The ITO, Ward-4(2), Ahmedabad V. Kassar Innovative Foods Pvt.Ltd., Ahmedabad

ITA 561/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85542 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 23-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER THE ITO, WARD (2), AHMEDABAD, ROOM NO. 105,. NAVJIVAN TRUST BLDG., OFF. ASHRAM ROAD, AHMEDABAD (APPELLANT) VS KASSAR INNOVATIVE FOODS PVT. LTD., 415/P VIII, MORAIYA, N-H8, TAL, SANAND, SARKHEJ BAVLA ROAD, AHMEDABAD PAN: AAACK6249G (RESPONDENT) REVENUE BY: SHRI B.L. YADAV, SR.D.R. ASSESSEE BY: NONE DATE OF HEARING : 22-12-2014 DATE OF PRONOUNCEMENT : 09-01-20 15 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF CIT(A)-VIII, AHMEDABAD DATED 06-12-2010 FOR A.Y. 2006-07. ITA NO. 561/AHD/2011 ASSESSMENT YEAR 2006-07 I.T.A NO. 561/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. KASSAR INNOVATIVE FOODS PVT. LTD 2 2. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF T HE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED BY ASSESSEE. WE THEREFORE PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL ON RECORD EX PA RTE QUA THE ASSESSEE. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. 4. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF MANUFACTURING AND SELLING OF DEHYDRATED ONION FLAKE S. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2006-07 ON 08/12/2006 DECLARING TOTAL INCOME OF RS. NIL. THE CASE WAS SE LECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) VI DE ORDER DATED 28/11/2008 AND THE TOTAL INCOME WAS DETERMINED AT R S. 16,53,714 BEFORE SET OFF OF BROUGHT FORWARD LOSSES. WHILE ASSESSING THE TOTAL INCOME DISALLOWANCE OF RS. 6,09,235/- WAS MADE U/S. 40(A)( IA) BY THE AO. ON THE AFORESAID AMOUNT DISALLOWED U/S. 40(A)(IA), AO VIDE PENALTY ORDER DATED 15/04/2009 LEVIED PENALTY OF RS. 2,39,246/- U/S. 27 1(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A). LD. CIT(A) DELETED THE PENALTY BY HOLDING AS UNDER: 5.7. IN THE LIGHT OF THE ABOVE DECISION, IF WE CON SIDER THE FACTS OF THE CASE, WE NOTICE THAT THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS OF INCOME AND THE ASSESSING OFFICER HAS CALCULATED THE TOTAL INCOME ON THE BASIS OF THOSE PARTICULARS FILE D BY THE ASSESSEE. THE ASSESSEE HAS RIGHT TO CLAIM ALL DEDUCTIONS WHIC H ACCORDING TO HIM ARE PERMISSIBLE IN LAW. IT IS THE DUTY OF ASSE SSING OFFICER TO CALCULATE CORRECT INCOME IN ACCORDANCE WITH LAW. I F THE ASSESSING OFFICER FOUND OTHERWISE ON CONSIDERING THAT MATERIA L FILED BY THE ASSESSEE, WE DO NOT FIND THAT IN SUCH CASES WHICH T HE ASSESSING OFFICER COMPUTED THE DIFFERENT TOTAL INCOME THAN TH E TOTAL INCOME DECLARED BY THE ASSESSEE THE SAME WOULD NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME. IN THE CASE UNDER CONSIDERATION, THE ASSES SEE HAS CLAIMED TRANSPORTATION EXPENSES AMOUNTING TO RS. 609235/- A S ALLOWABLE EXPENSES. THE AO HAS DISALLOWED THE SAME, SINCE AS SESSEE HAS NOT DEDUCTED TAX AT SOURCE OUT OF THE PAYMENT. THE AO HAS DISALLOWED IT U/S. 40(A)(IA). IT IS THE DISALLOWAN CE UNDER LEGAL ISSUE. I.T.A NO. 561/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. KASSAR INNOVATIVE FOODS PVT. LTD 3 THE AO HAS NOT TREATED HE TRANSPORTATION EXPENSES A S BOGUS. THE ASSESSEE HAS INCURRED THIS EXPENDITURE. SINCE HE HA S NOT DEDUCTED TDS ON THIS PAYMENT, AO DISALLOWED THE EXPENDITURE BY LEGAL FIXATION OF SECTION 40(A)(IA). THE ENTIRE DETAILS WERE FURNISHED BY THE APPELLANT IN THE FORM OF RETURN OF INCOME AND TAX A UDIT REPORT. I FIND THAT IT IS NOT A CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME. IN THE LI GHT OF THE ABOVE DISCUSSION, I FIND THAT IT IS NOT A FIT CASE FOR PE NALTY LEVIABLE U/S. 271(1)(C). 5. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENU E IS NOW IN APPEAL BEFORE US. 6. BEFORE US, ID. D.R. TOOK US THROUGH THE PENALTY ORDER OF A.O AND SUBMITTED THAT ADDITION WAS MADE BECAUSE ASSESSEE HAD FAILED TO COMPLY WITH TDS PROVISIONS OF THE ACT AND THE ASSESSEE WAS WELL AWA RE ABOUT ITS OBLIGATION TO DEDUCT TAX AND DEPOSIT TO THE GOVERNMENT ACCOUNT AS WELL AS THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE SHOULD HAVE THEREFORE DISALLOWED THE EXPENSES WHILE COMPUTING THE INCOME. FAILURE ON THE PART OF ASSESSEE TO DISALLOW THE EXPENSES HAS RESULTED INTO NON REFLECT ION OF THE TRUE INCOME OF THE ASSESSEE. FURTHER HAD THE CASE NOT BEEN SELECTED F OR SCRUTINY, THE INCOME TO THE TUNE OF RS. 6,09,235/- WOULD HAVE ESCAPED ASSESSMEN T, THUS IT WAS CLEAR THAT ASSESSEE HAD WILLFULLY AND DELIBERATELY FURNISHED I NACCURATE PARTICULARS OF INCOME AND THEREFORE A.O HAD RIGHTLY LEVIED PENALTY. HE THEREFORE SUBMITTED THAT THE ORDER OF A.O LEVYING THE PENALTY BE UPHELD. 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE PENALTY HAS GIVEN A FINDING THAT THE TRANSPORTATION EXPENSES ON WHICH THE TDS WAS DEDUCT IBLE, HAS NOT BEEN TREATED AS BOGUS BY AO AND THE DETAILS OF EXPENSES HAVE BEEN FURNISHED BY ASSESSEE AND THE DISALLOWANCE IS ON ACCOUNT OF L EGAL FICTION. WE FURTHER FIND THAT LD. CIT(A) RELYING ON THE DECISIO N IN THE CASE OF RELIANCE PETRO-PRODUCTS LTD VS. CIT 322 ITR 158 HAS DELETED THE PENALTY. BEFORE US I.T.A NO. 561/AHD/2011 A.Y. 2006-07 PAGE NO ITO VS. KASSAR INNOVATIVE FOODS PVT. LTD 4 REVENUE COULD NOT CONTROVERT THE FINDINGS OF LD. CI T(A) BY BRINGING ANY CONTRARY MATERIAL ON RECORD, NOR HAS BROUGHT ANY CO NTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THIS GROUND O F REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (G.C. GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 09/01/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,