RUZBEH DAVER, MUMBAI V. JCIT RG 17(3), MUMBAI

ITA 465/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2191 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MISHRA
• Keywords: Opportunity of being heard
• Section: 142(1); 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.465/MUM/2013 ( # % &% / ASSESSMENT YEAR: 2008-09) MR. RUZBEH DAVER 4-CD, SETHNA BUILDING, GOLANJI HILL, PAREL, MUMBAI-400012 / VS. JOINT COMMISSIONER OF INCOME TAX RANGE 17(3) PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 ./ ./ PAN/GIR NO. : AEJPD4532K ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI K.GOPAL DEPARTMENT BY: SHRI S.K.MISHRA !'# $% &' / DATE OF HEARING: 09.09.2015 ()*+ $% &' /DATE OF PRONOUNCEMENT: 09.12.2015 ,- / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL DIRECTED AGAINST THE ORDER DATED 23.11.2012 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-16 , MUMBAI [HEREINAFTER REFERRED TO AS THE LEARNED CIT(A)] RELEVANT TO TH E ASSESSMENT YEAR 2008-09. 2. THE APPELLANT HAS RAISED THE FOLLOWING ISSUE:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDI NG THE ADDITION OF RS.10,00,000/- BEING DETERRENT CHAR GES / PENALTY LEVIED BY TATA MOTORS LTD. FOR LOSS/PILFERA GE IN THEIR PREMISES. 3. THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSE SSMENT YEAR 2008-09 ON 30.09.2009 DECLARING TOTAL INCOME OF RS.64,27,135/- . THE RETURN OF INCOME WAS ITA NO.465/MUM/2013 ASSESSMENT YEAR: 2008-09 2 PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT). THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND STATU TORY NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE A SSESSEE AND AFTER GIVING PROPER AND FULL OPPORTUNITY OF BEING HEARD, LEARNED ASSESSING OFFICER HAS DECLINED THE EXPENDITURE TO THE TUNE OF RS.10,00,00 0/- CLAIMED BY THE ASSESSEE AGAINST THE M/S. TATA MOTORS LTD. ON ACCOUNT OF PEN ALTY RECOVERY OF DAMAGES INCURRED AND DECLINED THE SAID PENALTY CHARGES DEDU CTED BY THE M/S. TATA MOTORS LTD. PAYABLE TO THE ASSESSEE BY HOLDING THAT IT WAS A PERSONAL LIABILITY OF THE EMPLOYEE AND THEREFORE NO PENALTY AMOUNT SHOULD BE ADDED TOWARDS THE EXPENDITURE OF THE ASSESSEE. ASSESSEE FILED AN APP EAL BEFORE LEARNED CIT(A) WHO UPHOLD THE SAME. FEELING AGGRIEVED THE ASSESSE E FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFU LLY. THE SOLE POINT IS THAT WHETHER AN AMOUNT TO THE TUNE OF RS.10,00,000/- PAY ABLE TO THE ASSESSEE COMPANY BY M/S. TATA MOTORS LTD. AS PENALTY FOR LOS S/PILFERAGE IN THEIR PREMISES WHICH HAS NOT BEEN PAID IS ALLOWABLE AS EX PENDITURE OF THE ASSESSEE OR NOT. THE ASSESSEES EXPLANATION IS HEREBY REPRODUC ED BELOW: WE SUBMIT THAT DURING THE YEAR 2007-08, THE EMPLOYEE OF THE ASSESSEE POSTED AT THE PREMISE OF M/S.TATA MOTORS LTD. WAS INVOLVED IN THE THEFT OF G OODS OF M/S. TATA MOTORS LTD. ON ACCOUNT OF WHICH THERE WAS LOSS AND DAMAGE TO THE PROPERTY OF TATA MOTORS LTD. THE COPY OF THE LETTER WRITTEN BY THE ASSESSEE TO M/S.TATA MOTORS LTD. DATED 07.01.2008 IS ENCLOSED. THEREAFTER M/S. TATE MOTORS LTD HAS LEVIED A PENALT Y OF RS. 10 LACS TOWARDS THE RECOVERY OF DAMAGE INCURRED . THE DEBIT NOTE HAS ALREADY BEEN SUBMITTED VIDE OUR SUBMISSION DATED 25. 11.2010. WE SUBMIT THAT THE DE BIT NOTE FROM REPUTED COMPANY LIKE M/S. TATA MOTORS LTD IS SUFFICIENT. IF HOWEVER, STILL FURTHER EVIDENCE IS NEEDED WE WOULD REQUEST YOU TO WRITE TO M/S. TATA MOTORS L TD FOR VERIFICATION OF PARTICULAR MATTER. ITA NO.465/MUM/2013 ASSESSMENT YEAR: 2008-09 3 THE ASSESSING OFFICER ARRIVED AT THIS CONCLUSION TH AT THE EMPLOYEE OF THE ASSESSEE WAS WORKING WITH M/S. TATA MOTORS LTD AND AMONG OF THEM ANYBODY COMMITTED THE THEFT OF THE ARTICLE OF THE AMOUNT OF RS.10,00,000/- BUT THE ASSESSEE COMPANY HAS WRONGLY CLAIMED THE BUSINESS E XPENDITURE OF THEFT AMOUNT OF RS.10,00,000/- WHICH WAS THE PERSONAL LIA BILITY OF THE EMPLOYEE CONCERNED. LEARNED CIT(A) HAS UPHOLD THE FINDING O F THE ASSESSING OFFICER. IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS PROVIDING T HE SERVICES OF THE EMPLOYEES TO M/S. TATA MOTORS LTD. IT IS ALSO NOT IN DISPUTE TH AT M/S. TATA MOTORS LTD LEVIED THE PENALTY OF RS.10,00,000/- TOWARDS DAMAGES INCUR RED BY THE EMPLOYEE OF ASSESSEE COMPANY. THE SAID TRANSACTION HAS BEEN CO NFIRMED BY THE M/S. TATA MOTORS LTD IN VIEW OF THE DEBIT NOTE DATED 23.04.2 008 LIES AT PAGE NO. 17 OF THE PAPER BOOK. IT IS UP TO THE EMPLOYER TO TAKE THE A CTION AGAINST THOSE EMPLOYEES WHO COMMITTED THE THEFT/DAMAGE TO RECOVER ANY AMOUN T OF PENALTY DAMAGE IN ACCORDANCE WITH LAW. THE SERVICES OF THE EMPLOYEE WAS PROVIDED TO M/S. TATA MOTORS LTD IN THE COURSE OF BUSINESS AND IF ANY LOS S OCCURRED DURING THE COURSE OF BUSINESS EVEN AFTER DUE TO WRONGFUL ACT OF THE E MPLOYEE THE SAME CANNOT BE DECLINED IN THE INTEREST OF THE JUSTICE. ANYHOW, T HE AMOUNT TO THE TUNE OF RS.10,00,000/- HAS NOT BEEN RECEIVED BY THE ASSESSE E COMPANY IN VIEW OF THE DEBIT NOTED DATED 23.04.2008 LIES AT PAGE NO.17 OF THE PAPER BOOK. IN THE SAID CIRCUMSTANCE IT IS NOT REQUIRED TO BE DECLINED AND ADDED TO THE INCOME OF THE ASSESSEE. IN VIEW OF THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAS WRONGLY UPHELD THE ORDER OF ASSESSING OF FICER. THEREFORE, THE ORDER OF LEARNED CIT(A) DATED 23.11.2012 IS HEREBY ORDERE D TO BE SET ASIDE ON THIS POINT AND THE ASSESSING OFFICER IS DIRECTED TO DELE TE THE IMPUGNED DISALLOWANCE. ITA NO.465/MUM/2013 ASSESSMENT YEAR: 2008-09 4 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2015 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) , / ACCOUNTANT MEMBER ./$ , /JUDICIAL MEMBER 0 1# MUMBAI; 2,!$ DATED : 9 TH DECEMBER, 2015 MP MP MP MP ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ 3& ( ) / THE CIT(A)- 4. $ 3& / CIT 5. 4'56 /&/!78 , $ ' 78$+ , 0 1# / DR, ITAT, MUMBAI 6. 69: ;# / GUARD FILE. ' / BY ORDER, 4& /& //TRUE COPY// , / ' (DY./ASSTT. REGISTRAR) , 0 1# / ITAT, MUMBAI