SPYKAR LIFESTYLES P.LTD,MUMBAI vs. ASST CIT 8(2)(2), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeal by assessee are directed against the separate orders of Commissioner (Appeals)-14, Mumbai dated 27th September 2016 for assessment year 2012-13, which in turn arises from the assessment order passed by assessing officer under section under section 143(3) dated 31st March 2015 and order of penalty levied under section 271(1)(c) dated 18th September 2015. In the appeal in quantum assessment the assessee has raised following grounds of appeal;

Ground I:

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2. The CIT(A) rejected the condonation merely by stating that submission made by the Appellant is not convincing and devoid of any evidence.

3. The CIT(A) ought to have explained as to how the submission of the Appellant is not convincing/what evidence the Appellant ought to have given.

4. The Appellant prays that the rejection of condonation by CIT(A) be quashed.

Without prejudice to Ground I Ground II: 1. On the facts and circumstances of the case and in law, the Assistant Commissioner of Income Tax 8(2)(2) ("the Act)") erred in making addition of Rs. 16,95,000/- being cash deposited in bank account by the Appellant on the alleged ground that the cash deposits made were non-bonafide and unexplained.

2. The AO failed to appreciate and ought to have held that the cash was deposited by the Appellant in its normal course of business and was duly explained in the assessment proceedings

3. The Appellant prays that the said addition on account of the alleged unexplained cash credit be deleted.

Without prejudice to Ground I Ground III: 1. On the facts and circumstances of the case and in law, the AO erred in disallowing an amount of Rs. 4,39,00,000/- on acco.unt of the provision of Rate Difference on the alleged ground that the entire provision is estimated and therefore distorts the income under consideration and thus correct income is not reported.

2. The AO ought to have held that provision for rate difference was made with proper basis and was in compliance with the accounting principles and thus it is allowable as an expense u/s. 37(1) of the Act.

3. The Appellant prays that the said disallowance of provision on account of Rate Difference be deleted.

Without prejudice to Ground I Ground IV: 1. On the facts and in the circumstances of the case and in law, the AO erred in not complying with the provisions of sub-section (2) to section 50C.

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3. The Appellant prays that as the AO has failed to follow the mandate of the Act, the addition made under section 50C of the Act be held as bad in law. 4. Without prejudice to the above, the Appellant prays that the AO may be directed to follow the procedure of section 50C(2) by referring the valuation of the property to a valuation officer. Ground V: The Appellant craves leave to add, to alter and to amend above grounds of appeal

at the time of hearing.

2. In the appeal against the confirmation of penalty levied under section 271(1)(c) the assessee has raised following grounds of appeal.

Ground I:

1. 1. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-14, Mumbai ("the CIT") erred in upholding the validity of the penalty order passed by the Dy. Commissioner of Income Tax-8(2)(2) ("the AO").

2. He failed to appreciate and inter-alia ought to have held that: a. The AO has passed penalty order by inter-alia discussing the facts not pertaining to the Appellant's case and therefore the penalty order was passed without proper application of mind and completely in haste and without any basis. b. No clear satisfaction for levy of penalty has been recorded by the AO in the assessment order. c. No clear charge has been alleged by the AO on the penalty notice rendering the notice to be invalid. d. The AO has failed to give any findings on merits for levy of penalty in the penalty order 3. The Appellant prays that the penalty order be held as void-ab-initio and be quashed accordingly. Without Prejudice to Ground I Ground 11: 1. On the facts and circumstances of the case and in law, the CIT erred in confirming the action of the AO in levying penalty in respect of disallowance on account of the provision of Rate Difference amounting to Rs. 4,39,00,000/-. 3 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.

2. He failed to appreciate and ought to have held that the Appellant has explained the necessity and basis of making the provision and complete and true disclosures were made by the Appellant in its return of income and computation of income.

It was submitted that the non filing of appeal within the statutory period of limitation was not intentional and deliberate but due to ill-advised of consultant of assessee. The assessee has good case on merit and likely to succeed if the appeal of the assessee is decided on merit. In support of his 5 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd. submission the ld AR of the assessee relied upon the decision of Hon’ble Bombay High Court in case of Vijay Vishin Meghani Versus DCIT [2017] 86 taxman.com 98 (Bombay). On the contrary the ld. DR for the revenue supported the order of Commissioner (Appeals). It was submitted that the assessee failed to explain the delay in filing appeal beyond the prescribed period of limitation. The explanation furnished before the Commissioner (Appeals) was not plausible and adequate. The learned Commissioner (Appeals) considered the submissions of the assessee, and after considering the contents of application for condonation of delay, dismissed the same.

The assessee is a corporate entity and may have been advised by seasoned consultants. The assessee cannot take a lame excuse or shift the burden by making vague allegations against the consultant.