220/AHD/2009 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE 1. DATE OF DICTATION 24.05.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.05.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.25.5.11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 26.5.11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 27.5.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.5.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..