M/s. Ashish Enterprises, Thane V. Assistant Commissioner of Income-tax,

ITA 804/PUN/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7215 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Bonafide belief
• Section: 143(3); 27

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM / ITA NO.804/PUN/2015 / ASSESSMENT YEAR : 2009-10 M/S. ASHISH ENTERPRISES, 2 ND FLOOR, SUDHA KUNJ, TILAK ROAD, NEAR BRAHMAN SABHA, DOMBIVALI (EAST), DIST. THANE. PIN 421 201. PAN NO.AAJFM6952E. . / APPELLANT V/S ACIT, CIRCLE - 3, KALYAN, 2 ND FLOOR, RANI MANSION, MURABAD ROAD, KALYAN, DIST. THANE. PIN 421 201. . / RESPONDENT / APPELLANT BY : NONE. (WRITTEN SUBMISSIONS) / RESPONDENT BY : SHRI P.L. KUREEL. / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL OF THE ASSESSEE IS EMANATING OUT OF THE ORDE R OF COMMISSIONER OF INCOME TAX (A) I, THANE DATED 27.03.2015 FOR THE ASSESSMENT YEAR 2009-10. / DATE OF HEARING : 23.01.2017 / DATE OF PRONOUNCEMENT: 27.01.2017 2 ITA NO.804/PUN/2015 AY.NO.2009-107 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF LIASIONING SERVICES OF CONNECTING LINK BETWEEN RA ILWAYS AND M/S. EXIDE INDUSTRIES LTD., AND OTHER COMPANIES. ASS ESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 30.08.2009 DECLARING TOTAL INCOME OF RS.18,07,810/-. THEREAFTER ASSESS EE REVISED THE RETURN OF INCOME ON 30.08.2010 DECLARING TOTAL INCOME O F RS.18,07,810/-. THE CASE WAS SELECTED FOR SCRUTINY AND T HEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DT.30.11.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.39,82,120/- INTER-ALIA BY MAKING ADDITION OF RS.21,74,312/- ON ACCOUNT OF COMMISSION INCOME TO THE ASSESSEE. ON THE AFORESAID ADDITION OF COMMISSION INCOME, AO CONCLUDED THAT ASSESSEE HAD CONCEALED ITS INCOME BY FUR NISHING INACCURATE PARTICULARS OF INCOME AND HAD COMMITTED DEFAULT WITHIN THE MEANING OF 271(1)(C) OF THE ACT AND THEREFORE LIABLE FOR PENALTY . HE ACCORDINGLY LEVIED PENALTY OF RS.6,71,863/- U/S 271(1)(C) VIDE O RDER DT.18.05.2012. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DT.27.03.2015 (IN AP PEAL NO.34/12-13) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS. CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF RS.6,71,863/- WITHOUT CONSIDERING ADEQUATELY AND APPROPRIATELY THE FACTS OF THE MATTER AND THE CIRCUMSTANCES OF THE APPELLANT AND THE LEGAL POSITI ON IN THIS REGARD. 3. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE BUT HOWEVER AN APPLICATION WAS FILED BY THE LD.A.R WHEREIN IT WAS 3 ITA NO.804/PUN/2015 AY.NO.2009-107 CONTENDED THAT AN ADJOURNMENT MAY BE GRANTED AND ALT ERNATIVELY IT WAS SUBMITTED THAT IN CASE THE ADJOURNMENT IS NOT GRAN TED WRITTEN SUBMISSIONS THAT WERE BEING FILED BE CONSIDERED WHILE DECIDING THE APPEAL. IN THE PRESENT CASE, WE ARE DISMISSING THE ADJO URNMENT APPLICATION AND PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD AND THE WRIT TEN SUBMISSIONS FILED BY THE ASSESSEE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON P ERUSAL OF PROFIT AND LOSS ACCOUNT, AO NOTICED THAT ASSESSEE HAD S HOWN COMMISSION RECEIPTS OF RS.54,54,113/-, WHEREAS AS PER AIR, T HE ASSESSEE WAS IN RECEIPT OF COMMISSION OF RS.76,28,425/- AND THUS THERE WAS A DIFFERENCE OF RS.21,74,312/- IN THE INCOME THAT WAS DECLARED BY THE ASSESSEE. AO NOTICED THAT ASSESSEE HA D CLAIMED CREDIT FOR TDS AS AND WHEN IT HAD RECEIVED CERTIFICATES B UT DID NOT OFFER THE RECEIPTS PROPORTIONATELY. HE WAS OF THE VIEW TH AT SINCE ASSESSEE WAS FOLLOWING THE MERCANTILE METHOD OF ACCOUNTING AND HAD DEBITED ALL EXPENDITURE RELATING TO THAT PERIOD, HE SHOULD H AVE CREDITED ALL THE RECEIPTS TO THE PROFIT AND LOSS ACCOUNT. THE SUBM ISSION OF THE ASSESSEE THAT IT WAS ACCOUNTING THE COMMISSION WHEN IT R ECEIVED THE DEBIT NOTES WAS NOT FOUND ACCEPTABLE TO THE AO. AO THE REFORE ADDED RS.21,74,312/-, BEING THE DIFFERENCE BETWEEN THE COMMISSION RECEIPTS SHOWN BY THE ASSESSEE TO THE PROFIT AND LOSS ACCOUNT AND THE COMMISSION RECEIPTS AS PER AIR, AS THE INCOME OF THE ASSE SSEE. ON THE AFORESAID ADDITION OF COMMISSION MADE BY AO, HE ALSO LEVIED PENALTY U/S 271(1)(C) OF THE ACT. THE LEVY OF PENALTY WAS ALSO CONFIR MED BY THE LD. CIT(A). 4 ITA NO.804/PUN/2015 AY.NO.2009-107 5. IN THE WRITTEN SUBMISSIONS BEFORE US IT WAS INTER-ALIA SUBMITTED BY THE ASSESSEE THAT THE COMMISSION WAS OFFERED TO TAX WHEN IT RECEIVED THE DEBIT NOTES, AND SINCE THE DEBIT NOTES FOR THE IMPUGNED AMOUNTS WAS RECEIVED IN A.Y. 2010-11, THE AMOUNT WAS OFFER ED TO TAX IN A.Y. 2010-11. IT WAS FURTHER SUBMITTED THAT IN ORIGINAL F ORM -16 SUBMITTED BY M/S.EXIDE INDUSTRIES LTD., IT HAD CONSIDERED THE TDS FOR THE PERIOD AY. 2010-11 BUT SUBSEQUENTLY, THE SAME WAS AMENDED AND THE PERIOD OF DEDUCTION WAS CONSIDERED IN A.Y. 2009-10. A O ON THE BASIS OF REVISION IN TDS CERTIFICATE HAD CONSIDERED THE INCOM E TO BE TAXABLE IN A.Y. 2009-10. IT IS SUBMITTED THAT ASSESSEE WA S UNDER BONAFIDE BELIEF THAT IT COULD CLAIM TDS ONLY IN THE YEAR TO W HICH IT PERTAINS AND THEREFORE HAD OFFERED THE INCOME TO TAX IN T HE YEAR IN WHICH DEBIT NOTE WAS RAISED. IT IS FURTHER SUBMITTED THA T ASSESSEE HAD OFFERED TO TAX OF INCOME IN A.Y. 2010-11 AND THERE IS NO C HANGE IN THE TAX RATES. IT IS FURTHER SUBMITTED THAT THERE WAS NO IN TENTION TO AVOID THE TAX AND THEREFORE PENALTY LEVIED U/S 271(1)(C) BE DELETE D. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IT IS AN UNDISPUTED FACT T HAT THE ADDITION TO THE COMMISSION INCOME WAS MADE BY THE AO ON THE BASIS OF THE DIFFERENCE BETWEEN THE COMMISSION RECEIPTS SHOWN BY THE ASSESSEE TO THE PROFIT AND LOSS ACCOUNT AND THE COMMIS SION RECEIPTS AS PER AIR, AS THE INCOME OF THE ASSESSEE. THE SUBMISSIO N OF THE ASSESSEE THAT IT IS ACCOUNTS THE COMMISSION INCOME ON T HE BASIS OF RECEIPT OF DEBIT NOTES AND SINCE THE DEBIT NOTE FOR THE IM PUGNED COMMISSION WAS RECEIVED IN A.Y. 2010-11, IT HAD ACCOUNTED T HE INCOME IN A.Y. 2010-11. THE AFORESAID FACTUAL SUBMISSIONS OF THE 5 ITA NO.804/PUN/2015 AY.NO.2009-107 ASSESSEE HAVE NOT BEEN CONTROVERTED BY THE REVENUE OR HAVE BEEN FOUND FALSE. 7. IT IS SETTLED LAW THAT PARAMETERS OF JUDGING THE DEC ISION FOR THE ADDITION MADE IN THE ASSESSMENT IS DIFFERENT FROM THE PENALT Y IMPOSED ON ACCOUNT OF INCOME AND THAT CERTAIN DISALLOWANCES / ADD ITION COULD LEGALLY BE MADE IN THE ASSESSMENT PROCEEDINGS ON THE PR EPONDERANCE OF THE PROBABILITIES BUT NO PENALTY COULD BE IMPOSED U/S 27 1(1)(C) OF THE ACT ON THE PREPONDERANCE OF THE PROBABILITIES AND T HE REVENUE HAS TO PROVE THAT THE CLAIM MADE BY THE ASSESSEE WAS NOT GENUINE. FURTHER TO LEVY PENALTY, IT HAS TO BE SHOWN THAT THE A SSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME OR C ONCEALED THE PARTICULARS OF INCOME. IT IS ALSO A SETTLED LAW THAT T HE PENALTY PROCEEDINGS ARE ENTIRELY DISTINCT FROM THE ASSESSMENT PR OCEEDINGS AND HOWSOEVER GOOD THE FINDINGS OF THE ASSESSMENT MAY BE, T HEY ARE NOT CONCLUSIVE AS FAR AS PENALTY PROCEEDINGS ARE CONCERNED. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE VIEW TH AT THE PRESENT CASE IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C). WE THEREFORE, DIRECT ITS DELETION. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON THE 27 TH DAY OF JANUARY, 2017. SD/- SD/- /- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; ! DATED : 27 TH JANUARY, 2017. YAMINI 6 ITA NO.804/PUN/2015 AY.NO.2009-107 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. THE CIT-(A)-I, THANE. THE CIT-I, THANE. #$% & 1 &'(, * '(, / DR, ITAT, B PUNE; %,- . / GUARD FILE. / BY ORDER, //// // TRUE COPY // T // // TRUE COPY // //TRUE COPY// / 0123 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.