DCIT 10(1), MUMBAI V. ALL SERVICES GLOBAL P. LTD ( FORMELRY KNOWN AS ALL SERVICES UNDER 1 ROOF INDIA P.LTD), MUMBAI

ITA 5328/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4329 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: RASHMIKANT C MOD I
• Keywords: Difference of opinion; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- ABENCH , , BEFORE S/SH. JOGINDER SINGH,JUDICIA L MEMBER & RAJENDRA,ACCOUNTANT MEMBER /.ITA/5328/MUM/2013, /ASSESSMENT YEAR :2009-10 DY. CIT-10(1) 455, 4 TH FLOOR AAYAKAR BHAVAN MUMBAI-400 020. VS M/S. ALL SERVICES GLOBAL PVT. LTD. (FORMERLY KNOWN AS ALL SERVICES UNDER 1 ROOF INDIA PVT. LTD.) AG-3, CAMA INDUSTRIAL ESTATE NEAR KUSUM MASALA GOREGAON(E) MUMBAI-400 063. PAN:AAECA 7278 D ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY :SHRI RASHMIKANT C. MODI / REVENUE BY :SHRI ASGHAR ZAIN / DATE OF HEARING : 01-12- 2015 / DATE OF PRONOUNCEMENT : 01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.06.05.2013 OF CIT(A)-21,MU MBAI,THE ASSESSING OFFICER(AO) HAS FILED THE PRESENT APPEAL. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF FACILIT Y MANAGEMENT AND MANPOWER RECRUIT -MENT,FILED ITS RETURN OF INCOME ON 29.09.2009,DECLARING INCOME AT RS.4.73 CRORES.THE AO COMPLETED THE ASSESSMENT ON 05.12.2011,U/S. 143(3) OF THE ACT DETERMINING THE I NCOME OF THE ASSESSEE AT RS.4.62 CRORES. DURING THE ASSESSMENT PROCEEDINGS,THE AO MADE CERTA IN DISALLOWANCES/ADDITIONS AMOUNTING TO RS.28.84 LAKHS(PRELIMINARY EXPENSES OF RS.41,500/-,PAYMENT O F EMPLOYEES CONTRIBUTION TO PF AFTER STIPULATED DATE-RS.9.49 LAKHS,SHARE ISSUE EXPENSES-RS.8.70 LAK HS,DIFFERENCE IN AIR INFORMATION-RS.1.73 LAKHS AND DISALLOWANCE OF RS.4.49 LAKHS U/S.14A OF THE ACT).A GGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTH ORITY (FAA),WHO CONFIRMED THE ADDITION/DISALLOWANCE S MADE BY THE AO.THE ASSESSEE DID NOT AGITATE THE MAT TER BEFORE THE TRIBUNAL WITH REGARD TO THE ADDITION S. MEANWHILE THE AO INITIATED PENALTY PROCEEDING U/S.2 71(1)(C)OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME.AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE,THE AO HELD THAT DURING THE ASSESSMENT PROCEEDINGS DELAYED PAYMENT OF PF WAS TR EATED AS INCOME FROM OTHER SOURCES,THAT SHARE ISSUE EXPENSES WERE TREATED AS CAPITAL EXPENDITURE AS AGA INST THE REVENUE EXPENDITURE CLAIMED BY THE ASSESSEE,THAT THE ASSESSEE HAD NOT FURNISHED ANY EX PLANATION WITH REGARD TO THE AIR DIFFERENCE OF RS.1 .73 LAKHS,THAT A DISALLOWANCE OF RS.4.49 LAKHS WAS ALSO MADE U/S.14A R.W.RULE 8D DURING THE ASSESSMENT PROCEEDINGS.HE IMPOSED A PENALTY OF RS.8.44 LAKHS U /S.271 (1)(C)OF THE ACT,FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3 .DURING THE APPELLATE PROCEEDINGS,BEFORE THE FAA,TH E ARGUED THAT CERTAIN ADDITIONS/ DISALLOW -ANCES WERE MADE BY THE AO,THAT SUCH DISALLOWANCE SHOULD N OT RESULT IN AUTOMATIC LEVY OF PENALTY,THAT IT HAD INCURRED ALL THE EXPENSES FOR CARRYING OUT THE BUSI NESS,THAT THE QUESTION WITH REGARD TO SHARE ISSUE EXPENSES WAS A DEBATABLE ISSUE AND PENALTY WAS NOT LEVIABLE IN SUCH MATTERS.AFTER CONSIDERING THE 5328-ALL SERVICES GLOBAL -09-10 2 SUBMISSIONS OF THE ASSESSEE,THE FAA HELD THAT DISAL LOWANCE U/S.14A,PRELIMINARY EXPENSES AND ISSUE OF NON RECONCILIATION OF AIR INFORMATI-ON WERE THE LEG AL ISSUES,THAT EXPENDITURE INCURRED ON ACCOUNT OF ISSUING SHARES WAS DEBATABLE. FINALLY,THE FAA DELET ED THE PENALTY LEVIED BY THE AO RELYING UPON THE JUDGMENT OF RELIANCE PETROPRODUCTS PVT.LTD.(322ITR1 58). 4 .BEFORE US,THE DEPARTMENTAL REPRESENTATIVE(DR)STATE D THAT THE ASSESSEE HAD NOT RECONCILED THE DIFFERENCE OF AIR INFORMATION,THAT ADDITIONS MADE B Y THE AO WERE CONFIRMED BY THE FAA WERE NOT CONTESTED BY THE ASSESSEE.AUTHORISED REPRESENTATIVE (AR)ARGUED THAT THE ADDITION IN QUANTUM PROCEEDINGS DID NOT PROVE THAT THE ASSESSEE HAD FILED INACCURAT E PARTICULARS.ON A SPECIFIC QUERY BY THE BENCH HE ADMITTED THAT ON EXPLANATION WAS FILED ABOUT THE DI FFERENCE IN AIR INFORMATION BEFORE THE FAA AND THAT THE ASSESSEE WAS AWARE ABOUT THE ADVERSE INFERENCE DRAWN BY THE AO IN THAT REGARD DURING THE ASSESSMEN T PROCEEDINGS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD MADE CERTAIN ALLOWANCES AND ADDITIONS WHILE FINALISING T HE ASSESSMENT,THAT THE FAA CONFIRMED THE ADDITIONS/DISALLOWANCES.WE ARE OF THE OPINION THAT THE MERE CONFIRMATION OF ADDITIONS/DISALLOWANCES SHOULD NOT AND DO NOT RESULT IN CONCEALMENT PENALTY ,AS THE ASSESSMENT AND PENALTY ARE TWO DIFFERENT PROCEEDINGS.DECISION TAKEN BY THE AO OR FAA OR THE TRIBUNAL IN QUANTUM MAY BE HELPFUL TO DECIDE THE ISSUE OF IMPOSING PENALTY. BUT,IT IS NOT THE SOLE C RITERIA.EXPLANTION FILED BY THE ASSESSEE DURING PEN ALTY PROCEEDINGS HAVE TO BE COMPULSORILY CONSIDERED.IN T HE CASE UNDER CONSIDERATION THE ASSESSEE HAD FILED ALL THE DETAILS AND THE AO HAD NOT DOUBTED THE INCURRIN G OF EXPENDITURE.THERE WAS DIFFERENCE OF OPINION BETWEEN THE AO AND THE ASSESSEE AS HOW TO TREAT A P ARTICULAR ITEM OF EXPENDITURE.THE ASSESSEE CLAIMED SOME EXPENSES AS REVENUE,WHEREAS THE AO TREATED IT CAPITAL IN NATURE.IN OUR OPINION ADDITION MADE ON T HAT ACCOUNT WAS JUSTIFIED,BUT NO PENALTY FOR FILING INA CCURATE PARTICULARS COULD BE LEVIED FOR IT.SIMILARL Y,FOR THE DISALLOWANCE MADE U/S.14A R.W.R.8D NO CONCEALMENT P ENALTY IS LEVIABLE.BESIDES,THE STAND TAKEN BY THE AO WITH REGARD TO THE PRELIMINARY EXPENSES AND PAYM ENT OF EMPLOYEES CONTRIBUTION COULD BE CONSIDERED VALID FOR QUANTUM BUT CLAIM FOR SUCH EXPENSES SHOUL D NOT BE VISITED BY PENAL PROVISIONS.AS FAR AS DIFFERENCE ABOUT AIR INFORMATION IS CONCERNED WE FI ND THAT THE ASSESSEE HAD FAILED TO FILE ANY EXPLANA TION IN THAT REGARD BEFORE THE AO OR THE FAA DURING PENA LTY PROCEEDINGS.THEREFORE,PARTLY CONFIRMING THE ORD ER OF THE FAA,WE HOLD THAT PENALTY LEVIED FOR ALL OTHE R ITEMS EXCEPT FOR DIFFERENCE OF AIR INFORMATION,WA S RIGHTLY DELETED BY HER.WE UPHOLD THE ORDER OF THE A O WITH REGARD TO AIR INFORMATION DIFFERENCE.EFFECTI VE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE AO,IN PART. AS A RESULT,APP EAL FILED BY THE AO STANDS PARTLY ALLOWED. . ORDER PRO NOUNCED IN THE OPEN COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( / JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE :01.01.2016 . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 5328-ALL SERVICES GLOBAL -09-10 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.