ASST CIT 8(1)(1), MUMBAI V. RICHARDSON AND CRUDDAS(1972) LTD, MUMBAI

ITA 7100/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3011 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.7100/M/2014 ASSESSMENT YEAR: 2010-11 ACIT-8(1)(1), ROOM NO.624, M.K. ROAD, MUMBAI - 400020 VS. M/S. RICHARDSON AND CRUDDAS (1972) LTD., 1, SIR, J.J. ROAD, BYCULLA, MUMBAI 08 PAN: AAACR 5670A (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RASHMIKANT C. MODI, A.R. REVENUE BY : SHRI B.S. BIST, D.R. DATE OF HEARING : 26.09.2016 DATE OF PRONOUNCEMENT : 26.09.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 25.09.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] AGITATING THE ACTION OF THE LD. CIT(A) IN DELETING THE PENALTY OF RS.1688994/- LEVIED BY THE ASSESSING OFF ICER (HEREINAFTER REFERRED TO AS THE AO) UNDER SECTION 271(1)(C) OF THE ACT. 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. THE AO IN THIS CASE HAD LEVIED THE IMPUGNE D PENALTY IN RELATION TO THE DISALLOWANCE OF PRIOR PERIOD EXPENDITURE. THE ASSE SSEE IN THE RETURN OF INCOME OFFERED PRIOR PERIOD INCOME OF RS.54.66 LAKHS AGAIN ST WHICH IT CLAIMED PRIOR PERIOD EXPENDITURE OF RS.125.91 LAKHS. THE AO DISA LLOWED THE AMOUNT OF PRIOR PERIOD EXPENSES WITHOUT ADJUSTING PRIOR PERIO D INCOME. HE ALSO LEVIED ITA NO.7100/M/2014 M/S. RICHARDSON AND CRUDDAS (1972) LTD. 2 PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN RELAT ION TO THE ABOVE DISALLOWANCE OF PRIOR PERIOD EXPENDITURE. 3. IN APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE SU BMITTED THAT THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING FULLY OWNED BY GOVER NMENT OF INDIA AND WAS ENGAGED IN THE BUSINESS AS ENGINEERS AND CONTRACTO RS AND THAT THE ASSESSEE COMPANY HAD NO REASON TO CONCEAL OR SUBMIT INACCURA TE PARTICULARS OF INCOME. THE ASSESSEE WAS A SICK COMPANY AND WAS UNDER BIFR. IT WAS ALSO SUBMITTED THAT THE PRIOR PERIOD EXPENDITURE WAS DEBITED IN TH E P&L ACCOUNT AS THE SAME CAME TO THE NOTICE OF THE COMPANY DURING THE RELEVA NT PREVIOUS YEAR ONLY. MOREOVER, THE ASSESSEE HAD ALSO OFFERED THE PRIOR P ERIOD INCOME ALSO IN THE RETURN OF INCOME WHICH HAS BEEN ACCEPTED BY THE AO. THE DISALLOWANCE, IF ANY, WAS TO BE MADE THAT COULD HAVE BEEN EVEN OTHER WISE RESTRICTED TO NET DISALLOWANCE ONLY. NEITHER ANY INACCURATE PARTICUL ARS HAVE BEEN FURNISHED NOR ANY INCOME HAD BEEN CONCEALED. 4. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE OBSERVED THAT THE FACTS OF THE CASE OF THE ASSESSEE FOR A.Y. 2010-11 AND A.Y. 2011-12 WERE SAME. HOWEVER, THE AO HAD CHOSEN TO L EVY PENALTY FOR ONE YEAR AND NOT TO LEVY PENALTY FOR ANOTHER YEAR. HE, FURT HER, NOTICED THAT THE ASSESSEE HAD FULLY DISCLOSED ALL THE MATERIAL FACTS. THOUGH THE AO HAD DISALLOWED THE PRIOR PERIOD EXPENDITURE WHILE COMPUTING THE BUSINE SS INCOME OF THE ASSESSEE, HOWEVER, ALL THE DETAILS WERE AVAILABLE IN THE RETU RN OF INCOME ITSELF. HE, FURTHER, OBSERVED THAT THE ASSESSMENT PROCEEDINGS A ND PENALTY PROCEEDINGS WERE TWO SEPARATE, DIFFERENT AND DISTINGUISHED PROC EEDINGS. MERELY BECAUSE THE AO HAD MADE CERTAIN DISALLOWANCE IN THE ASSESSM ENT PROCEEDINGS THAT ITSELF WOULD NOT BE SUFFICIENT FOR LEVY OF PENALTY UNDER S ECTION 271(1)(C) OF THE ACT. HE, RELYING UPON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT, LUDHIANA VS. EAST MAN INTERNATION AL (2014) 41 TAXMAN.COM 239 OBSERVED THAT MERE MAKING OF CLAIM FOR DEDUCTIO N OF PRIOR PERIOD EXPENSES WHICH WAS ULTIMATELY FOUND TO BE UNSUSTAINABLE WOUL D NOT BY ITSELF BE ITA NO.7100/M/2014 M/S. RICHARDSON AND CRUDDAS (1972) LTD. 3 INACCURATE PARTICULARS OF INCOME AS TO PASS PENALTY ORDER UNDER SECTION 271(1)(C) OF THE ACT. 5. AFTER HEARING THE LD. REPRESENTATIVE OF THE PART IES, WE FIND THAT ON THE IDENTICAL FACTS, THE AO FOR A.Y. 2011-12 HAS DROPPE D THE PENALTY PROCEEDINGS. COPY OF THE ORDER OF THE AO IN THIS RESPECT DATED 2 6.08.2014 IS PLACED ON PAGE 21 OF THE FILE. WE FURTHER FIND THAT ASSESSEE IS A GOVERNMENT UNDERTAKING AND NO PERSONAL INTEREST WAS INVOLVED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. IN OUR VIEW, IT I S NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR OF CONCEALMENT OF INCOME. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT(A) WHILE DELETING THE IMPUGNED PENALTY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS THER EFORE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.09.2016. SD/- SD/- (ASHWANI TANEJA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 26.09.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.