Appeal details
Counselvise Citation
[2010] 136 COUNSELVISE.COM (IT) 1621 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-05-2010
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
E
Next Hearing Date
18-05-2010
Assessment Year
2004-2005
Appeal Filed On
24-02-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI. R.S. SYAL (A.M.) AND SHRI. VIJAY PAL R AO (J.M) ITA NO.1251/MUM/2009 ASSESSMENT YEAR: 2004-2005 SARAF BROTHERS FINANCE CORPORATION 201, 2 ND FLR., KAKAD CHAMBERS, 132, DR. A.B. RD., WORLI, MUMBAI PAN : AABFS6305B VS. INCOME TAX OFFICER WARD 18(1)(2) R.NO.104, 1 ST FLR., PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JITENDRA JAIN RESPONDENT BY : SHRI SHRAVAN KUMAR O R D E R PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 02.12.2008 OF LEARNED CIT(A)-XXII, MUMBAI ARISING F ROM PENALTY ORDER PASSED U/S.271(1)(C) OF THE I.T. ACT FOR THE ASSESS MENT YEAR 2004-2005. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL. HOWEVER THE ONLY ISSUE ARISES IS WHETHER THE FACTS AND CIRCUMST ANCES OF THE CASE, THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY LEVIE D U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.1,39,072/-. 3. WE HAVE HEARD THE LEARNED AR AS WELL AS LEARNED DR AND CONSIDERED THE RELEVANT RECORD. THE LEARNED AR OF THE ASSESS EE HAS SUBMITTED THAT THE ASSESSEES CLAIMED FOR THE INTEREST INCOME ON DEPOS ITS/ADVANCES AS INCOME FROM BUSINESS AND ACCORDINGLY ADJUSTED THE BROUGHT FORWARD BUSINESS LOSS AGAINST THE BUSINESS INCOME SO COMPUTED BY THE ASSE SSEE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INTEREST ON DEPOSI TS/ADVANCES IS NOT A BUSINESS INCOME BUT INCOME FROM OTHER SOURCES AND T HEREFORE, THE ASSESSEE HAS WRONGLY SET OFF THE BROUGHT FORWARD BUSINESS LO SS AGAINST INTEREST ITA NO.1251/MUM/2009 A.Y.: 2004-2005 2 INCOME. HE HAS FURTHER CONTENDED THAT THOUGHT THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE AUTHORITIES BELOW BUT THE S AME CAN NOT BE A REASON FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT BECAUS E THE ASSESSEE DISCLOSED ALL THE NECESSARY PARTICULARS ABOUT THE INTEREST INCOME . HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC). 4. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE HAS TREATED THE INTEREST INCOME AS BUSINESS INCOME ONLY WITH INTENTION TO SET OFF BROUGHT FORWARD BUSINESS LOSS AGAINST THE N ON BUSINESS INCOME. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN TR EATING THE INTEREST INCOME AS INCOME FROM OTHER SOURCES IN THE EARLIER YEARS BUT FOR THIS YEAR ASSESSEE HAS DELIBERATELY ADOPTED THIS PRACTICE WHI CH WAS A DELIBERATE ACT OF FURNISHING INACCURATE PARTICULARS AND THEREBY REDUC ING THE TAXABLE INCOME. HE HAS RELIED UPON THE ORDER OF THE LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL CONTENTION AND RELE VANT RECORD. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS CLAIMED THE I NTEREST ON FIXED DEPOSITS, ON BONDS AND OTHER ADVANCES TOTAL AMOUNTING TO RS.3 ,87,555/- AS BUSINESS INCOME BUT IT IS NOT THE CASE THAT THE ASSESSEE HAS SHOWN THE INTEREST INCOME AS INCOME FROM ANY OTHER SOURCES THAN THE IN TEREST. THEREFORE, WHEN THE BASIC AND PRIMARY FACTS WERE DISCLOSED BY THE ASSESSEE THEN THOUGH THE CLAIM OF THE ASSESSEE TREATING THE INTER EST INCOME AS BUSINESS INCOME IS NOT SUSTAINABLE UNDER LAW, THE SAME CANNO T BE BASIS FOR ATTRACTING THE PENALTY U/S.271(1)(C) OF THE ACT. IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. THE HONBLE SUPREME COURT HAS HELD AS UNDER IN PARA 11. WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTICU LARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WOR DS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN T HE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORD ING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT I N THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE AS SESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FAL SE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 27(1)(C) OF THE ACT. A MERE MAKING OF T HE CLAIM, ITA NO.1251/MUM/2009 A.Y.: 2004-2005 3 WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOU NT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 7. THEREFORE, AS HELD BY THE HONBLE SUPREME COURT IN THE CASE SUPRA MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW , BY ITSELF, WILL NOT AMOUNTING TO FURNISH THE INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE, SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO INACCURATE PARTICULARS. IN THIS CASE THE ASSESSEE HAS DISCLOSE D THE PARTICULARS OF INCOME AS THE INTEREST ON THE DEPOSITS, BONDS AND OTHER AD DITIONS. IT IS NOT A CASE OF BOGUS CLAIM OR INCORRECT FACTUAL PARTICULARS. 8. ACCORDINGLY, IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT SUPRA, WE DELETE THE PENALTY LEVIED U/S.271(1)(C). ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON THIS 31 ST DAY OF MAY, 2010. SD/- (R.S. SYAL) (ACCOUNTANT MEMBER) SD/- (VIJAY PAL RAO) (JUDICIAL MEMBER) MUMBAI, DATED 31 ST MAY, 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- , MUM BAI 4. COMMISSIONER OF INCOME TAX, CITY- , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI
