SHRI SHIV BIHARI SHARMA, Jaipur V. DCIT, Jaipur

ITA 857/JPR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59538 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHARI

Judgement Text

1 ITA 857-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 857/JP/2011 ASSTT. YEAR : 2005-06. SHRI SHIV BIHARI SHARMA, VS. THE DCIT, CIRCLE-5, PROP. M/S. VALINTINO TEXTILES, JAIPUR. BEHIND GOLIMAR GARDEN, AMER ROAD, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.C. PARWAL RESPONDENT BY : SHRI VINOD JOHARI DATE OF HEARING : 12.01.2012 DATE OF PRONOUNCEMENT : 30.01.2012. ORDER DATE OF ORDER : 30/01/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST CONFIRMING T HE PENALTY LEVIED UNDER SECTION 271(1)(C) IN RESPECT TO DISALLOWANCE OF VEHICLE EXP ENSES OF RS. 2,77,505/- RELATING TO ASSESSMENT YEAR 2005-06. 2. THE AO IMPOSED PENALTY OF RS. 1,61,307/- UNDER S ECTION 271(1)(C) ON TRADING ADDITION OF RS. 2,01,721/- AND BOGUS CAR REPAIR EXP ENSES OF RS. 2,77,505/-. IN FACT, DURING THE ASSESSMENT PROCEEDINGS, THE AO HAS GIVEN A FIND ING THAT REPAIR AND MAINTENANCE EXPENSES OF RS. 2,77,505/- WERE CLAIMED ON THE BASI S OF BOGUS BILLS WHICH WERE NOT CONFIRMED AND CORROBORATED BY THE RELEVANT PARTIES ALLEGED TO HAVE RENDERED THE SERVICES 2 TO THE ASSESSEE. IT WAS ARGUED BEFORE LD. CIT (A) THAT ASSESSEE HAD CLAIMED VEHICLE RUNNING AND MAINTENANCE EXPENSES AT RS. 4,70,945/- WHICH INCLUDES A SUM OF RS. 2,77,505/- IN RESPECT OF CAR REPAIRS PAID TO M/S. L .M.J. SERVICES LTD., JODHPUR FOR REPAIRS OF MARUTI 800 CAR NO. RJ-14-5C-0887. REPAIR CHARGE S WERE PAID AT RS. 49,970/-. SIMILARLY, A SUM OF RS. 67,635/- WAS PAID TO M/S. W ESTERN INDIAN STATE MOTORS, JAIPUR FOR REPAIRS OF MARUTI ESTEEM CAR AND RS. 1,59,900/- WAS PAID TO M/S. PINKCITY MOTORS PVT. LTD., JAIPUR FOR REPAIR OF HONDA CITY ACCORD CAR. PAYMENTS WERE MADE IN CASH. ON ENQUIRY, THEY DENIED HAVING REPAIRED THE CAR. THERE FORE, THE AO HAD DISALLOWED THESE EXPENSES TOTALING TO RS. 2,77,505/-. THE ADDITION H AS BEEN SUSTAINED UPTO THE STAGE OF TRIBUNAL. BY CONSIDERING THE PENALTY ORDER AND SUB MISSIONS OF THE ASSESSEE, THE LD. CIT (A) FOUND THAT SINCE THESE EXPENSES WERE NOT FOUND GENUINE AS THE PARTIES HAVE DENIED HAVING REPAIRED THE CARS, THEREFORE, THE CLAIM OF T HE ASSESSEE IS BOGUS AND ACCORDINGLY HE CONFIRMED THE LEVY OF PENALTY ON THIS ACCOUNT. 3. THE LD. COUNSEL OF THE ASSESSEE FILED WRITTEN SU BMISSIONS. 4. ON THE OTHER HAND, THE LD. D/R STRONGLY PLACED R ELIANCE ON THE ORDERS OF THE AO AND LD. CIT (A). 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED. IT IS NOTED THA T THE EXPENSES WERE INCURRED THROUGH DRIVERS WHO REPORTED THAT CARS NEEDS SOME REPAIRS A ND ACCORDINGLY THE ASSESSEE PAID THE AMOUNT TO THE DRIVERS FOR GETTING THE CAR REPAIRED. IT IS FURTHER SEEN THAT ASSESSEE ;HAS ALSO ISSUED REGISTERED NOTICES TO THESE PARTIES TO CONFI RM THE DENIAL MADE DIRECTLY TO THE AO AS PER ORDER OF AO. HOWEVER, NO REPLY HAS BEEN SENT B Y THESE PARTIES WHO HAVE CONDUCTED THE REPAIR WORK. THEREFORE, IT SEEMS THAT THERE IS EVERY LIKELIHOOD THAT THE DRIVERS IN 3 COLLUSION WITH THESE PARTIES MAY HAVE TAKEN THE MON EY FOR REPAIRS AND MAY HAVE POCKETED THE MONEY BY THE DRIVERS AND THESE PARTIES IN CONNI VANCE. ADDITION HAS ALREADY BEEN MADE AND SUSTAINED. THEREFORE, KEEPING IN MIND THA T ASSESSEE BONA FIDE PAID THE AMOUNT TO THE DRIVERS FOR GETTING THE CARS REPAIRED, THERE FORE, THERE WAS NO MALAFIDE INTENTION ON THE PART OF THE ASSESSEE FOR SHOWING THESE EXPENDIT URE. ASSESSEE HAS ALREADY SUFFERED TAX, WE FEEL THAT AT LEAST PENALTY SHOULD NOT BE IMPOSED . ACCORDINGLY, WE CANCEL THE LEVY OF PENALTY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30. 01.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHRI SHIV BIHARI SHARMA, JAIPUR. THE DCIT, CIRCLE-5, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 857/JP/2011) BY ORDER, AR ITAT JAIPUR.