ACIT, Mathura V. M/s Mercury Engineers India, Mathura

ITA 447/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7051 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 16-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M M AGARWAL
• Assessee Lawyers: A K SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 447/AGRA/2009 ASSTT. YEAR : 2002-03 A.C.I.T. 3, MATHURA. VS. M/S. MERCURRY ENGINE ERS INDIA, A-11, INDUPURAM, MATHURA. (PAN : AAAFI 9191C) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI A.K. SHARMA, JR. D.R. FOR RESPONDENT : SHRI M.M. AGARWAL, C.A. ORDER PER P.K. BANSAL, A.M. : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 04.08.2009, BY WHICH THE CIT(A) HAS DELETED THE PEN ALTY IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER WHILE FRAMING THE ASSESSMENT, MADE THE FOLLOWING ADDITIONS : (A). BOGUS SUNDRY CREDITORS RS.13,71,120/- (B). OUT OF EXPENSES RS. 75,200/- (C). DISALLOWANCE OUT OF VARIOUS WORK RELATED EXPE NSES RS. 75,000/- (D). DISALLOWANCE OUT OF CASUAL LABOUR EXPENSES RS. 50,000/- (E) DISALLOWANCE OUT OF TELEPHONE & MOBILE EXPENSE S RS. 24,000/- PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED I N RESPECT OF THE ABOVE ADDITIONS/DISALLOWANCES AND ULTIMATELY, THE ASSESSING OFFICER AFTER GIVING SHOW CAUSE NOTICE TO THE ASSESSEE IMPOSED PENALTY U/S. 271(1)(C) IN RESPECT OF ADDITION OF RS .13,71,120/- ON ACCOUNT OF SUNDRY CREDITORS AND ALSO FOR THE DISALLOWANCE OF RS.2,24,200/-. THE ASS ESSEE WENT BEFORE THE CIT(A) IN QUANTUM 2 APPEAL. THE CIT(A) DELETED THE ADDITION MADE IN RES PECT OF SUNDRY CREDITORS WHICH WAS DULY CONFIRMED BY THE TRIBUNAL VIDE ITS ORDER DATED 17.0 9.2010. SO FAR AS THE DISALLOWANCE OF RS.2,24,200/- WAS CONCERNED, THE CIT(A) DIRECTED TH E ASSESSING OFFICER TO APPLY 8% RATE FOR COMPUTING THE NET PROFIT OF THE ASSESSEE. NO SEPARA TE DISALLOWANCE IN RESPECT OF THE SUM OF RS.2,24,200/- WAS SUSTAINED BY THE CIT(A). THE ORDE R OF THE CIT(A) WAS CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 17.09.2010. THE CIT(A) DE LETED THE PENALTY BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE RIVAL CONTENTIONS AND THE AR GUMENTS OF THE APPELLANT. AS REGARDS PENALTY IMPOSED U/S. 271(1)(C ) OF THE ACT IN RESPECT OF THE ADDITION OF RS.13,71,120/- ON ACCOUNT OF SUNDRY CRE DITORS, THE SAME IS NOT SUSTAINABLE AS THE ADDITION STANDS DELETED BY THE O RDER DATED 01.07.2009 PASSED BY THIS OFFICE IN RESPECT OF THE QUANTUM APPEAL. AS REGARDS THE PENALTY IMPOSED U/S. 271(1)(C) OF THE ACT IN RESPECT OF THE OTHER A DDITIONS AGGREGATING TO RS.2,24,200/- MADE BY THE AO IN THE ASSESSMENT ORDE R AND ACCEPTED BY THE APPELLANT BY NOT DISPUTING THE SAME IN QUANTUM APPE AL, THE SAME IS NOT TENABLE AS THE RELEVANT ADDITIONS ARE IN THE NATURE OF ADHOC D ISALLOWANCES. THERE IS NO MATERIAL OR EVIDENCE ON RECORD TO SHOW THAT THE DIS ALLOWANCES REPRESENT/COMPRISE OF EXPENSES IN RESPECT OF WHICH THE APPELLANT HAD F URNISHED INACCURATE PARTICULARS OR CONCEALED PARTICULARS. CONSEQUENTLY, PENALTY OF RS.5,69,532/- IMPOSED U/S. 271(1)(C) OF THE ACT IS NOT SUSTAINABLE AND ACCORDI NGLY, DELETED. 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT THE ASSESSING OFFICER HAS IMPOSED PEN ALTY U/S. 271(1)(C) IN RESPECT OF THE ADDITION MADE ON ACCOUNT OF SUNDRY CREDITORS AMOUNTING TO RS .13,71,120/- WHICH WAS ULTIMATELY DELETED BY THE TRIBUNAL. THEREFORE, THE ADDITION DID NOT SU RVIVE AND, THUS, NO QUESTION OF LEVYING PENALTY U/S. 271(1)(C) IN RESPECT OF THE SAID ADDITION ARIS ES. WE, THEREFORE, DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE CIT(A) IN DELETING T HE PENALTY U/S. 271(1)(C) SO FAR AS IT RELATES TO T HE ADDITION OF RS.13,71,120/-. 4. NOW COMING TO THE PENALTY IMPOSED U/S. 271(1)(C) IN RESPECT OF DISALLOWANCE OF RS.2,24,200/-, WE NOTED THAT THE ASSESSING OFFICER MADE THESE DISALLOWANCES, BUT WHEN THE 3 ASSESSEE WENT IN QUANTUM APPEAL BEFORE THE CIT(A), THE CIT(A) DIRECTED THE ASSESSING OFFICER TO COMPUTE THE NET PROFIT BY APPLYING THE RATE OF 8 %. THUS, THE ADHOC DISALLOWANCE DID NOT SURVIVE. THE ACTION OF THE CIT(A) WAS DULY CONFIRME D BY THE TRIBUNAL IN QUANTUM PROCEEDINGS VIDE ITS ORDER DATED 17.09.2010. IN VIEW OF THIS FA CT, SINCE NO SEPARATE DISALLOWANCE IN RESPECT OF EXPENDITURE WAS MADE, NO QUESTION OF CONCEALMENT OF THE PARTICULARS OF INCOME WILL ARISE. THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) HAS R IGHTLY DELETED THE PENALTY IMPOSED U/S. 271(1)(C). IN VIEW OF THESE FACTS, WE CONFIRM THE O RDER OF CIT(A) DELETING THE PENALTY IMPOSED U/S. 271(1)(C). 5. IN THE RESULT, THE APPEAL OF REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.4.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 ST APRIL, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY