M/s. Atlas Cable Industries, Anand V. The ACIT.,Circle-3, Baroda

ITA 3321/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67919 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-10-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 15-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KAREEL SR DR

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) )* + ) )* + ) )* + ) ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.3321/AHD/2010 [ASSTT.YEAR : 2005-2006] M/S.ATLAS CABLE INDUSTRIES AT. PETLAD CAMBAY ROAD DHARMAJ, ANAND. PAN : AACFA 9002 E /VS. ACIT, CIR.3 BARODA. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI VARTIK CHOKSHI + 2 3 )/ REVENUE BY : SHRI P.L KAREEL, SR.DR 5 2 &(*/ DATE OF HEARING : 7 TH OCTOBER, 2013 678 2 &(*/ DATE OF PRONOUNCEMENT : 13/11/2013 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-2006, IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I, BARODA, DATED 20 .9.2010. ITA NO.3321/AHD/2010 -2- 2. THE ONLY GROUND OF THE APPEAL OF THE ASSESSEE IS AS UNDER: '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE DEPARTMENTAL AUTHORITIES HAVE ERRED IN CONSIDERING IT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) AND FURTHER ERRED IN QUANTIFYING IT AT RS.43,820/- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT PENALTY FOR CONCEALMENT WAS LEVIED ON ACCOUNT OF UNVERIFIAB LE EX- GRATIA PAYMENT TO WORKERS OF THE ASSESSEE, AMOUNTING TO RS .L,46,065/-. HE SUBMITTED THAT THE AO HAS DISALLOWED BY OBSERVIN G THAT THERE WAS NO PROVISION FOR THESE EXPENSES BEFORE THE CLOS E OF THE ACCOUNT ON 31.3.2005, AND THAT THE PAYMENTS WERE MA DE IN CASH. HE SUBMITTED THAT THE ASSESSEE HAS MADE THE PAYMENT S TO ITS WORKERS AND WERE INCURRED WHOLLY AND EXCLUSIVELY FO R THE PURPOSE OF BUSINESS, AND DUE TO SMALLNESS OF THE AM OUNT, THE ASSESSEE DID NOT PREFER ANY APPEAL. THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT EVIDENCE IN THE FORM OF DET AILS THEREOF ALONG WITH SIGNATURE OF THE PAYEE WORKERS ALONG WIT H REVENUE STAMP, WHEREVER APPLICABLE, WAS FILED BEFORE THE AO , AND COPY THEREOF HAS BEEN FILED IN THE COMPILATION BEFORE TH E TRIBUNAL. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE L EARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE AO HAS GIVEN A FINDING THAT THE ASSESSEE HAS NOT MADE ANY PROVISIO N FOR THE ALLOWANCE OF THESE EXPENSES BEFORE THE CLOSE OF THE ACCOUNTING YEAR ON 31.3.2005. THE AO HAS FURTHER OBSERVED THAT THERE WERE NO REVENUE STAMP, AND IN SOME CASES, EVEN THERE WER E NO SIGNATURE OF THE PAYEES. HE SUBMITTED THAT THE EXPE NSES WERE NOT VERIFIABLE, AND THEREFORE, THE DISALLOWANCE WAS M ADE BY THE AO, ITA NO.3321/AHD/2010 -3- AND ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST T HE DISALLOWANCE. THE ASSESSEE HAS FAILED TO LEAD ANY EVIDENCE THAT IT HAS ACTUALLY MADE THE PAYMENTS TO ITS WORKERS. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE P ERUSED THE ORDER OF THE AO AND THE CIT(A). WE FIND THAT ALL TH E MATERIAL FACTS RELEVANT TO THE CLAIM OF EX-GRATIA PAYMENTS MADE TO ITS WORKERS BY THE ASSESSEE, AMOUNTING TO RS.1.46 LAKHS WERE DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME F ILED WITH THE DEPARTMENT. THE ASSESSEE HAS FILED NECESSARY DETAIL S DURING THE COURSE OF SCRUTINY ASSESSMENT, WHEREIN NAME OF THE PAYEE ALONG WITH AMOUNT PAID TO THEM AND ALSO REVENUE STAMP AFF IXED, WHERE THE PAYMENTS WERE OF MORE THAN RS.5,000/-, WERE FIL ED BEFORE THE AO AND COPY THEREOF WERE FILED IN THE COMPILATION B EFORE US. IN THESE FACTS, WE ARE OF THE VIEW THAT THE ASSESSEE H AS DISCLOSED NECESSARY FACTS FOR ITS ASSESSMENT, AND HAS FILED E XPLANATION WHICH COULD NOT BE SAID TO BE NOT BONA FIDE , AND MERELY BECAUSE SOME OF THE PAYMENTS REMAINED UNPROVED/UNVERIFIABLE , IN THE OPINION OF THE DEPARTMENT, COULD NOT BE MADE BASIS FOR LEVYING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE DEFECTS IN THE EVIDENCE IN SUPPORT OF CLAIM OF THE ASSESSEE REGARD ING EX-GRATIA PAYMENTS MADE BY THE ASSESSEE TO ITS WORKERS, MAY B E SUFFICIENT TO UPHOLD THE DISALLOWANCE MADE BY THE AO, BUT ARE NOT SUFFICIENT TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, ITA NO.3321/AHD/2010 -4- THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT IS CANCELLED, AND THE GROUND OF THE APPEAL OF THE ASSE SSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&' %&' %&' %&'( (( ( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD