TMI Blog2017 (9) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... Gotru, Sr. DR ORDER PER H.S. SIDHU, JM These appeals by the Assessees are directed against the respective Orders of the Ld. Commissioner of Income Tax (Appeals)-XXVIII, New Delhi relating to assessment years 2003-04 to 2005-06. Assessee also filed the 03 Stay Applications for stay of outstanding demand/penalty in dispute. Since the issues involved in these Appeals and Stay Applications are common and identical, hence, the same were heard together and are being disposed of by this common order for the sake of convenience, by dealing with ITA No. 5766/Del/2014 (AY 2003-04) only. 2. The grounds raised in all the appeals are common and identical, except the change in figure of penalty in dispute, therefore, for the sake of brevity, we are only reproducing the grounds involved in ITA No. 5766/Del/2014 (AY 2003-04) which read as under:- 1. The Ld. CIT(A) erred in law and on facts in confirming the levy of penalty of ₹ 86,92,330/- u/s. 271(1)(c) of the Act ignoring the facts, evidences and submissions placed on record. Thus the levy of penalty u/s. 271(1)(c) should be deleted. 2. The appellant craves the leave to add, substitute, modify, delete or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and M/s.Uzind Corporation, the assessee was to receive commission at 7% of cost of tickets and 7% of the Cargo Freight and the same amount has been claimed as an expense by the firm. However the assessee had only offered a small portion of this amount for taxation. There is no evidence of any written correspondence between the assessee and the Airways regarding transfer of GSA or the claim that the agreement was a on compete agreement. On the above basis the Assessing Officer made an addition of ₹ 2,75,94,701/-. The order of the Assessing Officer was confirmed by the Commissioner of Income Tax(A) by treating the same as part of salary income. However, the ITAT vide its Order passed in ITA Nos.2311 to 2313/0el/ for A.Y. 2003-04 to 2005-06 reversed the order of Ld. CIT(A) and the Assessing Officer stating that the provisions of Section 28(v)(a) are applicable to the case of the assessee. The Hon'ble Delhi High Court however vide its order ITA 602/2010,607/2010 and 921/2011 dated 30.09.2012 reversed the decision of the ITAT stating that the commission amount was clearly part of salary and not covered under the definition under section 17 of the Act. The Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble High Court and the Hon ble Supreme Court on the debatable issue and when there is only change in Head of Income by the AO. In another Paper Book which is containing pages 95 to 193 in which she has attached the copies of various decisions and a photocopy of the order dated 3.2.2014 passed by the Hon ble Supreme Court of India in the case of assesee granting leave against the order of Hon ble High Court; photocopy of the order dated 5.4.2013 passed by the Hon ble Supreme Court of India in the case of the assesee in above SLP; case status updated on 4.5.2017 of the SLP; copy of assessment order dated 28.2.2005 29.11.2007 for AY 2003-04 2005-06 in the case of Uzind Corporation; photocopy of agreement dated 15.3.2002 entered into between M/s Uzind Corporation and the assesee; copy of acknowledgement of return as on 31.3.2003; AY 2004-05 2005-06 alongwith its enclosures; photocopy of chart showing the year-wise details of non-compete fees and list of cases relied upon by the assessee. In view of above facts and circumstances of the present case, she requested that by following the aforesaid decisions the penalty in dispute may be cancelled and appeal of the assessee may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. The assessee was a key person in M/s.Uzind Corporation and was working as a Manager; he was also the authorized signatory to operate bank account of M/s. Uzind Corporation. As per the agreement dated 15.03.2002 between the assessee and M/s.Uzind Corporation, the assessee was to receive commission at 7% of cost of tickets and 7% of the Cargo Freight and the same amount has been claimed as an expense by the firm. However the assessee had only offered a small portion of this amount for taxation. There is no evidence of any written correspondence between the assessee and the Airways regarding transfer of GSA or the claim that the agreement was a on compete agreement. On the above basis the Assessing Officer made an addition of ₹ 2,75,94,701/-. The order of the Assessing Officer was confirmed by the Commissioner of Income Tax(A) by treating the same as part of salary income. However, the ITAT vide its Order passed in ITA Nos.2311 to 2313/0el/ for A.Y. 2003-04 to 2005-06 reversed the order of Ld. CIT(A) and the Assessing Officer stating that the provisions of Section 28(v)(a) are applicable to the case of the assessee. The Hon'ble Delhi High Court however vide its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on debatable issue and appeal is admitted in Hon ble High Court/ Hon ble Supreme Court. Our view is fortified by the decision of the ITAT, Mumbai in the case of Nayan Builders Developers (P) Ltd. vs. ITO in ITA No. 2379/Mum/2009 vide order dated 18.3.2011 and Hon ble High Court Of Mumbai decision of the above said case in Revenue s Appeal being CIT vs. Nayan Builders Developers Pvt. Ltd. in ITA No. 415/2012 vide order dated 8.7.2014.). The ITAT Nayan Builders Developers (P) Ltd. vs. ITO in ITA No. 2379/Mum/2009 vide order dated 18.3.2011 has held as under:- 3. It is, therefore, abundantly clear that the additions in respect of which penalty was confirmed have been accepted by the Hon'ble Bombay High Court leading to substantial question of law. When the High Court admits substantial question of law on an addition, it becomes apparent that the addition is certainly debatable. In such circumstances penalty cannot be levied u/s. 271(1) as has been held in several cases including Rupam Mercantile vs. DCIT (2004) 91 ITD 237 (Ahd.) (TM)] and Smt. Ramila Ratilal Shah vs. ACIIT (1998) 60 TTJ (Ahd) 171). The admission of substantial question of law by the Hon ble High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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