MAHARASHTRA COLOUR PROCESSORS P.LTD, MUMBAI V. ITO 6(3)(3), MUMBAI

ITA 6438/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62566 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 01-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Assessee Lawyers: SATENDRA PANDEY; JITENDRA A SINGH
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLA TE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI G.E. VEERABHADRAPPA, PRESIDENT AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO.6438/M/2010 ASSESSMENT YEAR: 2006-07 M/S. MAHARASHTRA COLOUR PROCESSORS PVT. LTD., 9, PATNWALA BUILDING, 2 ND FLOOR, 62 E.S. PATANWALA MARG, MUMBAI 400 027. PAN: AAACM 5793P VS. INCOME TAX OFFICER- 6(3)(3), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JITENDRA A SINGH & SATENDRA PANDEY RESPONDENT BY: SHRI PKB MENON DATE OF HEARING: 9.5.2012 DA TE OF ORDER:15.6.2012 O R D E R PER S.S. GODARA, J.M: THIS ASSESSEES APPEAL CHALLENGES CONFIRMATION OF PENALTY U/S 271(1)(C) OF THE ACT BY CIT (A) VIDE ORDER DATED 24.6.2010 FOR ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT IN ASSESSMENT P ROCEEDINGS WHEREIN THE ASSESSEE HAD CLAIMED CREDIT OF RS. 73,967/- AO ISSUED NOTICE TO THE CREDITOR U/S 133(6) OF THE ACT, WHO, IN TURN VERIFIED ONLY AN AMOUNT OF RS. 5,327/- PAYABLE TO THE ASSESSEE. WHEN CONFRONTED WITH THE SAID VERIFICATION, THE ASSESSEE TERMED IT AS A RESULT OF DISPUTE WHICH HAD ARISEN BECAUSE OF RATE DIFFERENCE. HOWEVER, THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION AND CAME TO CONCLUSION THAT THERE WAS SOME RATE DIFFERENCE IN C ASE OF OUTSTANDING AMOUNT RECEIVABLE TO THE EXTENT OF RS. 68,640/- SO, MADE ADDITION. ALON G WITH THIS, THE AO HAD ALSO MADE SOME OTHER MINOR DISALLOWANCES. THE AO LEVIED PENALTY U /S 271(1)(C) OF THE ACT IN RESPECT OF 2 ITA NO.6438/M/2010 THESE DISALLOWANCES. THE LD CIT (A) HAS ALSO CONFI RMED PENALTY IN APPEAL. THE ASSESSEE IS AGGRIEVED. 3. LD AR HAS SUBMITTED THAT THE ASSESSEE HAD FULLY EXPLAINED BEFORE THE AO THE REASONS FOR RATE DIFFERENCE BETWEEN THE BALANCE SHOWN BY TH E ASSESSEE AND CREDITOR AS ATTRIBUTABLE TO SOME DISPUTE BETWEEN THE PARTIES. LD AR HAS ALS O RELIED ON THE CASE LAW OF RELIANCE PETRO CHEMICALS PVT LTD. 322 ITR 158 WHEREIN THE HO NBLE SUPREME COURT HAS DISTINGUISHED THE EARLIER CASE LAW OF THE DHARMENDRA TEXTILE PROC ESSORS 306 ITR 277 (AS RELIED BY LOWER AUTHORITIES) AND DELETION OF PENALTY HAS BEEN PRAYE D. 4. LD DR HAS RELIED ON ORDER OF CIT (A) CONFIRMING PENALTY AND PRAYED FOR REJECTION OF THE APPEAL. 5. WE HAVE HEARD BOTH SIDES AND CAREFULLY GONE THRO UGH THE RECORD INCLUDING EXPLANATION GIVEN BY THE ASSESSEE IN RELATION TO DI SALLOWANCE / ADDITION. MERELY BECAUSE SOME ADDITIONS ARE MADE, IMPOSITION OF PENALTY IS N OT AUTOMATIC. THE ATTENDING FACTS AND CIRCUMSTANCES ARE REQUIRED TO BE APPRECIATED. THE MAJOR ADDITION IS IN RESPECT OF RATE DIFFERENCE BETWEEN THE PARTIES. THE CLAIM OF DISPUT E IS IN OUR VIEW, BONA FIDE. IN VIEW OF FACTS OF THIS CASE, IT CANNOT BE CALLED EITHER A CA SE OF FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THE HONBLE APEX COURT IN R ELIANCE PETRO CHEMICALS CASE 322 ITR 158 HAS REAFFIRMED THE PRINCIPLE THAT EVERY DISALLO WANCE IPSO FACTO DOES NOT LEAD TO IMPOSITION OF PENALTY. HAVING REGARD TO UNDISPUTED FACTS OF THE CASE, WE HOLD THAT PENALTY IS NOT LIABLE TO BE SUSTAINED. 6. THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.6.2012. SD/- SD/- (G.E. VEERABHADRAPPA) (S. S. GODARA) PRESIDENT JUDICIAL MEMBER 3 ITA NO.6438/M/2010 DATE : 15.6.2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CONCERNED 5. THE DR B BENCH, ITAT, MUMBAI. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI.