WSA SHIPPING BOMBAY PRIVATE LIMITED, MUMBAI V. ACIT-11(3)(1), MUMBAI

ITA 4869/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4104 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 16-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: NITIN A JOSHI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S . RIFAUR RAHMAN, AM & SHRI RAVISH SOOD , JM ./ I.T.A. NO . 4869 / MUM/ 2018 ( / ASSESSMENT YEAR: 2010 - 11 ) WSA SHIPPING BOMBAY PVT. LTD. 701 - 705, T SQUARE, OPP.CHANDIVALI PETROL PUMP, SAKI VIHAR ROAD, SAKI NAKA, ANDHERI(E), MUMBAI - 400 072 / VS. A CIT - 11(3)( 1) , 4 TH FLOOR, AAYA KAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN NO. A A ACW 2373 B ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI NITIN A. JOSHI , AR / RESPONDENTBY : SHRI V. VINOD KUMAR , DR / DATE OF HEARING : 27.11 .2019 / DATE OF PRONOUNCEMENT : 08.01.2020 / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) : THE PRESENT A PPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 18 , MUMBAI, D ATED 15.06.18 FOR AY 2010 - 11 . 2 I.T.A. NO. 4869 /MUM/201 8 WSA SHIPPING BOMBAY PVT. LTD. 2 . THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF SHIPPING AGENCY AND ITS ASSESSMENT U/S 143(3) WAS COMPLETED ON 14.03.13 DETERMINING THE TOTAL INCOME OF RS. 1,52,56 ,610 / - UNDER THE NORMAL PROVISION OF INCOME TAX ACT, AS AGAINST THE RETURNED INCOME OF RS. 1,40,50,865/ - . THE DIFFERENCE BETWEEN THE RETURN I NCOME AND ASSESSED INCOME IS ON ACCOUNT OF ADDITION /DISALLOWANCE ON ACCOUNT O F MISMATCH OF AIR (CONTRACTUAL RECEIPTS) OF RS. 10,49,323/ - AND ADHOC 10% DISALLOWANCE OF MISC. EXPENSES AMOUNTING TO RS. 1,56,423/ - . THE ASSESSEE ACCEPTED THE ASSESSMENT MADE U/ S 143(3) OF THE ACT AND DOES NOT CHALLENGED BEFORE ANY AUTHORITY. AO INITIATED THE PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF THE ABOVE DISALLOWANCE. ASSESSEE WAS GIVEN OPPORTUNITY TO PUT FORTH SUBMISSION IN THE MATTER. ACCORDINGLY, SHOW CAUSE NOTICE I SSUED AND SERVED UPON THE ASSESSEE. IN THE PENALTY PROCEEDING, ASSESSEE SUBMITTED THAT THE INTEREST IN THE AIR ARE 707 TRANSACTION AGGREGATING T O RS. 19,00,63,573/ - AND ASSESSEE COULD RECONCILE 706 TRANSACTIONS AMOUNTING TO RS. 18,90,14,250/ - WITH ITS FINANC IAL STATEM ENTS. ASSESSEE SUBMITTED THAT IT HAS MADE ALL POSSIBLE DISCLOSURES AT THE TIME OF FILING RETURN OF INCOME AND 3 I.T.A. NO. 4869 /MUM/201 8 WSA SHIPPING BOMBAY PVT. LTD. MERE DISALLOWANCE CANNOT BE A REASON FOR LEVYING OF PENALTY. AO REJECTED THE CONTENTIONS OF THE ASSESSEE AND LEVIED PENALTY FOR RS. 3,60 ,000/ - . 3 . AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) REJECTED THE SUBMISSION OF THE ASSESSEE AND OBSERVED THAT THE CLAIM MADE BY THE ASSESSEE IS NOT VERIFIABLE AT THIS STAGE. MOREOVER, AR COULD NOT EXP LAIN AS TO WHY THIS EVIDENCE WAS NOT SUBMITTED BEFORE THE AO DURING THE PENALTY PROCEEDINGS AND FURTHER HE OBSERVED THAT PENALTY PROCEEDINGS WERE COMPLETED ON 23.03.16, WHEREAS LETTER SUBMITTED BY THE AR ON 11.04.14. HE FURTHER OBSERVED THAT AO HAS GIVEN S UFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AT THE TIME OF PENALTY PROCEEDING. ACCORDINGLY, ADDITIONAL EVIDENCE CANNOT BE ADMITTED AS THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES ARE NOT APPLICABLE. 4 . NOW BEFORE US, THE ASSESSEE HAS PREFE R RED APPEAL BY RAISING THE GROUNDS OF APPEAL AS UNDER: - 4 I.T.A. NO. 4869 /MUM/201 8 WSA SHIPPING BOMBAY PVT. LTD. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE CONCEALMENT PENALTY OF RS.3,60,000 IN RESPECT OF INCOME OF RS. 10,49,323. THE APPEL LANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND, TO MODIFY, TO SUBSTITUTE AND/OR TO DELETE ANY ONE OR MORE OF THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THIS APPEAL. 5 . AT THE OUTSET, LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBM ITTED BEFORE US THAT THIS GROUND IS SQUARELY COVERED BY THE CONSOLIDATE ORDER OF COORDINATE BENCH OF HONBLE ITAT IN ITA NO. 3828 & 3829/MUM/2018 FOR AY 2010 - 11 & 2011 - 12 IN THE CASE OF TOTAL TRANSPORT SYSTEMS LTD. VRS. ACIT AND FOR THE SAKE OF CLARITY, WHICH IS REPRODUCED BE LOW: - 4. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT IT IS SETTLED LAW THAT QUANTUM PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE. CONFIRMATION OF ADDITION IN THE QUANTUM PROCEEDINGS DOES NOT IPSO FACTO MEANS THAT PENALTY HAS TO BE CONFIRMED. IN THIS CASE WE NOTE THAT IN ONE OF THE YEARS ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCES WHICH WERE REJECTED BY LEARNED CIT(A) ON THE GROUND THAT ASSESSEE 5 I.T.A. NO. 4869 /MUM/201 8 WSA SHIPPING BOMBAY PVT. LTD. DID NOT SUBMIT THE SAME BEFORE THE ASSESSING OFFICER. IN ANOTHER YEAR THE A.O. REJECT ED THE REMANDED EVIDENCES ON THE GROUND THAT HE WAS NOT SATISFIED WITH THE RECONCILIATION EVEN THOUGH HE DID NOT DISPUTE THAT THE CONTRACT RECEIPT ACCOUNTED FOR FROM THE DISPUTED PARTY WAS MORE THAN THAT REFLECTED IN THE 26AS STATEMENT. IN THESE FACTS IN O UR CONSIDERED OPINION THE CONDUCT OF THE ASSESSEE IS NOT CONTUMACIOUS SO AS TO WARRANT VISIT BY THE RIGOURS OF PENALTY U/S. 271(1)(C) OF THE ACT. THIS VIEW IS SUPPORTED BY THE DECISION OF THE LARGER BENCH OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN S TEEL VS. STATE OF ORISSA VS. (83 ITR 26). IN THIS CASE IT WAS EXPOUNDED THAT THE AUTHORITY MAY NOT LEVY THE PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. IN THE PRESENT CASE WE FIND THAT IN ONE OF THE YEARS ASSESSEE HAS DULY SUBMI TTED THE RECONCILIATION ALTHOUGH AT THE APPELLATE STAGE WHICH WERE REJECTED BY LEARNED CIT(A) ON THE GROUND THAT HE WAS NOT ADMITTING THE SAME AS THE SAME WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. IN ANOTHER YEAR ASSESSING OFFICER REJECTED THE EVIDEN CES OF RECONCILIATION EVEN THOUGH HE ADMITTED THAT THE CONTRACT RECEIPTS FROM THE DISPUTED PARTY ACCOUNTED FOR WERE MORE THAN THAT REFLECTED IN THE STATEMENT 26AS. 6 I.T.A. NO. 4869 /MUM/201 8 WSA SHIPPING BOMBAY PVT. LTD. 6 . ON THE OTHER HAND, LD. DR FA IRLY CONCEDED THAT THESE GROUND IS COVERED BY THE ORDER OF ITAT. 7 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT THE IDENTICAL GROUND RAISED IN THE PRESENT APPEAL HAS ALREADY BEEN DECIDED BY THE COO RDIN ATE BENCH OF ITAT IN ITA NO. 3828 & 3829/MUM/2018 FOR AY 2010 - 11 & 2011 - 12 IN THE CASE OF TOTAL TRANSPORT SYSTEMS LTD. VRS. ACIT ON MERITS. 8 . T HEREFORE , RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF IT AT WHICH IS APPLICABLE MUTATIS MUTANDIS IN THE PRESENT CASE, WE ARE INCLINED TO DELETE THE PENALTY LEVIED BY AO. ACCORDINGLY , WE ALLOW THE GROUND RAISED BY THE ASSESSEE. 9 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JAN 2020 . SD/ - SD/ - (RAVISH SOOD ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 08 . 01.2020 SR.PS. DHANANJAY 7 I.T.A. NO. 4869 /MUM/201 8 WSA SHIPPING BOMBAY PVT. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI