ACIT 11(2), MUMBAI V. A.F, FERGUSON & CO., MUMBAI

ITA 6095/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71757 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: JAYESH DESAI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 6095/MUM/2012 (ASSESSMENT YEAR: 2006-07) A C I T - 11(2) M/S. A.F. FERGUSON & CO. ROOM NO. 479, 4TH FLOOR C/O. DELOITTE HASKINS & SEL LS AAYAKAR BHAVAN, M.K. ROAD VS. OPP. SHIVA SAGAR ESTATE MUMBAI 400020 DR. ANNIE BESANT ROAD, WORLI MUMBAI 400030 PAN - AABFA5846M APPELLANT RESPONDENT APPELLANT BY: SHRI M.L. PERUMAL RESPONDENT BY: SHRI JAYESH DESAI DATE OF HEARING: 04.12.2013 DATE OF PRONOUNCEMENT: 04.12.2013 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R DATED 05.07.2012 PASSED BY THE CIT(A)-3, MUMBAI AND IT PERTAINS TO A .Y. 2006-07. 2. THE FOLLOWING GROUNDS WERE URGED BEFORE US: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.24,5 1,448/- WITHOUT APPRECIATING THE FACT THAT DEPARTMENT HAS FILED APP EAL IN THE HON'BLE HIGH COURT AGAINST THE QUANTUM ADDITION. 2) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(AP PEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 3. FACTS IN BRIEF ARE THAT THE AO INITIATED PENALTY PR OCEEDINGS UNDER SECTION 271(1)(C) CONSEQUENT TO THE ADDITION MADE I N THE ASSESSMENT PROCEEDINGS. DESPITE THE EXPLANATION FILED BY THE A SSESSEE THE AO CONCLUDED THAT IT IS A FIT CASE FOR LEVY OF PENALTY AND ACCOR DINGLY PASSED AN ORDER UNDER SECTION 271(1)(C) OF THE ACT ON 18.03.2011. AGGRIEV ED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE ASSESSEE DID NOT FURNISH INACCURATE PARTICULARS OF ITA NO. 6095/MUM/2012 M/S. A.F. FERGUSON & CO. 2 THE SAID INCOME AND FURTHER SUBMITTED THAT ON SIMIL AR SET OF FACTS THE ADDITION WAS DELETED BY THE ITAT MUMBAI BENCHES IN ASSESSEES OWN CASE FOR A.Y. 2003-04 AND A.Y. 2004-05. 4. DURING THE COURSE OF HEARING BEFORE THE CIT(A) IT W AS BROUGHT TO THE NOTICE OF THE CIT(A) THAT AN ADDITION OF ` 72,82,971/- WAS MADE REFERABLE TO PAYMENTS MADE TO THE RETIRED PARTNERS AND WIDOWS OF THE PARTNERS ON THE GROUND THAT THEY DID NOT RENDER ANY SERVICE TOWARDS THE FIRM TO GET THE ABOVE BENEFIT AND THUS IT CANNOT BE CLAIMED AS DEDU CTION. THE ITAT MUMBAI BENCHES CONSIDERED THE SAME ISSUE IN ASSESSEES OWN CASE FOR EARLIER YEARS AND DECIDED THE SAME IN FAVOUR OF THE ASSESSEE AND ON FURTHER APPEAL THE HON'BLE BOMBAY HIGH COURT DISMISSED THE APPEAL FILE D BY THE REVENUE. IT WAS, THEREFORE, SUBMITTED THAT THE VERY BASIS FOR L EVY OF PENALTY NO LONGER SUBSISTS. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) CANCELLED THE PENALTY LEVIED BY THE AO. 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE LEARNED D.R. AS WELL AS THE LEARNED COUNSEL FOR THE ASSESSE E IN THIS REGARD. IT IS NOT IN DISPUTE THAT IN RESPECT OF THE ASSESSMENT YEAR U NDER CONSIDERATION THE ITAT D BENCH, MUMBAI SET ASIDE THE DISALLOWANCE M ADE BY THE AO (ITA NO. 663/MUM/2010 DATED 10.08.2011). SINCE THE PENAL TY WAS SOUGHT TO BE LEVIED CONSEQUENT TO THE DISALLOWANCE MADE BY THE A O, WHICH NO LONGER SUBSISTS, WE ARE OF THE VIEW THAT THE PENALTY LEVIE D BY THE AO HAS NO LEGS TO STAND AND THUS THE ORDER PASSED BY THE LEARNED CIT( A), IN CANCELLING THE PENALTY, IS IN ACCORDANCE WITH LAW. WE, THEREFORE, DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER, 2013. SD/- SD/- (SANJAY ARORA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 4 TH DECEMBER, 2013 ITA NO. 6095/MUM/2012 M/S. A.F. FERGUSON & CO. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 3, MUMBAI 4. THE CIT 11, MUMBAI CITY 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.