SANDEEP DAMANI, MUMBAI V. ITO 20(3)(2), MUMBAI

ITA 5617/MUM/2010

• Counselvise Citation: 561719914 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 23-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI ALW MR P C MOURYA
• Assessee Lawyers: PRAMOD D RASAM
• Keywords: Business income; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, A ND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 5617/MUM./2010 (ASSESSMENT YEAR : 2006-07 ) MR. SANDEEP DAMANI D-204, JAYANT APARTMENTS NR. SAHAR CARGO COMPLEX SAHAR, AHDHERI (E) MUMBAI 400 099 PAN AACPD7057L .. APPELLANT V/S INCOME TAX OFFICER WARD-20(3)(2) PARIMAN CHAMBER LOWER PAREL, MUMBAI .... RESPONDENT ASSESSEE BY : MR. PRAMOD D. RASAM REVENUE BY : MR. G.P. TRIVEDI ALW MR. P.C. MOURYA DATE OF HEARING 23.11.2011 DATE OF ORDER 30.11.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 17 TH MAY 2010, PASSED BY THE COMMISSIONER (APPEALS)-XXXI, MUMBAI, FOR ASSESSMENT YEAR 2006-07 , WHEREIN THE COMMISSIONER (APPEALS) CONFIRMED THE PENALTY IMPOSE D BY THE ASSESSING MR. SANDEEP DAMANI ITA NO. 5617/MUM./2010 2 OFFICER UNDER SECTION 271B OF THE INCOME TAX ACT, 1 961 (FOR SHORT THE ACT ) ON THE GROUND THAT THE ASSESSEE HAD NOT COMPLIED WI TH THE PROVISIONS OF SECTION 44AB OF THE ACT. 2. THE ASSESSING OFFICER NOTICED FROM THE TDS CERTIFIC ATES FILED, THAT THE YEARLY RECEIPTS OF THE ASSESSEE WERE ` 49,98,492. THE ASSESSEE FILED EXPLANATION AND SUBMITTED AS FOLLOWS:- 3. THE APPELLANT IS INDIVIDUAL, HAVING BUSINESS OF INTERNATIONAL FREIGHT BROKER OF VARIOUS AIRLINES LIKE AIR INDIA, SAUDI ARABIA, CATHAY PACIFIC, GULF AIR, ETC. THE APPELLANT HAS FILED THE RETURN OF INCOME FOR THE A.Y. 2006-07 ON 15.10.2006. BEING IN THE BUSINE SS OF AIR FREIGHT BROKER, THE APPELLANT HAS CONSIDERED ONLY COMMISSIO N INCOME IN THE PROFIT & LOSS ACCOUNT. BUT CERTAIN CUSTOMERS HAS DE DUCTED TDS ON FREIGHT AMOUNT PAYABLE BY THEM TO VARIOUS AIRLINES. THE LEARNED AO HAS ONLY ADDED THE AMOUNT AS SHOWN ON TDS CERTIFICA TE & CONCLUDED THAT PROVISIONS OF SECTION 44 AB IS APPLICABLE & LE VIED THE PENALTY U/S 271B. 3) IN THE TDS LIST THE FOLLOWING PARTIES HAS DEDUCT ED TDS ON FREIGHT AMOUNT PAYABLE BY THEM TO AIRLINES. SL.NO. NAME OF PARTY AMOUNT TDS AMOUNT 1. NOUVA SHOES 511889.00 11487.00 2. PREMIER FASHION 521783.00 11710.00 3. PREMIX FASHION 174746.00 3922.00 4. SAHYOG EXPORTS 54956.00 1231.00 5. BEST BUY INC. 61451.00 1254.00 6. 1324825.00 29604.00 7. AMJEY CHEMICAL 36000.00 3672.00 8. HDFC BANK 5921.00 604.00 9. DEVP. CREDIT BANK 15931.00 1625.00 57852.00 5901.00 5) THE PROVISION OF SECTION 44AB IS APPLICABLE TO E VERY PERSON CARRYING ON BUSINESS SHALL , IF HIS TOTAL SALES TUR NOVER OR GROSS RECEIPTS AS THE CASE MAY BE, IN BUSINESS EXCEED OR EXCEEDS F ORTY LAKH RUPEES. THE REIMBURSEMENT OF EXPENSES AND OTHER CHARGES TO A CLEARING / CONSIGNMENT AGENT, INCOME FROM INTEREST ETC DOES NO T FORM THE GROSS MR. SANDEEP DAMANI ITA NO. 5617/MUM./2010 3 RECEIPTS. THERE ARE MANY OTHER TYPES OF RECEIPTS WH ICH DO NOT FORM THE PART OF GROSS RECEIPTS WHILE CALCULATING LIMIT UNDER 44 AB. THE SAMPLE LIST IS ENCLOSED. 6) THEREFORE THE PROVISIONS OF SECTION 44AB IS NOT APPLICABLE IN THE CASE OF APPLICANT AS HIS TOTAL TURNOVER OR GROSS RE CEIPTS HAS NOT EXCEEDED THE LIMIT OF FORTY LAKH RUPEES DURING THE FINANCIAL YEAR ENDED 3 1.3.2006. 3. ON APPEAL, THE COMMISSIONER (APPEALS), REJECTING TH E CONTENTIONS OF THE ASSESSEE, CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. AFTER HEARING THE LEARNED COUNSEL, MR. PRAMOD D. RA SAM, ON BEHALF OF THE ASSESSEE, AND THE LEARNED DEPARTMENTAL REPRESEN TATIVE, MR. G.P. TRIVEDI, ON BEHALF OF THE REVENUE, IT IS CLEAR THAT THE TOTAL RECEIPTS IN THE HANDS OF THE ASSESSEE IS ` 49,98,492. THE ASSESSEE RECEIVES THE ENTIRE AMOUNT BILLED BY IT AND AFTER RETAINING THE COMMISS ION, REMITS THE BALANCE TO THE RESPECTIVE AIRLINES. ACCORDINGLY, THE TURNOVER OF THE ASSESSEE IS 49,98,492. BILLS OF THIS AMOUNT HAVE BEEN RAISED BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE AGREE WITH THE FINDINGS OF THE AUTHORITIES BELOW THAT THE PROVISIONS OF SECTION 44AB OF THE ACT ARE ATTRA CTED IN THIS CASE. AS THE ASSESSEE HAS NOT COMPLIED WITH THE SAME, THE PENALT Y WAS RIGHTLY IMPOSED. THE ASSESSEE HAS NOT SHOWN ANY REASONABLE CAUSE FOR NOT LEVYING THE PENALTY. CONSEQUENTLY, THE GROUND RAISED BY THE ASS ESSEE IS DISMISSED. 5. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2011 SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH NOVEMBER 2011 MR. SANDEEP DAMANI ITA NO. 5617/MUM./2010 4 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, E BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI DATE INITIAL 1. DRAFT DICTATED ON 24.11.2011 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28.11.2011 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 29.11.2011 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 29.11.2011 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29.11.2011 SR.PS 6. DATE OF PRONOUNCEMENT 30.11.2011 SR.PS 7. FILE SENT TO THE BENCH CLERK 30.11.2011 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER