WEB WERKS INDIA P.LTD, MUMBAI V. ITO 7(3)(4), MUMBAI

ITA 7708/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8444 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 15-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HASMUKH SHAH
• Keywords: Difference of opinion
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI I P BANSAL, JM & SHRI RAJENDRA SINGH, AM ITA NO. 7708/MUM/2011 (ASST YEAR 2005-06) WEB WORKS INDIA P LTD 124 UINIWUR ZINFL RDYSYR PTSBHSFRBI OGG VBRRT DSESTKAR MARG MUMBAI 25 VS THE INCOME TAX OFFICER WARD 7(3)(4), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAACW3955H ASSESSEE BY SH HASMUKH SHAH REVENUE BY SH AMAR DEEP DT.OF HEARING 23 RD OCT 2012 DT OF PRONOUNCEMENT 23 RD OCT 2012 PER I P BANSAL, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS) DATED 2.5.2011 FOR THE ASSESSMENT YEAR 2005-06. 2 THE ASSESSEE IN THE PRESENT APPEAL IS AGGRIEVED W ITH THE SUSTENANCE OF CONCEALMENT PENALTY AMOUNTING TO ` 73,790/- LEVIED IN RESPECT OF THE FOLLOWING TWO DISALLOWANCES: I) DISALLOWANCE OF CONVEYANCE EXPENSES ` 1,74,850/- II) ADVANCE WEB HOSTING CHARGES ` 26,792/- 2.1 THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED A T ` 2,57,090/- WHICH INTER-ALIA INCLUDE BOTH THE ABOVE MENTIONED DISALLOWANCES. THE LD COMMISSIONER OF INCOME TAX(APPEALS) IN THE QUANTUM ORDER DATED 9.9.2011 HA D GRANTED RELIEF TO THE ITA NO.7708/M/2011 WEB WORKS INDIA LTD . 2 ASSESSEE WITH REGARD TO THE ADDITION ON CONVEYANCE EXPENSES AND ORDER GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME T AX(APPEALS) HAS BEEN PASSED BY THE ASSESSING OFFICER ON 8.11.2011, COPY OF WHICH H AS BEEN PLACED ON RECORD, ACCORDING TO WHICH THE REVISED TOTAL INCOME OF THE ASSESSEE STOOD AT ` 12,730/- AS THE LD COMMISSIONER OF INCOME TAX(APPEALS) HAS DELE TED THE ADDITION MADE ON ACCOUNT OF CONVEYANCE EXPENSES, MOTOR CAR RENT AND DISALLOWANCE U/S 14A TOTALLING TO ` 2,44,365/-. THE DEPARTMENT DID NOT PREFER ANY APP EAL AGAINST THE DELETION MADE BY THE LD COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, THE QUESTION BEFORE US IS LIMITED TO THE PENALTY TO BE LEVIED IN RESPECT OF THE ADDITION OF ` 26,792/- ON ACCOUNT OF WEB HOSTING CHARGES. 3 THE LD AR OF THE ASSESSEE HAS RELIED UPON THE WRI TTEN SUBMISSIONS FILED BY HIM VIDE LETTER DATED 18.10.2012. IT HAS BEEN STATED T HAT THE SAID AMOUNT WAS SHOWN AS INCOME IN THE NEXT FINANCIAL YEAR AS THE REVISED RE TURN COULD NOT BE FILED IN RESPECT OF THE YEAR UNDER CONSIDERATION DUE TO TIME BARRED. THE, CHARGES ARE SHOWN AS ADVANCE ONLY IN THE BOOKS OF ACCOUNT AND IT IS ONLY BECAUSE OF DIFFERENCE OF OPINION, THE SAID AMOUNT HAS BEEN ADDED TO THE INCO ME OF THE ASSESSEE. THE LD AR HAS ALSO RELIED UPON THE DECISION OF THE HONBLE BO MBAY HIGH COURT IN THE CASE OF CIT VS SHIVLAL DESAI &SONS REPORTED IN 114 ITR 388 TO CONTEND THAT MERELY BECAUSE SOME ADDITION/DISALLOWANCE HAS BEEN IN THE ASSESSME NT PROCEEDINGS, CONCEALMENT PENALTY CANNOT BE LEVIED. THE LD AR HAS ALSO RELIE D UPON SEVERAL DECISION AS UNDER: 1 RELIANCE PEDUCTS 322 ITR 158 SC 2 ACIT-V- VIP INDUSTRIES 122 TTJ 289 (MUM) 3 CIT V MITHALAL RAMCHANDRA (82 ITR 470) 4 CIT V INDO-AMERICAN ELECTRICAL LTD (45 CTR 146) 5 HINDUSTAN STEEL LTD V STATE OF ORISSA (83 ITR 26) , 6 YASMIN PROPERTIES (P) LTD. 46 LTD 331 D.M. DAHANU KAR V CIT (65 ITR 280) 7 ITO V H.A. SODHAN (GREATER HUF) 17 LTD 479 (AHD I TAT) 8 HIMATVALANJIKARIA V ITO (AHD IT AT) 36 LTD 76 9 CIT V INDIAN METALS AND FERRO ALLOYS LTD (ON) 211 ITR 35 ITA NO.7708/M/2011 WEB WORKS INDIA LTD . 3 10 NUCHEM LIMITED V DCIT (DEL. ITAT) 47 LTD 487 11 ASSOCIATED CEMENT COMPANIES LTD V DCIT (BORN ITA T) 40 LTD 70; AND 12I AC C SMT. RAJ KUMAR MAHAJAN (CHD ITAT) 40 LTD 3 37 THUS, IT WAS PLEADED BY HIM THAT THE PENALTY SHOULD BE DELETED. 3.1 ON THE OTHER HAND, THE LD DR HAS RELIED UPON TH E ORDERS PASSED BY THE ASSESSING OFFICER AND LD COMMISSIONER OF INCOME TAX (APPEALS). 4 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. AS THE DISALLOWANCE ON ACCOUNT O F CONVEYANCE EXPENSES AS ALREADY BEEN DELETED, THE LEVY OF PENALTY IS TO BE CONSIDERED ONLY FOR AN ADDITION OF ` 26,792/- RELATING TO ADVANCE TO WEB HOSTING CHARGE S. THE AMOUNT IS VERY SMALL AND IT WAS SHOWN AS ADVANCE BY THE ASSESSEE IN THE RETURN OF INCOME. MOREOVER, THE SAID AMOUNT WAS ADDED TO THE INCOME IN THE NEXT FIN ANCIAL YEAR. THEREFORE, WE ARE OF THE OPINION THAT THE LEVY OF PENALTY ON SUCH ADD ITION IS NOT JUSTIFIED AND THE SAME IS DELETED. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF OCT 2012. SD/- SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER ( I P BANSAL ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 23 RD OCT 2012 RAJ* ITA NO.7708/M/2011 WEB WORKS INDIA LTD . 4 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI