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S.H.A.M.K. International P.Ltd and Another Vs. Ito -9(3)(1) and Another Mumbai and Another - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Mumbai
Decided On
Case NumberITA Nos. 1410, 1411 & 1413/Mum of 2011, C.O. 164, 165 & 166/Mum of 2013 (Arising Out of ITA Nos. 1410, 1411 & 1413/Mum of 2011)
Judge
AppellantS.H.A.M.K. International P.Ltd and Another
Respondentito -9(3)(1) and Another Mumbai and Another
Excerpt:
.....order. 2. the relevant facts are that during the assessment years under consideration, various additions on account of ad hoc disallowance of credit card expenses, ad hoc disallowance of telephone expenses, disallowance of donation and estimated profit of receipts of turnover have been made by the ao. consequently in the penalty proceedings, the ao levied penalties on the respective additions made by him by invoking section 271(1)(c) of act. on appeal, the ld.cit(a) deleted the penalties by relying on the decisions of the hon'ble apex court in the cases of cit vs. atul mohan bindal (317 itr 1) and in the case of cit vs. reliance petro products pvt. ltd. (322 itr 158). aggrieved by the impugned decisions, the revenue is in before us. on the other hand, the assessee has filed the cross.....
Judgment:

1. These appeals and cross objections filed by the Revenue and the Assessee are directed against the orders of the Ld.CIT(A) -20, Mumbai dated 02.12.2010 for the Assessment Years 2000-01, 2001-02 and the order dated 03.12.2010 for the assessment year 2002-03, deleting the penalties levied by the AO under section ITA Nos. 1410, 1411 and 1413/Mum/2011

Assessment Years: 2000-01, 2001-02, 2002-03 271(1)(c) of the Income Tax Act. Since identical issues are involved in all these appeals and cross objections, the same are heard together and disposed off this common order.

2. The relevant facts are that during the assessment years under consideration, various additions on account of ad hoc disallowance of credit card expenses, ad hoc disallowance of telephone expenses, disallowance of donation and estimated profit of receipts of turnover have been made by the AO. Consequently in the penalty proceedings, the AO levied penalties on the respective additions made by him by invoking section 271(1)(c) of Act. On appeal, the Ld.CIT(A) deleted the penalties by relying on the decisions of the Hon'ble Apex Court in the cases of CIT Vs. Atul Mohan Bindal (317 ITR 1) and in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. (322 ITR 158). Aggrieved by the impugned decisions, the revenue is in before us. On the other hand, the assessee has filed the cross objections claiming that in the quantum appeal, the assessee has been given relief by the Tribunal and only a portion of ad hoc disallowances have been confirmed by the Tribunal and hence the deletion of penalties are justified.

3. Having heard both the sides and perused the material on record, it is pertinent to note that for the assessment year 2000-01, in the quantum appeal, out of the total disallowances of Rs.14,92,441/-, the Tribunal has given relief of Rs.13,92,441/- to the assessee vide order dated 06.08.2011 in ITA No. 6756/Mum/2008. Only the remaining balance of Rs.1,00,000/-, comprising of ad hoc disallowances out of expenses duly declared by the assessee in PandL Account has been confirmed by the Tribunal. For the assessment year 2001-02, out of the total disallowances of Rs.25,89,709/-, the Tribunal has given relief of Rs.24,64,709/- to the assessee and remaining balance of Rs.1,25,000/- comprising of ad hoc disallowances out of expenses duly declared by the assessee in PandL Account has been confirmed by the Tribunal. For the assessment year 2002-03, out of total disallowances of Rs.17,57,189/-, the Tribunal has given a relief of Rs.16,32,189/- vide order dated 06.08.2012 in ITA No. 6758/Mum/2008 and the remaining balance of Rs.1,25,000/- comprises of ad hoc disallowances out of expenses duly declared by the assessee in PandL Account has been confirmed by the Tribunal. When the fact ITA Nos. 1410, 1411 and 1413/Mum/2011 being so, we are of the considered view that when in the quantum proceedings, the Tribunal has deleted various additions, there remains no basis for confirming any penalty on such additions. As regards the remaining balances on which the penalties are levied, it is pertinent to mention that the Tribunal has sustained the additions only pertaining to the ad hoc disallowances in respect of certain expenses and the same cannot be the basis for the levy of penalty since the said expenses have been duly declared by the assessee in the PandL Account which do not attract the provisions of section 271(1)(c). Accordingly, we do not find any infirmity in the orders of the Ld.CIT(A) deleting the penalties levied by the AO.

4. In the result, the appeals filed by the Revenue are dismissed and the cross objections of the assessee are allowed.


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