Shri Pradeep Bakshi, Ahmedabad V. The ACIT.,Circle-3, Ahmedabad

ITA 488/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60539 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-05-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 23-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIKITA BRAHMBHATT
• Keywords: Corroborative evidences
• Section: 271(1)(c)

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) )* + ) )* + ) )* + ) ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.488/AHD/2012 [ASSTT.YEAR : 2003-2004] SHRI PRADEEP BAKSHI CN-6, SURAMYA-3, VILLAGE GARODIA S.O. GODHAVI, DIST. AHMEDABAD. PIN : 382 115. PAN : ABMPB 7217 K /VS. ACIT, CIR.3 VADODARA. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : MS.NIKITA BRAHMBHATT + 2 3 )/ REVENUE BY : SHRI SANJAY DHARIWAL 5 2 &(*/ DATE OF HEARING : 24 TH MAY, 2012 678 2 &(*/ DATE OF PRONOUNCEMENT : 22-6-2012 )9 / O R D E R PER ANIL CHATURVEDI, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-2004 IS DIRECTED AGAINST THE ORDER OF THE LD CIT-III, BAROD A DATED 21.12.2011 CONFIRMING THE ACTION OF THE AO IN LEVYING PENALTY U/S.271(1)(C) OF THE IT ACT. ITA NO.488/AHD/2012 -2- 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF PROVIDING CONSULTANCY AND ADVISORY SERVICES IN THE FIELD OF PROJECT CONSULTANCY, TECHNOLOGY, PLANT EFFICIENCY, MACHINE DESIGN ETC. HE FILED HIS RETURN OF INCOME ON 29.3.2003 SHOWING TOT AL INCOME OF RS.16,17,730/- . THEREAFTER HE REVISED HIS RETURN O F INCOME SHOWING TOTAL INCOME OF RS.20,18,130/-. THE CASE WAS SELECT ED FOR SCRUTINY. THE ASSESSMENT WAS FINALISED ON 31.3.2006 U/S 143(3 ) AND THE INCOME WAS DETERMINED AT RS.34,70,360/- AFTER MAKING VARIO US ADDITIONS AND DISALLOWANCES TO THE RETURNED INCOME. 3. AGAINST THE ADDITIONS MADE BY THE AO, THE ASSESS EE PREFERRED APPEAL BEFORE CIT(A). CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE. ON THE ADDITIONS MADE AND TO THE EXTENT SUSTAINED B Y CIT(A), THE AO WAS OF THE VIEW THAT TO THAT EXTENT THE ASSESSEE HA S FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREFORE THE AO INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY U/S 271(1)(C ) VIDE ORDER DATED 12.3.2009. AGAINST THE PENALTY ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). CIT(A) CONFIRMED THE PENALTY LEVIED ON THE DISALLOWANCE OF MEDICAL EXPENSES AND ON TRAVELLING EXPENSES BY HOLDING AS UNDER: 6.2 I HAVE CONSIDERED THE APPELLANTS SUBMISSION A ND THE PENALTY ORDER. THE ADDITION ON ACCOUNT OF DISALLOW ANCE OUT OF MEDICAL EXPENSES AND OUT OF TRAVELING EXPENSES HAVE BEEN ACCEPTED BY THE APPELLANT DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, SINCE HE WAS NOT IN A POSITION TO FURN ISH PROPER EXPLANATION REGARDING INCURRING THESE EXPENSES ALON GWITH SUPPORTING EVIDENCES. HENCE, IN SUCH A CASE IT IS TO BE HELD THAT HE HAD FURNISHED INACCURATE PARTICULARS OF INCOME O N ACCOUNT OF THESE EXPENSES. THE CSE LAW RELIED UPON BY THE APPELLANT IN THE WRITTEN SUBMISSION ARE NOT APPLICABLE, BECAUSE AS PER THE ITA NO.488/AHD/2012 -3- LAW FOR LEVY OF PENALTY EXISTING AS ON DATE, NO MEN S REA ON BEHALF OF THE ASSESSEE IS REQUIRED TO BE ESTABLISHE D BY THE AO. THE VERY FACT THAT THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE THE EXPLANATION FILED BY IT AND HAS NO T BEEN ABLE TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT A LL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, MAKE THE PENALTY LEVIED BY THE AO CORRECT. HENCE, IT IS HELD THAT AO HAS RIGH TLY LEVIED PENALTY ON THESE AMOUNTS. ACCORDINGLY, THE AOS OR DER FOR LEVY OF PENALTY ON ACCOUNT OF DISALLOWANCE OUT OF MEDICA L EXPENSES AND TRAVELING EXPENSES ARE UPHELD. 4. AGAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. BEFORE US THE LD A.R. SUBMITTED T HAT THE AO LEVIED PENALTY ON ADHOC DISALLOWANCE OF MEDICAL EXPENSES O F RS.15,000/- AND TRAVELLING EXPENSES OF RS. 1,76,300/- ON THE GR OUND THAT THE SAME WERE OF PERSONAL IN NATURE. LD. CIT(A) CONFIRMED TH E ADDITION ON THE GROUND THAT THE ADDITION WAS AGREED UPON BY THE ASS ESSEE IN THE QUANTUM PROCEEDINGS. THE LD. A.R. SUBMITTED THAT TH E AO HAS NOT POINTED OUT A SINGLE INSTANCE OF INCURRING THE EXPE NSES FOR NON BUSINESS PURPOSE OR WHICH ARE NOT PROPERLY VERIFIAB LE. THE ASSESSEE HAD PRODUCED ALL DOCUMENTS BEFORE THE AO FOR SUBSTA NTIATING THE CLAIM. THE REASONS FOR INCURRING OF EXPENSES WERE A LSO FURNISHED BEFORE THE AO AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. THE INC OME OR EXPENDITURE WERE NOT FOUND TO BE INACCURATE. IT WAS THUS SUBMIT TED THAT MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE AN D WHICH WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE AO CANNOT BE A REASON FOR LEVY OF PENALTY. THE LD. A.R. ALSO RELIED ON THE DECISIO N OF APEX COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT LTD. (322 ITR 158 (SC). ITA NO.488/AHD/2012 -4- 5. ON THE OTHER HAND, THE LD. D.R. SUBMITTED THAT T HE DISALLOWANCE OF EXPENSES WAS AGREED BY THE ASSESSEE DURING THE C OURSE OF ASSESSMENT PROCEEDINGS FOR THE REASON THAT HE WAS N OT IN A POSITION TO FURNISH PROPER EXPLANATION REGARDING THE INCURRING OF THE EXPENSES ALONGWITH THE NECESSARY EVIDENCE. IN SUCH AN EVENTU ALITY, THE AO HAD RIGHTLY LEVIED THE PENALTY. HE THUS URGED THAT THE ORDER OF THE AO BE UPHELD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE FACTUAL MATRIX OF THE CASE IS THAT T HE DURING THE COURSE OF ASSESSMENT THE AO DISALLOWED MEDICAL AND TRAVELL ING EXPENSES FOR THE REASON THAT THE MEDICAL EXPENSES WERE INCURRED IN CASH, WERE THROUGH SELF MADE VOUCHERS AND SOME OF THE BILLS W ERE IN THE NAME OF THE ASSESSEE AND HIS WIFES NAME. HE THEREFORE CONS IDERED IT TO BE OF BEING IN PERSONAL IN NATURE. THE DISALLOWANCE WAS A GREED BY THE ASSESSEE AND THUS THE DISALLOWANCE OF RS.15,000/- W AS MADE. WITH RESPECT TO THE DISALLOWANCE OF TRAVELLING EXPENSES, IT WAS OBSERVED BY THE AO THAT THE EXPENSES WERE INCURRED THROUGH CRED IT CARD AND CASH. IN THE ABSENCE OF FULL DETAILS, THE ASSESSEE AGREED FOR 25% DISALLOWANCE OUT OF THE TOTAL EXPENSES AND ACCORDIN GLY RS.1,76,300/- WAS MADE. THUS BOTH THE DISALLOWANCES WERE MADE ON ADHOC BASIS. THE AO HAS NOT POINTED OUT ANY INSTANCE OF THE EXPE NSE OF BEING FOR NON BUSINESS PURPOSE. NO INFORMATION WITH RESPECT T O THE EXPENSES FURNISHED BY THE ASSESSEE WAS FOUND TO BE INACCURAT E OR INCORRECT. THE HBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODU CTS (SUPRA) HAS HELD THAT MERELY BECAUSE THE ASSESSEE HAS CLAIMED T HE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE, THAT BY ITSELF WILL NOT ATTRACT PENALTY U/S 271(1)(C). IN VIEW OF THE A FORESAID FACTS AND ITA NO.488/AHD/2012 -5- RESPECTFULLY FOLLOWING THE DECISION OF RELIANCE PET ROPRODUCTS (SUPRA) WE ARE OF THE VIEW THAT ON THE PRESENT FACTS PENALT Y U/S 271(1)(C) CANNOT BE LEVIED. HENCE WE DIRECT THE DELETION OF P ENALTY. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD