Rohde & Schwarz India Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4570/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3235 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 21-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 20-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV DODEJA
• Assessee Lawyers: S SRINIVASAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SMT BEENA PILLAI, JUDICIAL MEMBER ITA NO.4570/DEL/2014 ASSESSMENT YEAR: 2007-08 ROHDE & SCHWARZ INDIA PVT. LTD., A-27, FIRST FLOOR, MOHAN COOPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI. PAN: AAACR3267P VS. DCIT, CIRCLE-15(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. SRINIVASAN, CA DEPARTMENT BY : SHRI GAURAV DODEJA, SR. DR DATE OF HEARING : 13.11.2017 DATE OF PRONOUNCEMENT : 14.11.2017 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER 10.06.2014 PASSED BY THE CIT(A) UPHOLDING PENALTY O F RS.24,15,500/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF T HE INCOME-TAX ACT, ITA NO.4570/DEL/2014 2 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATIO N TO THE ASSESSMENT YEAR 2007-08. 2. THE APPEAL IS TIME BARRED BY 11 DAYS. THE LD. A R EXPLAINED THE REASONS FOR THE DELAY IN PRESENTING THE INSTANT APP EAL. WE ARE SATISFIED WITH THE SAME. THE DELAY IS, ACCORDINGLY, CONDONED AND THE APPEAL IS ADMITTED FOR HEARING. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE INSTANT PENALTY WAS IMPOSED WITH REFERENCE TO THREE ADDITIONS VIZ., RS.49,51,38 2/- TOWARDS REPAIR EXPENSES INCURRED OF LET OUT PREMISES; RS.10,58,630 /- BEING, THE AMOUNT OF COMMISSION RECEIVED BUT NOT ACCOUNTED FOR; AND R S.11,66,152/- BEING, THE DISALLOWANCE MADE U/S 40(A)(I) ON ACCOUNT OF NO N-DEDUCTION OF TAX AT SOURCE. IN SO FAR AS THE FIRST DISALLOWANCE OF RS.4 9,51,382/- AND THE THIRD DISALLOWANCE OF RS.11,66,152/- ARE CONCERNED, THE T RIBUNAL, VIDE ITS ORDER DATED 30.03.2016, HAS DELETED THESE ADDITIONS . SINCE NO CAUSE OF ACTION SURVIVES IN RESPECT OF PENALTY ON THESE TWO SCORES, WE ORDER FOR THE PRO TANTO DELETION OF PENALTY. ITA NO.4570/DEL/2014 3 4. WITH REGARD TO THE ONLY OTHER ADDITION OF R S.10,58,630/-, WE FIND THAT THE ASSESSEE CLAIMED DEDUCTION @ 8% TOWARDS EX PENSES INCURRED ON ACCOUNT OF WARRANTY SERVICES. THE ASSESSING OFFICE R, WHILE CONSIDERING THE PAST DATA, ARRIVED AT THE CONCLUSION THAT SUCH PROVISION SHOULD HAVE BEEN AT 6.4%. THIS LED TO THE MAKING OF ADDITION O F THE ABOVE SUM. THE TRIBUNAL REMITTED THE MATTER TO THE FILE OF ASSESSI NG OFFICER TO RECOMPUTE INCOME RECEIVED BY THE ASSESSEE ON ACCOUN T OF COMMISSION AND SERVICE INCLUDING WARRANTY OBLIGATION IN PURSUA NCE OF ITS FINDINGS. SINCE THE MATTER IN QUANTUM PROCEEDINGS HAS BEEN RE STORED TO THE FILE OF THE ASSESSING OFFICER, WE ARE OF THE CONSIDERED OPI NION THAT IT WOULD BE IN THE FITNESS OF THINGS IF THE MATTER CONCERNING T HE PENALTY ON SUCH AMOUNT IS ALSO SENT BACK TO BE DECIDED IN CONFORMIT Y WITH THE VIEW TAKEN BY THE ASSESSING OFFICER IN THE PROCEEDINGS PURSUAN T TO THE DIRECTIONS GIVEN BY THE TRIBUNAL. OUR VIEW IN RESTORING THE PE NALTY TO THE AO IS FORTIFIED BY THE JUDGMENT OF THE HONBLE SUPREME CO URT IN THE CASE OF MOHD. MOHATRAM FAROOQUI VS. CIT (SC) 2010-TIOL-23-S C-IT IN WHICH IT HAS BEEN HELD THAT IF ADDITION IS RESTORED TO TH E AO, THEN PENALTY SHOULD ALSO BE RESTORED. THE HONBLE JURISDICTIONAL HIGH COURT IN SANJAY ITA NO.4570/DEL/2014 4 GUPTA VS. CIT (2014) 366 ITR 18 (DEL) HAS ALSO HELD THAT WHERE THE QUANTUM HAS BEEN REMANDED TO THE AO, THE QUESTION O F PENALTY ON ACCOUNT OF THE SAID AMOUNT BEING TREATED AS UNDISCL OSED INCOME, SHOULD ALSO BE REMANDED TO THE AO. WE, THEREFORE, SET ASID E THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO FOR DETE RMINING THE QUESTION OF IMPOSITION OR OTHERWISE OF THE PENALTY ON THIS ISSU E, AFTER THE PASSING OF A FRESH ASSESSMENT ORDER ON THIS COUNT. NEEDLESS TO SAY, THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF HEARING IN T HIS REGARD. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 14.11.201 7. SD/- SD/- [BEENA PILLAI] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 14 TH NOVEMBER, 2017. DK ITA NO.4570/DEL/2014 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.