ASST CIT 17(1), MUMBAI V. DAWN INDIA, MUMBAI

ITA 4603/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0649 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI RAJENDRA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 4603 / MUM/ 20 1 6 ( / ASSESSMENT YEAR: 2008 - 09 ) ACIT 17(1), R. NO. 117, 1 ST FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMB AI - 400020 / VS. M/S. DAWN INDIA, 411/412 4 TH FLOOR APEEJAY HOUSE 13 MUMBAI SAMACHAR MARG, FORT, MUMBAI - 400023 ./ ./ PAN/GIR NO. : AAAFD 2674 D ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 05 . 02 .201 8 / DATE OF PRONOUNCEMENT : 09 .02 . 2018 / O R D E R PER AMARJIT SINGH, J M: THE REVENUE HAS FILED TH E PRESENT APPEAL AGAINST THE ORDER DATED 13 .0 4 .20 16 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 8 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE AY. 20 08 - 09 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1 ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A] HAS ERRED IN DIRECTING TO DEL ETE THE PENALTY LEVIED U/S 271(1 )(C) OF THE ACT IN RESPECT OF THE DISALLOWANCES OF RS,1.56 CRORES OUT OF THE AMOUNT OF WAREHOUSE CHARGES BY INVOKING THE PROVISION O F SEC 40 (A ) (IA) OF THE ACT - WITHOUT REVENUE BY: S HRI RAJAT MITTAL AS SESSEE BY : SHRI GYANESHWAR KATARAM ITA. NO. 4603 /M/20 1 6 A.Y. 20 08 - 09 2 APPRECIATING THE FACT THAT THE SAID ADDITION HAS BEEN CONFIRMED BY THE LD. CIT(A) IN THE QUANTUM APPEAL PREFERRED BY THE ASSESSEE,' 2/ ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DIRECTING TO DELETE THE PENALTY LEVIED U/S 271 (L)(C) OF THE ACT IN RESPECT OF THE DISALLOWANCES OF RS. 1.56 CRORES OUT OF THE AMOUNT OF WAREHOUSING CHARGES BY INVOKING THE PROVISION OF SEC 40(A)(IA) OF THE ACT. WITHOUT APPRECIATING THE FACT, THE HONBLE D ELHI HIGH COURT IN THE CASE OF CIT VS ZOOM COMMUNICATION (P) LTD, 327 1TR 510 AND CIT VS, N.G TECHNOLOGIES LTD. 57 TAXMANN.CM.389 HAS UNAMBIGUOUSLY HELD THAT IF ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY CORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT ANY BASIS AN D EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONA FIDE. EXPLANATION 1 TO SECTION 271(L)(C) WOULD DONE IN TO PLAY AND ASSESSEE WILL BE LIABLE TO PENALTY.' 3.. 'THE APPELLANT PRAYS THAT THE ORDER OF THE AO SHOULD BE RESTORED A ND ORDER OF THE CIT(A] SHOULD BE SET ASIDE.' 4 THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3 . THE BRIEF FACTS OF THE CASE , ARE THAT THE ASSESSE E F ILED HIS R ETURN OF INCOME ON 30 .09.20 08 DECLARING T OTAL INCOME T O THE TUNE OF RS.66,28,970 / - . THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT, 1961 ON 20.12.2010, DETERMINING THE TOTAL INCOME TO THE TUNE OF RS.2,50,99,870/ - , A FTER MAKING CERTAIN ADDITIONS/DISALLOWANCE WHICH INCLUDE (A) DISALLOWANCE U/S 40(A)(IA) OF THE ACT IN RESPECT OF REIMBURSABLE EXPENSES/ (B) DISAL LOWANCE U/S 14A OF THE ACT OF RS.20,439/ - ON WHICH PENALTY PROCEEDING WAS INITIATED. THEREAFTER THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO ORDER D ATED 20.03.2012. THEREAFTER, THE ASSESSEE HAS FILED AN APPEAL BEFORE ITAT CHALLENGING THE ORDER OF THE CIT(A) WHICH WAS PENDING AT THE TIME OF INITIATING THE PROCEEDING U/S 271(1)(C) OF THE ITA. NO. 4603 /M/20 1 6 A.Y. 20 08 - 09 3 ACT. THEREAFTER, THE NOTICE WAS GIVEN TO THE ASSESSEE AND PENALTY TO THE TUNE OF RS.53,26,670/ - WAS LEVIED U/S 271(1)(C) OF THE I.T. ACT, 1961 . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DELETED THE PENALTY, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY T HE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE LD. REPRESENTATIVE OF THE REVENUE HAS ARGUED THAT THE CIT(A) HAS DELETED THE PENALTY WRONGLY AND ILLEGALLY, THEREFORE, THE ORDER OF THE CIT(A) IS LIABLE TO BE SET ASIDE AS WELL AS THE ORDER O F THE AO IS LIABLE TO BE RESTORED. THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE PENALTY HAS BEEN LEVIED BY THE AO ON THE BASIS OF ADDITION RAISED IN VIEW OF PROVISION U/S 40(A)(IA) OF THE ACT TO THE TUNE OF RS.1,56,50,480/ - WHICH HAS BEEN DE LETED BY HONBLE ITAT IN THE ASSESSEES APPEAL IN ITA. NO.594/MUM/2010 DATED 28.08.2014 , T HEREFORE, IN THE SAID CIRCUMSTANCES, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY. IT IS ALSO ARGUED THAT THE SECOND LIMB TO LEVY THE PENALTY WAS ON ACCOUNT OF DISALLOW ANCE U/S 14A WHICH HAS BEEN DELETED BY CIT(A) BY RELYING UPON THE LAW SETTLED IN THE CASE OF RELIANCE PETRO PRODUCTS (2010) 322 ITR 158 (SC) WHICH IS QUITE CORRECT, THEREFORE, THE PENALTY HAS BEEN RIGHTLY DELETED,HENCE, THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED . TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES, WE NOTICED THAT THE CIT(A) HAS DELETED THE PENALTY ON THE BASIS OF THE ORDER PASSED BY HONBLE ITAT IN THE ASSESSEES OWN ITA. NO. 4603 /M/20 1 6 A.Y. 20 08 - 09 4 CASE IN ITA. NO. 4055/M/2014 DATED 28.08.2014 IN WHICH T HE ADDI TION ON ACCOUNT OF PROVISION U/S 40(A)(IA) OF THE ACT HAS BEEN DELETED. THEREFORE, IN THE SAID CIRCUMSTANCES NO PENALTY IS LEVIABLE, THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY ON THIS COUNT. SO FAR AS THE DELETION OF PENALTY ON ACCOUNT OF DISALL OWANCE U/S 40(A)(IA) OF THE ACT IS CONCERNED, THE ASSESSEE NOWHERE CONCEALED ANY MATERIAL FACTS BEFORE THE AO AND DISALLOWANCE OF ANY CLAIM OF THE ASSESSEE NOWHERE ATTRACT THE PENALTY IN VIEW OF THE LAW SETTLED IN RELIANCE PETRO PRODUCTS (2010) 322 ITR 158 (SC). IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE PENALTY AND PASSED HIS ORDER JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT T HIS APPELLATE STAGE. 5 . IN THE RESULT, THE APPEAL FILE D BY THE REVENUE IS HERE BY ORDERED TO BE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 09. 02 . 2018 . SD/ - SD/ - ( RAJENDRA ) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 09 .0 2 . 2018 VIJAY ITA. NO. 4603 /M/20 1 6 A.Y. 20 08 - 09 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI