Vivil Exports P. Ltd, Mumbai vs Department Of Income Tax
- CitationI.T.A. No. 5970/Mum/2013
Ratio decidendi
The rule this decision rests on
The penalty under section 271(1)(c) cannot survive in respect of an addition where the assessee has, during the assessment proceedings, accepted that the amount was claimed as expenditure by mistake and agreed to its addition; once the assessee has conceded the mistake, no reason exists for levying penalty for concealment or furnishing inaccurate particulars in respect of that disallowance, and the penalty is to be deleted on that item. Where the quantum additions have been set aside by the Tribunal and restored to the Assessing Officer for fresh verification, the penalty levied in respect of those additions cannot be sustained in the interim and is to be set aside to that extent, the Assessing Officer being directed to consider the issue afresh after deciding the quantum.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
सव ौी वजय पाल राव, याियक सदःय एवं नरे ि कुमार ब#लै%या, लेखा सदःय के सम'
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No. 5970/Mum/2013 िनधा रण वष / Assessment (िनधा Year : 2007-08 The ITO 2(3)(4), बनाम/ बनाम M/s. Vivil Exports Pvt. Aayakar Bhavan, Ltd., Vs. Mumbai-400 020 3-A, Dhannur Bldg., Sir P.M. Road, Mumbai-400 001 ःथायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAACV 1752B (अपीलाथ+ /Appellant) .. (ू-यथ+ / Respondent) अपीलाथ+ ओर से/ Appellant by: Shri P.K. Beerla
ू-यथ+ क/ ओर से/Respondent by: Ms. Neha Paranjpe
सुनवाई क/ तार1ख / Date of Hearing :23.02.2015 घोषणा क/ तार1ख /Date of Pronouncement :23.02.2015
आदे श / 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)-6, Mumbai dt. 29.7.2013 pertaining to assessment year 2007-08.
2. The sole grievance of the Revenue is that the Ld. CIT(A) has erred in deleting the penalty levied by the AO u/s. 271(1)(c) of the Act.
2 ITA No. 5970/M/2013 3. While completing the assessment u/s. 143(3) of the Act, the Assessing Officer disallowed the following and added to the returned income of the assessee.
1) Commission on exports Rs. 32,408/- 2) Disallowance u/s. 40a(ia) towards transportation Rs. 1,59,386/-
3) Payments towards export freight u/s.40(a)(ia)-Rs. 6,17,830/-
4) Export freight paid to foreign shipping Companies disallowed u/s. 40(a)(ia) Rs.28,02,230/-
Simultaneously, penalty proceedings were initiated in respect of the amount disallowed in the assessment proceedings.
4. Against the quantum additions, the assessee preferred appeal before the Ld. CIT(A). However, no ground was taken for the addition of commission on exports. The Ld. CIT(A) allowed the appeal of the assessee on the addition of Rs. 28,02,230 in respect of export freight paid to foreign shipping companies and confirmed the other disallowances made by the AO. The penalty has been levied in respect of the disallowances confirmed by the Ld. CIT(A) and also on commission on exports amounting to Rs. 32,408/-.
5. Aggrieved by the levy of penalty, assessee carried the matter before the Ld. CIT(A). After considering the facts and the submissions, the Ld. CIT(A) directed the AO to delete the levy of penalty.
6. Aggrieved by this, the Revenue is before us.
7. At the very outset, the Ld. Counsel for the assessee brought to our notice the decision of the Tribunal in ITA No. 509/M/2011 and stated that the Tribunal has allowed the appeal for statistical purpose.
3 ITA No. 5970/M/2013 8. The Ld. Departmental Representative on the other hand could not place before us any contrary judgement on this issue.
9. After considering the facts and perusing the assessment order, the penalty order and the order of the First Appellate Authority and the order of the Tribunal in ITA No. 509/M/11, we find that the issue relating to the disallowance of Rs. 1,59,386/-, 6,17,830/- and Rs. 3,70,062/- have been restored back to the files of the AO for verification as per the directions of the Tribunal in ITA No. 509/M/11. We, therefore set aside the order of the penalty to the extent of the quantum additions set aside by the Tribunal. The AO is directed to consider the issue afresh after deciding the quantum. The only addition which survives is that of commission on exports amounting to Rs. 32,408/-. We find that during the course of the assessment proceedings, the assessee has stated that Rs. 32,408/- is exchange difference and is claimed as expenditure by mistake and agreed for the addition. In our considered opinion once the mistake has been accepted by the assessee, we do not find any reason for the levy of penalty u/s. 271(1)(c) of the Act. We, accordingly direct the AO to delete the levy of penalty in respect of the disallowance of Rs. 32,408/-.
10. In the result, the appeal filed by the assessee is partly allowed for statistical purpose.
Order pronounced in the open court at the time of hearing on 23rd February, 2015.
Sd/- Sd/ (VIJAY PAL RAO ) (N.K. BILLAIYA) याियक सदःय/JUDICIAL MEMBER लेखा सदःय / ACCOUNTANT MEMBER
मुंबई Mumbai; 5दनांक Dated : 23rd February, 2015 व.िन.स./ RJ , Sr. PS 4 ITA No. 5970/M/2013
आदे श क/ ूितिल प अमे षत/Copy षत of the Order forwarded to :
1. अपीलाथ+ / The Appellant
2. ू-यथ+ / The Respondent.
3. आयकर आयु7(अपील) / The CIT(A)-
4. आयकर आयु7 / CIT
5. वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानुसार/ ार BY ORDER, स-या पत ूित //True Copy// उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai
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