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IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, MUMBAI
[^ , Û Û] ãá, ¢
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
./I.T.A. No. 5691/Mum/2010
( [ [ / Assessment Year :2002-03
M/s. Mennen Financial / The ITO, 9(2)(3),
Services Ltd., Mumbai
Vs.
501, Acme Industrial Park,
Western Express Highway,
Goregaon (W),
Mumbai-400 063
. / . / PAN/GIR No. :AAACM 3164A
( /Appellant) .. (× / Respondent)
/ Appellant by: Shri Beharilal
× /Respondent by: Shri Jeetendra Kumar
/ Date of Hearing :16.03.2015
/Date of Pronouncement :18.03.2015
/ O R D E R
PER N.K. BILLAIYA, AM:
This is an appeal by the assessee preferred against the order of the
Ld. CIT(A)-20, Mumbai dt. 20.5.2010 pertaining to assessment year
2002-03.
2. The sole grievance of the assessee is that the Ld. CIT(A) erred in
confirming the penalty levied u/s. 271(1)(c) of the Act amounting to Rs.
6,09,332/-.
2 ITA. No. 5691/M/2010
3. The roots for the levy of penalty lie in the assessment order dt.
29.12.2004 made u/s. 143(3) of the Act wherein inter alia, the Assessing
Officer has made additions on account of bogus claim of depreciation -
Rs. 3,78,974/-, bogus claim of expenses-Rs. 10,08,832/- and suppression
of sales Rs. 6,26,598/-. When the disallowances were contested before
the Ld. CIT(A), the Ld. CIT(A) allowed Rs. 41,181/- out of bogus claim
of depreciation , Rs. 4,72,061/- out of bogus claim of expenses and Rs.
4,60,732/- out of suppression of sale. The AO proceeded to levy penalty
u/s. 271(1)(c) of the Act in respect of the additions sustained by the Ld.
CIT(A).
4. The assessee was asked to explain why penalty should not be
levied u/s. 271(1)(c) of the Act. It was claimed that the variation in the
returned income and the assessed income is due to the disallowances of
genuine expenses made by the AO. It was strongly contended that there
was no malafide intention or any deliberate attempt on the part of the
assessee to conceal the income. The explanations made by the assessee
did not find any favour from the AO who was of the strong belief that the
assessee has deliberately inflated its expenditure thereby filing inaccurate
particulars of income. The AO proceeded by levying penalty u/s.
271(1)(c) of the Act at Rs. 6,09,332/-.
5. The assessee carried the matter before the Ld. CIT(A) but without
any success.
6. Aggrieved, the assessee is before us.
7. The Ld. Counsel for the assessee reiterated what has been
submitted before the lower authorities. It is the say of the Ld. Counsel
that the additions on account of suppression of sale is for the sales made
3 ITA. No. 5691/M/2010
in earlier years and has been shown as sales returned during the year
under consideration which has not been properly appreciated by the AO.
In so far as the disallowance on the claim of depreciation is concerned,
the Ld. Counsel stated that the claim was reduced by filing a revised
return which has been accepted by the AO.
8. Per contra, the Ld. Departmental Representative supported the
orders of the authorities below.
9. We have carefully perused the assessment order and the order of
the First Appellate Authority. In so far as the levy of penalty on the claim
of excess depreciation is concerned, we find that during the course of the
assessment proceedings itself the assessee has revised the claim of
depreciation and the said revised return has been duly accepted by the
AO. We, therefore do not find any merit in levying penalty u/s. 271(1)(c)
of the Act on this count.
9.1. In so far as the suppression of sale is concerned, we find that in the
quantum appeal while reconciling the difference in the sales figure, the
assessee itself has accepted that sales upto Rs. 1,82,056/- stands
unreconciled. The claim of the assessee that the sales were of earlier
years and shown as sales returned. The Ld. CIT(A) has considered this
submission and has deleted the addition of Rs. 4,60,732/-, therefore the
submissions made by the Ld. Counsel on this issue does not hold any
water. The penalty has been levied on the unreconciled and accepted
addition on account of suppression of sale. Therefore, we do not find any
reason to interfere with the findings of the Ld. CIT(A) on this issue.
9.2. In so far as the disallowance on account of bogus claim of
expenditure is concerned, we find that in the quantum addition, the Ld.
CIT(A) has given a substantial relief to the assessee. For the balance of
4 ITA. No. 5691/M/2010
the claim, the assessee could not adduce any satisfactory reply neither in
the quantum proceedings nor in the penal proceedings. We, therefore,
confirm the findings of the Ld. CIT(A) on this issue also.
10. To sum up, the AO is directed to delete the penalty on the additions
made on account of depreciation and recompute the levy as per our
findings given in respect of other disallowances.
11. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 18th March, 2015.
Sd/- Sd/-
(VIJAY PAL RAO ) (N.K. BILLAIYA)
Û /JUDICIAL MEMBER / ACCOUNTANT MEMBER
Mumbai; Dated : 18th March, 2015
.../ RJ , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. × / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , ,
/ DR, ITAT, Mumbai
6. [ / Guard file.
/ BY ORDER,
× //True Copy//
/
(Dy./Asstt. Registrar)
, / ITAT, Mumbai
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