MOTOROL LUBRICANTS LIMITED,VADODARA V. ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE 4, VADODARA, VADODARA

ITA 1203/AHD/2024

AI Insights

The case involves Motorol Lubricants Ltd., the appellant, contesting a penalty imposed by the Assistant Commissioner of Income Tax, Vadodara, which was based on additions made in the assessment order for the Assessment Year 2006-07. The penalty was initially levied due to disallowances made on purchases from related parties and a claimed loss, both of which were contested by the assessee. The Tribunal, after reviewing the records and noting the absence of the assessee's representation, decided the case based on the merits of the documents available, concluding that the penalty was unjustified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35065 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADJOURNMENT APPLICATION
• Keywords: Rejection of books of accounts
• Section: 271(1)(c)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: Shri Sanjay Garg, Judicial Member Motorol Lubricants Ltd., 11th Floor, Kirti Tower, Tilak Road, Vadodara PAN: AABCM5928M (Appellant) Vs The Assistant Commissioner of Income Tax , Circle-4, Vadodara (Respondent) Assessee by: None Revenue by: Adjournment Application Date of hearing : 27-02-2025 Date of pronouncement : 20-03-2025 आदेश/ORDER The present appeal has been filed by the Assessee against the order passed by the Learned Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 10.05.2024 arising out of the order passed u/s. 271(1)(c) of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2006-07. ITA No. 1203 /Ahd/2024 Assessment Year 2006-07 I.T.A No. 1203/Ahd/2024 Motorol Lubtricants Ltd., A.Y. 2006-07 2 2. None has appeared on behalf of the assessee despite the notice. A perusal of the file reveals that on earlier dates also no- one has appeared on behalf of the assessee. Under the circumstances, it appears that the assessee is no more interested in prosecuting his appeal by personal appearance or through his counsel. 3. Adjournment application has been filed on behalf of the ld. D.R. stating therein that she was not well. Identical type of application has been filed in all the cases fixed for today. It will not be appropriate to adjourn all the matters. Since there is not any complicated issue involved in this appeal, hence, the matter is being decided after going through the records. 4. The Assessing Officer in this case had levied the penalty on the basis of addition made in the assessment order. In the assessment order, the additions were made on two counts. Firstly that the assessee had made purchases from borrowed funds from related parties but the assessee failed to show that the said purchases were at market rate, therefore, the Assessing Officer invoked the provisions of section 40A(2) and made disallowance @ 5% of the purchases on adhoc basis out of the purchases made from related parties. Further, the Assessing Officer observed that assessee had not properly prepared the books of accounts, he therefore, also disallowed the loss claimed by the assessee of Rs. 10,95,135/-. I.T.A No. 1203/Ahd/2024 Motorol Lubtricants Ltd., A.Y. 2006-07 3 5. A perusal of the assessment order would reveal that in this case, the disallowances were made by the Assessing Officer on adhoc/estimation basis. Firstly 5% of purchases made from related parties were disallowed without any evidence on the file that the assessee’s purchases were not actually at market rates or that assessee in this respect has concealed the income. Similarly in respect of disallowance of loss, the said disallowance has been made because of rejection of books of accounts but there were no evidences on the file that the assessee’s claim of loss was wrong or false. Under the circumstances, it is not established that the assessee has concealed its income or furnished inaccurate particulars of income for the purpose of evasion of tax. Therefore, the penalty u/s. 271(1)(c) of the Act is not attracted in this case. The impugned penalty is therefore ordered to be deleted. 6. In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 20-03-2025 Sd/- (SANJAY GARG) JUDICIAL MEMBER Ahmedabad : Dated 20/03/2025 आदेश क\u0006 \u0007\bत ल\fप अ\u000fे\fषत / Copy of Order Forwarded to:- I.T.A No. 1203/Ahd/2024 Motorol Lubtricants Ltd., A.Y. 2006-07 4 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "