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2015 (5) TMI 585 - ITAT MUMBAI

2015 (5) TMI 585 - ITAT MUMBAI - TMI - Penalty u/s 271(1)(C) - disallowance was a case of concealment and that the assessee had furnished in accurate particulars of income - Held that:- The assessee valued its closing stock at cost or market value whichever is lower and on that basis adopted the market value of obsolete stock is also not disputed. The revenue authorities were of the view that the cost should have been taken, according to us, was an infirm presumption. The assessee during regular .....

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he assessee is not a proprietary concern, where one can think of disallowances made on personal use. In such a circumstance, penalty is not exigible. Thus penalty is not exigible. - Decided in favour of assessee.

Penalty u/s 271(1)(C) - disallowance the payment of office Rent - Held that:- Before us, except for making submissions that the CA firm Todarwal & Todarwal had made the submissions. This according to us does not serve any purpose. Unless the assessee is able to fully substant .....

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Shri B R Baskaran And Shri Vivek Varma JJ. For the Appellant : Shri Naryan Atal For the Respondent : Shri Pavan Kumar Beerla ORDER Per Vivek Varma, JM: The two appeals are filed by the assessee against the orders of CIT(A) 23, Mumbai, dated 27.04.2012, wherein, the CIT(A) has sustained the levy of penalty of ₹ 1,80,375/- in assessment year 2002-03 and ₹ 2,95,989 in assessment year 1998-99 u/s 271(1)(c). 2. Since both the appeals pertain to the same assessee, we are disposing off both .....

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made for further time, when in fact M/s Todarwal & Todarwal, Chartered Accountant for Appellant had sent a letter for the same on 09th April 2012 and the same was not accepted by the learned CIT(A). 2. The learned CIT(A) failed to appreciate the various case laws cited in submission dated 15th March, 2012 by M/s Todarwal & Todarwal, Chartered Accountants on behalf of the assessee. 3. The learned CIT(A) erred in confirming the penalty of ₹ 2,95,989/- u/s 271(1)(C) of the Income Tax .....

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trading activity. The AO also disallowed ₹ 3,34,399/- claimed as bad debts and ₹ 1,78,345/- on account of travelling, telephone, electricity, business development expenses and maintenance charges. 6. These disallowances were agitated before the CIT(A) who gave relief on account of bad debts and sustained the other disallowance. Those disallowances were sustained by the ITAT. 7. In the penalty proceedings, the AO proceeded to levy the penalty on the two additions sustained @ 150%. 8. .....

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ings showed the value & reasonable value of its products. This information and detail was always there with the revenue authorities. In such a case, an allegation on the assessee that it had concealed income or provided inaccurate particulars of income, would be wrong. 11. In so far as disallowance of items of P&L account are concerned, it is fact that the AO had made the disallowances on ad-hoc basis, because the assessee could not provide necessary details. 12. No doubt the assessee co .....

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d by the assessee is therefore allowed. ITA No. 3907/Mum/2012 : Asst. Year 2002-03 : 16. The assessee has raised the following grounds: The u nder mentioned Grounds of Appeal are without prejudice to one another: 1. The learned CIT(A) has erred in recording in para (3) that no request was made for further time, when in fact M/s Todarwal & Todarwal, Chartered Accountant for Appellant had sent a letter for the same on 09th April 2012 and the same was not accepted by the learned CIT(A). 2. The .....

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levying u/s 271(1)(C), in the said matter. 6. The Appellant prays that the penalty of ₹ 1,80,375/- u/s 271(1)(C) be deleted . 17. The facts pertaining to addition made and penalty levied are i) During the course of assessment proceedings, the AO had observed that the firm had debited office rent at ₹ 1,20,000/-for the use of office premises at 304-B, Manish Commercial Building, Worli. However, it was observed from the records that the firm had given office address as 161-C, Mittal To .....

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uot;the firm has paid office rent of ₹ 5000/- per month each to Avantika Gupta and Anika Gupta. Due to typographical error the same has been mentioned as ₹ 10,000/- per month ". ii) As regards utilization of office premises, it was revealed from the local enquiry that the firm had never operated from the office at 304B Manish Commercial Building. Under the circumstances, the AO had came to the conclusion that the payment of office rent is a devised only to inflate the expenses i .....

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in such huge expenditure. The assessee firm vide letter dtd. 6/11/2000 stated that they have no ownership godown and they have rented godown at Byculla. The AO had observed that the owner of the godown premises was one Diana Soap Co situated at Sussex Cross Road Byculla and not Saidpur Jute Co. as shown in the debit note for repairs of Mangla Shelters Pvt.ltd. The assessee firm also failed to furnish the details called by AO, such as Application for permission with approved plan, Architect's .....

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ached the ITAT in quantum, wherein the coordinate Bench restored the issues to the AO for fresh adjudication. In the assessment proceedings consequent to ITAT orders, the AO sought information u/s 133A and in these proceedings as well, the assessee was unable to substantiate. 19. The facts on which the additions were made and penalty imposed are, During A.Y. 1998-99, the assessee firm had a godown, being taken on rent from M/s. Diana Soap. The assessee firm incurred expenses of ₹ 4,43,789/ .....

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Gupta and ₹ 5,000/- per month to Anika Gupta. The agreement pertaining to lease of premises at Manish Building was over. Confirmation from the owner that premises was rented were produced before the Assessing Officer. The Assessing Officer has raised the issue of two premises 304 B and 304 C. He failed to appreciate that both 304 B and 304 C together form only one premise and which has been taken on rent by the appellant. The secretary of Manish Commercial Centre was asked by the Assessing .....

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over of ₹ 29,55,212/- was made possible due to taking this premise on rent. Previous year turnover was Nil. The premises was used for the purpose of business and hence the expenditure of ₹ 1,20,000/- on account of office is allowable as business expenditure . The firm has not paid any other office rent to any other entity and has no office premises of its own. The appellant also filed confirmation from Avantika Gupta and Anika Gupta who confirmed having received ₹ 60,000/- each .....

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h Commercial Centre. Therefore the Assessing Officer held that the payment office rent is devised only to inflate the expenses in the expenditure head to reduce the profit and to show income in the hands of the minors. Accordingly, the Assessing Officer disallowed the rental expenditure of ₹ 1,20,000/-. The Assessing Officer issued notices u/s 133(6) to Smt. Anjana Gupta mother of the minors Ms. Avantika Et Ms. Anika Gupta and secretary of Manish Commercial Centre, Worli. In response, Smt. .....

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reply received from the society till date, in respect of - i) Name of the owners of Flat No.304B and 304C ii) Confirmation whether the flat were given on lease iii) Name of the concern carrying out business from flat No.304B and 304C. The Assessing Officer held that the claim of rent of assessee firm is not found genuine for the reasons discussed as under: i) There was no rent agreement between M/s Gaurisons and Ms. Avantika & Ms. Anika Gupta ii) The assessee has not furnished any documenta .....

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was no information in respect of Flat No. 304B, in the reply received from Smt. Anjana Gupta, which can prove that M/s. Gaurisons carried out the business from flat No. 304B. vi) The society of Manish Commercial Centre not furnished the information in respect of ownership of flat nos. 304B and 304C and whether the flats were given on lease during the period 1997-98 and the name of concern carrying out the business activities form the said premises . In the original order the Assessing Officer s .....

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assessee that the employee was sitting in the premises situated at Manish Commercial Centre and the partner Shri Sushi( Gupta was also occasionally sitting there. At present, Shri Satpathy is not employee of M/s Gaurisons, also the whereabouts of Shri Satpathy not known to the assessee, therefore, it is not possible to confirm the same from him. From the aforesaid discussion, the assessee itself had not confirmed that from which premises (30413 or 304C) the business was carried out. Also it has .....

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