MIRACLE SHIPPING AGENCIES P.LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 3459/MUM/2012

• Counselvise Citation: 345919914 RSA 2012
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: RA JEEV WAGLAY
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BENCH BEFORE SHRI G.E.VEERABHADRAPPA (PRESIDENT) AND SHRI B.R.MITTAL(JUDICIAL MEMBER) ITA NO.3459/MUM/2012 ASSESSMENT YEAR: 2008 -09 MIRACLE SHIPPING AGENCIES P. LTD., B WING, 101105, SAGAR TECH PLAZA, ANDHERI KURLA ROAD, SAKI NAKA, ANDHERI(E), MUMBAI-72 PAN: AACCM 7606 H DCIT, CIRCLE 2(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI RAJEEV WAGLAY RESPONDENT BY: SHRI C.G.K. NAIR DATE OF HEARING: 4.7.2012 DATE OF PRONOUNCEMENT: 13.7.2012 ORDER PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2008-09 AGAINST ORDER DATED 9.3.2010 OF LD CIT(A), MUMBAI DISPUTING THE C ONFIRMATION OF PENALTY OF RS.22,24,327 LEVIED BY AO U/S.271(1)(C) OF THE ACT. 2. THE RELEVANT FACTS GIVING RISE TO THIS APPEAL AR E THAT ASSESSEE IS IN THE BUSINESS OF RENDERING SERVICES AS SHIPPING AGENCY. A SURVEY ACTION UNDER SECTION 133A WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE AS ON 2 5.3.2008. IN THE COURSE OF SURVEY PROCEEDINGS, CERTAIN DOCUMENTS WERE FOUND AND BASED ON THE SAME, ASSESSEE ADMITTED UNDISCLOSED INCOME OF RS.60 LAKHS. THE ASSESSEE WH ILE FILING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 OFFERED THE SAID SUM OF RS. 60 LAKHS FOR TAXATION. 3. ON VERIFICATION OF AIR REPORT WITH THE LEDGER AC COUNT OF THE ASSESSEE, THE AO NOTICED THAT ASSESSEE COULD NOT RECONCILE THE DISCR EPANCIES IN RESPECT OF 96 VOUCHERS ITA NO.3459/MUM/2010 ASSESSMENT YEAR: 2008 -09 2 AGGREGATING TO RS.14,14,422. THE DETAILS OF THE SA ID VOUCHERS ARE GIVEN BY AO IN ASSESSMENT ORDER AT PAGES 2 TO 4 AND ALSO BY LD CIT (A) AT PAGES 3 TO 5 OF THE IMPUGNED PENALTY ORDER. IN RESPECT OF VOUCHERS, WHICH COULD NOT BE RECONCILED BY THE ASSESSEE, ASSESSEE STATED THAT THEY WERE ABLE TO RECONCILE 12 18 NOS. OF VOUCHERS AMOUNTING TO RS.5,29,11,855 I.E. ABOUT 93% COVERING BY 97% OF TH E AMOUNT AND FOR THE BALANCE AMOUNT, IT WAS SUBMITTED THAT THEY WERE NOT ABLE TO GET CORRECT INFORMATION AS PER AIR INFORMATION. 4. THE AO INITIATED PENALTY PROCEEDINGS IN RESPECT OF THE AMOUNT OF RS. 60 LAKHS WHICH WAS ADMITTED BY THE ASSESSEE AT THE TIME OF S URVEY PROCEEDINGS AS UNDISCLOSED INCOME AND OFFERED FOR TAXATION AND ALSO FOR MAKING ADDITION OF RS.14,14,422 AND LEVIED PENALTY @ 100% OF TAX SOUGHT TO BE EVADED, WHICH CO MES TO RS.22,24,327. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). LD CIT(A) CONFIRMED THE ACTION OF AO. HENCE, ASSESSEE IS IN FURTHER APPEAL BEFORE TH E TRIBUNAL. 5. AT THE TIME OF HEARING, LD A.R. SUBMITTED THAT I N RESPECT OF LEVY OF PENALTY OF RS.60 LAKHS, WHICH WAS OFFERED FOR TAXATION IN THE RETURN OF INCOME FILED, THAT SIMILAR ISSUE WAS CONSIDERED BY THE ITAT, MUMBAI IN THE CAS E OF M/S. LINK SHIPPING & MANAGEMENT PVT LTD VS DCIT (I.T.A. NO.2122/M/2010 F OR A.Y. 2008-09) BY ORDER DATED 30.4.2012, WHEREIN, IT HAS BEEN HELD THAT IF ADDITI ONAL INCOME WAS OFFERED BY THE ASSESSEE FOR TAXATION IN THE RETURN FILED PURSUANT TO SURVEY, WHICH TAKES PLACE BEFORE THE END OF THE RELEVANT FINANCIAL YEAR, THERE IS NO CON CEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WARRANTING THE IMPOSITION OF PENALTY. TO SUBSTANTIATE HIS SUBMISSION, HE FILED A COPY OF SAID ORDER DATED 30. 4.2012. LD A.R. FURTHER SUBMITTED THAT IN RESPECT OF ADDITION OF RS.14,14,422, ASSESS EE COULD NOT RECONCILE THE AMOUNT AS PARTIES WERE NOT TRACEABLE. HE FURTHER SUBMITTED T HAT THERE WAS SUBSTANTIAL NUMBER OF ENTRIES AND THE ASSESSEE COULD RECONCILE THE FIGURE S TO THE EXTENT OF 97% OF THE AMOUNT. HE FURTHER SUBMITTED THAT BALANCE 96 VOUCHERS AGGRE GATING TO RS.14,14,422 WERE IN RESPECT OF SMALL AMOUNTS OF EACH PARTY. HE REFERRE D TO THE DETAILS OF THOSE AMOUNTS GIVEN BY LD CIT(A) AT PAGES 3 TO 5 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE LARGEST AMOUNT IS ONLY RS.67,227. LD A.R. REITERATED THE F ACT THAT ASSESSEE WAS ALSO NOT SURE OF ITA NO.3459/MUM/2010 ASSESSMENT YEAR: 2008 -09 3 THE ACCURACY OF THE DATA WHICH WAS REPORTED IN AIR. LD A.R. SUBMITTED THAT THE LEVY OF PENALTY IN RESPECT OF ABOVE ITEMS SHOULD BE DELETE D. 6. ON THE OTHER HAND, LD D.R. RELIED ON ORDERS OF A UTHORITIES BELOW. HE FURTHER SUBMITTED THAT THE CONCEALMENT IS DETECTED DURING THE COURSE OF SURVEY PROCEEDINGS AND OFFERING OF THE AMOUNT FOR TAXATION IS NOT VOLU NTARY THEREFORE, LEVY OF PENALTY ON THE ADDITION OF RS.60 LAKHS IS JUSTIFIED. TO SUBSTA NTIATE HIS SUBMISSION, HE REFERRED THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F P.GOVINDASWAMY VS CIT, 116 TAXMAN 155(MAD). HE SUBMITTED THAT ASSESSEE COULD NOT ESTABLISH GENUINENESS OF RS.14,14,422. HENCE, LEVY OF PENALTY IS IN ORDER. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. 8. IN RESPECT OF LEVY OF PENALTY ON THE AMOUNT OF R S.60 LAKHS, WHICH WAS DETECTED BY THE DEPARTMENT DURING THE COURSE OF SURVEY PROCE EDINGS TAKEN PLACE ON 25.3.2008, WE OBSERVE THAT ASSESSEE SURRENDERED THE SAID AMOUN T DURING THE COURSE OF SURVEY AND ALSO OFFERED THE SAME FOR TAXATION IN THE RETURN FI LED. THE SURVEY WAS CONDUCTED BEFORE THE END OF THE FINANCIAL YEAR CORRESPONDING TO ASSE SSMENT YEAR UNDER CONSIDERATION, THE OCCASION TO FILE THE INCOME TAX RETURN HAD NOT MATU RED. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE FILED THE RETURN OF INCOME AND OFFER ED THE SAID AMOUNT OF RS.60 LAKHS FOR TAXATION. SIMILAR ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE CASE OF M/S. LINK SHIPPING & MANAGEMENT PVT LTD(SUPRA), WHICH WAS DEC IDED BY CONSIDERING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS, 335 ITR 259(DELHI). IN THE SAID CASE, THE HONBLE HIGH COU RT OBSERVED THAT A SURVEY WAS CARRIED OUT AT THE BUSINESS PREMISES AND GODOWN OF THE ASSE SSEE ON 6.1.2003. THE ASSESSEE SURRENDERED THE AMOUNT OF RS. RS. 88,14,676 DURING THE SURVEY. WHEN THE INCOME TAX RETURN WAS ULTIMATELY FILED BY THE ASSESSEE, THE AS SESSEE INCLUDED THE SURRENDERED AMOUNT IN THE RETURN FILED. THE AO INITIATED PENAL TY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND THAT THE SURREN DER WAS MADE ONLY WHEN DISCREPANCIES WERE BROUGHT TO THE NOTICE OF THE ASS ESSEE. THE AO LEVIED PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME. LD CIT(A) DELETE D THE SAID PENALTY ON THE GROUND THAT THERE WAS NO CONCEALMENT OF INCOME AS IN THE R ETURN FILED BY THE ASSESSEE, THIS ITA NO.3459/MUM/2010 ASSESSMENT YEAR: 2008 -09 4 INCOME WAS DULY REFLECTED. THE TRIBUNAL UPHELD THE ORDER OF LD CIT(A). ON FURTHER APPEAL BEFORE HONBLE HIGH COURT, THEIR LORDSHIPS H ELD THAT THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME BY THE ASSESSEE HAD TO BE IN THE RETURN FILED BY IT. NO PENALTY COU LD BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE PROVISIONS WERE DULY AND UNAMBIGU OUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING THE SURVEY, MAY BE, IT WOULD HAV E NOT DISCLOSED THE INCOME BUT FOR THE SURVEY. HOWEVER, THERE COULD NOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. UNLESS IT WAS FOUND THAT THERE WAS A CTUALLY CONCEALMENT OR NON-DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY COULD NOT BE IMPOSED. SINCE THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN THE RETURN AND OFFERE D THE SURRENDERED AMOUNT FOR THE PURPOSE OF TAXATION, THERE WAS NO SUCH CONCEALMENT OR NON-DISCLOSURE. HENCE, PENALTY COULD NOT BE IMPOSED. WE ARE OF THE CONSIDERED VIE W THAT THE ABOVE CASE OF HONBLE DELHI HIGH COURT (SUPRA) SQUARELY APPLIES TO THE FA CTS OF THE CASE BEFORE US. FURTHER, THE TRIBUNAL BY ITS ORDER DA0TED 30.4.2012 (SUPRA) FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT ALSO CANCELLED THE PENALTY ON SIMI LAR FACTS. HENCE, WE HOLD THAT LEVY OF PENALTY ON THE SAID OFFERED AMOUNT OF RS.60 LAKHS I N THE RETURN OF INCOME IS NOT JUSTIFIED. 9. NOW COMING TO THE LEVY OF PENALTY ON ADDITION OF RS.14,14,422, WE OBSERVE THAT THE DEPARTMENT HAS NOT DISPUTED THE FACT THAT ASSES SEE COULD RECONCILE 93% OF THE ITEMS COVERING 97% OF THE AMOUNT. FURTHER, ASSESSE E CATEGORICALLY CONTENDED THAT THE ACCURACY OF THE DATA WHICH WAS REPORTED IN AIR COUL D NOT BE ACCURATE AND THE SAID FACT HAVE NOT BEEN CONTROVERTED BY THE DEPARTMENT. WE A LSO OBSERVE THAT SAID AGGREGATE AMOUNT OF RS.14,14,422 COMPRISED OF 96 VOUCHERS AND LARGEST AMOUNT IS RS.66,227 ONLY. WE OBSERVE THAT ASSESSEE AGREED FOR THE SAID ADDITION AS IT WAS NOT POSSIBLE TO GET THE INFORMATION BEFORE 31.12.2010. CONSIDERING THE ABOVE CONTENTIONS OF THE ASSESSEE AND ALSO KEEPING IN VIEW THE TOTAL AGGREGA TE AMOUNT REFLECTED IN THE AIR IS RS.5,43,26,277 OUT OF WHICH ASSESSEE WAS ABLE TO RE CONCILE 1218 NUMBERS AMOUNTING TO RS.5,29,11,855, THE ADDITION FOR THE BALANCE AMOUNT OF RS.14,14,422 ON ACCOUNT OF NON- RECONCILIATION OF THE ITEMS COULD NOT BE SAID CONCE ALED INCOME OF THE ASSESSEE OR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. HENCE, THE LEVY OF PENALTY ON THE SAID ADDITION OF RS.14,14,422 IS NOT JUSTIFI ED. ITA NO.3459/MUM/2010 ASSESSMENT YEAR: 2008 -09 5 10. IN VIEW OF ABOVE, WE ALLOW GROUND OF APPEAL TAK EN BY THE ASSESSEE BY DELETING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) BY SETT ING ASIDE THE ORDERS OF AUTHORITIES BELOW. 11. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLO WED. PRONOUNCED IN THE OPEN COURT ON 13 TH JULY , 2012 SD/- (G.E.VEERABHADRAPPA) PRESIDENT SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 13 TH JULY , 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),5, MUMBAI 4. COMMISSIONER OF INCOME TAX, 2 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI