M/s. Gandhi Corporation, Ahmedabad V. Dy.Commissioner of Income Tax,Circle-11, Ahmedabad

ITA 3296/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6349 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 27-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 3296/AHD/2015 (ASSESSMENT YEAR: 2011-12) M/S. GANDHI CORPORATION 5-A, RATNAM BUILDING, C. G. ROAD, NAVRANGPURA, AHMEDABAD - 380009 APPELLANT VS. DCIT, CIRCLE-11, AHMEDABAD RESPONDENT PAN: AAHFG4321K /BY ASSESSEE : NONE /BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R. /DATE OF HEARING : 02.01.2018 /DATE OF PRONOUNCEMENT : 04.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12, EMANATES AGAINST THE CIT(A)-5, AHMEDABADS EX PARTE ORDER DATED 21.09.20 15, IN CASE NO. CIT(A)- 5/DCIT CIR.11/437/2014-15, UPHOLDING ASSESSING OFFI CERS ACTION IMPOSING PENALTY OF RS.8,64,165/- PERTAINING TO THE TWO QUAN TUM ADDITIONS OF DISALLOWANCE OF MANDAP EXPENSES ON ACCOUNT OF REUSABLE ITEMS AND ADDITION ON ACCOUNT OF CESSATION OF LIABILITY AMOUNTING TO RS.18,45,033/- AND RS.9,51,614/- RESPECTIVELY, IN PROCEEDINGS U/S.271(1)(C) OF THE INCOME TAX ACT, 1961, HEREINAFTER THE ACT. ITA NO. 3296/AHD/15 [M/S. GANDHI CORPORATION VS. DC IT] A.Y. 2011-12 - 2 - CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHE ST. THE REGISTRY HAD SENT AN RPAD NOTICE DATED 27.11.2015. THE SAME STA NDS RETURNED. WE THEREFORE PROCEED EX PARTE AGAINST THE ASSESSEE IN THE INSTAN T PROCEEDINGS AS WELL. 2. LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE REPRE SENTING REVENUE STRONGLY SUPPORTS THE IMPUGNED PENALTY IMPOSED IN B OTH THE LOWER PROCEEDINGS. MR. NAGPAL FILES BEFORE US A CO-ORDINATE BENCH ORDE R IN ITA NO.3297/AHD/2015 IN ASSESSEES CASE ITSELF DATED 13.11.2017 FOR SUCC EEDING ASSESSMENT YEAR UPHOLDING IDENTICAL PENALTY QUA THE VERY ISSUES OF REUSABLE ITEMS AS WELL AS CESSATION OF LIABILITY AS FOLLOWS: 4. HEARD BOTH THE PARTIES REITERATING THEIR RESPEC TIVE STANDS. CASE FILE PERUSED. LEARNED COUNSEL VEHEMENTLY CONTENDS THAT NONE OF THE ABOVE THREE ISSUES IS AN INSTANCE OF EITHER CONCEALMENT OR FURN ISHING OF INACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT THE IMPUGNED STATUTORY P ROVISION U/S.271(1)(C) OF THE ACT. WE PROCEED IN THIS BACKDROP TO ONCE AGAIN REI TERATE THE ASSESSEES CASE THROUGHOUT HAS BEEN TO HAVE AGREED FOR ALL THE THRE E ADDITIONS TO BUY PEACE. THE FIRST AND FOREMOST QUESTION AS TO WHETHER THE IMPUG NED PENAL PROVISION COMES INTO PLAY IN CASE OF SUCH AN INSTANCE OF AGREED ADD ITION ALREADY STAND ANSWERED IN REVENUES FAVOUR IN HONBLE APEX COURTS JUDGMEN T IN MAK DATA (P) LTD. VS. CIT 358 ITR 593 (SC) WHEREIN THEIR LORDSHIPS AFFIRM ED HONBLE DELHI HIGH COURTS FINDINGS RESTORING A SIMILAR PENALTY IN ABS ENCE OF A BONAFIDE JUSTIFIABLE EXPLANATION. WE NOW PROCEED TO EXAMINE ALL THE THR EE QUANTUM ADDITIONS ONE BY ONE. FIRST ISSUE HEREIN IS THAT OF DISALLOWANCE OF MANDAP EXPENSES. THE ASSESSEE HAD CLAIMED AN AMOUNT OF RS.2,08,53,762/- COMPRISIN G OF MANDAP CARPET, CLOTH, JUTE, PLASTIC AND WOOD EXPENSES DESPITE THE FACT TH AT ALL OF THEM WERE REUSABLE ITEMS. THE ASSESSING OFFICER SOUGHT TO KNOW DETAIL S THEREOF . WE FIND FROM ASSESSMENT ORDER THAT HE PROPOSED TO DISALLOW 8%. THE ASSESSEE ADMITTEDLY COULD NOT FILE ANY EVIDENCE TO DISPEL THE ABOVE REU SABILITY OF ALL THE ITEMS. WE OBSERVE IN THESE FACTS THAT THE ASSESSEE HAD IN FAC T FILED INACCURATE PARTICULARS IN CLAIMING ALL THE RE-USABLE ITEMS AS EXPENDITURE IN ENTIRETY AFTER SINGLE USE. WE ACCORDINGLY ARE OF THE VIEW THAT THE MERE FACT THAT THE ASSESSING OFFICER ESTIMATED 8% DISALLOWANCE INSTEAD OF THE ENTIRE AMOUNT IN ITS ELF WOULD NOT FORM A VALID REASON FOR US TO DELETE THE CONSEQUENTIAL PENALTY. THE SAME IS THEREFORE CONFIRMED. 5. THE SECOND QUANTUM DISALLOWANCE ITEM IS CESSATIO N OF LIABILITY AMOUNTING TO RS.333500/-. THE ASSESSEES CASE BEFORE US IS T HAT THESE AMOUNTS WERE OUTSTANDING IN ITS BOOK SINCE LONG AS PAYABLE TO IT S CUSTOMERS/PARTY PLOT OWNERS. IT EMERGES THAT THE ASSESSEE COULD NOT EVEN STATE D ETAILS OF ITS RELEVANT CUSTOMERS TO WHOM IT OWED THE MONEY IN QUESTION. WE NOTICE T HAT THE VERY FACTUAL POSITION HAS CONTINUED IN THE IMPUGNED PENALTY PROCEEDINGS. WE THEREFORE FIND NO MERIT IN ITS CONTENTION THAT THE MERE FACT OF THE IMPUGNE D ADDITION BEING AN AGREED ONE ITA NO. 3296/AHD/15 [M/S. GANDHI CORPORATION VS. DC IT] A.Y. 2011-12 - 3 - WOULD RENDER THE CORRESPONDING PENALTY UNSUSTAINABL E AS HELD BY BOTH THE LOWER AUTHORITIES. WE THEREFORE ADOPT CONSISTENCY IN THE INSTANT FACTS AS WELL FOR AFFIRMING BOTH THE LOWER AUTHORITIES ACTION IMPOSING THE PEN ALTY IN QUESTION. 3. THIS ASSESSEES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 04 TH DAY OF JANUARY, 2018.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 04/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0