ITO 6(1)(2), MUMBAI V. BHORUKA LOGISTICS P. LTD, MUMBAI

ITA 4458/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2054 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 27-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M JAGDISH SHRI S S RANA
• Keywords: TDS
• Section: 271(1)(c); 40(a)(ia); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI. BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER I.T.A. NO. 4458 /MUM/2009. ASSESSMENT YEARS : 2005-06. ASSTT. COMMISSIONER OF M /S BHORUKA LOGISTICS PVT. LTD. INCOME TAX, VS. 84-B AMBA BHAVAN, CIRCLE-6(1), MUMBAI. BROACH STREET, MASJID (EAST), MUMBAI-19. PAN : AABCB 3165H APPELLANT RESPONDENT APPELLANT BY : SHRI M. JAGDISH, SHRI S.S. RANA. RESPONDENT BY : NONE. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-VI, MUMBAI DATED 12-05-20 09 FOR THE ASSESSMENT YEAR 2005-09 ON THE FOLLOWING GROUNDS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN CANCELLING THE PENALTY LEVIED DEPENDIN G ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF D ILIP N. SHROFF VS. JCIT (291 ITR 519) IGNORING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF UOI VS. DHARMENDRA TEXTILE PRO CESSORS AND OTHERS (306 ITR 277). 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUAL OF NOTICE. A LETTER DATED 7 TH MAY, 2010 WAS FILED BY THE CHARTERED ACCOUNTANT FIRM REQUESTING FOR ADJOURNMENT. AS NO P OWER OF ATTORNEY HAS 2 BEEN FILED, NO COGNIZANCE IS TAKEN OF THIS LETTER. AS NOBODY HAS FILED A POWER OF ATTORNEY, AND AS NONE APPEARED ON BEHALF O F THE ASSESSEE, WE DISPOSE OF THE CASE EXPARTE, QUA THE ASSESSEE, ON M ERITS, AFTER HEARING THE LEARNED DR. 3. FACTS IN BRIEF : THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE B USINESS OF TRANSPORTER AND PUBLIC CARRIER. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE AO MADE A DISALLOWANCE U/S 40(A)(I A) OF THE ACT BY OBSERVING THAT THE ASSESSEE HAD DEDUCTED TAX AT SOU RCE BUT THERE WAS SOME DELAY IN PAYMENT OF TDS IN THE GOVT. TREASURY. THE AO ASKED THE ASSESSEE TO FILE DETAILS OF PARTY-WISE FREIGHT RATE , WITH CORRESPONDING DETAILS OF TDS DEDUCTED AND THE DATE ON WHICH THE A MOUNT WAS CREDITED IN THE GOVT. TREASURY. THE ASSESSEE ADMITTED DELAY AND REQUESTED THE AO TO DISALLOW THE AMOUNT U/S 40(A)(IA) OF THE ACT. HE REQUESTED THAT THE AMOUNT IN QUESTION SHOULD BE ALLOWED AS AN EXPENDIT URE IN THE ASSESSMENT YEAR 2006-07, AS THE PAYMENT OF TDS WAS MADE IN THA T YEAR. THE AO DISALLOWED THIS AMOUNT OF RS.56,38,686/- U/S 40(A)( IA) IN THIS YEAR AND ALSO LEVIED A PENALTY U/ 271(1)(C) BY OBSERVING THA T THE ASSESSEE HAD MADE A MENTION ABOUT THE DELAY IN TDS PAYMENT IN THE AUD IT REPORT, WHILE AT THE SAME TIME, HE DID NOT DISALLOW THE AMOUNT IN TH E COMPUTATION OF INCOME FILED BY IT. THUS HE CONCLUDED THAT THE ASSE SSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. HE LEVIED A PENAL TY U/S 271(1)(C) OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL. 4. THE FIRST APPELLATE AUTHORITY AGREED WITH THE SUBMISSIONS OF THE ASSESSEE THAT THE DISALLOWANCE OF EXPENDITURE D OES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. 3 HE HELD THAT THE ASSESSEE HAD MADE FULL DISCLOSURE. HE DELETED THE PENALTY. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD MR. M. JAGDISH AND MR. S.S. RANA, THE LEARNED REPRESENTATIVES APPEARED ON BEHALF OF THE REVENUE. 6. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIR CUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD S FOLLOWS. 7. THIS IS A CASE WHERE THE DISPUTE AROSE AGAINST THE DISALLOWANCE OF EXPENDITURE IN VIEW SECTION 40(A)(I A) OF THE ACT. THE ASSESSEE HAD IN FACT PAID TDS AND IT IS NOT IN DISP UTE THAT THE EXPENDITURE SHOULD BE ALLOWED IN THE SUBSEQUENT YEAR IN WHICH T HE TDS HAS BEEN PAID TO THE GOVT. TREASURY. THE FIRST APPELLATE AUTHORIT Y, IN OUR CONSIDERED OPINION, HAS RIGHTLY RELIED UPON THE JUDGMENT OF TH E HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. AJAIN SI NGH & CO. 253 ITR 630, WHEREIN IT IS HELD THAT MERE DISALLOWANCE OF E XPENDITURE WILL NOT PER SE AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. AT PARA 4 PAGE 3 OF HIS ORDER, THE FIRST APPELLATE AUTHORITY RIGHTLY HELD AS FOLLOWS : ONCE THE EXPLANATION OF THE ASSESSEE IS NOT CONSI DERED FALSE AND EXPLANATION HAS BEEN GIVEN, THE PENALTY CAN ONL Y BE LEVIED IF THE EXPLANATION IS NOT BONAFIDE AND FULL DETAILS FO R THE COMPUTATION OF INCOME HAS NOT BEEN GIVEN BY THE APPELLANT. IT M AY BE NOTED THAT RAJASTHAN HIGH COURT DECISION IN 251 ITR 373 HAS EN UNCIATED THE PRINCIPLE OF BONAFIDE, WHEREIN IT HAS BEEN HELD THA T THERE IS PRESUMPTION THAT EXPLANATION GIVEN IS BONAFIDE UNLE SS PROVED TO BE OTHERWISE. 4 WE UPHOLD THIS FINDING OF THE FIRST APPELLATE AUTHO RITY. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF MAY, 2010. SD/- SD/- (D. MANMOHAN) (J. SUDHAKAR REDDY) VICE PRESIDENT. ACCOUNTANT MEMBER. MUMBAI, DATED : 21 ST MAY, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, B-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.