MARKS SHIPPING P.LTD, MUMBAI V. DCIT CIR 4(2),

ITA 5455/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0108 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: SANJUKTA CHOW DHURY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 5455/MUM/2015 (ASSESSMENT YEAR 2011-12) MARKS SHIPPING PVT. LTD. NO.401/402, 4 TH FLOOR, ATLANTA TOWER, SAHAR ROAD, ANDHERI (E), MUMBAI. PAN:AAACM 3202B ...... APPELLANT VS. DY.COMM. OF INCOME TAX, CIR.4(2), MUMBAI. .... RESPON DENT APPELLANT BY : SHRI SANJUKTA CHOWDHUR Y RESPONDENT BY : SHRI SUMAN KUMAR DATE OF HEARING : 31/08/2017 DATE OF PRONOUNCEMENT : 31/08/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAI NING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST AN ORD ER PASSED BY CIT(A)- 9 MUMBAI DATED 09/09/2015, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 27/08/2014 . 2 ITA NO. 5455/MUM/2015 (ASSESSMENT YEAR 2011-12) 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL:- 1. THE LD. DY. COMMISSIONER OF INCOME TAX ERRED IN LEVYING THE PENALTY OF RS.14,55,498/- OF 100% OF TAX LIABILITY U/S. 271 (1 ) (C) ON THE BASIS OF DISALLOWANCE OF THE FOLLOWING EXPENDITURE: I. CARGO CLEARANCE EXPENSE OF' RS.15,68,248/-, DESP ITE THE FACT THAT THE HON'BLE ITAT IN 1997-98 HAD SUSTAINED THE DISALLOWA NCE ON ADHOC BASIS AND NO PENALTY WAS LEVIED. THE ORDER OF THE HON'BLE ITA T IS SCRUPULOUSLY FOLLOWED BY THE DEPARTMENT SINCE THEN AND NO PENALTY IS LEVI ED. II. VARIOUS EXPENSES ON ADHOC BASIS RS. 1,85,460/- III. COMMISSION TO WORKING DIRECTOR U/S 36(L)(II) R S.47,10,351/-. THE COMMISSION BEING CONTINUOUSLY ALLOWED FROM 1996-97 TO 2008-09. THE APPELLANT IS IN APPEAL FOR A.Y 2009-10 AND 2011-12, HAVING FOLLOWED CBDT CIRCULAR NO. 551 OF 1989. 2. THE LD. CIT (A) SHOULD HAVE CONSIDERED THAT TH E IMPUGNED DISALLOWANCE CANNOT BE TERMED AS FILING OF INACCURATE PARTICULAR OF INCOME AND/OR INTENT TO CONCEAL PARTICULAR OF INCOME AS REQUIRED FOR INVOKI NG PENALTY U/S 271(1)(C). 3. THE LD. DY. COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THAT PENALTY U/S. 271(1) (C) IS NOT LEVIABLE ON DISALLOWANCE OF EXPENSE, AS IT CANNOT BE HELD THAT THE ASSESSEE HAD FILED INACCURATE PARTICULAR O F INCOME OR CONCEALED THE INCOME. 2. THE ISSUES RAISED IN THIS APPEAL ARISE FROM PE NALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF TH E ACT AMOUNTING TO RS.14,55,498/-. THE CIT(A) HAS AFFIRMED THE PENAL TY IMPOSED BY THE ASSESSING OFFICER. NOT BEING SATISFIED WITH THE OR DER OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE THAT THE DISALLOWANCES MADE BY TH E ASSESSING OFFICER IN THE QUANTUM ASSESSMENT ON THE BASIS OF WHICH TH E PENALTY HAS BEEN IMPOSED UNDER SECTION 271(1)(C) HAS SINCE BEEN DELE TED BY THE TRIBUNAL VIDE ORDER IN ITA NO.555/MUM/2015 DATED 04/08/2017. A COPY OF THE 3 ITA NO. 5455/MUM/2015 (ASSESSMENT YEAR 2011-12) ABOVE ORDER HAS BEEN PLACED ON RECORD BY THE LD. R EPRESENTATIVE FOR THE ASSESSEE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT CONT ROVERT THE FACTUAL POSITION ASSERTED BY THE ASSESSEE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN VIEW OF THE AFORESAID DECISION OF THE TRIBUNAL DATED 04/08/ 2017 (SUPRA), THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) HAS BECOME INFRUCTUOUS AND THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COUR T IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF T HE HEARING ON 31/08/2017. SD/- SD/- (RAMLAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 31/08/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI