ACIT CC 38, MUMBAI v. VIDYUT METALLICS P.LTD, MUMBAI

ITA 5911/MUM/2012 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 591119914 RSA 2012
Assessee PAN AABCV3305R
Bench Mumbai
Appeal Number ITA 5911/MUM/2012
Duration Of Justice 2 year(s) 10 month(s) 2 day(s)
Appellant ACIT CC 38, MUMBAI
Respondent VIDYUT METALLICS P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 31-07-2015
Date Of Final Hearing 28-07-2015
Next Hearing Date 28-07-2015
Assessment Year 2009-2010
Appeal Filed On 28-09-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH MUMBAI BEFORE MS. SUSHMA CH O WLA JUDICIAL MEMBER AND SHRI N.K . BILLAIYA A CCOUNTANT M EMBER / I .T.A. NO . 5911/MUM/2012 ( / ASSESSMENT YEAR : 2009 - 10 THE ACIT CC - 38 AAYAKAR BHAVAN MUMBAI - 400 020 / VS. M/S. VIDYUT METALLICS PVT. LTD. 4 TH FLOOR MALHOTRA HOUSE OPP. GPO FORT MUMBAI - 400 001 ./ ./ PAN/GIR NO. : AABCV 3305R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI PAWAN KUMAR BEERLA / RESPONDENT BY : SHRI PRAYAG JHA / DATE OF HEARING : 28 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 31 .0 7 .2015 / O R D E R PER N.K. BILLAIYA AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 41 MUMBAI D ATED5.7.2012 PERTAINING TO ASSESSMENT YEAR 200 9 - 1 0. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE AO U/S. 271AAA OF THE ACT. ITA. NO . 5911/M/2012 2 3. IN THIS CASE THE ASSESSEE FILED THE RETURN OF INCOME ON 30.9.2009 RETURNING TOTAL INCOME AT RS. 1 58 29 643/ - . IN PURSUANCE TO NOTICE U/S. 153A THE ASSESSEE FILED RETURN OF INCOME ON 15.10.2009 DECLARING TOTAL INCOME AT RS. 2 14 38 727/ - WHICH INCL UDED RS. 50 LAKHS SURRENDERED BY THE ASSESSEE DURING THE COURSE OF THE SEARCH PROCEEDINGS ON 24.7.2008. THE RETURN ED INCOME OF RS. 2 14 38 727/ - WAS ASSESSED AT RS. 2 15 55 748/ - AFTER MAKING ADDITION OF RS. 1 17 019/ - ON ACCOUNT OF PERSONAL EXPENSES CLAI MED AS BUSINESS EXPENSES. THE AO INITIATED PENALTY PROCEEDINGS U/S. 271AAA ON AMOUNT OF RS. 51 17 019/ - (I.E. RS. 50 00 000 + RS. 1 17 019/ - . WHILE LEVYING THE PENALTY U/S. 271AAA OF THE ACT THE AO WAS CONVINCED THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS BY WHICH THE ASSESSEE GETS IMMUNITY FROM THE LEVY OF PENALTY U/S. 271AAA OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS MADE THE DISCLOSURE DURING T HE COURSE OF THE SEARCH PROCEEDINGS IN ITS STATEMENT MADE U/S. 132(4) OF THE ACT AND HAS ALSO OFFERED THE SAME IN ITS RETURN OF INCOME AND HAS PAID TAXES ACCORDINGLY. THEREFORE THE PROVISIONS OF SEC. 271AAA OF THE ACT GIV ING IMMUNITY FROM THE LEVY OF PE NALTY SQUARELY APPLY . 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS THE LD. CIT(A) OBSERVED THAT THE OBJECTION OF THE AO THAT THE ASSESSEE HAS NOT SPECIFIED THE SOURCE OF INCOME DERIVED IS NOT SUSTAINABLE BECAUSE IN THE STATEMENT ITSELF THE ASSES SEE HAS ADMITTED THAT THE ENTRIES OF THE SEIZED PAPERS WERE BUSINESS TRANSACTIONS NOT REFLECTED IN THE BOOKS OF ACCOUNT. THE LD. CIT(A) WAS CONVINCED THAT THE ASSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN U/S. 271AAA OF THE ACT THEREFORE NOT LIABLE FO R PENALTY. ITA. NO . 5911/M/2012 3 4.2. IN SO FAR AS THE PENALTY ON THE DISALLOWANCE OF RS. 1 17 019/ - IS CONCERNED THE LD. CIT(A) WAS OF THE OPINION THAT NO PENALTY CAN BE LEVIED ON THIS DISALLOWANCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158. 5. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE AO. 7. PER CONTRA THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEF ORE THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE BEFORE US IS WHETHER ON FACTS THE AO WAS RIGHT IN LEVYING PENALTY U/S. 271AAA OF THE ACT. SECTION 271AAA READ AS UNDER : (1) THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE 2007 THE ASSESSEE SHALL PAY BY WAY OF PENALTY IN ADDITION TO TAX IF A NY PAYABLE BY HIM A SUM COMPUTED AT THE RATE OF TEN PER CENT. OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB - SECTION (1) SHALL APPLY IF THE ASSESSEE ? (I) IN THE COURSE OF THE SEARCH IN A STATEMENT UNDER SUB - SECTI ON (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED ; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED ; AND ITA. NO . 5911/M/2012 4 (III) PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN RES PECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB - SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB - SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 A ND 275 SHALL SO FAR AS MAY BE APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . 8.1. NOW LET US SEE WHETHER THE ASSESSEE HAS PASSED THE TEST OF IMMUNITY FROM THE RIGOURS OF THIS SECTION. UNDISPUTEDLY THE SURRENDER RS. 50 00 000/ - WAS MADE IN A STATEMENT U/S. 132(4) OF THE ACT WHEREIN THE ASSESSEE HAD ADMITTED THE UNDISCLOSED INCOME AND HAS ALSO SPECIFIED THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. FURTHER THE ASSESSEE HAS ALSO SUBSTANTIATED T HE MANNER IN WHICH THE ENTRIES FOUND RECORDED IN THE DIARY WAS NOT REFLECTED IN ITS REGULAR BOOKS OF ACCOUNT AND THE ASSESSEE HAS ALSO PAID TAXES ON SUCH INCOME DISCLOSED. THE AO HAS ACCEPTED THE SAME AND THE SURRENDERED INCOME OF RS. 50 00 000/ - HAS BEE N ASSESSED TO TAX UNDER THE HEAD BUSINESS INCOME. 9. IN OUR CONSIDERED VIEW THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS LAID DOWN IN CLAUSE (2) OF SEC. 271AAA OF THE ACT AND THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY SO LEVIED. 10. IN SO FAR AS LEVY OF PENALTY ON THE DISALLOWANCE OF RS. 1 17 019/ - IS CONCERNED WE FIND THAT THE DISALLOWANCE WAS ONLY IN RESPECT OF EXPENDITURE OF PERSONAL IN NATURE THEREFORE THE LD. CIT(A) HAS RIGHTLY FOLLOWED THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (SUPRA). WE THEREFORE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS REVENUES APPEAL. ITA. NO . 5911/M/2012 5 11 . IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. OR DER PRONOUNCED IN THE OPEN COURT ON 31 ST JU LY 2015 SD/ - SD/ - ( SUSHMA CH O WLA ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 31 ST JU LY 2015 . . ./ RJ SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI