M/S. MOTWANI GIFTS (P) LTD, MUMBAI V. THE ITO 10(1)(2), MUMBAI

ITA 5606/MUM/2006

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7216 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-03-2010
• Assessment Year: 1992-1993
• Appeal Filed On: 23-10-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA; S S RANE
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.K.GUPTA, JM AND SHRI R.S.SYAL, AM ITA NO.5606/MUM/2006 : ASST.YEAR 1992-93 M/S.MOTWANI GIFTS (P.) LIMITED 204, BALARAMA, BANDRA KURLA COMPLEX BANDRA (EAST), MUMBAI 400 051. PA NO.AAACM2667C. VS. THE INCOME TAX OFFICER WARD 10(1)(2) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.SUBRAMANIAN RESPONDENT BY : S/SHRI VIRENDRA OJHA & S.S.RANE O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 03.08.2006 IN RELATION TO THE ASSESSMENT YEAR 1992-93 UPHOLDING PENALTY IMPOSED BY THE ASSES SING OFFICER U/S.271(1)(C) OF THE ACT. IT IS A RECALLED MATTER INASMUCH AS THE EA RLIER EX PARTE ORDER PASSED BY THE BENCH WAS SUBSEQUENTLY RECALLED VIDE ITS LATER ORDE R DATED 20.04.2009. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED ITS RETURN DECLARING TOTAL INCOME AT RS.14,68,740. THE ASSESSM ENT WAS FRAMED U/S.143(3) DETERMINING TOTAL INCOME AT RS.22,34,360. THE LEARN ED CIT(A) ALLOWED SOME RELIEF AND IN THE ORDER GIVING EFFECT TO THE ORDER OF THE LEARNED CIT(A) INCOME WAS DETERMINED AT RS.18,43,520. THE ASSESSEE PREFERRED SECOND APPEAL BEFORE THE TRIBUNAL IN WHICH THE MATTER RELATING TO ALLOWABILI TY OF COMMISSION OF RS.1,02,896 CLAIMED TO HAVE BEEN PAID TO M/S.KAY PEE & COMPANY AND DISALLOWANCE IN RESPECT OF ADVERTISEMENT AND SALES PROMOTION EXPENSES AT RS .3,08,300 WERE RESTORED TO THE FILE OF A.O. IN THE FRESH PROCEEDINGS THE A.O. REPE ATED THE ADDITION IN RESPECT OF ADVERTISEMENT AND SALES PROMOTION EXPENSES AT RS.3, 08,300 ON THE GROUND THAT THE ASSESSEE DID NOT FILE DETAILS OF ADVERTISEMENT AND SALES PROMOTION EXPENSES AND ALSO COULD NOT FURNISH THE NAMES OF THE PERSONS TO WHOM SUCH GIFTS WERE GIVEN. AS REGARDS COMMISSION THE ASSESSEE COULD NOT FURNISH A NY EVIDENCE. THE A.O. ISSUED ITA NO.5606/MUM/2006 M/S.MOTWANI GIFTS (P.) LIMITED. 2 NOTICE U/S.133(6) TO M/S.KAY PEE & COMPANY WHICH WE RE RETURNED BY THE POSTAL AUTHORITIES. APART FROM MAKING THE ADDITION SUSTAI NED IN THE FIRST APPEAL, THE AO WITHDREW THE RELIEF ALLOWED BY THE LEARNED CIT(A) IN RESPECT OF COMMISSION AT THE RATE OF 50% AMOUNTING TO RS.51,484, IN THE INSTANT PROCEEDINGS. RESULTANTLY MINIMUM PENALTY WAS IMPOSED U/S.271(1)(C) AT RS.2,0 6,876. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED A.R. INITIALLY RAISED LEGAL GRO UND ABOUT THE TIME LIMIT BUT SUBSEQUENTLY, DURING THE COURSE OF INSTANT PROCEED INGS BEFORE US, DID NOT PRESS THE SAME. ON MERITS HE CONTENDED THAT IT WAS A CASE OF SIMPLE DISALLOWANCE AND NO PENALTY COULD BE IMPOSED. INSOFAR AS THE COMMISSION PAYMENT IS CONCERNED, WE FIND THAT INITIALLY THE LEARNED CIT(A) ALLOWED RELI EF AMOUNTING TO RS.51,484 WHICH WAS WITHDRAWN BY THE ASSESSING OFFICER DURING THE P RESENT PROCEEDINGS. EVEN THOUGH THERE WAS NO DIRECT EVIDENCE IN SUPPORT OF T HE CLAIM FOR COMMISSION PAID, THE ASSESSEE SUCCEEDED PARTLY IN PUTTING UP ITS CAS E ABOUT THE GENUINENESS OF COMMISSION EXPENDITURE AS A RESULT OF WHICH, SOME R ELIEF WAS ALLOWED IN THE FIRST APPEAL IN THE QUANTUM PROCEEDINGS. IT INDICATES THA T IT MAY BE A GOOD CASE FOR MAKING ADDITION, BUT CANNOT BE SO ON THE QUESTION O F PENALTY. IN VIEW OF THE FACT THAT PARTIAL RELIEF EARLIER ALLOWED BY THE LEARNED CIT(A) WAS NOT WITHDRAWN BY THE TRIBUNAL, IN OUR CONSIDERED OPINION, NO PENALTY U/S .271(1)(C) CAN BE IMPOSED ON SUCH AMOUNT. 4. COMING TO THE OTHER ITEM OF DISALLOWANCE O F RS.3,08,300, WE FIND THAT THE ASSESSEE FAILED TO GIVE ANY EVIDENCE WORTH THE NAME IN THE ORIGINAL AS WELL AS SUBSEQUENT ASSESSMENT PROCEEDINGS ABOUT THE DETAILS OF EXPENDITURE INCURRED. EVEN NO DETAIL WAS PROVIDED OF THE PERSONS TO WHOM SUCH GIFTS WERE GIVEN. IT IS NOT A CASE OF MERE DISALLOWANCE OF EXPENDITURE BUT THE VE RY CLAIM FOR EXPENSES WAS NOT ITA NO.5606/MUM/2006 M/S.MOTWANI GIFTS (P.) LIMITED. 3 BACKED BY ANY EVIDENCE. IN OUR CONSIDERED OPINION, THE PENALTY DESERVES TO BE UPHELD ON THIS ISSUE. WE ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY OF MARCH 2010. SD/- SD/- ( R.K.GUPTA ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 23 RD MARCH, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - X, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.