AMPOULES & VIALAS MFG. CO. LTD, MUMBAI V. CIT 14 CIR 6(1)(3), MUMBAI

ITA 502/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2425 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Keywords: Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.502/M/2015 ASSESSMENT YEAR: 2006-07 M/S. AMPOULES & VILAS MFG. CO. LTD., UNIT NO.8, 2 ND FLOOR, MAHALAXMI INDL. ESTATE, GANDHI NAGAR, LOWER PAREL (WEST), MUMBAI 400 013 PAN: AAACA9853E VS. INCOME TAX OFFICER, CIRCLE 6(1)(3), MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI C.W. ANGOLKAR, D.R. DATE OF HEARING : 19.07.2016 DATE OF PRONOUNCEMENT : 22.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 03.11.2014 OF COMMISSIONER OF INCOME TAX (APP EALS) [HEREINAFTER REFERRED TO AS THE CIT(A)]. THE ASSESSEE HAS AGITA TED THE CONFIRMATION OF THE PENALTY OF RS.1,20,684/- IMPOSED ON THE ASSESSEE BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) UNDER SECTION 2 71(1)(C) OF THE INCOME TAX ACT. 2. NONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE DESPITE NOTICE. HOWEVER, CONSIDERING THE SOLE ISSUE INVOLVED AND TH E FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE CASE CAN BE DECIDED AFTER HEAR ING THE LD. D.R. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE DIRECTO R OF THE ASSESSEE COMPANY NAMELY MR. ARVIND KEJRIWAL ALONG WITH HIS WIFE SMT. SAPNA KEJRIWAL VISITED ITA NO.502/M/2015 M/S. AMPOULES & VILAS MFG. CO. LTD. 2 FOREIGN COUNTRIES FOR BUSINESS PURPOSES. THE AO DI SALLOWED THE FOREIGN TRAVELLING EXPENSES OF THE WIFE OF THE DIRECTOR SMT . SAPNA KEJRIWAL AND ALSO LEVIED THE PENALTY IN THAT RESPECT. 4. THE LD. CIT(A) CONFIRMED THE SAID PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE, THUS, HAS COME IN APPEAL BEFORE US. 5. WE FIND THAT IN THE STATEMENT OF FACTS BEFORE TH E LD. CIT(A), THE ASSESSEE HAD EXPLAINED THAT SMT. SAPNA KEJRIWAL HAD ACCOMPAN IED HER HUSBAND MR. ARVIND KEJRIWAL, THE DIRECTOR OF THE COMPANY FOR FO REIGN TRAVEL AND THEY VISITED TO DUBAI, HONG KONG FAIR, COTTON FAIR IN CHINA AND USA FOR BUSINESS PURPOSES; THAT SMT. SAPNA KEJRIWAL HELPED HER HUSBAND IN PROC URING THE BUSINESS ORDERS BECAUSE SHE KNOWS THE SPANISH AND FRENCH LANGUAGES. SHE HAD ALSO TAKEN PART IN ONE EXHIBITION OF BUSINESS. FURTHER, THAT AS A RESULT OF THEIR VISIT THE COMPANY GOT VARIOUS ORDERS AND MADE EXPORTS. THE C OMPANY HAS ALREADY SUFFERED FRINGE BENEFIT TAX OF 20% OF THE EXPENSES ON SUCH TRAVEL EXPENSES. CONSIDERING THE ABOVE STATEMENTS, WE FIND THAT NEIT HER IT IS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME NOR OF CONCEALM ENT OF INCOME. MERELY BECAUSE THE AO DID NOT ALLOW THE FOREIGN TRAVEL EXP ENSES OF THE WIFE OF THE DIRECTOR, THAT ITSELF CANNOT BE HELD TO BE A CASE O F FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. TH E ASSESSEE WAS UNDER BONAFIDE BELIEF THAT IT WAS ENTITLED TO THE CLAIM O F ABOVE EXPENSES. THE ASSESSEE HAS ALSO GIVEN JUSTIFICATION FOR THE SAME AS DISCUSSED ABOVE. EVERY DISALLOWANCE OF EXPENDITURE CANNOT ALSO BE HELD TO BE A CASE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6. IN VIEW OF THIS, WE DO NOT FIND ANY JUSTIFICATIO N ON THE PART OF THE LOWER AUTHORITIES IN IMPOSING THE ABOVE PENALTY UPON THE ASSESSEE. THE PENALTY LEVIED BY THE LOWER AUTHORITIES UNDER SECTION 271(1 )(C) OF THE ACT IS THEREFORE ORDERED TO BE DELETED. ITA NO.502/M/2015 M/S. AMPOULES & VILAS MFG. CO. LTD. 3 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.07.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.