The DCIT, Circle-2, Surat V. M/s. Supreme India Overseas Corporation, Surat

ITA 859/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80473 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-10-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 21-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: RAMESH K MAL
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFO RE SHRI SHAILENDRA KUMAR YADAV, J.M. & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 859 / AHD/ 20 1 1 (A SSESSMENT YEAR: 2005 - 06) THE D.C.I.T, CIRCLE - 2, SURAT V/S M/S. SUPREME INDIA OVERSEAS CORPORATION 13/1, DOCTORWADI, NR. KRISHAN PETROL PUM P, UDHAN MAIN ROAD, SURAT (APPELLANT) (RESPONDENT) PAN: AAJFS5561K APPELLANT BY : SHRI B.L. YADAV, SR. D.R. RESPONDENT BY : SHRI RAMESH K. MALPANI, A.R. ( )/ ORDER DATE OF HEARING : 16 - 10 - 2014 DATE OF PRONOUNCEMENT : 31 - 10 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - II, SURAT DATED 4.1.2011 FOR A.Y. 2005 - 06. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UND ER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF TEXTILE GOODS. . ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 05 - 0 6 ON 31.10.2005 DECLAR ING TOTAL INCOME OF RS. 26,86,140/ - . THE CASE WAS SELECTED FO R SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) VIDE ITA NO 859/AHD2011 . A.Y. 2005 - 06 2 ORDER DATED 26.12.2007 AND TOTAL INCOME WAS DETERMINED AT RS. 4,91,86,620 / - B Y MAKING ADDITION ON ACCOUNT OF JOB WORK CHARGES OF RS. 1,22,06,493/ - AND DISALLOWANCE OF FOREIGN AGENT COMMI SSION OF RS. 3,42,93,984/ - . AGAINST THE QUANTUM ADDITIONS MADE BY A.O, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO VIDE ORDER DATED 19.11.2008 DELETED THE ADDITION ON ACCOUNT OF FOREIGN AGENT COMMISSION OF RS. 3,42,93,984/ - BUT CONFIRMED THE ADDITION OF R S. 1,22,06,493/ - ON ACCOUNT OF BOGUS JOB WORK EXPENSES. AGAINST THE ORDER OF CIT(A), ASSSESSEE PREFERRED APPEAL BEFORE HON BLE TRIBUNAL. HON BLE TRIBUNAL VIDE ORDER DATED 21.12.2011 IN ITA NO. 258/AHD/2009 DELETED THE ADDITION OF RS. 1,22,06,493/ - ON THE ADDITIONS OF RS. 1,22,06,493/ - ON ACCOUNT OF JOB WORK CHARGES. A.O VIDE ORDER DATED 19.03.2010 LEVIED PENALTY OF RS. 44,66,662/ - U/S 271(1)(C) OF THE ACT WHICH WAS DELETED BY CIT(A) VIDE ORDER DATED 4.01.2011. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S 271(L)(C) INSPITE OF THE A.O. CLEARLY PROVING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME, BY INCURRING BOGUS JOB WORK EXPENSES. 2. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S 271(L)(C) INSPITE OF THE 3. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, THE LEARNED CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET - SIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 4. BEFORE US LD. A.R. S U BMITTED THAT ON THE ADDITION OF RS. 1,22,06,493/ - ON ACCOUNT OF JOB WORK CHARGES, A.O HAD LEVIED PENALTY U/S 271(1)(C). HE FURTHER SUBMITTED THAT SINCE THE QUANTUM ADDITION ITSELF HAS BEEN DELETED BY HON BLE TRIBUNAL IN ITA NO. 258/AHD/2009 PENALTY U/S 27 1(1)(C) DOES NOT SURVIVE. HE ALSO PLACED ON RECORD THE COPY OF THE AFORES AID ORDER OF TRIBUNAL. THE LD. D .R. ON THE OTHER HAND RELIED ON THE ORDER OF A.O. ITA NO 859/AHD2011 . A.Y. 2005 - 06 3 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT WHILE FRAMING THE ASSESSMENT U/S 143(3) A.O HAD DISALLOWED JOB WORK EXPENSES OF RS. 1,22,06,493/ - AND THE DISALLOWANCE WAS CONFIRMED BY CI(A) WHICH IN SECOND APPEAL WAS DELETED BY TRIBUNAL BY ORDER DATED 21.12.2011. O N THE AFORESAID DISALLOWANCE , A.O HAD LEVIED PENALTY U/S 271(1)(C) OF THE ACT . WE ARE OF THE VIEW THAT NO PENALTY ON THE AFORESAID DISALLOWANCE CAN BE MADE IN THE PRESENT CASE BECAUSE THE QUANTUM ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED HAS ITSELF BEEN DELETED BY THE TRIBUNAL . WE THEREFORE FIND NO REA SON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THIS GROUND OF REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31 - 10 - 201 4 . SD/ - SD/ - (SHAILENDRA KUMAR YADAV ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD