M/S. STERLING GREENWOOD LTD.,AHMEDABAD vs. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-4(1)(1), AHMEDABAD

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ITA 2715/AHD/2016Status: DisposedITAT Ahmedabad23 March 2018AY 2010-113 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that there was no evidence of filing inaccurate particulars or concealment of income. Therefore, the penalty levied under Section 271(1)(c) was not justified.

What were the facts?

The assessee's income was assessed at a higher amount due to disallowances on gratuity, dividend, PF/ESIC contribution, and sundry balances written off. Penalty proceedings were initiated under Section 271(1)(c).

What were the issues?

Whether the levy of penalty under Section 271(1)(c) is justified when the additions made during assessment were not due to concealment or furnishing of inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: SHRI N.K. BILLAIYA & SHRI S. S. GODARA

For Appellant: Shri Anil Kshatriya, AR

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:

1.

This appeal by the Assessee is directed against the order of the Ld. CIT(A)-8, Ahmedabad dated 26.07.2016 pertaining to A.Y. 2010-11.

ITA No. 2715/Ahd/2016 2 . A.Y. 2010-11 2. The only grievance of the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s. 271(1)(c) of the Act.

3.

The roots for the levy of penalty lie in the assessment order dated 16.11.2012 framed u/s. 143(3) of the Act.

4.

The returned income of the assessee amounting to Rs. 61,38,260/- was assessed at Rs. 78,24,590/- after making the following additions/disallwonces:- (i) Disallowance of gratuity Rs. 1,04,150/- (ii) Disallowance of dividend Rs. 1,56,006/- (iii) Disallowance of contribution to PF/ESIC Rs. 2,48,859/- (iv) Disallowance out of sundry balances written off Rs. 11,77,323/-

5.

Penalty proceedings were separately initiated.

6.

The only disallowance agitated by the assessee before the First Appellate Authority was on account of contribution to PF/ESIC amounting to Rs. 2,48,859/-. The other disallowances were never contested before the First Appellate Authority. The disallowance contested before the FAA was deleted by him vide order dated 23.09.2013.

7.

The only disallowances survived as not agitated in quantum proceedings related to gratuity, dividend and sundry balances written off.

8.

We find that the gratuity was added on account of the adverse observation made by the auditors in the audit report. The dividend was claimed as exempt being received from Rajkot Nagrik Co-Operative Bank Ltd. and the sundry

ITA No. 2715/Ahd/2016 3 . A.Y. 2010-11 balances written off pertained to some advances on account of some real estate transaction.

9.

A thoughtful consideration to the factual matrix relating to these disallowances show that there was no particular which can be termed as filing of inaccurate particulars nor there is any element of concealment of any income. In our understanding of the facts and the law, we do not find this to be a fit case for the levy of penalty u/s. 271(1(c) of the Act. We accordingly set aside the findings of the ld. CIT(A) and direct the A.O. to delete the penalty so levied u/s. 271(1)(c) of the Act.

10.

Appeal filed by the Assessee is allowed.

Order pronounced in Open Court on 16- 04- 2018

Sd/- Sd/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad: Dated 16 /04/2018 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

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