The ACIT,(OSD)Circle-8, Ahmedabad V. M/s. Swastik Textile Engg.Pvt.Ltd., Ahmedabad

ITA 994/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76749 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 04-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANISTA
• Section: 143(3)

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.994/AHD/2011 WITH CO NO.105/AHD/2011 [ASSTT.YEAR : 2005-2006] ACIT, (OSD) CIR.8 AHMEDABAD. /VS. SWASTIK TEXTILE ENGINEERS P. LTD. SWASTIK PREMISES, AMRAIWADI AHMEDABAD. PAN : AABCS 5522 K ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI R.K. DHANISTA, SR.DR 4& 1 2 )/ ASSESSEE BY : WRITTEN SUBMISSIONS 5 1 &(*/ DATE OF HEARING : 13 TH MAY, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 06-06-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE AND THE CO BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-2006 ARE DIRECTED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA NO.994/AHD/2011 WITH CO NO.105/AHD/2011 -2- 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE. HOWEVER, THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS WITH THE REQUEST THAT THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSE E MAY BE DISPOSED OF AFTER CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. ACCORDINGLY, WE DECIDE THE APPEAL PREFERRED BY THE REVENUE AND THE CO PREFERRED BY THE ASSESSEE ON MERITS AFTER CONSIDERI NG THE ARGUMENTS OF THE LEARNED DR AND WRITTEN SUBMISSIONS FILED BY THE ASS ESSEE. ITA NO.994/AHD/2011 (REVENUES APPEAL) 3. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CANC ELING THE PENALTY OF RS.27,52,469/- LEVIED U/S.271(1)(C) OF T HE ACT. 4. THE LEARNED DR FAIRLY SUBMITTED THAT IN THE ASSE SSMENT FRAMED BY THE AO UNDER SECTION 143(3) R.W.S 254 OF THE ACT VI DE ORDER DATED 30.11.2011, THE ADDITION/DISALLOWANCE OF COMMISSION PAYMENT OF RS.75,21,948/- WAS NOT MADE, AND THEREFORE, THERE R EMAINS NO BASIS FOR PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. 5. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND HAVE PERUSED THE CONTENTS OF THE WRITTEN SUBMISSIONS FIL ED BY THE ASSESSEE. WE FIND THAT IN THE QUANTUM APPEAL OF THE ASSESSEE, TH E TRIBUNAL VIDE ITS ORDER DATED 31.12.2010 HAS RESTORED THE ISSUE OF DISALLOW ANCE OF COMMISSION EXPENDITURE TO THE FILE OF THE AO FOR THE ASSTT.YEA R 2005-2006 IN ITA NO.708/AHD/2009. THE AO, IN THE ASSESSMENT FRAMED UNDER SECTION ITA NO.994/AHD/2011 WITH CO NO.105/AHD/2011 -3- 143(3) R.W.S 254 OF THE ACT, AFTER THE ASSESSMENT W AS SET ASIDE TO HIS FILE, HAS ACCEPTED THE CLAIM OF THE ASSESSEE REGARDING TH E ALLOWABILITY OF THE COMMISSION EXPENDITURE AMOUNTING TO RS.75,21,948/- VIDE ASSESSMENT ORDER DATED 30.11.2011. IN THESE FACTS, WE HOLD TH AT SINCE THE VERY BASIS OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT, I.E. DISALLOWANCE OF COMMISSION EXPENDITURE AMOUNTING TO RS.75,21,948 /- HAS NOT BEEN ADDED WHILE FRAMING THE SET ASIDE ASSESSMENT BY THE AO VIDE ASSESSMENT ORDER DATED 30.11.2011, THERE REMAINS NO BASIS FOR IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT, AND ACCORDINGLY, WE HOLD THAT THE PENALTY IS NOT LEVIABLE IN THIS CASE, AND THE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. CO NO.105/AHD/2011 (ASSESSEES CO) 4. THE ONLY GROUND OF THE CO OF THE ASSESSEE IS AS UNDER: 1. THE CIT(A) OUGHT TO HAVE CANCELLED THE PENALTY LEVIED BY AO ON MERITS OF THE CASE ALSO. IT IS SUBMITTED THAT I N THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON MERIT OF THE CASE, THE PENALTY U/S.271(1)(C) OF THE ACT CANNOT BE LEVIED. IT IS S UBMITTED THAT IT MAY BE SO HELD NOW. 5. THE ASSESSEE HAS REQUESTED IN ITS WRITTEN SUBMIS SIONS THAT ON MERITS ALSO THE PENALTY U/S.271(1)(C) OF THE ACT COULD NOT BE LEVIED IN THE FACTS OF THE CASE. THE LEARNED DR HAS NOT CONTROVERTED THE PLEA OF THE ASSESSEE. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN VIEW OF T HE FACT THAT THE AO WHILE FRAMING THE SET ASIDE ASSESSMENT UNDER SECTIO N 143(3) R.W.S. 254 OF THE ACT VIDE ASSESSMENT ORDER DATED 30.11.2011 HAS NOT MADE ANY DISALLOWANCE OF COMMISSION EXPENDITURE AT RS.75,21, 948/-, WE HOLD THAT EVEN ON MERITS OF THE CASE, THERE REMAINS NO BASIS FOR LEVY OF PENALTY UNDER ITA NO.994/AHD/2011 WITH CO NO.105/AHD/2011 -4- SECTION 271(1)(C) OF THE ACT, AND THE GROUND OF THE CO OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CO OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD