NEW EMPIRE TEXTILE PROCESSORS P.LTD, MUMBAI V. ASST CIT RG 4(3), MUMBAI

ITA 4131/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88572 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-01-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 19-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Assessee Lawyers: N M PORWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.4131/M/2011 ASSESSMENT YEAR: 2003-04 M/S. NEW EMPIRE TEXTILE PROCESSORS PVT. LTD., 51/53, TELGALLI, GROUND FLOOR, VITHALWADI, KALBADEVI ROAD, MUMBAI - 400 002 PAN: AAACN 7363A VS. INCOME TAX OFFICER 4(3)(1), AAYAKAR BHAVAN, MUMBAI 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N.M. PORWAL, A.R. REVENUE BY : SHRI ASGHAR ZAIN V.P., D.R. DATE OF HEARING : 15.01.2015 DATE OF PRONOUNCEMENT : 04.03.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 01.03.2011 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 2003-04 AGITATING THE LEVY OF PENALTY U/S 271(1) (C) OF THE INCOME TAX ACT IN RELATION TO DISALLOWANCE OF RS.3,45,925/- ON ACCOUNT OF TRANSPORT CHARGES CLAIM ED TO BE PAID BY THE ASSESSEE TO M/S. KARAN TRANSPORT. 2. THE LD. CIT(A) HAS CONFIRMED THE PENALTY IN RELA TION TO ABOVE SAID DISALLOWANCE OBSERVING THAT THE SAID DISALLOWANCE H AS BEEN HAS BEEN CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 30.03.10 PASSED IN ASSESSEES APPEAL BEARING ITA NO.7235/M/2007. THE SAID DISALLOWANCE WAS MADE BECAUSE OF THE FACT THAT THE ASSESSEE HAD CLAIMED TO HAVE PAID THE SAID AMOUNT ON ACCOUNT OF TRANSPORTATION CHARGES TO M/S. KARAN TRANSPORT, WHE REAS, THE SAID AMOUNT WAS ITA NO.4131/M/2011 M/S. NEW EMPIRE TEXTILE PROCESSORS PVT. LTD. 2 FOUND CREDITED INTO THE ACCOUNT OF SOME OTHER PERSO N NAMELY MR. DHARMENDRA P. DUBEY. THE ASSESSEE COULD NOT EXPLAIN AS TO HOW THE SAID AMOUNT GOT CREDITED IN THE ACCOUNT OF MR. DHARMENDRA P. DUBEY. THEREFORE, IT WAS HELD THAT THE ASSESSEE COULD NOT ESTABLISH THE GENUINENE SS OF THE EXPENDITURE AND THAT THE PAYMENT CREDITED IN THE ACCOUNT OF MR. DHA RMENDRA P. DUBEY COULD NOT BE CONSIDERED AS HAVING BEEN INCURRED FOR BUSIN ESS PURPOSES. THE ASSESSEE THEREAFTER MOVED A MISCELLANEOUS APPLICATION NO.370 /M/2012 UNDER SECTION 254 OF THE ACT PLEADING THAT A MISTAKE HAD OCCURRED IN THE ORDER OF THE TRIBUNAL DATED 30.03.10. THE ASSESSEE EXPLAINED THAT THE PR OPRIETOR OF M/S. KARAN TRANSPORT NAMELY MR. PRATAP LALCHAND AGNANI, TO WHO M THE PAYMENTS BY WAY OF CHEQUE WERE MADE, HAD FURTHER DISCOUNTED SOME OF THE CHEQUES TO SUB CONTRACTORS AS THEY COULD NOT WAIT FOR PAYMENT DUE TO FINANCIAL PROBLEMS. THE SAID MR. PRATAP LALCHAND AGNANI HAD ALSO MADE A STA TEMENT BEFORE THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) IN THIS RESPECT. IT HAD BEEN FURTHER EXPLAINED THAT THE SAID SUB CONTRACTOR S FURTHER DISCOUNTED THE CHEQUES IN FAVOUR OF MR. DHARMENDRA P. DUBEY. IT W AS FURTHER PROVED BY WAY OF A CERTIFICATE FROM THE BANK THAT THE CHEQUES CRE DITED INTO THE ACCOUNT OF MR. DHARMENDRA P. DUBEY WERE IN FACT ISSUED IN THE NAME OF M/S. KARAN TRANSPORT. IT WAS THEREFORE SUBMITTED THAT THE ORD ER IN THE QUANTUM APPEAL BE RECTIFIED. HOWEVER, THE TRIBUNAL REJECTED THE APPLICATION OF T HE ASSESSEE ON THE GROUND THAT THERE WAS NO MISTAKE APPARENT ON THE RECORD. IT WAS HELD THAT THOUGH THE ASSESSEE HAD GIVEN SOME EXPLANATION IN THIS RESPECT , BUT THE TRIBUNAL HAD TAKEN INTO CONSIDERATION THE OTHER FACTORS SUCH AS THAT THE IDENTITY OF MR. DHARMENDRA P. DUBEY WAS NOT ESTABLISHED AND THAT FU LL DETAILS OF TRANSPORT CHARGES HAD NOT BEEN GIVEN. 3. NOW IN THE PRESENT PENALTY APPEAL, THE ASSESSEE HAS AGAIN STRESSED THAT THERE WAS NO DISPUTE THAT THE SERVICES WERE TAKEN F ROM M/S. KARAN TRANSPORT AND THAT THE PAYMENT/CHEQUES IN QUESTION WAS ISSUED IN THE NAME OF M/S. ITA NO.4131/M/2011 M/S. NEW EMPIRE TEXTILE PROCESSORS PVT. LTD. 3 KARAN TRANSPORT. IT HAS ALSO BEEN ESTABLISHED IN T HE STATEMENT OF PROPRIETOR OF M/S. KARAN TRANSPORT I.E. MR. PRATAP LALCHAND AGNAN I THAT HE HAD DISCOUNTED SOME OF THE CHEQUES IN FAVOUR OF SUB CONTRACTORS. THE ASSESSEE HAS ALSO CLAIMED THAT THE SUB CONTRACTORS HAD FURTHER DISCOU NTED THE CHEQUES IN THE NAME OF MR. DHARMENDRA P. DUBEY. THE ASSESSEE HAS ALSO RELIED UPON THE CERTIFICATE OF THE BANK CONFIRMING THAT THE CHEQUES IN QUESTION WERE ISSUED BY THE ASSESSEE IN THE NAME OF M/S. KARAN TRANSPORT ON LY. ALL THESE FACTS SHOW THAT THE ASSESSEE HAS GIVEN THE EXPLANATION REGARDI NG THE CREDIT OF THE DISPUTED AMOUNT IN THE NAME OF MR. DHARMENDRA P. DUBEY. THO UGH, IN THE QUANTUM APPEAL, THE ASSESSEE COULD NOT FURNISH PROPER EVIDE NCES AND THE TRIBUNAL HAD UPHELD THE DISALLOWANCE FOR WANT OF SUFFICIENT EVID ENCE IN THIS RESPECT BUT THE FACT REMAINS THAT IT IS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE ASSESSEE HAS G IVEN AN EXPLANATION AS TO HOW THE AMOUNT IN QUESTION WAS CREDITED TO THE ACCO UNT OF MR. DHARMENDRA P. DUBEY, WHICH HAS NOT BEEN DISPROVED. THE LEVY OF PE NALTY UNDER SUCH CIRCUMSTANCES CANNOT BE SAID TO BE JUSTIFIED. IN V IEW OF THE ABOVE, THE PENALTY LEVIED BY LOWER AUTHORITIES IS HEREBY ORDERED TO BE SET ASIDE. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.2015. (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 04.03.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI ITA NO.4131/M/2011 M/S. NEW EMPIRE TEXTILE PROCESSORS PVT. LTD. 4 THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.