The ACIT, (OSD)-I, Range-4, Ahmedabad V. Mahendra Petrochemicals Ltd., Ahmedabad

ITA 330/AHD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6301 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 07-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARTAR SINGH
• Keywords: Corroborative evidences

Judgement Text

ITA NO.330/AH D/2011. ASSESSMENT YEAR 2006-07. 1 IN THE INCOME TAX APPELLATE TRIBUNAL - A BENCH, A HMEDABAD. (BEFORE SHRI MUKUL KUMAR SHRAWAT & SHRI A. K. GARODIA) I.T.A.NO. 330/AHD/2011 (ASSESSMENT YEAR: 2006 -2007) THE ASSISTANT COMMISSIONER OF INCOME TAX, (OSD)-I, RANGE-4, NAVJIVAN TRUST BUILDING, OFF ASHRAM ROAD, AHMEDABAD. (APPELLANT) VS. MAHENDRA PETROCHEMICALS LTD., SURVEY NO.221-222,VILLAGE SARI, NEAR BAVLA, TAL. SANAND,DIST. AHMEDABAD. (RESPONDENT) PAN: AABCM 8843 P APPELLANT BY : SHRI KARTAR SINGH, CIT (DR) RESPONDENT BY : NONE. ( )/ ORDER PER: SHRI A.K. GARODIA, A.M. THIS IS A REVENUES APPEAL DIRECTED AGAINST THE OR DER OF LD. CIT (A)- XX, AHMEDABAD DATED 12-11-2010 FOR ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. THE LD. CIT (A) XX, AHMEDABAD HAS ERRED IN LA W AND ON FACTS IN DELETING THE PENALTY OF RS.6,42,200/- LEVI ED U/S. 271(1)(C) OF THE ACT BY THE A.O. WITHOUT PROPERLY APPRECIATING T HE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE A.O. 1.2 IN DOING SO, THE LD. CIT (A) HAS ERRED IN LAW A ND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE COULD NOT FURNISH AN Y SUPPORTING EVIDENCE IN SUPPORT OF EXCESSIVE EXPENSES CLAIMED O N ACCOUNT OF FREIGHT AND INSURANCE AND THEREFORE THE SAID PENALT Y WAS RIGHTLY LEVIED BY THE AO U/S. 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS BY THE ASSESSEE. ITA NO.330/AH D/2011. ASSESSMENT YEAR 2006-07. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF NOTICE AND HENCE WE DECIDE THIS APPEAL EX-PARTE QUA THE ASSESSEE. 4. BRIEF FACTS ARE THAT IT IS NOTED BY THE A.O. IN THE PENALTY ORDER THAT AS PER THE DETAILS SUBMITTED BY THE ASSESSEE, EMPLOYEE S CONTRIBUTION TO PROVIDENT FUND RS.2,07,903 WERE PAID AFTER THE DUE DATE AND THE SAME WAS DISALLOWED BY THE AO IN THE ASSESSMENT AND PENALTY PROCEEDINGS WERE INITIATED. IN ADDITION TO THIS, THERE IS A DISALLOW ANCE OF RS. 15 LAKHS AND RS.2 LAKHS OUT OF FREIGHT EXPENSES AND INSURANCE EXPENSE S RESPECTIVELY. WITH REGARD TO THESE THREE ADDITIONS, THE A.O. IMPOSED P ENALTY OF RS. 6,42,200/- .WHEN THE ASSESSEE CARRIED THE MATTER BEFORE THE LD . CIT (A), HE HAS HELD THAT NO PENALTY IS IMPOSABLE WITH REGARD TO THE ADD ITION MADE BY THE A.O. ON ACCOUNT OF LATE PAYMENT OF PROVIDENT FUND BECAUSE S UCH ADDITION IS BEING DELETED BY VARIOUS BENCHES OF THE TRIBUNAL. IT IS ALSO NOTED BY THE LD. CIT(A) THAT HONBLE DELHI HIGH COURT HAS ALSO HELD THAT IF THE PAYMENT IS MADE BEFORE THE DUE DATE FOR FILING THE RETURN OF I NCOME THEN NO DISALLOWANCE CAN BE MADE U/S. 36 (1) (VA) OF THE I. T. ACT. IN VIEW OF THIS FACTUAL AND LEGAL POSITION, WE FEEL THAT LD. CIT (A ) WAS JUSTIFIED IN DELETING THE PENALTY WITH REGARD TO THIS ADDITION. REGARDIN G PENALTY IMPOSED BY THE A.O. ON ACCOUNT OF OTHER TWO ADDITIONS OF RS.15 LAK HS AND RS.2 LAKHS ON ACCOUNT OF FREIGHT EXPENSES AND INSURANCE EXPENSES RESPECTIVELY, WE FIND THAT BOTH THESE ADDITIONS / DISALLOWANCES ARE ON AD HOC BASIS WITHOUT BRINGING ANY ADVERSE MATERIAL ON RECORD. IT IS NOTED BY THE A.O. IN PARAGRAPH 4 OF THE PENALTY ORDER THAT THE TURNOVER OF THE ASSESSEE-COM PANY DURING THIS YEAR IS OF RS. 68.65 CRORES AS COMPARED TO THE TURNOVER OF RS. 79.29 CRORES IN THE ITA NO.330/AH D/2011. ASSESSMENT YEAR 2006-07. 3 PRECEDING YEAR. THE A.O. NOTED THAT THERE IS DECLI NE IN TURNOVER BUT THERE IS INCREASE IN FREIGHT, OCTROI, CLEARING AND LABOUR CH ARGES AND INSURANCE EXPENSES. BECAUSE OF THIS REASON, HE HAS MADE THESE TWO ADHOC DISALLOWANCES BUT IN THE ABSENCE OF ANY OTHER ADVER SE MATERIAL ON RECORD, WE FEEL THAT IN RESPECT OF THESE TWO DISALLOWANCES, PE NALTY IS NOT JUSTIFIED BECAUSE, IN SOME CASES, EVEN AFTER DECREASE IN TURN OVER, THESE EXPENSES MAY GO UP IF THE RATES ARE INCREASED. WE THEREFORE, FEE L THAT FOR SUCH DISALLOWANCES WHEN NO OTHER ADVERSE MATERIAL IS BRO UGHT ON RECORD, PENALTY WAS NOT JUSTIFIED AND HENCE, WE DECLINE TO INTERFER E IN THE ORDER OF THE CIT (A) ON THIS ISSUE. 5 IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 30- 06 - 2011. SD/- S D/- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. DATED: 30 - 6 - 2011. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-XX, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO.330/AH D/2011. ASSESSMENT YEAR 2006-07. 4 1.DATE OF DICTATION 22 - 06 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 23 /06 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..