SABOO BROTHERS LTD, MUMBAI V. ASST CIT 4(3), MUMBAI

ITA 7920/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88048 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-12-2014
• Assessment Year: 1995-1996
• Appeal Filed On: 24-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: VIPUL B JOSHI; NISHIT GANDHI
• Keywords: Charitable institution; Deemed to accrue or arise in india
• Section: 69C; 80G

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM) , AND B.R.BASKARAN (AM) , ! ' # . . , ./I.T.A. NO.7920/MUM/2011 ( / ASSESSMENT YEAR : 1995-96) M/S SABOO BROTHERS LIMITED, 209, NIRANJAN, 99-MARINE DRIVE, MUMBAI. $ / VS. ASSTT.COMMISSIONER OF INCOME TAX -4(3), 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) ./ ./ PAN/GIRNO.:AAACS6148L / APPELLANT BY : SHRI VIPUL B JOSHI AND NISHIT GANDHI /RESPONDENT BY SHRI NEIL PHILIP ! '# / DATE OF HEARING : 18.12.2014 $% '# /DATE OF PRONOUNCEMENT : 14.1.2015. %& / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 13-09- 2011 PASSED BY LD CIT(A)-9, MUMBAI CONFIRMING THE P ENALTY LEVIED U/S 271(1)(C) OF THE ACT TO THE EXTENT OF RS.3,45,000/-. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E FACTS RELATING TO THE ISSUE UNDER CONSIDERATION ARE THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80G OF THE ACT TO THE EXTENT OF RS.7.50 LAKHS IN ITS RE TURN OF INCOME IN RESPECT OF DONATION OF RS.15.00 LAKHS GIVEN TO M/S SHRIMATI GO DAWARI DEVI SARAF CHARITABLE TRUST. IN THE COMPUTATION OF INCOME, THE ASSESSEE HAD ALSO DISALLOWED THE DONATION AMOUNT OF RS.15.00 LAKHS. IN THE REASSESS MENT PROCEEDINGS, THE AO NOTICED THAT THE RECEIPT ISSUED BY THE ABOVE SAID T RUST WAS INCOMPLETE. FURTHER THE AO NOTICED THAT THE ASSESSEE HAS SHOWN A SUM OF RS.15,000/- ONLY AS ITA NO.7920/M/2011 2 CHARITY & DONATION IN THE PROFIT AND LOSS ACCOUNT. ACCORDINGLY THE AO TREATED THE AMOUNT OF RS.15.00 LAKHS AS DEEMED INCOME/UNEXP LAINED EXPENDITURE U/S 69C OF THE ACT AND ASSESSED THE SAME. THE AO ALSO DID NOT ALLOW DEDUCTION U/S 80G OF THE ACT CLAIMED BY THE ASSESSEE. THE AO LEVI ED PENALTY OF RS.7,00,000/- ON THE ABOVE SAID ADDITION ON THE GROUND THAT THE A SSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME. 3. IN THE QUANTUM APPEAL, THE LD CIT(A) RESTRIC TED THE ADDITION TO RS.7.50 LAKHS, SINCE THE NET ADDITION WAS RS.7.50 LAKHS ONL Y (RS.15.00 LAKHS ADDED LESS 80G DEDUCTION OF RS.7.50 LAKHS). THE TRIBUNAL ALSO CONFIRMED THE ORDER OF LD CIT(A) PASSED IN THE QUANTUM APPEAL PROCEEDING. IN THE APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER, THE LD CIT(A) H ELD THAT THE PENALTY SHOULD HAVE BEEN LEVIED ON RS.7.50 LAKHS ONLY, I.E., THE A MOUNT THAT WAS SUSTAINED BY LD CIT(A) AND TRIBUNAL. ACCORDINGLY THE LD CIT(A) SUTAINEDED THE PENALTY TO THE EXTENT OF RS.3,45,000/- AND DELETED THE BALANCE AMO UNT. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. THE UNDISPUTED FACT REMAINS THAT, AS PER TH E BOOKS OF ACCOUNT, THE ASSESSEE HAS NOT PAID THE AMOUNT OF RS.15.00 LAKHS AS SHOWN IN THE RECEIPT. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASS ESSEE HAS SUBMITTED THAT IT HAS PAID A SUM OF RS.3.00 LAKHS ONLY BY WAY OF CHEQ UE AND THE SAME HAS BEEN SHOWN AS ADVANCE IN THE BOOKS OF ACCOUNT. THE ASSE SSEE HAS FURTHER SUBMITTED THAT THE DISALLOWANCE OF RS.15.00 LAKHS MADE BY THE ASSESSEE WAS WRONG, WHICH CONTENTION IS ALSO CORRECT. A DISALLOWANCE COULD B E MADE ONLY IF THE SAME HAD BEEN CLAIMED AS DEDUCTION. THE ASSESSEE HAS CLAIME D DEDUCTION U/S 80G TO THE EXTENT OF RS.7.50 LAKHS. THE NET EFFECT OF THE SAM E WAS THAT THE ASSESSEE HAS, IN FACT, OFFERED A SUM OF RS.7.50 LAKHS AS ITS INCO ME OVER AND ABOVE THE AMOUNT DISCLOSED IN THE PROFIT AND LOSS ACCOUNT. 5. THE AO HAS MADE THE ADDITION OF RS.15.00 LA KHS ON THE BASIS THAT THE ASSESSEE HAS GIVEN THE DONATION REFERRED ABOVE. HO WEVER, IT IS SEEN THAT THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY WITH THE TRUST TO FIND OUT AS TO WHETHER THE ASSESSEE HAS GIVEN THE DONATION OR NOT, EVEN THOUGH THE ASSESSEE HAS DENIED THE SAID PAYMENT. IN THIS CONNECTION, T HE FOLLOWING OBSERVATION MADE ITA NO.7920/M/2011 3 BY THE TRIBUNAL IN THE ORDER DATED 05-09-2008 PASSE D IN THE QUANTUM ASSESSMENT PROCEEDINGS IN ITA NO.2743/M/06 ARE RELE VANT:- WE FIND THAT THERE IS NO EVIDENCE OR MATERIAL BROU GHT ON RECORD TO SUGGEST THAT THE ASSESSEE HAS GIVEN A DONATION OF RS. 15 LA KHS TO THE TRUST. THIS FINDING OF THE TRIBUNAL, IN FACT, SHOWS THAT T HE IMPUGNED ADDITION OF RS.15.00 LAKHS MADE BY THE ASSESSING OFFICER IS NOT SUPPORTE D BY ANY MATERIAL. 6. IT IS A WELL SETTLED PROPOSITION OF LAW THAT TH E ADDITIONS MADE IN THE ASSESSMENT PROCEEDINGS WOULD NOT AUTOMATICALLY LEAD TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE MATTER AFRESH AND IN THIS CONNECTION , THE FINDINGS ARRIVED AT BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS CAN BE TAKEN AS A GUIDING FACTOR. IN THE INSTANT CASE, THE TRIBUNAL HAS NOTI CED THAT THE ADDITION IS NOT SUPPORTED BY ANY MATERIAL. THE CLAIMS OF THE ASSES SEE THAT IT DID NOT PAY THE DONATION OF RS.15.00 LAKHS AND THE DONATION RECEIPT WAS WRONGLY ISSUED WERE NOT CONTROVERTED. ON THE CONTRARY, DUE TO THE MISTAKE THE ASSESSEE ITSELF WAS CONSTRAINED TO OFFER A SUM OF RS.7.50 LAKHS OVER AN D ABOVE THE AMOUNT DISCLOSED IN THE PROFIT AND LOSS ACCOUNT. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THERE WAS NO CASE FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE ASS ESSING OFFICER TO DELETE THE PENALTY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14TH JAN,2015 . $% ! & '( )* 14TH JAN,2015 % + , SD SD ( %-+& / 0/ JOGINDER SINGH ) ( . . ,/ B.R. BASKARAN ) & / JUDICIAL MEMBER / ACCOUNTANT MEMBER ` ' ! MUMBAI: 14TH JAN,2015. . . ./ SRL , SR. PS ITA NO.7920/M/2011 4 %& ' (!)* +%*,) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! 2' ( ) / THE CIT(A)- CONCERNED 4. ! 2' / CIT CONCERNED 5. 6. 34+ '- , # - , ' ! / DR, ITAT, MUMBAI CONCERNED +5 6 / GUARD FILE. 7 ! / BY ORDER, TRUE COPY 0 (ASSTT. REGISTRAR) # - , ' ! /ITAT, MUMBAI