GENRAL MOTROS OVERSEAS CORPORATION, HARYANA V. ADIT (IT) 3(1), MUMBAI

ITA 8151/MUM/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3179 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-09-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 25-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AARSHI PRASAD
• Keywords: Transfer pricing; Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI BEFORE SRI MAHAVIR SINGH, JM AND SRI RAMIT KOCHAR, AM ITA NO.8151/MUM/2010 (A.Y.:2001-02) M/S. GENERAL MOTORS OVERSEAS CORPORATION, C/O. C. C. CHOKSI & CO., 19 TH FLOOR, NIRMAL, NARIMAN POINT, MUMBAI 400 021 VS. THE ASSISTANT DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION, 3 (1), MUMBAI PAN: AAACG 7603 A APPELLANT .. RESPONDENT APPELLANT BY MS. PRIYANKA GADA MR. PARAS SAVLEE, ARS RESPONDENT BY SHRI AARSHI PRASAD, DR DATE OF HEARING 09-06-2016 DATE OF PRONOUNCEMENT 15-06-2016 O R D E R PER MAHAVIR SINGH, JM : THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE O RDER OF THE CIT (A)-10, MUMBAI PASSED IN APPEAL NO.CIT (A)-10/ADIT (IT) 3(1)/IT-20/06- 07 DATED 23-09-2010. ASSESSMENT WAS FRAMED BY THE A DIT(IT), CIRCLE 3 (2), MUMBAI FOR ASSESSMENT YEAR 2001-02 VIDE HIS OR DER DATED 18-03- 2006 U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). PENALTY UNDER DISPUTE WAS LEVIED BY TH E ADIT (IT), CIRCLE 3 (1), MUMBAI U/S 271 (1) (C) OF THE ACT VIDE ORDER DATED 21-03-2006. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) CONFIRMING THE LEVY OF PENALTY BY THE AO U/ S 271(1) (C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF CLAIM OF ITA NO.8151/MUM/2010 2 DEDUCTION FOR EXPENDITURE INCURRED IN RESPECT OF SE CONDED EMPLOYEES UNDER THE MANAGEMENT PROVISION AGREEMENT (MPA). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A FOREIGN COMPANY INCORPORATED IN THE USA. GENERAL MO TORS INDIA LTD. (GMIL) ENTERED INTO MANAGEMENT PROVISION AGREEMENT (MPA) WITH THE ASSESSEE COMPANY. THE ASSESSEE COMPANY RAISED INVOI CES ON GMIL ON CASE TO CASE BASIS, WITH NO MARK UP AND AS PER CLAU SE 4 OF THE MPA; GMIL WOULD REIMBURSE THE COST OF REMUNERATION OF TH E SECONDED EMPLOYEES TO THE ASSESSEE. IN TERMS OF THE MPA, THE ASSESSEE MAKES AVAILABLE TO GMIL EXECUTIVE PERSONNEL IN THE AREAS RELATING TO DEVELOPMENT OF GENERAL MANAGEMENT, FINANCE AND PURC HASING, SALES, MARKETING AND ASSEMBLING/MANUFACTURING ACTIVITIES E TC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED T O FURNISH DETAILS OF INVOICES RAISED FOR MANAGEMENT FEES, WHICH SHOWS TO TAL INVOICES AT US $ 622117.58. THE ASSESSEE VIDE LETTER DARTED 13-03-20 04 FURNISHED THE DETAILS IN RESPECT OF THE EXPENSES INCURRED FOR AN AMOUNT OF US $ 471497.93. IN REGARD TO THE BALANCE EXPENSES, THE A SSESSEES REPRESENTATIVE VIDE ORDER SHEET NOTING DATED 15-03- 2004 WAS REQUESTED FOR THE DETAILS. BUT, NO DETAILS/CONFIRMATION IN RE SPECT TO OTHER EXPENSES WAS FILED. ACCORDINGLY, THE AO TREATED THE EQUIVALE NT AMOUNT OF US $ 150619.75 AS BUSINESS PROFIT AND WORKED OUT THE ADD ITION AT RS.69,93,275/-. THE AO INITIATED PENALTY PROCEEDING S U/S 271 (1) (C) OF THE ACT. AGAINST THE ADDITION, THE ASSESSEE PREFERRED A PPEAL BEFORE CIT (A), WHO CONFIRMED THE ACTION OF THE AO. THE AO STARTED PENALTY PROCEEDINGS ITA NO.8151/MUM/2010 3 U/S 271 (1) (C) OF THE ACT AND REQUIRED THE ASSESSE E TO EXPLAIN AS TO WHY THE PROFIT ADDED AT RS.69,93,275/- EQUIVALENT TO US $ 150690 BE NOT TREATED AS CONCEALED INCOME OF THE ASSESSEE FOR FUR NISHING OF INACCURATE PARTICULARS OF INCOME. 4. DURING THE PENALTY PROCEEDINGS THE ASSESSEE FURT HER SUBMITTED SOME DETAILS AND THE AO HAS NOT CONSIDERED THE SAME BY OBSERVING AS UNDER:- ASSESSEE VIDE ITS REPRESENTATIVES LETTER DT. 14.0 3.2006 HAS SUBMITTED CERTAIN DETAILS OF EXPENSES. BUT IT IS DIFFICULT TO CONSIDER THE SAME AT THIS STAGE. ACCORDINGLY, THE AO LEVIED PENALTY U/S 271(1) (C) O F THE ACT, AMOUNTING TO RS.33,56,773/-. AGGRIEVED, THE ASSESSEE PREFERRED A PPEAL BEFORE CIT (A). BEFORE CIT (A) ALSO THE ASSESSEE FILED DETAILS OF E XPENSES TO THE EXTENT OF US $ 122306, WHICH WERE FORWARDED BY HIM BEING ADDI TIONAL EVIDENCES TO THE AO FOR HIS COMMENTS. THE AO SUBMITTED HIS REMAN D REPORT NEGATING THE CLAIM OF THE ASSESSEE. THE CIT (A) CONFIRMED TH E LEVY OF PENALTY BY OBSERVING AS UNDER:- 1.4 I HAVE CONSIDERED THE FACTS AND GONE THROUGH T HE PENALTY ORDER PASSED BY THE AO AND ALSO THE SUBMISS IONS MADE BY THE APPELLANT BEFORE ME. THE ASSESSMENT ORD ER WAS PASSED ON 18.03.2004. A PERUSAL OF THE ASSESSMENT O RDER REVEALS THAT THE AO HAD FOUND THAT APPELLANT HAS RA ISED MANAGEMENT FEE INVOICES OF USD 622,117.58 AS AGAINS T WHICH IT HAS FURNISHED DETAILS OF EXPENSES OF USD 4 71497.93 VIDE LETTER DATED 13.3.2004. AS PER ORDER SHEET NOT INGS DATED 15-3-2004, THE AO SPECIFICALLY ASKED THE AR OF THE ASSESSEE TO STATE WHETHER THERE ARE ANY OTHER EXPENSES HAVE BEEN INCURRED OTHER THAN THAT THE DETAILS FURNISHED AS P ER LETTER DATED 13-3-2004. THE AR OF THE ASSESSEE ATTENDED ON 18-3- 2004 AND CONFIRMED THAT NO MORE BILL FOR EXPENSES A RE TO BE SUBMITTED. IN SUCH CIRCUMSTANCES, THE AO COMPUTED T HE PROFIT ATTRIBUTABLE TO ACTIVITIES CONDUCTED IN INDIA AT US D 150619.75 BEING DIFFERENCE BETWEEN INVOICES RAISED AND EXPEND ITURE ITA NO.8151/MUM/2010 4 INCURRED WITH SUPPORTING EVIDENCE (622,117.58 471 ,497.93) AS PER DETAILS BEFORE THE AO. THIS CLEARLY SHOWS TH AT THE ASSESSEE HAS NOT DECLARED THE INCOME TO THAT EXTENT OF USD 150,619.75 IN THE RETURN OF INCOME. THE AR OF THE A PPELLANT CLEARLY8 STATED THAT THERE WERE NO MORE INVOICES OF EXPENDITURE TO BE SUBMITTED AT THE TIME OF ASSESSME NT. THEREFORE, THE CLAIM MADE DURING APPELLATE PROCEEDI NGS IS AFTER THOUGHT. THE APPEAL ORDER WAS PASSED ON 7-12- 2004, EVEN THERE THE APPELLANT FAILED TO FURNISH THE REQU IRED SUPPORTING EVIDENCE. ACCORDINGLY, THE PROFIT COMPUT ED WAS HELD TO BE RIGHT AND JUSTIFIED. THUS, IT APPEARS TH AT THE CLAIM WHICH IS MADE AFTER THE ASSESSMENT IS NOT CORRECT A ND LACKS SUPPORTING EVIDENCE. IT IS ALSO DIFFICULT TO BELIEV E THAT THE ASSESSEE HAS NOT EARNED ANY PROFIT FROM ITS INDIAN OPERATIONS. 1.4.1 A PERUSAL OF THE PENALTY ORDER REVEALS THAT T HE AO HAS REJECTED THE CONTENTIONS ON THE BASIS THAT THE ASSE SSEE HAD ADMITTED IN THE ASSESSMENT PROCEEDINGS THAT NO MORE INVOICES WERE TO BE SUBMITTED. FURTHER, CIT (A) HAS AGREED W ITH THE AO THAT IN ABSENCE OF THE DOCUMENTARY EVIDENCE IT IS D IFFICULT TO ACCEPT THE CLAIM OF THE APPELLANT. THE SO CALLED IN VOICES PURPORTED TO HAVE BEEN FILED DURING PENAL PROCEEDIN GS BEFORE THE AO WERE ALSO EXAMINED. I FIND THAT THE SAID INV OICE WAS RAISED ON 03-09-2001 WHEREAS ACCOUNTING PERIOD OF T HE APPELLANT HAS CLOSED ON 31-03-2001. THEN HOW COULD IT BE RELATED TO PREVIOUS YEAR RELEVANT TO ASSESSMENT YEA R UNDER CONSIDERATION. IT IS MENTIONED ON THE INVOICE THAT IT PERTAINS TO MONTH OF FEBRUARY 2001; WHEREAS THE PAYMENT WAS MAD E IN CASH AND THAT TOO IN THE MONTH OF JANUARY 2001. THE REFORE, THIS EVIDENCE COULD NOT BE CONSIDERED AS RELIABLE E VIDENCE UNLESS IT IS SUPPORTED BY INDEPENDENT EVIDENCE BEIN G THIRD PARTY. SIMILARLY INVOICES OF USD 80381 IS ALSO PERT AINS TO ADVANCE PAID, THEREFORE IT COULD NOT BE CONSIDERED AS EXPENDITURE FOR EARNING INCOME. THIS VIEW IS ALSO S UPPORTED FROM THE FACT THAT NOTICE ISSUED UNDER SECTION 133 (6) OF THE ACT ON THE ADDRESS GIVEN IN THE INVOICES HAVE RETUR NED UN- SERVED. THIS ALSO LEADS TO INFER THAT EXPLANATION I S NOT BONAFIDE AND CLAIM IS NOT GENUINE. THE CLAIM OF THE AR THAT IT WAS SENT ON WRONG ADDRESS CANNOT ABSOLVE THE RESPONSIBILITY OF THE APPELLANT. THE AR WAS WELL AWARE THAT A REMAND REP ORT HAS BEEN CALLED FOR FROM THE AO, THEREFORE HE COULD HAV E ASSISTED THE AO IN THIS REGARD BUT NO EFFORTS ON THIS DIRECT ION APPEARS TO HAVE BEEN MADE. I FIND THAT THE APPELLANT HAS APPRO ACHED TO AAR IN THE PAST YEARS FOR THE RULING THAT IT HAD NO T PE IN INDIA HENCE ITS INCOME IS NOT TAXABLE IN INDIA. HOWEVER T HE HONBLE AAR HELD THAT THE APPELLANT HAD PE IN INDIA AND INC OME ATTRIBUTABLE TO INDIAN OPERATION IS TAXABLE IN INDI A. THEREFORE, IT COULD NOT BE BELIEVED THAT THE APPELLANT DOES NOT H AVE ANY INCOME IN INDIA. THE APPELLANT HAS SHOWN NIL INCOME IN INDIA ON THE GROUND THAT EXPENDITURE INCURRED IS COST TO COST BASIS. ITA NO.8151/MUM/2010 5 HOWEVER, SUCH CLAIM CANNOT BE ACCEPTED IN ABSENCE O F ANY TRANSFER PRICING STUDY REPORT. NO TRANSFER PRICING REPORT BEEN BROUGHT TO MY FURNISHED TO SUPPORT THE CLAIM. IT IS FURTHER SEEN FROM THE PAST HISTORY THAT THE APPELLANT HAS NEVER BEEN ABLE TO FURNISH DOCUMENTARY EVIDENCE IN SUPPORTS OF EXPENDI TURE INCURRED THEREFORE SUCH DISALLOWANCE WERE ALSO MADE IN EARLIER YEARS. IT IS ALSO UNBELIEVABLE THAT THE APPELLANT W OULD NOT KEEP ITS EVIDENCE OF 96 LAKHS OF EXPENDITURE CLAIMED TO HAVE BEEN INCURRED. UNDER THESE CIRCUMSTANCES, I AM OF CONSID ERED OPINION THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HIDE THE FACT FROM THE AO THEREFORE, THE CLAIM MADE IS FALSE AND AMOUNTS TO FURNISHING OF INACCURA TE PARTICULARS OF INCOME LIABLE TO ATTRACT PENALTY PRO VISIONS UNDER SECTION 271 (1) (C) OF THE ACT. AGGRIEVED AGAINST THE ACTION OF CIT(A), FOR CONFIRM ING LEVY OF PENALTY, THE ASSESSEE CAME IN SECOND APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US, THE LEARNED C OUNSEL MS PRIYANKA GADA FOR THE ASSESSEE STATED THE FACTS OF THE CASE THAT THE ASSESSEE ALMOST ALL INVOICES (99.5%) RAISED TO GMIL, BEING R EIMBURSEMENT COST INCURRED BY THE ASSESSEE WERE FILED EITHER DURING P ENALTY PROCEEDINGS OR BEFORE CIT (A) DURING APPELLATE PROCEEDINGS, WHICH IN TURN WAS REFERRED TO THE AO FOR REMAND REPORT. IT WAS EXPLAINED THAT OUT OF TOTAL INVOICES RAISED OF US $ 622117, THE ASSESSEE SUBMITTED THE DETAILS OF US $ 471497 (APPROX. 76%) BEFORE THE AO DURING THE COURSE OF AS SESSMENT PROCEEDINGS VIDE SUBMISSIONS DATED 13-03-2004 (THER E IS NO DISPUTE ON THE SAME). THE LEARNED COUNSEL FOR THE ASSESSEE EXP LAINED THAT THE AO DISALLOWED EXPENSES OF US $ 150690 EQUAL TO AMOUNT OF RS.69,93,275/- FOR THE REASON THAT TO THIS EXTENT THE DOCUMENTARY EVIDENCES IN RESPECT OF INVOICES RAISED AND DETAILS OF EXPENSES INCURRED WA S NOT PRODUCED. THUS, ITA NO.8151/MUM/2010 6 INCOME WAS ASSESSED INCLUDING THIS AS BUSINESS PROF IT AT RS.69,93,275/- AND THE CIT (A) ALSO CONFIRMED THE ACTION OF THE AO . DURING THE PENALTY PROCEEDINGS, ACCORDING TO THE LEARNED COUNSEL FOR T HE ASSESSEE, THE ASSESSEE FURTHER SUBMITTED THE DETAILS OF INVOICES OF EXPENDITURE INCURRED TO THE EXTENT OF US $ 26500 VIDE SUBMISSIONS DATED 14-03-2004. BUT THE AO REFUSED TO ENTERTAIN THE SAME BY STATING THAT IT IS DIFFICULT TO CONSIDER THE INVOICES AT THIS STAGE. BEFORE CIT(A) THE ASSES SEE PRODUCED THE DETAILS OF INVOICES RAISED ON GMIL AND EXPENSES INC URRED TO THE EXTENT OF US $ 122306 (NOW TOTAL AGGREGATING TO 99.7% OF THE CLAIM WAS PRODUCED). THE CIT (A) FORWARDED THE ADDITIONAL EVIDENCES TO T HE AO FOR HIS COMMENTS VIDE LETTER DATED 15-01-2009 BEARING NO.CI TA.XXXIII/INT. TAX/IT/30-G/06-07. RELEVANT PART OF THE ABOVE LETTE R I.E. PARA 6 AND 7, WHICH IS GIVEN AT ASSESSEES PAPER BOOK AT PAGE 53, READS AS UNDER:- 6. THE APPELLANT HAS ALSO SUBMITTED THAT IT FILED SUPPORTING EVIDENCES FOR EXPENSES TO THE EXTENT OF US $ 26500 BEFORE THE A. O. DURING THE PENALTY PROCEEDINGS. THIS FACT IS ALSO MENTIONED ON PAGE NO.2 OF THE PENALTY ORDER. THE AP PELLANT HAS FURNISHED SUPPORTING EVIDENCES BEFORE ME TO THE EXTENT OF US $122306. SUBSEQUENT TO THE ASSESSMENT PROCEEDING S, THE APPELLANT HAS FILED SUPPORTING DOCUMENTS TO THE EXT ENT OF US $ 148806 AGAINST THE DISALLOWANCE OF US $ 150619.75. THE APPELLANT SUBMITTED THAT SINCE ASSESSMENT PROCEEDIN GS AND PENALTY PROCEEDINGS ARE DIFFERENT, THE EVIDENCES SU BMITTED DURING THE PENALTY PROCEEDINGS SHOULD HAVE BEEN EXA MINED IN THE PENALTY PROCEEDINGS. THE APPELLANT ALSO SUBMITT ED THAT THE REQUIRED DOCUMENTS COULD NOT BE FILED IN TIME WITH THE A. O. DURING THE ASSESSMENT PROCEEDINGS BECAUSE OF CONSTR AINT OF TIME AND DIFFICULTY IN LOCATING THE DOCUMENTS IN U. S. THE APPELLANT SUBMITTED THAT NOW WITH LOT OF EFFORTS, I T COULD TRACE OUT THE DOCUMENTS AND IT HAS SUBMITTED DURING THE P ENALTY PROCEEDINGS. I ALSO FEEL THAT SINCE IT IS A PENALTY PROCEEDINGS WHICH IS OF PENAL IN NATURE, THE APPELLANTS ADDITI ONAL EVIDENCES SHOULD BE EXAMINED IN THE INTEREST OF JUS TICE. 7. IN VIEW OF THE ABOVE, I REQUEST YOU TO KINDLY GO THROUGH THE EVIDENCES FILED AND EXAMINE ABOUT THE GENUINENI TY OF THE ITA NO.8151/MUM/2010 7 EVIDENCES FILED AND TO REPORT WHETHER THE APPELLANT COULD SUBSTANTIATE THE EXPENSES TO THE EXTENT OF US $ 148 806. YOU MAY ALSO MAKE NECESSARY ENQUIRIES (IF NEEDED) BEFOR E SUBMITTING THE REPORT. YOU MAY ALSO PROVIDE SUFFICI ENT OPPORTUNITY OF BEING HEARD TO THE APPELLANT BEFORE SENDING THE REPORT. YOU ARE REQUESTED TO SUBMIT THE REPORT ON O R BEFORE 16- 02-2009. 6. SHE ALSO REFERRED TO THE REMAND REPORT OF THE AO GIVEN VIDE NO. ADIT (IT)-3(1)/REMAND REPORT/2010-11 DATED 03-09-20 10, WHEREIN IT IS STATED THAT THE NOTICE ISSUED U/S 133(6) OF THE ACT WAS RETURNED UN-SERVED. THE RELEVANT PART OF THE REMAND REPORT READS AS UND ER, WHICH IS GIVEN AT PAGE 54-55 OF THE PAPER BOOK FILED BY THE ASSESSEE, :- PLEASE FIND ENCLOSED HEREWITH, A LETTER NO.DDIT (I T)- 3(1)/REMAND REPORT/2010-11 DATED 30.04.2010 WHICH W AS ADDRESSED TO YOUR OFFICE. AS PER THE LETTER, A NOTI CE U/S 133(6) WAS ISSUED TO THE CONCERNED PARTY AND THE REPLY WAS YET TO BE RECEIVED, HENCE THE REMAND REPORT COULD NOT BE SUBM ITTED. IT MAY BE SUBMITTED THAT, A NOTICE U/S 133 (6) WAS ISSUED TO THE PRINCIPAL OFFICER, NORTH AMERICAN OPE RATIONS, GENERAL MOTORS CORPORATION DISBURSEMENT (2613), 16E JUDSON, PONTIAC, MI. ALONG WITH THE NOTICE DOCUMENT RELATING TO CLAIM OF EXPENSES MADE BY GENERAL MOTORS OVERSEA S CORPORATION TO TUNE OF USD 122306 WAS ALSO SENT (CO PY OF NOTICE U/S 133(6) DATED 30.04.2010 ENCLOSED AS ANNE XURE B). HOWEVER, THE CLOSED COVER WITH THE NOTICE U/S 133(6 ) AND RELATED DOCUMENTS WAS RETURNED UNSERVED WITH THE FO LLOWING MARKINGS MAIL PIECE BEING RETURNED BECAUSE: BUILDING/SITE HAS CLOSED . (FRONT PAGE COPY OF CLOSED COVER IS ENCLOSED AS ANNEXURE C). IN VIEW OF THE ABOVE MENTIONED FACTS, CONSCIOUS EFF ORTS HAVE BEEN MADE TO VERIFY THE GENUINENESS OF THE CLA IM OF THE ASSESSEE, BUT THE SAME IS NOT AVAILABLE FOR THE AFOREMENTIONED REASONS. THUS, IT IS CLEAR THAT ADDI TIONAL EVIDENCES FILED BY THE ASSESSEE CANNOT BE RELIED UP ON TO ALLOW THE SAID CLAIM OF THE ASSESSEE AND NEEDS TO BE REJE CTED. 7. IN VIEW OF THE ABOVE LEARNED COUNSEL FOR THE ASS ESSEE EXPLAINED THAT IN THE REMAND REPORT, THE AO TOOK A PLEA FOR R EJECTING THE EVIDENCES THAT NOTICE ISSUED U/S 133(6) OF THE ACT TO USA OFF ICE WAS RETURNED UN- ITA NO.8151/MUM/2010 8 SERVED. THE ASSESSEE EXPLAINED THAT THE AO FAILED T O APPRECIATE THAT THE OFFICE OF THE ASSESSEE WAS AT THE GIVEN ADDRESS- GENERAL MOTORS OVERSEAS CORPORATION 300 RELIANCE CENTER DETROIT MICHIGAN USA AND NOT, WHAT IS MENTIONED BY THE AO IN HIS REMAND REPORT. SHE EXPLAINED THAT HAD THE AO SENT THE LETTER AT THE ADDRESS MENT IONED IN ALL THE CORRESPONDENCE WITH INCOME TAX DEPARTMENT, THE SAME WOULD HAVE REACHED IN THE RIGHT HAND AND EVEN NO OPPORTUNITY T O REBUT THIS NOTICE, RETURNED UN-SERVED, HAS BEEN GIVEN TO THE ASSESSEE. SHE ALSO ASSAILS THE ORDER OF CIT (A) AND THE REASONING GIVEN THEREIN TH AT CIT (A) CONFIRMED LEVY OF PENALTY ONLY ON THE GROUND THAT THE INVOIC E RAISED ARE DATED 03.09.2001, WHEREAS ACCOUNTING PERIOD OF THE ASSESS EE CLOSES ON 31-03- 2001. SHE EXPLAINED THAT CIT (A) FAILED TO APPRECIA TE THAT THE INVOICE WAS IN AMERICAN FORMAT I.E. MM/DD/YY. ACCORDING TO HER, THE INVOICE WAS RAISED ON 9 TH MARCH 2001 AND NOT ON 03 RD SEPTEMBER 2001. FOR THIS, SHE TOOK US THROUGH THE INVOICE IN RESPECT OF INTERNATI ONAL SERVICE PERSONNEL ISSUED BY GENERAL MOTORS OVERSEAS CORPORATION IS ON LY ON DATED 03/09/2001 IN AMERICAN FORMAT WHICH IS ENCLOSED AT PAGE 2 OF THE ASSESSEES PAPER BOOK. IN RESPECT TO THE ALLEGATION OF THE AO THAT THE NOTICE U/S 133(6) OF THE ACT WAS NOT SERVED ON THE ASSESSEE, SHE TOOK US THROUGH PAGE 4 OF ASSESSEES PAPER BOOK AND EXPLAIN ED THE FACTUM OF THE CASE AS ARGUED BY HER. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO REFERRED TO THE DETAILS OF PAYMENT AND TAX PAID BY THE CONCERNED EMPLOYEES IN US, AS GIVEN AT PAGE 3 OF THE ASSESSEE S PAPER BOOK ITA NO.8151/MUM/2010 9 WHEREIN PAID AMOUNT IN THE LAST COLUMN OF THE TAB LE IS SHOWN AS $26,500.00. 8. IN VIEW OF THE ABOVE FACTS, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE ENTIRE EPISODE HAPPENED BECAUSE THE ASSESSEE COULD NOT LAY ITS HANDS ON THE EVIDENCES AT THE RIGHT TIME, W HILE THE ENTIRE EVIDENCES WERE AVAILABLE WITH THE ASSESSEE FOR CLAIM OF DEDUC TION OF EXPENSES. ACCORDING TO HER, IT IS UNFORTUNATE THAT THE ASSESS EES CLAIM IN QUANTUM IS NOT CONTESTED FURTHER. IN VIEW OF THIS, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THERE IS NO IOTA OF CONCEALMEN T OR FURNISHING OF INACCURATE PARTICULARS OF INCOME QUA THIS CLAIM OF DEDUCTION. 9. WHEN THESE FACTS WERE CONFRONTED TO THE LEARNED SR. DR, HE FAIRLY CONCEDED TO THE POSITION AND HAS NOT POINTED OUT AN YTHING THAT THE FACTS ARE WRONG. 10. WE HAVE HEARD THE RIVAL SUBMISSION AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE LEARNED COUNSEL FOR THE ASSESSEE HAS EXPLAINED THE CASE WITH FACTS AND FIGU RES AS NARRATED ABOVE AND IN SUCH CIRCUMSTANCES; IT IS NOT AT ALL A CASE FOR LEVY OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR THE REASON THAT THE ASSESSEE HAS FILED ALL THE DETAILS BEFORE THE CIT(A ) AND BEFORE THE ASSESSING OFFICER DURING THE COURSE OF PENALTY PROC EEDINGS OR DURING THE COURSE OF APPELLATE PROCEEDINGS. WE FIND THAT THE A SSESSEE HAS FILED DETAILS TO THE EXTENT OF 99.97 PERCENT, WHICH MEANS THE ASSESSEE ON MERITS IS ELIGIBLE FOR DEDUCTION OF THESE EXPENSES FROM ITS INCOME, WHAT TO ITA NO.8151/MUM/2010 10 TALK OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THIS CASE IS NOT COVERED UNDER ANY OF THE PENALTY PROVISIONS PROVIDED UNDER SECTION 271(1)(C) OF THE ACT, IT IS VERY CLEAR FROM THE FACTS OF THE CAS E ITSELF. FROM THE ABOVE FACTS, IT IS CLEAR THAT IT IS NOT A CASE OF CONCEAL MENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS THE CASE MAY BE BECAUSE NEITHER THE AO NOR CIT (A) HAS APPRECIATED THE FACTS OF THE CASE DURING PENALTY PROCEEDINGS OR DURING APPELLATE PROCEEDINGS. THE ME ANING OF THE TERM PARTICULARS USED IN SECTION 271 (1) (C) OF THE AC T WOULD EMBRACE THE DETAILS OF THE CLAM MADE. WHERE NO INFORMATION IS G IVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE C ANNOT BE HELD GUILTY OF FURNISHING OF INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIONS OF SECTION 271 (1) (C) OF THE ACT, THE PENALTY PROVISIONS CANN OT BE INVOKED. THE REVENUE HAS WRONGLY INVOKED THE PROVISIONS IN THE P RESENT CASE. THE CIT (A) HAS MISCONSTRUED THE FACTS OF THE CASE FOR THE REASON THAT HE HAS NOT UNDERSTOOD THE AMERICAN SYSTEM OF DATES AND FOR THA T PURPOSE THE ENTIRE MATTER WENT FOR A TOSS. IN THE GIVEN FACTS OF THE C ASE, WE ARE OF THE VIEW THAT THE PENALTY LEVIED BY AO AND SUSTAINED BY CIT (A) CANNOT BE UPHELD AND HENCE, THE SAME IS DELETED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15 /06/2016. SD/- SD/- ( RAMIT KOCHAR ) ( MAHAVIR SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 15/6/2016 LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA DEKA/SR.PS DEKA/SR.PS DEKA/SR.PS DEKA/SR.PS ITA NO.8151/MUM/2010 11 COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI DATE INITIAL DICTATION PAD ATTACHED WITH THE DRAFT ORDER YES 1. DRAFT DICTATED ON 09-06-16 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 10-06-16 13-06-16 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//