TMI Blog2017 (5) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... the block return by the assessee, the assessee was not obliged to declare the expenses in the return particularly when no material or evidences was found relating to these expenses (except the statement of the CEO which was retracted) in the course of search on the business premises of the assessee. Thus we reverse the orders of the lower authorities and the penalty levied under section 158BFA(2) of the Act on this jurisdictional issue. - Decided in favour of assessee. - I. T. (SS) A. No. 1/Mumbai/2015 - - - Dated:- 17-2-2017 - Mahavir Singh (Judicial Member) And Rajesh Kumar (Accountant Member) For the Appellant : Hariom Tulsyan, Authorised Representative For the Respondent : T. A. Khan, Departmental Representative ORDER Mahavir Singh (Judicial Member) 1. This appeal by the assessee is arising out of the order of the Commissioner of Income-tax (Appeals)-51, Mumbai in Appeal No. CIT(A)-51/IT-168/2013-14 dated January 2, 2015. The assessment was framed by the Deputy Commissioner of Income-tax Central Circle 24 and 26, Mumbai for the block period of the previous years 1989-90 to 1998-90 and the broken period of April 1, 1999 to December 2, 1999 vide order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,000 on December 6, 1999. Finally, Shri Arun Kapoor recorded his statement dated May 23, 2000 wherein undisclosed income was modified to the extent of ₹ 16,58,238. The assessee claimed that the following amounts of bills represents genuine transaction : Sl. No. Party name Amount 1. M/s. Central Tyres 5,37,350 2. M/s. Indian Freightways 7,45,167 3. M/s. Nilesh Transport 6,00,000 Total 18,82,517 Further, the assessee also claimed that the following expenses were incurred for the business purposes out of cash generated from the accommodation bills : Sl. No. Account Amount 1. Dahej Jetty 5,22,000 2. Cuddalore Jetty 8,00,000 3. Commission paid 2,07,182 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer while going through the order of the Income-tax Appellate Tribunal for giving appeal effect, has allowed relief of ₹ 5.22 lakhs but not considered the relief granted by the Tribunal of sum of ₹ 8,00,000. The Assessing Officer levied the penalty on the addition of disallowance expenses confirmed by the order of the Income-tax Appellate Tribunal on the followings : Particulars Amount 1. Addition of alleged bogus/accommodation bills 18,82,517 2. Disallowance of expenses claimed for amount utilised for business purposes out of cash generated from the accommodation bills 8,00,000 3. Disallowance of expenses on account of commission for obtaining bogus accommodation bills 2,07,182 Total 28,89,699 5. At the outset, the learned counsel for the assessee argued on the amount of ₹ 8,00,000 being disallowance of expenses for an amount utilised for the purpose of business out of cash generated from accommodation bills was already allowed by the Tribunal and the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible for deduction in its respect. We decide accordingly, disposing, thus, the Revenue's ground No. 2. From the above paragraph the learned counsel for the assessee stated that when a Tribunal has given a specific finding regarding allowance of this expenditure, the penalty under section 158BFA(2) cannot be levied on the above disallowance. 6. As regards to the levy of penalty in relation to the addition of bogus/accommodation bills of ₹ 18,82,517 and consequential disallowance of expenditure of commission paid for obtaining these bogus/accommodation bills amounting to ₹ 2,07,182, the learned counsel for the assessee argued that the addition was made solely on the basis of statement of the CEO of the assessee and the Assessing Officer nowhere pointed out any incriminating material found during the course of search, based on which these additions were made. The Assessing Officer has placed complete reliance on the statement of the CEO, which was subsequently retracted vide affidavit dated May 23, 2000 and the CEO claimed his affidavit that his bills are genuine. But the Assessing Officer did not accept retraction of the assessee on the ground that it was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce i.e. or any expense, deduction or allowance claimed under this Act which is found to be false did not exist. According to the learned counsel, this amended provision could not apply to this case. 9. On the legal aspect, after hearing the parties we have gone through the decision of the hon'ble Bombay High Court in the case of CIT v. Essar Teleholdings Ltd. in (Tax Appeal No. 438 of 2012 judgment dated August 7, 2014), after considering the decision of the hon'ble Supreme Court in the case of Star India (P.) Ltd. v. CCE [2006] 280 ITR 321 (SC) has interpreted the retrospectivity as under : . . . . . 18. In the case of Star India (P.) Ltd. v. CCE [2006] 280 ITR 321 (SC) the hon'ble Supreme Court held that the service of 'broad casting' was made a taxable service with effect from July 16, 2001, by the Finance Act, 2001. The appellant disputed its liability to make any payment for service tax on the ground that it did not broadcast. The Commissioner, however, held against the appellant. The matter was carried before the Commissioner of Income-tax (Appeals) and during the pendency of appeal the Finance Act, 2001 was amended by the Finance Act, 2002. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been laid down which is followed by the Calcutta High Court. It is that principle relied upon by the Calcutta High Court which has been applied by the Tribunal to the facts and circumstances of the present case. We do not think that the assessee before us can be called upon to pay interest in terms of section 234B, once the Explanation was introduced or brought in with retrospective effect but by Finance Act, 2008. Then, there was no liability to pay interest in terms of this provision. That was because the assessee cannot be termed as defaulter in payment of advance tax. The advance tax computation on the basis of the unamended (sic) provision therefore could not have been entertained. 10. Similarly, even the hon'ble Calcutta High Court in the case of Emami Ltd. v. CIT [2011] 337 ITR 470 (Cal), has taken a similar view wherein it is held that the last date of the relevant financial year was March 31, 2001, and on that day, admittedly, the assessee had no liability to pay any amount of advance tax in accordance with the law then prevailing. The amended provisions of section 115JB having come into force with effect from April 1, 2001, the assessee could not be he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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