M/s. Creative Shelters, Pune V. Assistant Commissioner of Income-tax,

ITA 838/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0990 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DHEERAJ KUMAR JAIN

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.838/PN/2014 ASSESSMENT YEAR : 2009-10 M/S CREATIVE SHELTERS, 110-113, FUSION PARK, SANT DNYANESHWARNAGAR AJMERA, MORWADI LINK ROAD, PIMPRI, PUNE 411 018. PAN : AAEFC7090A . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE- 8, PUNE. . RESPONDENT / APPELLANT BY : SHRI BHARAT SHAH / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 29.10.2015 / DATE OF PRONOUNCEMENT: 30.10.2015 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS AGA INST THE ORDER OF CIT(A)-V, PUNE DATED 20.02.2014 RELATING TO ASSESSM ENT YEAR 2009-10 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOM E-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER :- 1) THE AUTHORITIES BELOW ERRED IN FACTS AND CIRCUM STANCES OF THE CASE AND IN LAW IN CONFIRMING PENALTY U/S 271(1)(C) OF THE INCOME T AX ACT WHEN THE ADDITION WAS MADE BY MAKING DISALLOWANCE OF COMMISSION PAID TO O NE OF THE BROKERS AS THE LEARNED AO TREATED THIS COMMISSION AS IN GENUINE. JUST AND PROPER RELIEF BE GRANTED TO THE ASSESSEE IN THIS RESPECT. 2) THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE, RAISE ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 ITA NO.838/PN/2014 3. THE SOLITARY ISSUE INVOLVED IS IMPOSITION OF PEN ALTY OF RS.2,36,366/- BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF TH E ACT AS A CONSEQUENCE OF DISALLOWANCE OF COMMISSION OF RS.6,95,400/- PAID TO ONE OF THE PARTIES, MRS. KALPANA JOSHI. 4. THE BRIEF FACTS CONCERNING THE ISSUE INVOLVED AR E THAT THE ASSESSEE IS A FIRM AND ENGAGED IN THE BUSINESS OF CONSTRUCTION OF BUILDINGS, DEVELOPERS AND PROMOTERS BESIDES RUNNING COMMISSION AGENCY. RETUR N OF INCOME FOR ASSESSMENT YEAR 2009-10 WAS FILED ON 29.10.2009 DEC LARING TOTAL INCOME OF RS.97,57,260/-. IN THE QUANTUM ASSESSMENT, THE ASS ESSING OFFICER REJECTED THE COMMISSION PAYMENT TO ONE OF THE PARTIES, NAMELY, M RS. KALPANA JOSHI. THE DISALLOWANCE WAS MADE ON THE PREMISE THAT THE ASSES SEE DID NOT PROVIDE THE DETAILS OF NATURE OF SERVICES RENDERED BY THE AFORE SAID COMMISSION AGENT. THE QUANTUM ADDITION WAS CONFIRMED BY THE CIT(A) AGAINS T WHICH ASSESSEE HAS NOT FILED ANY APPEAL BEFORE THE ITAT. IN CONSEQUENCE O F THE ADDITION IN THE QUANTUM ASSESSMENT TOWARDS DISALLOWANCE OF RS.6,95, 400/- TOWARDS COMMISSION PAYMENT TO MRS. KALPANA JOSHI, THE ASSES SING OFFICER ALSO IMPOSED PENALTY ON THE DISALLOWANCE MADE. THE CIT( A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN IMPOSING THE PEN ALTY. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN FURTHER APPEAL BEFORE US AGAINST THE IMPOSITION OF PENALTY OF RS.2 ,36,366/-. 6. IN THE COURSE OF HEARING, THE LD. AUTHORIZED REP RESENTATIVE FOR THE ASSESSEE ADVERTED OUR ATTENTION TO PARA 8 OF THE OR DER OF THE CIT(A) AND SUBMITTED THAT PAYMENTS OF THE COMMISSION AGENT INC LUDING MRS. KALPANA JOSHI HAS IMMENSELY BENEFITED THE ASSESSEE FIRM, WH OSE TURNOVER HAS ARISEN BY 194%. THE TDS HAS BEEN DEDUCTED AGAINST THE PAYMEN T OF COMMISSION WHICH HAS BEEN OFFERED FOR TAXATION IN THE HANDS OF COMMI SSION AGENT. THE INCREASE IN THE TURNOVER ITSELF SUGGESTS RENDITION OF SERVIC ES. 3 ITA NO.838/PN/2014 7. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, SUBMITTED THAT THE RENDERING OF SERVICES COULD NOT BE PROVED AND T HEREFORE PENALTY WAS JUSTIFIED FOR WRONGFUL CLAIM MADE. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE NOTICE FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE PENALTY HA S BEEN TRIGGERED DUE TO DISALLOWANCE OF EXPENDITURE. WE OBSERVE THAT THE P ERSON TO WHOM COMMISSION HAS BEEN PAID IS IDENTIFIABLE. THE TDS HAS BEEN ON LY DEDUCTED AT THE TIME OF MAKING THE PAYMENT AND THE INCOME IS STATED TO HAVE BEEN OFFERED IN THE HANDS OF THE COMMISSION AGENT. IN THESE CIRCUMSTANCES, T HE EXPLANATION OFFERED ON BEHALF OF THE ASSESSEE HAS THE TRAPPINGS OF BONA-FI DE AND IS PLAUSIBLE FOR DELETION OF PENALTY. MERE DISALLOWANCE OF EXPENDIT URE DOES NOT ORDINARILY CALL FOR IMPOSITION OF PENALTY. THE CLAIM OF EXPENDITUR E HAS ALBEIT REMAINED UNPROVED AND UNSUPPORTABLE BY SUFFICIENT DOCUMENTS, WHICH MAY CALL FOR APPROPRIATE DISALLOWANCES IN QUANTUM ASSESSMENT. H OWEVER, THIS BY ITSELF DOES NOT AUTOMATICALLY CALL FOR IMPOSITION OF PENAL TY. MERE DISALLOWANCE OF EXPENDITURE DOES NOT LEAD TO INFERENCE THAT PARTICU LARS OF INCOME HAS BEEN CONCEALED OR THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME PER SE . ON PERUSAL OF FACTS NOTED ABOVE AND IN THE TOTALITY OF CIRCUMSTANCES, WE FIND THAT THE IMPOSITION OF PENALTY IS NOT JUSTIFIED. A CCORDINGLY, THE ORDER OF THE CIT(A) IS SET-ASIDE AND IMPOSITION OF PENALTY IS CA NCELLED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF OCTOBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH OCTOBER, 2015. 4 ITA NO.838/PN/2014 % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE