ITO 11(2)(3), MUMBAI V. A.F. FERGUSON & CO., MUMBAI

ITA 8766/MUM/2010

• Counselvise Citation: 876619914 RSA 2010
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 15-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: P B CHHAPGAR

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI P.M. JAGTAP, AM AND SHRI VIVEK VARMA, J M ./ I.T.A. NO. 8766/ MUM/2010 ( / ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME TAX 11(2), ROOM NO. 479, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -20. / VS. M/S A.F. FERGUSON & CO., ALLAHABAD BANK BUILDING, BOMBAY SAMACHAR MARG, MUMBAI 400 001. ./ PAN : AABFA5846M ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI A.R. N INAWE R E SPONDENT BY : SHRI P.B. CHHAPGAR & SHRI KETAN VED / DATE OF HEARING : 19-6-2014 / DATE OF PRONOUNCEMENT : 23-7-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - 3, MUMBAI DATED 28-9-2010 WHEREBY HE CANCELLED THE PENALTY IMPOSED BY THE A.O. IN RESPECT OF ADDITIONS OF RS. 3,24,795/- AND RS. 41,45,000/- MADE ON ACCOUNT OF OUTSTANDING SUNDRY CREDITORS AND PAYMENT MADE TO THE RETIRED PARTNERS RESPECTIVELY. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE FROM ORDER DATED 24-09-2010 PASSED BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS IN ITA NO. 2675/MUM/2008, THE A DDITION MADE TO THE ITA 8766/M/10 2 TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DISALLOW ANCE OF PAYMENT MADE TO THE RETIRED PARTNERS HAS ALREADY BEEN DELETED BY TH E TRIBUNAL. CONSEQUENTLY, THE PENALTY IMPOSED BY THE A.O. U/S 271(1)(C) OF TH E ACT IN RESPECT OF THE SAID ADDITION IS NOT SUSTAINABLE AND WE THEREFORE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) CANCELLING THE PENALTY SO IMPOSED BY THE A.O. AS REGARDS THE PENALTY IMPOSED BY THE A.O. IN RESPECT OF ADDITION OF RS. 3,24,795/- MADE IN RESPECT OF OUTSTANDING SUNDRY CREDITORS, IT IS OBSE RVED THAT THE TRIBUNAL VIDE ITS ORDER DATED 24-09-2010 (SUPRA) PASSED IN THE QU ANTUM PROCEEDINGS, HAS DELETED THE SAID ADDITION TO THE EXTENT OF RS. 2,94 ,330/- AND THE BALANCE ADDITION TO THE EXTENT OF RS. 30,465/- ON ACCOUNT O F UNPAID BALANCE TO EX EMPLOYEE, PETTY CASH AND SUSPENSE IS SUSTAINED BY T HE TRIBUNAL AFTER ACCEPTING THE ALTERNATIVE CONTENTION OF THE ASSESSE E THAT THE SAID AMOUNT HAVING BEEN PAID IN A.Y. 2005-06, THE DEDUCTION FOR THE SAME MAY BE ALLOWED IN THAT YEAR. IT IS THUS CLEAR THAT THE ADDITION TO THE EXTENT OF ONLY RS. 30,465/- HAS BEEN FINALLY SUSTAINED BY THE TRIBUNAL AND THAT TOO AFTER MAKING AN OBSERVATION THAT THE SAID AMOUNT HAVING BEEN PAI D BY THE ASSESSEE IN A.Y. 2005-06, THE DEDUCTION FOR THE SAME MAY BE ALLOWED IN THAT YEAR. HAVING REGARD TO THIS OBSERVATION RECORDED BY THE TRIBUNAL , WE ARE OF THE VIEW THAT IT IS NOT A CASE OF CONCEALMENT OF PARTICULARS OF ITS INCOME BY THE ASSESSEE OR FURNISHING IN-ACCURATE PARTICULARS OF SUCH INCOME A TTRACTING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. WE THEREFORE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) CANCELLING THE PEN ALTY IMPOSED BY THE A.O. U/S 271(1)(C) OF THE ACT IN RESPECT OF THIS ADDITIO N ALSO. ACCORDINGLY, THE IMPUGNED ORDER OF THE LD. CIT(A) CANCELLING THE PEN ALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF BOTH THE ADDITIONS OF RS. 3,24,79 5/- AND RS. 41,45,000/- IS UPHELD AND THIS APPEAL OF THE REVENUE IS DISMISSED. ITA 8766/M/10 3 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2014 . ( ) * 23 -7-2014 SD/- SD/- (VIVEK VARMA) (P.M. JAGTAP ) (- JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; * DATED 231712014 [ \ .-../ RK , SR. PS ! '$% &% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT(A)3 MUMBAI. 4. 7 / CIT 11, MUMBAI 5. : --< , < , / DR, ITAT, MUMBAI A BENCH 6. ? / GUARD FILE. / BY ORDER, : - //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI