Gujarat High Court
Commissioner Of Income Tax Ahmedabad Iv vs Vishal Madhusudanhai ... on 18 March, 2014
Author: Sonia Gokani
Bench: Akil Kureshi, Sonia Gokani
O/TAXAP/178/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 178 of 2014
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COMMISSIONER OF INCOME TAX AHMEDABAD IV....Appellant(s)
Versus
VISHAL MADHUSUDANHAI CHOKSHI....Opponent(s)
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Appearance:
MR.VARUN K.PATEL, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MS JUSTICE SONIA GOKANI
Date : 18/03/2014
ORAL ORDER
(PER : HONOURABLE MS JUSTICE SONIA GOKANI) Challenging the order of the Income Tax Appellate Tribunal dated 5.7.2013, the present Tax Appeal is preferred raising following substantial question of law for our consideration:
"Whether, in the facts and circumstances of the case, the ITAT has erred in law in confirming the decision of CIT(A) deleting the penalty u/s 271(1)(c) of the Income Tax Act, 1961 levied against the assessee?"
We have heard learned advocate Shri Varun Patel for the Revenue and with his assistance examined the material on record.
In the present case, for the assessment year 2008-09, the
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O/TAXAP/178/2014 ORDER
assessment of the respondent was finalized after scrutiny. On
verification of documents on record, it was noticed that the respondent paid interest amounting to Rs.31.26 lacs (rounded off) to a Finance Company. The assessee though was liable to deduct TDS on such payment of interest, he failed to deduct the same. A show cause notice was, therefore, issued to which he had replied. The Assessing Officer made disallowance on account of interest income of Rs.10,856/- and added Rs.2 lacs which was made on account of unexplained investment in mutual fund. Penalty was levied of Rs.11.43 lacs (rounded off).
This was when challenged, the CIT (Appeals), in an elaborate order concluded that the action of levying penalty was not sustainable on additions made u/s.40(a)(ia) of the Act. In other words, out of the total additions made under four different heads, on the addition of Rs.31.26 lacs (rounded off) and Rs.3.49 lacs (rounded off) on disallowance u/s.40(a)(ia) penalty levied was deleted. The Tribunal was approached by the Revenue challenging deletion on two heads and respondent-assessee never challenged upholding of penalty under remaining items of additions. Tribunal also concurred with the findings of the CIT (Appeals) and dismissed the appeal of Revenue.
The Tribunal found that the payment of interest (Rs.31.26 lacs) made to the Finance Company on which TDS was to be deducted was genuine. So was the expenses on reparation charges (Rs.3.49 lacs) where TDS was to be deducted u/s.194C. It was Page 2 of 4 O/TAXAP/178/2014 ORDER not the case of the Revenue that these were bogus payments. It was also not the case that such payments were either excessive or unreasonable. And therefore, in absence of any inaccurate particulars furnished by the respondent in the return of income, by discussing judicial pronouncements on the subject, the Tribunal deleted the penalty.
We see no reason to interfere. Both the CIT (Appeals) and the Tribunal have rightly decided the issue in favour of the assessee. The assessee had made the payments for two different items on which TDS was to be deducted and the penalty was imposed by the AO on the additions made under section 40(a)(ia) of the Act for not accepting the version of the assessee. Since it was an undisputed fact that the said addition was only on account of non-deduction of TDS on the interest paid to the Finance Company and for having spent reparation charges without following requirement of provisions of section 194C, in absence of anything to indicate that such transactions were either bogus or there was any case of inaccurate particulars furnished by the assessee, both the authorities have rightly deleted the penalty on these additions.
No question of law arises, tax appeal is, therefore, dismissed.
(AKIL KURESHI, J.)
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O/TAXAP/178/2014 ORDER
(MS SONIA GOKANI, J.)
(vjn)
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