HINDUSTAN PLATINUM P.LTD, NAVI MUMBAI V. DCIT 2(1), MUMBAI

ITA 7412/MUM/2012

• Counselvise Citation: 741219914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: HINA DOSHI
• Keywords: Wrong claim; Non compliance

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND B.R.BHASKARAN (AM ) . . , . . , ./I.T.A. NO.7412/MUM/2012 ( / ASSESSMENT YEAR : 2005-06) HINDUSTAN PLATINUM PVT. LTD. C-122, TTC INDUSTRIAL AREA, PAWANE VILLAGE, NAVI MUMBAI-400703 / VS. THE DY. COMMISSIONER OF INCOME TAX, 2(1), AAYAKAR BHAVAN, MUMBAI-400020 ( % / APPELLANT) .. ( &% / RESPONDENT) ./ ./PAN/GIR NO. : AAACH1111J % / APPELLANT BY : MS. HINA DOSHI &% * /RESPONDENT BY : SHRI SURENDRA KUMAR * - / DATE OF HEARING : 25.2.2014 * - /DATE OF PRONOUNCEMENT : 28.2.2014 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT Y EAR 2005-06 AGAINST THE ORDER OF LD. CIT(A) DATED 4.9.2012 DISPUTING THE CONFIR MATION OF LEVY OF PENALTY U/S 271(1) ( C) OF THE INCOME TAX ACT, 1961 (THE ACT) ON ACCO UNT OF DISALLOWANCE OF INTEREST OF RS.10,86,841/- PAID TO OTHERS DUE TO NON-DEDUCTIO N OF TDS. 2. WE HAVE HEARD LD. REPRESENTATIVES OF THE PARTIES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE OBSERVE THAT THE ASSESSEE PAID INTEREST OF RS.10,86,841/- TO STANDARD BANK, UK. THE ASSESSEE BELIEVED THAT THE SAID FINANCIAL CHARGES PAID WAS A PART OF MATERIAL COST WHICH WAS PAID FOR THE DEFER MENT OF PAYMENT AND ACCORDINGLY NO TDS WAS DEDUCTED. THE AO DISALLOWED THE SAID PAYM ENT ON ACCOUNT OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE AO HAS STATED T HAT THE ASSESSEE MADE AN INCORRECT CLAIM AND ACCORDINGLY LEVIED PENALTY AT THE RATE OF 100 % OF TAX SOUGHT TO BE EVADED ON THE SAID AMOUNT. I.T.A. NO. 7412 /MUM/2012 2 3. LD CIT(A) ALSO CONFIRMED THE ACTION OF THE AO ST ATING THAT THE ASSESSEE HAD MADE WRONG CLAIM. HENCE, THIS APPEAL BY THE ASSESS EE. 4. WE ARE OF THE CONSIDERED VIEW THAT THE DEPARTMEN T HAS NOT DISPUTED THE FACT THAT THE ASSESSEE MADE PAYMENT OF INTEREST TO STA NDARD BANK, UK BUT THE SAID PAYMENT WAS DISALLOWED AS THE ASSESSEE DID NOT DEDU CT TDS ON THE SAID AMOUNT PAID. THERE IS NO ALLEGATION THAT THE SAID PAYMENT MADE BY THE ASSESSEE WAS NOT GENUINE. THE AMOUNT HAS BEEN DISALLOWED IN VIEW OF PROVISION OF SECTION 40(A)(IA) OF THE ACT. WE ARE OF THE CONSIDERED VIEW THAT MERELY BECAUSE THE AMOUNT HAS BEEN DISALLOWED ON ACCOUNT OF NON COMPLIANCE OF PROVISION OF AN ACT I. E. TDS, IT DOES NOT AMOUNT THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. HENCE, LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE OF CLAIM DOES NOT ATTRACT THE PROVISIONS OF SECTION 271(1)( C) OF THE ACT. THE HONBLE MA DRAS HIGH COURT IN THE CASE OF CIT V/S INDEN BISLERS ( 2000) (158) CTR 323 HAS HELD THAT THE MERE FACT THAT THE CERTAIN CLAIM IS DISALLOWED, IT DOES NOT FOLLOW THAT THE ASSESSEE CONCEALED ANY INCOME. IN THE CASE OF CIT VS. AJAIB SINGH & COMPANY (2002) 253 ITR 6 30 (P&H), THE HONBLE PUNJAB AND HARYANA HIGH COURT HAS ALSO HELD THAT DISALLOWANC E OF EXPENDITURE DOES NOT MEAN THAT INACCURATE PARTICULARS OF INCOME HAD BEEN FIL ED. WE ARE OF THE CONSIDERED VIEW THAT THE ABOVE DECISION SQUARELY APPLY TO THE CASE OF THE ASSESSEE BEFORE US. HENCE, WE DELETE THE PENALTY BY ALLOWING THE GROUND OF APP EAL TAKEN BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28TH FEBRUARY, 2014. 1 2 28TH FEBRUARY, 2014 * SD SD ( . . / B.R. BASKARAN ) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: ON THIS 28TH DAY OF FEBRARY,2014 I.T.A. NO. 7412 /MUM/2012 3 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &% / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- CONCERNED 4. 8 / CIT CONCERNED 5. 9 &: , - : , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) - : , /ITAT, MUMBAI