DCIT 10(1), MUMBAI v. VESTA BUILDING PRODUCTS P.LTD, MUMBAI

ITA 5333/MUM/2013 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 533319914 RSA 2013
Assessee PAN AABCV8118L
Bench Mumbai
Appeal Number ITA 5333/MUM/2013
Duration Of Justice 1 year(s) 11 month(s) 30 day(s)
Appellant DCIT 10(1), MUMBAI
Respondent VESTA BUILDING PRODUCTS P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Allowed
Bench Allotted F
Tribunal Order Date 31-07-2015
Date Of Final Hearing 12-02-2015
Next Hearing Date 12-02-2015
Assessment Year 2009-2010
Appeal Filed On 01-08-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH MUMBAI . . BEFORE SHRI SUSHMA CHOWLA JM AND SHRI N.K. BILLAIYA AM ./ ITA NO. 5333/MUM/2013 ( / ASSESSMENT YEAR : 2009 - 10 ) D C I T - 10(1) ROOM NO. 455 4TH FLOOR AYAKAR BHAVAN M.K. ROAD MUMBAI 400020 / VS. M/S. VESTA BUILDING PRODUCTS P LTD. 3RD FLOOR ANDANVAN KALANAGAR BANDRA (E) MUMBAI 4000 51 ./ PAN : AABCV8118L ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI A.K. DHANDIAL / RESPONDENT BY : NONE / DATE OF HEARING : 21.07.2015 / DATE OF PRONOUNCEMENT : 31 .0 7 .2015 / ORDER PER SUSHMA CHOWLA J.M. THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER DATED 09.05.2013 PASSED BY CIT(A) - 21 MUMBAI AND IT PERTAINS TO ASSESSMENT YEAR 2009 - 10. 2. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOU RNMENT. ON THE EARLIER DATE ALSO NONE HAD APPEARED ON BEHALF OF THE ASSESSEE THOUGH ON THE LAST DATE OF HEARING ASSESSEE HAD MOVED AN APPLICATION FOR ADJOURNMENT. IN VIEW OF THIS WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LEARNED D.R. FOR TH E REVENUE. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS WITH REGARD TO DELETION OF THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT OF ` 8 70 869/ - . ITA NO. 5333/MUM/2013 M/S. VESTA BUILDING PRODUCTS P LTD. 2 4. BRIEFLY IN THE FACTS OF THE PRESENT CASE THE ASSESSEE WAS ENGAGED IN MANUFACTURING EXPORTING IMPORTING PROCESSING AND DEALING IN ALL KIND OF BUILDING MATERIALS. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FILED RETURN OF INCOME DECLARING BUSINESS LOSS OF ` 40 83 763/ - . SINCE THE ASSESSEE HAD FILED THE RETURN OF INCOME AFTER THE DUE DATE THE LOSS CLAIMED BY THE ASSESSEE WAS HELD TO BE NOT ELIGIBLE FOR CARRY FORWARD. WITHOUT PREJUDICE TO THE SAME THE AO FURTHER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD MADE SALES AMOUNTING TO ` 3 21 107/ - AND THE CORRESPONDING COST OF GOODS SOLD AMOUNTED T O ` 31 39 452/ - . THE ASSESSEE WAS ASKED TO JUSTIFY AS TO HOW THE COST OF GOODS SOLD WAS ` 31 39 452/ - WHEREAS THE SALE OF GOODS WAS ONLY ` 3 21 107/ - . IN RESPONSE THE ASSESSEE FAILED TO FURNISH NEITHER ANY REPLY NOR ANY EVIDENCE TO SUBSTANTIATE HIS CLAIM. IN THE ABSENCE OF THE SAME THE AO WAS OF THE VIEW THAT THE LOSS CLAIMED ON ACCOUNT OF SALE OF DAMAGED STOCK WAS NOT ALLOWABLE IN THE HANDS OF THE ASSESSEE. CONSEQUENT THERETO THE AO ISSUED NOTICE UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PA RTICULARS OF INCOME AND CONCEALMENT OF INCOME. IN REPLY THE ASSESSEE CLAIMED THAT HE HAD FURNISHED THE DETAILS OF SALES COPY OF THE SALE BILLS COPY OF SALE S TAX RETURN AND ORDER OF CANCELLATION O F SALES TAX REGISTRATION NUMBER AND S INCE NO OTHER EVIDENCE WAS SOUGHT THERE WAS NO MERIT IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE AO NOTED THAT THE ASSESSEE HAD FURNISHED CERTAIN DOCUMENTS WHICH WERE UNRELATED AND DID NOT PROVIDE THE INFORMATION SOUGHT FOR AND THE ASSESSEE HAS FAILED TO EXP LAIN WITH EVIDENCE AS TO WHY PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED. THEREFORE THE AO LEVIED PENALTY OF ` 8 70 869/ - UNDER SECTION 271(1)(C) OF THE ACT. 5. THE CIT(A) NOTED THE SUBMISSIONS MADE BY THE ASSESSEE IN PARA 4 .1 ON PAGES 3 TO 7 OF THE APPELLATE ORDER. THE CIT(A) THEREAFTER ALSO NOTED THAT SINCE THE ASSESSEE HAD INCURRED LOSS NO FURTHER APPEAL WAS FILED BEFORE THE CIT(A) AGAINST THE QUANTUM ADDITION MADE BY THE AO. THE CIT(A) IN PARA 4.4 AND 4.5 OF THE APPELLATE ORDER REFERRE D TO THE MERITS OF THE ADDITION MADE IN THE HANDS OF THE ASSESSEE AND CONCLUDED THAT THE DISALLOWANCE MADE IN THE HANDS OF THE ASSESSEE IS TO BE DELETED AS PER THE LAW AND ITA NO. 5333/MUM/2013 M/S. VESTA BUILDING PRODUCTS P LTD. 3 THEREAFTER THE PENALTY LEVIED IS ALSO CANCELLED. ANOTHER POINT RAISED BY THE CIT(A) WAS THAT THE ASSESSEE HAD A LEGAL CLAIM WHICH THE AO HAD DISALLOWED AND HENCE THE PENALTY COULD NOT BE LEVIED WHERE SUCH DISALLOWANCE IS MADE IN THE HANDS OF THE ASSESSEE. 6. ON A PERUSAL OF THE RECORD WE FIND THAT THIS IS A CASE WHERE AN APPEAL WAS FILED BEF ORE THE CIT(A) BY THE ASSESSEE AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(A) HAS FAILED TO CONSIDER THE MERITS OF LEVY OF PENALTY UNDER SECTION 271(1)(C) AND ON THE OTHER HAND HAD ADJUDICATED THE ISSUE ON MERITS THAT NO DISALLOWANC E COULD BE MADE IN THE HANDS OF THE ASSESSEE. HOWEVER IT IS A FACT THAT THE DISALLOWANCE WAS MADE BY THE AO FOR WANT OF MATERIALS FILED BY THE ASSESSEE CONSEQUENT TO WHICH NO APPEAL WAS FILED BY THE ASSESSEE. THE CIT(A) IN SUCH CIRCUMSTANCES HAS ADJUDICAT ED THE ISSUE KEEPING IN MIND THE DISALLOWANCE MADE IN THE HANDS OF THE ASSESSEE BUT NOT THE ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT . IN FAIRNESS AND FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) TO DECIDE THE SAME AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND IN THE ABSENCE OF THE ASSESSEE TO ADJUDICATE THE ISSUE BY FOLLOWING THE PRINCIPLES OF LAW AND ON FACTS OF THE CASE. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN COURT ON 31 ST JULY 2015. 31.07.2015 SD/ - SD/ - ( N.K. BILLAIYA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 31 ST JULY 201 5 ITA NO. 5333/MUM/2013 M/S. VESTA BUILDING PRODUCTS P LTD. 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 21 4. / CIT - 10 5. / DR F BENCH ITAT MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) /ITAT MUMBAI N . P .