V 3 DESINGNS P LTD, MUMBAI V. ITO 5(3)-3, MUMBAI

ITA 3934/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7635 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK RIPOTE
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.3934/MUM/2011 (ASSESSMENT YEAR: 2007-08) V 3 DESIGNS PVT. LTD., 5TH FLOOR, SUNTECK CENTRE, 37-40 SUBHASH ROAD, VILE PARLE (E), MUMBAI -400 057 ...... APPELLANT VS INCOME-TAX OFFICER -5(3)-3, MUMBAI ..... RESPONDENT PAN: AACCV 0509 N APPELLANT BY: NONE RESPONDENT BY: MR. DIPAK RIPOTE DATE OF HEARING: 14.03.2012 DATE OF PRONOUNCEMENT: 28.03.2012 O R D E R PER R.S. PADVEKAR, JM : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-9, MUMBAI DATED 08.03.2011 FOR T HE A.Y. 2007-08. CONFIRMING THE PENALTY LEVIED BY THE A.O. U/S.271(1 )(C) OF THE ACT OF RS.67,320/-. WHEN THIS APPEAL WAS CALLED FOR THE H EARING THE LD. D.R. FOR THE REVENUE WAS PRESENT. NONE WAS PRESENT FOR THE ASSESSEE. WE, THEREFORE DECIDED TO DISPOSE OFF THIS APPEAL ON THE BASIS OF THE RECORD AVAILABLE BEFORE US. 2. THE FACTS ARE IN A VERY NARROW COMPASS. IN THIS CASE THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S.143(3) DETERMINING THE LOSS OF (-) RS.6,47,642/-. SUBSEQUENTLY, THE A.O. REVISED THE LOSS BY PASSING ORDER U/S.154 TO RS.4,99,312/-. DURING THE COURSE OF THE ASSESSMENT IT WAS NOTICED BY THE A.O. THAT THE ASSE SSEE HAS CLAIMED THE DEDUCTION OF RS.2 LAKHS TOWARDS FRANCHISE FEES. THE A.O. SOUGHT THE EXPLANATION OF THE ASSESSEE. THE ASSESSEE STAT ED THAT IT HAD PAID RS.2 LAKHS TO TANGY TOMATO FOR FRANCHISE FEES IN DECEMBER 2006 AND ITA 3934/M/2011 V 3 DESIGNS PVT. LTD. 2 THE SAID COMPANY HAD BEEN CLOSED DOWN AND NOT OPERA TING FOR THE LAST TWO YEARS. THE ASSESSEE HAS EXPRESSED HIS INABILIT Y TO PROVIDE ANY CONFIRMATION ABOUT FRANCHISE FEES PAID TO TANGY TOM ATO IN THE FINANCIAL YEAR 2006-07. THE ASSESSEE PRODUCED THE BANK-STATEMENT TO PROVE THAT ACTUAL PAYMENT WAS MADE. THE A.O. MADE THE ADDITION OF RS.2 LAKHS AS THE ASSESSEE COULD NOT PRODUCE THE SU PPORTING EVIDENCE IN RESPECT OF RS.2 LAKHS CLAIMED FOR DEBITING THE S AME TO THE PROFIT & LOSS ACCOUNT. THE A.O. INITIATED THE PENALTY PROCE EDINGS U/S.271(1)(C) AND LEVIED THE PENALTY OF RS.67,320/-. THE ASSESSE E CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT (A) BUT WITHOUT SU CCESS. 3. WE HAVE HEARD THE LD. D.R. AND PERUSED THE RECOR DS. WE FIND THAT AS PER THE REPLY FILED BY THE ASSESSEE TO THE A.O. RS.2 LAKHS WERE PAID TO M/S. TANGY TOMATO IN DECEMBER, 2006 WHICH I S DULY REFLECTED IN THE BANK-STATEMENT ON 10.12.2006. THE A.O. ASKE D THE SUPPORTING EVIDENCE BUT THE ASSESSEE COULD NOT PRODUCE IT BY G IVING THE REASON THAT TANGY TOMATO TO WHOM THE ASSESSEE HAD PAID THE SAID MONEY BECAME INOPERATIVE WHEN THE ASSESSMENT WAS GOING ON AND SUPPORTING PROOF COULD NOT BE PRODUCED. THE A.O. M ADE THE DISALLOWANCE OF THE SAID CLAIM AS SUPPORTING EVIDEN CE WAS NOT PRODUCED BY THE ASSESSEE. ADMITTEDLY, THE ASSESSEE S AMOUNT HAS BEEN ROUTED THROUGH THE BANK ACCOUNT AND IT IS NOT THE CASE OF DETECTION BY THE A.O. MERELY BECAUSE THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE CLAIM OF DEDUCTION THAT CANNOT BE THE GROUND IN ALL THE CASES TO LEVY PENALTY U/S.271(1)(C). THIS IS T HE CASE WHERE THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOM E OR HAS FILED ANY INACCURATE PARTICULARS OF INCOME, AT LEAST THE FACT S ON RECORD DO NOT SUPPORTS SUCH CONCLUSION. IN OUR OPINION, THERE IS NO JUSTIFICATION TO LEVY THE PENALTY U/S.271(1)(C) OF THE ACT. WE, ACC ORDINGLY, DELETE THE SAME AND ASSESSEES APPEAL IS ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ITA 3934/M/2011 V 3 DESIGNS PVT. LTD. 3 ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8TH MARCH, 2012. SD/- ( B. RAMAKOTAIAH ) ACCOUTANT MEMBER SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 28TH MARCH, 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-9, MUMBAI. 4) THE CIT -5, MUMBAI. 5) THE D.R. F BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN