Income Tax Appellate Tribunal - Mumbai
Vesta Building Products P.Ltd, Mumbai vs Department Of Income Tax on 31 July, 2015
आयकर अपील य अ धकरण "एफ" यायपीठ मुंबई म।
IN THE INCOME TAX APPELLATE TRIBUNAL "F" BENCH, MUMBAI
सु ी सुषमा चावला , या यक सद य एवं ी एन.के. बलै या, लेखा सद य के सम ।
Before Shri Sushma Chowla, JM and Shri N.K. Billaiya, AM
आयकर अपील सं./ ITA No. 5333/Mum/2013
( नधारण वष / Assessment Year: 2009-10)
D C I T - 10(1) बनाम/ M/s. Vesta Building Products P Ltd.
Room No. 455, 4th Floor Vs. 3rd Floor, Andanvan
Àayakar Bhavan, M.K. Road Kalanagar, Bandra (E)
Mumbai 400020 Mumbai 400051
थायी लेखा सं./PAN : AABCV8118L
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ क ओर से / Appellant by : Shri A.K. Dhandial
यथ क ओर से/ Respondent by : None
सुनवाई क तार ख /Date of Hearing : 21.07.2015
घोषणा क तार ख/Date of Pronouncement : 31.07.2015
आदे श/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 adjournment. 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 the 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/-.
2 ITA No. 5333/Mum/2013M/s. Vesta Building Products P Ltd.
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 to `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 particulars 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 sales tax return and order of cancellation of Sales Tax Registration Number and since 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 explain 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, referred 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 3 ITA No. 5333/Mum/2013 M/s. Vesta Building Products P Ltd.
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 before 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 disallowance 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 adjudicated 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.
प रणामतः राज व क अपील वीकृत क जाती है ।
Order pronounced in the open court on 31st July, 2015. आदे श क घोषणा खल ु े यायालय म दनांकः 31.07.2015 को क गई ।
Sd/- Sd/-
(N.K. Billaiya) (Sushma Chowla)
लेखा सद य/Accountant Member या यक सद य/Judicial Member
मुंबई Mumbai; दनांक Dated: 31st July,2015
4 ITA No. 5333/Mum/2013
M/s. Vesta Building Products P Ltd.
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- 21
4. आयकर आयु त / CIT - 10
5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, "F" Bench, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER
स या पत त //True Copy//
सहायक पंजीकार /Asstt. Registrar)
आयकर अपील य अ धकरण, मुंबई/ITAT, Mumbai
n.p.