Shri Vijay Bipinchandra Shah, Ahmedabad V. The Income tax Officer,Ward-3(4), Ahmedabad

ITA 1257/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8625 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-03-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 26-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: S N DIVETIA
• Keywords: Speculation loss; Wrong claim
• Section: 271(1)(c); 143(3); 54; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : A HMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 1257/AHD./2007 ASSESSMENT YEAR : 1998-1999 VIJAY BIPINCHANDRA SHAH, AHMEDABAD -VS.- INCOME TAX OFFICER, WARD-3(4), AHMEDABAD (PAN : ADFPS 0316 M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.N. DIVETIA RESPONDENT BY : SHRI M.C. PANDIT, SR. D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 29.01.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XII, AHMEDABAD CONFIRMING THE PENALTY OF RS.1,00,000/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 IN RESPECT OF DISALLOWANCE OF INTEREST EXPENSE OF RS.2,62,620/-, ARCHITECT FEES OF RS.80,000/- AND WRONG CLAIM OF SET OFF OF LONG-TERM CAPITAL LOS S OF RS.38,651/- FOR THE ASSESSMENT YEAR 1998- 99. 2. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE SH RI S.N. DIVETIA APPEARED AND CONTENDED THAT IN THE QUANTUM APPEAL, ITAT, D BENCH, AHMEDA BAD VIDE ORDER DATED 03.10.2008 IN ITA NO. 1212/AHD/2004 FOR THE ASSESSMENT YEAR 1998-99 S ET ASIDE AND RESTORED THE ADDITION MADE IN RESPECT OF DISALLOWANCE OF INTEREST EXPENSE OF RS.2 ,62,620/- AND ARCHITECT FEES OF RS.80,000/- TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICE R IN THE FRESH ASSESSMENT ORDER MADE ON 29.12.2009 UNDER SECTION 143(3) READ WITH SECTION 2 54 OF THE INCOME TAX ACT DELETED BOTH THESE ADDITIONS. THEREFORE, IN RESPECT OF THESE TWO ADDIT IONS, PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE. WITH REGARD TO ADDITION OF RS.38,651/- IN RESPECT OF DENIAL OF SET OFF OF LONG-TERM CAPITAL LOSS, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THA T THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THERE OF, THEREFORE, PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE IN RESPECT OF THIS ADDITION OF RS.4 5,982/-. 3. ON THE OTHER HAND, SHRI M.C. PANDIT, SR. D.R. AP PEARING ON BEHALF OF THE REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY TH E LD. COUNSEL OF THE ASSESSEE. 2 ITA NO. 1257/AHD/2007 4. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE ASSESSING O FFICER LEVIED THE PENALTY IN RESPECT OF FOLLOWING THREE ADDITION/ DISALLOWANCES :- (1) DISALLOWANCE OF ARCHITECT FEES OF RS.80,000/- ; (2) DISALLOWANCE OF INTEREST OF RS.2,62,620/-; (3) DISALLOWANCE OF SET OFF OF LONG-TERM CAPITAL LOSS OF RS.38,651/-. 4.1. THE FIRST TWO ADDITIONS HAS BEEN DELETED BY TH E ASSESSING OFFICER VIDE ORDER DATED 29.12.2009. THE PENALTY IN RESPECT OF DISALLOWANCE OF SET OFF OF LONG-TERM CAPITAL LOSS OF RS.38,651/-, WE FOUND THAT THROUGH INADVERTENCE THE ASSESSEE CLAIMED THE SET OFF OF THIS CAPITAL LOSS AGAINST SPECULATION LOSS. THIS GROUND OF APPEA L IN RESPECT OF THIS ADDITION WAS NOT PRESSED BY THE ASSESSEE WHEN HE CAME TO KNOW THE BONAFIDE MIST AKE. BY CONSIDERING THE TOTALITY OF THE FACTS, IN OUR OPINION, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF. WE ARE, T HEREFORE, OF THE VIEW THAT THIS IS NOT A FIT CASE T O LEVY THE PENALTY UNDER SECTION 271(1)(C) OF THE INC OME TAX ACT, 1961. WE ACCORDINGLY CANCEL THE PENALTY OF RS.1,00,000/- CONFIRMED BY THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 12.03.201 0 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12/ 03 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.