DCIT 8(2), MUMBAI V. MUMBI INTERNATIONAL AIRPORT P. LTD, MUMBAI

ITA 5061/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9032 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5061 /MUM/2014 (ASSESSMENT YEAR: 2008-09) D C I T - 8(2) VS. M/S. MUMBAI INTERNATIONAL ROOM NO. 216 - A, 2ND FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 AIRPORT PVT. LTD. 3RD FLOOR, CORPORATE CENTRE MAROL PIPELINE, ANDHERI-KURLA ROAD, ANDHERI (E), MUMBAI PAN AAECM6285C APPELLANT RESPONDENT APPELLANT BY: SHRI ANAND MOHAN RESPONDENT BY: SHRI VIJAY MEHTA DATE OF HEARING: 13.09.2017 DATE OF PRONOUNCEMENT: 11.10.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-17, MUMBAI DATED 19.05.2014 FOR A.Y. 2008-09 BY WHICH THE CIT(A) HAS DELETED THE PENALTY LEVIED ON THE ASSESSEE UNDE R SECTION 271(1)(C) ON THE ADDITION OF ` 132,58,59,023/- ON ACCOUNT OF SURPLUS PASSENGER SER VICE FEE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO IN THIS CASE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IN RESP ECT OF THE FOLLOWING ADDITIONS MADE BY HIM: - 1 LEAVE ENCASHMENT 1,37,82,831/- 2 SURPLUS ON COLLECTION OF PASSENGER SERVICES FEE (SECURITY COMPONENT) 132,58,59,023/- 3 DISALLOWANCE U/S 40(A)(IA) 83,318/- TOTAL DISALLOWANCES (PENALTY INITIATED) WHICH HAS BEEN CONFIRMED BY THE ACTION OF AO 133,96,41,854/- THE AO LEVIED A PENALTY OF ` 46,00,00,000/- BY OBSERVING AS UNDER: - ITA NO. 5061/MUM/2014 M/S. MUMBAI INTERNATIONAL AIRPORT PVT. LTD. 2 14. IN VIEW OF THE ABOVE OBSERVATION OF HON'BLE SU PREME COURT AND HIGH COURT, I HOLD THAT THE ASSESSEE HAS FILED THE INACCURATE PARTICULARS OF INCOME AMOUNTING TO CONCEALMENT OF H IS INCOME FOR A.Y. 2008-09. THEREFORE, IT IS A FIT CASE FOR LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE IT. ACT. ACCORDINGLY, PENALTY U/S. 271(1)(C) IS TO BE LEVIED ON THE ASSESSEE. 15. THE AMOUNT OF INCOME FOR WHICH CONCEALMENT/INAC CURATE PARTICULARS HAVE BEEN SUBMITTED IS RS. 133,96,41,85 4/-. THE MINIMUM PENALTY LEVIABLE ON THE AMOUNT OF INCOME CO NCEALED WORKS OUT TO RS. 45,53,44,266/- AND THE MAXIMUM PENALTY L EVIABLE COME TO RS.136,60,32,798/-. AFTER CONSIDERING ALL THE FACTS , I LEVY A LUMPSUM PENALTY OF RS.46,00,00,000/- UNDER SECTION 271(L)(C ) OF THE I.T. ACT, 1961. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) DELETED THE PENALTY LEVIED BY THE AO VIDE HIS ORDER DATED 19.05.2014. A GGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THRO UGH THE TAX AUTHORITIES BELOW WE NOTED THAT THE ADDITION OF ` 137,82,831/- AND ` 83,318/- IN RESPECT OF LEAVE ENCASHMENT AND DISALLO WANCE UNDER SECTION 40(A)(IA) WERE DELETED BY THE CIT(A) AND CONFIRMED THE ADDITION OF ` ,132,58,59,203/- IN RESPECT OF SURPLUS ON COLLECTIO N OF PASSENGER SERVICE FEES (SECURITY COMPONENT). WE NOTED THAT THIS TRIBU NAL IN ITA NOS. 3232 & 2760/MUM/2012 VIDE ORDER DATED 06.09.2016 RESTORED THIS ISSUE FOR THE PURPOSE OF VERIFICATION TO THE AO ALTHOUGH THEY HEL D IN PARA 14.44 OF ITS ORDER THAT THE SAID AMOUNT IS NOT TAXABLE AS INCOME IN THE HANDS OF THE ASSESSEE BY HOLDING AS UNDER: - 14.44. BEFORE PARTING WITH, WE HAVE ALSO ANALYSED THE FACTS ABOUT UTILIZATION OF THE IMPUGNED AMOUNT. THE ESCROW ACCO UNT MAINTAINED BY THE ASSESSEE IS SIMPLY A POOL CREATED BY THE MOCA T HROUGH ASSESSEE FOR MEETING SECURITY EXPENSES. UNDER THESE CIRCUMST ANCES, IF AT ALL ANY INCOME CAN BE COMPUTED, THAT WOULD BE POSSIBLE ONLY IF ANY SURPLUS ARISES, WHICH IS NOT POSSIBLE TO HAPPEN SINCE ENTIR E AMOUNT COLLECTED BY ASSESSEE COMPANY IS DEPOSITED IN ESCROW ACCOUNT WHI CH IS EARMARKED WHOLLY AND EXCLUSIVELY FOR MEETING SECURI TY EXPENSES. THERE IS NO FLEXIBILITY FOR USING THE FUNDS ELSEWHE RE. IF AT ALL ANY AMOUNT IS LEFT UNSPENT FROM THIS ACCOUNT, THEN, THE SAME IS TO BE TRANSFERRED TO THE ACCOUNT OF AIRPORT AUTHORITY OF INDIA FOR MEETING SECURITY EXPENSES. WE HAD DIRECTED THE ASSESSEE AS WELL AS THE LD. CIT-DR TO EXAMINE REQUISITE FACTS AND INFORM US WHE THER THERE WAS SURPLUS OR DEFICIT IN THE ESCROW ACCOUNT FINALLY. T HE INFORMATION PROVIDED BY THE ASSESSING OFFICER, THROUGH LD. CIT- DR, VIDE HIS LETTER ITA NO. 5061/MUM/2014 M/S. MUMBAI INTERNATIONAL AIRPORT PVT. LTD. 3 DATED 06-09-2016 REVEALS THAT UPTO THE ASSESSMENT Y EAR 2013-14 THOUGH THERE WAS SURPLUS IN THE SAID ACCOUNT, BUT F ROM A.Y. 2014-15 ONWARDS, THERE WAS HUGE DEFICIT, MEANING THEREBY, T HE EXPENDITURE WAS MORE THAN THE AMOUNT OF COLLECTION. AS PER THE TERMS OF SOP ISSUED BY MOCA, IF ULTIMATELY THERE WAS SOME DEFICIT, THEN IT WAS REQUIRED TO BE FUNDED BY GOVERNMENT OF INDIA, AND IF THERE WAS EVER ANY SURPLUS (I.E. UNSPENT AMOUNT), IT WAS TO BE TRANSFERRED TO THE ACCOUNT OF AIRPORT AUTHORITY OF INDIA (AAI). THUS, VIEWED FROM THIS AN GLE ALSO, THERE WAS NO QUESTION OF THERE BEING ANY INCOME IN THIS EXERC ISE, MUCH LESS, ANY INCOME, WHICH COULD BE CHARACTERISED AS TAXABLE INC OME IN THE HANDS OF THE ASSESSEE COMPANY. THUS, WE HAVE NO HESITATIO N IN HOLDING THAT THE AFORESAID AMOUNT IS NOT TAXABLE AS INCOME IN TH E HANDS OF THE ASSESSEE COMPANY. THE AO IS DIRECTED TO RECOMPUTE T HE INCOME OF THE ASSESSEE ACCORDINGLY. THE AO HAS ALSO THE LIBERTY T O EXAMINE THAT NO PORTION OF AMOUNT COLLECTED BY THE ASSESSEE ON ACCO UNT OF PSF-SC IS UTILISED BY THE ASSESSEE FOR ITS OWN PURPOSES OR FO R ANY PURPOSES WHICH ARE NOT PERMITTED BY MOCA/OTHER COMPETENT AUT HORITIES. IN CASE ANY VIOLATION IS DONE BY THE ASSESSEE IN THIS REGAR D, THEN THE AO WILL BE AT HIS LIBERTY TO TREAT THE AMOUNT SO MISAPPROPR IATED AS INCOME OF THE ASSESSEE BUT TO THAT EXTENT ONLY. FURTHER, IF A NY REFUND IS RECEIVED BY THE ASSESSEE ON ACCOUNT OF TDS DEDUCTED ON THIS COMPONENT, I.E. ON PSF-SC, THEN THE SAME SHALL ALSO BE DEPOSITED BY TH E ASSESSEE IN THE ESCROW ACCOUNT, AS WAS FAIRLY AGREED BY THE LD. COU NSEL DURING THE COURSE OF HEARING BEFORE US, FAILING WHICH IT WOULD BE TREATED AS INCOME OF THE ASSESSEE, TO THAT EXTENT ONLY. WE DIRECT ACC ORDINGLY. THIS GROUND IS ALLOWED SUBJECT TO DIRECTIONS GIVEN ABOVE. WE ALSO NOTED THAT SUBSEQUENT TO THIS THE AO VIDE H IS ORDER DATED 04.07.2017 AFTER GIVING EFFECT TO THE TRIBUNALS OR DER DELETED THE SAID ADDITION OF ` 132,58,59,203/-. THE ULTIMATE FACT IS THAT ALL THE ADDITIONS IN RESPECT OF WHICH PENALTY UNDER SECTION 271(1)(C) WE RE LEVIED ON THE ASSESSEE STAND DELETED SINCE ALL THE ADDITIONS STAN D DELETED. THEREFORE, NO PENALTY UNDER SECTION 271(1)(C) CONSEQUENTLY CAN BE LEVIED ON THE ASSESSEE. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OF INFIRM ITY IN THE ORDER OF THE CIT(A) DELETING THE PENALTY LEVIED BY THE AO. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH OCTOBER, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 11 TH OCTOBER, 2017 ITA NO. 5061/MUM/2014 M/S. MUMBAI INTERNATIONAL AIRPORT PVT. LTD. 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -17, MUMBAI 4. THE CIT - 8, MUMBAI 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.