Income Tax Appellate Tribunal - Mumbai
The Bombay Dyeing & Mfg Co.Ltd, Mumbai vs Assessee on 18 September, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "B", MUMBAI
Before Shri H L Karwa, President &
Shri N K Billaiya, Accountant Member
ITA No.269/Mum/2011 for Asst. Year: 1997-98
The Bombay Dyeing & Mfg. Co. The ACIT (OSD) Rg 2(1),
Ltd., Mumbai.
Nevile House, J.N.Heredia Marg, Vs.
Ballard Estate, Mumbai- 400001
PAN AAACT2328K
(Appellant) (Respondent)
Appellant By : Shri Yogesh A Thar
Respondent By : Shri Aarsi Prasad
Date of Hearing : 18.09.2013 Date of Pronouncement :18.09.2013
ORDER
Per N.K.Billaiya (AM) :
This appeal by the assessee is preferred against the order of the CIT(A)-4, Mumbai, dated 10.12.2010, pertaining to A.Y. 1997-98. The sole grievance of the assessee is that the CIT(A) erred in confirming penalty of Rs.1,29,000/- levied u/s. 271(1)(c) of the Act.
2. The penalty has been levied on the disallowance of expenditure on GDR issue to the tune of Rs.3,00,000/-. Vide show-cause notice dated 03.09.2009, the assessee was asked to explain why penalty should not be levied on the disallowance of expenditure on GDR issue. The assessee replied that it has neither concealed any particulars of income nor has furnished any inaccurate particulars of such income.
2 ITA No.269/Mum/2011AY: 1997-98 The entire details relating to the GDR issue has been explained in detail in the audited statement of accounts as also by a note in the computation of income filed for the year under consideration. The Assessing Officer did not accept the submissions made by the assessee. The Assessing Officer was of the opinion that the expenditure in connection with GDR is nothing but capital expenditure and, therefore, the assessee has furnished inaccurate particulars by claiming this capital expenditure as revenue expenditure and, thus, went on to levy penalty at Rs.1,29,000/-. The assessee carried the matter before the CIT(A) but without any success.
3. Before us the counsel for the assessee drew our attention to the computation of total income exhibited at pages 1-18 of the paper-book. The counsel submitted that the assessee has explained in detail expenses on GDR which have been claimed as deduction u/s. 37(1) of the Act. For claiming these expenses as revenue expenses the counsel drew our attention to the notes to the computation of income exhibited at page 8 of the paper-book. It is the say of the counsel that the assessee has relied upon the decision of the Hon'ble Supreme Court in the case of India Cements Ltd. 60 ITR 52 (SC), Federal Bank Ltd. 180 ITR 241 (Ker), Hindustan Machine Tools 40 Taxmann 43 (Kar) and Godavari Sugar Mills Ltd. 57 Taxman 205 (Bom). The counsel submitted that all the details were furnished along with the return and the assessee has also explained the basis for claiming the expenditure as revenue expenditure, therefore, no penalty should be levied. Per contra, the DR supported the findings of the lower authorities and submitted that the assessee has not explained the basis for claiming such expenditure before the Assessing Officer.
4. We have carefully perused the orders of the lower authorities and the relevant material brought on record. We do not find any force in the contentions of the DR because the Assessing Officer has discussed at length at page 5 of his order the decisions relied upon by the assessee for claiming the expenditure in relation to the GDR issue. Therefore, it cannot be said that details were not available before the Assessing Officer. Further, we find that in the computation of income itself, the 3 ITA No.269/Mum/2011 AY: 1997-98 assessee has explained why it is claiming the expenditure on GDR issue as revenue expenditure. The assessee has also specifically explained the basis i.e. the judicial decisions mentioned hereinabove by which it has claimed the expenditure as revenue. Considering these facts in totality, in our humble opinion, the ratio laid down by the Hon'ble Supreme Court in the case of Reliance Petro Products P. Ltd. 322 ITR 158 squarely apply to the present case. The Assessing Officer is directed to delete the penalty of Rs.1,29,000/-.
5. In the result, the appeal is allowed.
Order pronounced in the open court on 18th September 2013.
Sd/- Sd/-
(H L Karwa) (N.K.Billaiya)
PRESIDENT ACCOUNTANT MEMBER
MUMBAI, Dt : 18th September, 2013
SA
Copy forwarded to :
1. The Appellant
2. The Respondent
3. The C.I.T, Mumbai
4. The CIT (A)-4, Mumbai
5. The DR, "B"- Bench, ITAT, Mumbai
//True Copy// BY ORDER
ASSISTANT REGISTRAR
ITAT, Mumbai Benches, Mumbai