TATA AIG GENERAL INSURANCE COMPANY LTD, MUMBAI V. CIT (6), MUMBAI

ITA 640/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8125 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 640 /MUM/20 1 3 ASSESSMENT YEAR: 2008 - 09 M/S TATA AIG GENERAL INSURANCE COMPANY LIMITED, A - 501, 5 TH FLOOR, BUILDING NO. 4, INFINI TY PARK, DINDOSHI, MALAD (EAST), MUMBAI - 400097 PAN: AABCT3518Q VS. THE DEPUTY COMMISSIONER OF INCOME TAX 2(3), AAYAKAR BHAVAN, M. K. MARG, NEW MARINE LINES, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NISHANT THAKKAR REVENU E BY : SHRI V. JUSTIN (DR) DATE OF HEARING: 19 /09 /201 7 DATE OF PRONOUNCEMENT: 18 / 1 2 /201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE APPELLANT/ ASSESSEE AGAINST THE ORD ER DATED 19/11 /2012 PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) - 6 , MUMBAI , FOR THE A S S ESSMENT YEAR 2008 - 09 , WHEREBY THE LD. CIT (A) HAS CONFIRMED THE PENALTY ORDER PASSED BY THE AO U/S 271 (C) THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TO TAL INCOME OF RS. 22,68,25,380/ . DURING THE COURSE OF SCRUTINY AS S ESSMENT AO MADE DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE INCOME TAX RULES 1962 (FOR SHORT THE RULES), DISALLOWANCE U/S 40(A)(IA) CO. INSURANCE FEES, DISALLOWANCE OF INFORMATION TECHNOLOGY EXPENSES, SOFTWARE EXPENSES, DISALLOWANCE TOWARDS 2 ITA NO. 640/M UM/2013 ASSESSMENT YEAR: 2008 - 09 AMORTIZATION OF INVESTMENTS, DISALLOWANCE OF EXEMPTION ON PROFIT ON SALE OF INVESTMENT AND DISALLOWANCE OF INTEREST ON SERVICE TAX, THEREBY DETERMINED THE INCOME OF THE ASSESSEE AT RS. 25,07,79,870/ - (ROUNDED OFF). 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER IN APPEAL BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER H EARING THE ASSESSEE PARTLY ALLOWED THE APPEAL. STILL AGGRIEVED, THE ASSESSEE PREFERRED SECOND APPEAL BEFORE THE ITAT. IN THE MEANTIME, THE AO INITIATED PROCEEDINGS U/S 271 (C) OF THE ACT IMPOSING PENALTY OF RS. 1,000,000/ - . THE PENALTY ORDER WAS FURTHER C HALLENGED BY THE ASSESSEE. THE LD. CIT (A) AFTER HEARING THE ASSESSEE CONFIRMED THE PENALTY OF RS. 10 LACS U/S 271 (C) OF THE ACT HOLDING THAT THE ASSESSEE HAS CONCEALED INCOME AND FURNISH INACCURATE PARTICULARS OF INCOME BY CLAIMING DEDUCTION OF SOFTWARE EXPENSES TO THE TUNE OF RS. 10,55,352/ - . 4 . T HE ASSESSEE HAS PREFERRED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING GROUNDS: - 1. IN CONCLUDING THAT THE APPELLANT HAS CONCEALED INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME BY CLAIMING A DEDUCTION OF SOFTWARE EXPENSES OF RS. 1,055,352 IN THE ABSENCE OF INVOICES AND LEVYING A PENALTY AMOUNTING TO RS. 1,000,000 UNDER SECTION 271 (1)(C) OF THE ACT. 2. IN NOT CONSIDERING THE EVIDENCE OBTAINED IN THE FORM OF B ANK STATEMENTS ETC. SUBSTANTIATING THE CLAIM TOWARDS DEDUCTION OF THE EXPENDITURE. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE PRESENT CASE, THE ITAT HAS DELETED THE DISALLOWANCE U/S 14A, CO. INSURANCE FEES U/S 40(A)(IA), EXPEN DITURE TOWARDS PURCHASE OF HARD DISC RAM, HEADSETS ETC. (CAPITAL) AND SOFTWARE EXPENSES (CAPITAL) BY FOLLOWING THE ORDER OF THE COORDINATE BENCH RENDERED IN ASSESSEES OWN CASE FOR THE 3 ITA NO. 640/M UM/2013 ASSESSMENT YEAR: 2008 - 09 ASSESSMENT YEAR 2003 - 04, VIDE ORDER DATED 20/11/2015 . THE AO ACCORDING LY PASSED ORDER GIVING EFFECT TO THE ITAT ORDER DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 22,68,25,380/ - . SINCE, THE ADDITION MADE BY THE AO WAS DELETED AND THE INCOME OF THE ASSESSEE WAS DETERMINED AT THE AMOUNT MENTIONED IN THE ASSESSMENT ORDE R NO ADDITION REMAINS TO LEVY PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271 (C) OF THE ACT. THE LD. COUNSEL FURTHER SUBMITTED THAT UNDER THESE CIRCUMSTANCES, THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) IS LIABLE TO BE SET ASIDE. 6. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATIVE (DR) RELIED ON THE FINDINGS OF THE LD. CIT (A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIAL PLACED BEFORE US. WE NOTICE THAT VIDE ORDER DATED 20/11/2015, TH E COORDINATE BENCH HAS DELETED THE DISALLOWANCE U/S 14A, CO. INSURANCE FEES U/S 40(A)(IA), EXPENDITURE TOWARDS PURCHASE OF HARD DISC RAM, HEADSETS ETC. (CAPITAL) AND SOFTWARE EXPENSES (CAPITAL) BY FOLLOWING THE ORDER OF THE COORDINATE BENCH RENDERED IN AS SESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04. ACCORDINGLY, THE CO - COORDINATE BENCH HAS ALLOWED THE APPEAL OF THE ASSESSEE AND UPHELD THE ORDER PASSED BY THE LD. CIT (A). 8. THE AO HAS PASSED ORDER GIVING EFFECT TO ITAT ORDER ON 13/04/2016 AS PER WHIC H THE REVISED TOTAL INCOME COMES TO RS. 22,68,25,380/ - . WE FURTHER NOTICE THAT THE ASSESSEE HAD FILED THE RETURN ON 27/09/2008 DECLARING THE GROSS INCOME OF THE SAME AMOUNT I.E., RS. 22,68,25,380/ - . UNDER THESE CIRCUMSTANCES, WE FIND MERIT IN THE CONTENTIO N OF THE LD. COUNSEL THAT WHEN THE GROSS TOTAL INCOME AND THE INCOME DETERMINED BY THE AO AFTER GIVING EFFECT TO THE ITAT ORDER ARE EXACTLY THE SAME, NO 4 ITA NO. 640/M UM/2013 ASSESSMENT YEAR: 2008 - 09 SCOPE REMAINS FOR IMPOSING PENALTY U/S 271 (C) OF THE ACT. WE ARE THEREFORE OF THE CONSIDERED OPINIO N THAT SINCE THERE IS NO ADDITION, THE IMPUGNED ORDER CONFIRMING THE PENALTY DOES NOT SURVIVE. WE, THEREFORE, ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE PENALTY. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2008 - 2009 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER , 2017 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 18 / 1 2 / 2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT( A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI