KUONI TRAVEL (I) P. LTD, MUMBAI V. DCIT RG 3(2),

ITA 368/MUM/2009

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3301 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-09-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 16-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV GUBGOTRA
• Assessee Lawyers: JAI BHANSALI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M ANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 368 / MUM/2009 ( ASSESSMENT YEAR : 20 02 03 ) M/S. KUONI TRAVEL INDIA PVT. LTD. (NOW MERGED WITH TRAVEL CORPORATION INDIA PVT. LTD.) KUONI HOUSE, N.F. ROAD BEHIND TAJ MAHAL HOTEL COLABA, MUMBAI 400 001 PAN AAACS0170L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX RANGE 3(2), MUMBAI . RESPONDENT ASSESSEE BY : SHRI JAI BHANSALI REVENUE BY : SHRI RAJ EE V GUBG O TRA DATE OF HEARING 0 6 .0 8 .2018 DATE OF ORDER 23.08.2018 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 17 TH OCTOBER 2008, PASSED BY THE L EARNED COMMISSIONER (APPEALS) III , MUMBAI, CONFIRMING PENALTY IMPOSED OF ` 50 LAKH , UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) FOR ASSESSMENT YEAR 20 02 03 . 2 M/S. KUONI TRAVEL INDIA PVT. LTD. (NOW MERGED WITH TRAVEL CORPORATION INDIA PVT. LTD.) 2 . BRIEF FACTS ARE, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INCOME ON 28 TH OCTOBER 2002 DECLARING TOTAL INCOME OF ` 12,13,39,305. ASSESSMENT IN CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 17 TH MARCH 2005, DETERMINING THE TOTAL INCOME AT ` 16,42,76,830. THE DIFF ERENCE BETWEEN THE INCOME RETURNED BY THE ASSESSEE AND INCOME DETERMINED BY THE ASSESSING OFFICER WAS DUE TO ADDITION OF NON COMPETE FEE OF ` 1 CRORE AND LICENSE FEE OF ` 1.05 CRORE. BEING AGGRIEVED OF SUCH ADDITION S , THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3 . THE LEARNED COMMISSIONER (APPEALS) WHILE DECIDING THE APPEAL OF THE ASSESSEE REDUCED THE ADDITION MADE ON ACCOUNT OF NON COMPETE FEE TO ` 75 LAKH , WHEREAS , HE SUSTAINED THE ADDITION MADE O N ACCOUNT OF LICENSE FEE. AGAINST THE AF ORESAID ORDER OF THE LEARNED COMMISSIONER (APPEALS) ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. IN THE MEANWHILE, ON THE BASIS OF ADDITION S SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS), THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 271(1)(C) OF THE ACT IMPOSING PENALTY OF ` 50 LAKH. THOUGH, THE ASSESSEE CHALLENGED IMPOSITION OF PENALTY BEFORE THE LEARNED COMMISSIONER (APPEALS), HOWEVER, IT WAS UNSUCCESSFUL. 3 M/S. KUONI TRAVEL INDIA PVT. LTD. (NOW MERGED WITH TRAVEL CORPORATION INDIA PVT. LTD.) 4 . A T THE OUTSET, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT BOTH THE ADDITION S ON THE BASIS OF WHICH PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS IMPOSED HAVE BEEN DELETED BY THE TRIBUNAL WHILE DECIDING ASSESSEES APPEAL AGAINST SUCH ADDITION S . THUS, HE SUBMITTED , WHEN THE ADDITIONS HAVE BEEN DELETED THE PENALTY IMPOSED CANNOT SUR VIVE . 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE AGREED THAT THE TRIBUNAL HAS DELETED THE ADDITION S . 6 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. UNDISPUTEDLY, THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS IMPOSED BY THE ASSESSING OFFICER ON THE BASIS OF ADDITION S SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS) ON ACCOUNT OF DISALLOWANCE OF NON COMPETE FEE AND LICENSE FEE PAID BY THE ASSESSEE. HOWEVER, WHILE DECIDING ASSESSEES APPEAL AGAINST THE AFORESAID ADDITION S I N ITA NO.1924/MUM./2007, DATED 19 TH JANUARY 2018, THE TRIBUNAL HAS DELETED BOTH THE ADDITIONS. WHEN THE ADDITIONS ON THE BASIS OF WHICH PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS IMPOSED HAVE BEEN DELETED, THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT CANNOT SURVIVE. ACCORDINGLY, WE DELETE THE PENALTY IMPOSED OF ` 50 LAKH UNDER SECTION 271(1)(C) OF THE ACT. GROUNDS RAISED ARE ALLOWED. 4 M/S. KUONI TRAVEL INDIA PVT. LTD. (NOW MERGED WITH TRAVEL CORPORATION INDIA PVT. LTD.) 7 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.08.2018 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 23.08.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI