RIDHAM TEXPORT P.LTD, MUMBAI V. ASST CIT CIR 11(3), MUMBAI

ITA 5583/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79419 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 5583 /MUM/2012 ASSESSMENT YEAR: 2006-07 M/S. RIDHAM TEXPORT P. LTD. SHREE LAXMI WOOLLEN MILLS COMPOUND, DR. E MOSES ROAD, MUMBAI 400 011 PAN: AAACR 4900 P VS. ACIT 7(2) R. NO. 602, 6 TH FLOOR AAYAKAR BHAVAN MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY PARIKH REVENUE BY : SHRI P.K. SINGH DATE OF HEARING : 21.05.2014 DATE OF PRONOUNCEMENT : 25.07.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A) -13, MUMBAI DATED 07.06.2012 CONFIRMING T HE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 20 06-07. 2. BRIEFLY STATED, THE ASSESSEE, A COMPANY, WHILE D ECLARING A TOTAL INCOME AT RS. NIL HAD CLAIMED BROKERAGE EXPENSES OF RS.1,35,666/- IN THE RETURN OF INCOME. HOWEVER, IN THE ASSESSMENT FRAMED U/S 143(3), THE S AID AMOUNT WAS DISALLOWED U/S 40(A)(IA) AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AS THE ASSESSEE DID NOT DEDUCT TDS ON THE SAID BROKERAGE EXPENSE. CONSEQUEN TLY, IN THE PENALTY PROCEEDING, THE AO LEVIED A PENALTY OF RS.45,665/- U/S 271(1)(C) AND THE SAME WAS CONFIRMED BY THE LD.CIT(A). AGGRIEVED BY THE IMPUGN ED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE AUTHORITIES BELOW HAV E NOT DOUBTED THE GENUINENESS OF THE BROKERAGE EXPENDITURE INCURRED BY THE ASSESSEE. HOWEVER, THE DISALLOWANCE HAS ITA NO. 5583 /MUM/2012 M/S. RIDHAM TEXPORT P. LTD. ASSESSMENT YEAR: 2006-07 2 BEEN MADE ONLY ON THE REASON THAT TDS HAS NOT BEEN DEDUCTED BY THE ASSESSEE ON THE SAID EXPENDITURE. IN THIS CONNECTION, IT IS REL EVANT TO MENTION THAT THE DELHI HIGH COURT IN THE CASE OF CIT VS. AT & T COMMUNICATIONS SERVICES INDIA PVT. L TD. 342 ITR 257 (DEL) , HAS HELD THAT INVOKING THE PROVISIONS OF SECTION 40(A)(IA) FOR MAKING DISALLOWANCE SHOULD NOT BE GROUND FOR THE LEVY PENA LTY U/S 271(1)(C) OF THE ACT. ALSO, IN THE CASE OF NEW HORIZON INDIA LTD. VS. DCIT 12 ITR (TRIB) 332 ( DEL), THE DELHI BENCH OF THE TRIBUNAL HAS DELETED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE MADE U/S 40(A)(IA) OF TH E ACT ON THE GROUND THAT THE ASSESSEE CANNOT BE HELD GUILTY OF CONCEALMENT OR FU RNISHING OF INACCURATE PARTICULARS OF INCOME ON ACCOUNT OF DISALLOWANCE MADE U/S 40(A) (IA). SIMILAR VIEW HAS BEEN TAKEN BY THE AHMADABAD BENCH OF THE TRIBUNAL IN TH E CASE OF ACIT VS. M/S. SARASWATI CONSTRUCTION COMPANY IN ITA NO. 2865/AHD/ 2010 DATED 22.02.2011. IT IS ALSO RELEVANT TO STATE THAT THE AFOREMENTIONED DECI SIONS HAVE BEEN FOLLOWED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF RAMAKRISHNA S. SHETTY VS. DIT IN ITA NO. 7142/MUM/2011. CONSIDERING THAT THE FACTS OF THE CASE IN HAND IS SQUARELY COVERED BY THE DECISIONS OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE ORDER OF THE LD.CIT(A) CON FIRMING THE LEVY OF PENALTY DESERVES TO BE REVERSED. RESULTANTLY, THE IMPUGNED PENALTY STANDS DELETED. HOWEVER, THIS DELETION OF PENALTY DOES NOT PROVIDE ANY IMMUNITY TO THE ASSESSEE FROM THE PENAL PROCEEDINGS FOR MAKING A WRONG CLAIM OF SIMILAR NATURE, IF ANY, IN THE FUTURE. 4. IN THE RESULT, THE APPEAL FILED B Y THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF JULY, 2014. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 25.07.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.