DCIT 11(1)(1), MUMBAI V. SAAM TEXTILE P.LTD, MUMBAI

ITA 7083/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7908 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: HEMANT BAHEDIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I N.K. PRADHAN , ACCOUNTANT MEMBER ITA NO . 7083 /MUM. /2016 ( ASSESSMENT YEAR : 20 09 10 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 11(1)(1), MUMBAI . APPELLANT V/S M/S. SAAM TEXTILE PVT. LTD. 4060 63, B WING OBEROI GARDEN ESTATE OFF. SAKI VIHAR ROAD, CHANDIVALI ANDHERI (EAST), MUMBAI 400 072 PAN AAFCS0433B . RESPONDENT REVENUE BY : SHRI RAM TIWARI ASSESSEE BY : SHRI HEMANT BAHEDIA DATE OF HEARING 29.11.2017 DATE OF ORDER 13.12.2017 O R D E R PER SAKTIJIT DEY, J.M. AFORESAID APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 22 ND SEPTEMBER 2016 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 1 8 , MUMBAI,FOR THE ASSESSMENT YEAR 20 09 10 . 2. BRIEF FACTS ARE, THE ASSESSEE AN INDIAN COMPANY IS ENGAGED IN THE BUSINESS OF EXPORT AND IMPORT OF TEXTILE PRODUCTS AND ACCESSORIES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF 2 M/S. SAAM TEXTILE PVT. LTD. INCOME ON 22 ND JULY 2009, DECLARING TOTAL INCOME OF RS. 1,00,08,320. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WHILE VERIFYING THE COMPUTATION OF INCOME FILED BY THE ASSESSEE FOUND THAT WHILE COMPUTING INCOME UNDER THE HEAD PROFIT OR GAINS OF BUSINESS OR PROFES SION ASSESSEE HAS REDUCED AN AMOUNT OF RS. 53,67,488 TOWARDS UNUTILIZED FOREIGN EXCHANGE GAIN / LOSS. THOUGH, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO JUSTIFY ITS CLAIM, HOWEVER, AS ALLEGED BY THE ASSESSING OFFICER , THE ASSESSEE FAILED TO OFFER ANY PLAUSIBLE EXPLANATION. ACCORDINGLY, THE ASSESSING OFFICER ADDED BACK THE AMOUNT OF RS. 53,67,488 TO THE INCOME OF THE ASSESSEE. ON THE BASIS OF SUCH ADDITION MADE , THE ASSESSING OFFICER INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C ) OF THE ACT AND ULTIMATELY PASSED AN ORDER ON 5 TH MARCH 2014, IMPOSING PENALTY OF RS. 18,25,000 UNDER SECTION 271(1)(C) OF THE ACT. BEING AGGRIEVED OF THE PENALTY SO IMPOSED, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. T HE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT THE UNUTILIZED FOREIGN EXCHANGE GAIN WAS OFFERED AS INCOME IN THE SUBSEQUENT ASSESSMENT YEAR ON ACTUAL 3 M/S. SAAM TEXTILE PVT. LTD. REALIZATION AND THE REVENUE HAS ALSO ACCEPTED SUCH INCOME , DELETED THE PENA LTY IMPOSED. 4. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. 5. LEARNED AUTHORISED REPRESENTATIVE ON THE OTHER HAND SUBMITTED, AS PER THE ACCOUNTING METHOD FOLLOWED BY THE ASSESSEE FOREIGN EXCHANGE GAIN/LOSS REALIZ ED DURING THE YEAR IS SHOWN OFFERED IN THE RETURN OF INCOME AND THE UNUTILIZED GAIN / LOSS IS SHOWN ONLY IN THE YEAR OF ACTUAL REALIZATION. HE SUBMITTED, FOLLOWING THE AFORESAID POLICY CONSISTENTLY ADOPTED BY THE ASSESSEE , THE UNUTILIZED GAIN WAS OFFERED TO TAX IN THE NEXT ASSESSMENT YEAR ON ACTUAL REALIZATION. HE SUBMITTED, EVEN IN THE IMPUGNED ASSESSMENT YEAR ALSO, THE TRIBUNAL HAS ALLOWED PARTIAL RELIEF TO THE ASSESSEE ON THE ADDITION MADE ON ACCOUNT OF UNUTILIZED FOREIGN EXCHANGE GAIN. HE, THEREFORE, SUBM ITTED THAT PENALTY WAS RIGHTLY DELETED BY THE LEARNED COMMISSIONER (APPEALS). 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS COULD BE SEEN, THE LEARNED COMMISSIONER (APPEALS) HAS DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) HAVING FACTUALLY FOUND THAT THE UNUTILIZED FOREIGN EXCHANGE GAIN WAS OFFERED AS INCOME IN THE NEXT ASSESSMENT YEAR AND THE DEPARTMENT HAS ACCEPTED IT. THE AFORESAID FINDING OF FACT RECORDED BY THE FIRST 4 M/S. SAAM TEXTILE PVT. LTD. APPELLATE AUTHORITY HAS NOT BEEN CONTROVERT ED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE BY BRINGING ANY CONTRARY MATERIAL TO OUR NOTICE. MOREOVER, THE TRIBUNAL WHILE DECIDING ASSESSEES APPEAL AGAINST THE ADDITION MADE IN ITA NO.6123/MUM./2012 DATED 7 TH JULY 2013, HAS ALSO GRANTED PARTIAL RELIEF T O THE ASSESSEE. THUS, IN VIEW OF THE AFORESAID FACT, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER (APPEALS). GROUNDS RAISED ARE DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.12.2017 SD/ - SD/ - SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.12.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI