ACIT CC 39, MUMBAI V. HITA LAND P.LTD,

ITA 1362/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101067 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 16-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAMESH JAIN
• Keywords: Loose papers; Document seized; Retraction; Documents seized
• Section: 69C; 143(3); 260A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1362/MUM/2014 ASSESSMENT YEAR: 2009-10 ACIT, CC-39, R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, MUMBAI-400020 / VS. M/S HITA LAND PVT. LTD. OFFICE NO.D416, 7 TH FLOOR, PLOT NO.06, SECTOR-II, DRONAGIRI-400702 ( / REVENUE) ( !'#$ % /ASSESSEE) P.A. NO. AABCH9067J ITA NO.1371/MUM/2014 ASSESSMENT YEAR: 2009-10 ACIT, CC-39, R. NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, MUMBAI-400020 / VS. M/S HOME REALITY PVT. LTD. DRONAGIRI HOUSING COMPLEX, BUILDING NO.GH-10, FLAT NO.2 GR. FLOOR, SECTOR-30, POST BOKADVIRA VILLAGE, URBAN TALUKA, RAIGAD DIST, NAVI MUMBAI-400702 ( / REVENUE) ( !'#$ % /ASSESSEE) P.A. NO.AABCH9067J / REVENUE BY MS. KUSUM BANSAL-DR !'#$ % / ASSESSEE BY SHRI RAMESH JAIN ! & ' % ( / DATE OF HEARING : 16/09/2015 ' % ( / DATE OF ORDER: 29/09/2015 HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE IN THE CASES OF DIFFERENT ASSESSEE. IN ITA NO.1362/MUM/2014, THE GRIEVANCE OF THE REVENUE IS THAT THE LD. COMMISSION ER OF INCOME TAX (APPEALS) ERRED IN DELETING THE PENALTY LEVIED U/S 271AAA OF THE INCOME TAX ACT HOLDING THAT THE ADDIT ION U/S 69C DOES NOT SURVIVE SINCE THE ISSUE OF ACTION U/S 153C AND THE QUANTUM ADDITION MADE U/S 69C OF THE ACT HAS BE EN DELETED BY THE MUMBAI BENCH OF THE TRIBUNAL. 2. IDENTICALLY, IN ITA NO.1371/MUM/2014, THE ISSUE PERTAINS TO DELETING THE PENALTY LEVIED U/S 271(1)( C) STATING THAT THE ADDITION U/S 69C DOES NOT SURVIVE, WHEN TH E QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL W ITHOUT APPRECIATING THE FACT THAT THE DEPARTMENT HAS FILED APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL. 2.1. DURING HEARING OF THESE APPEALS, THE LD. DR, MS. KUSUM BANSAL, ADVANCED HER ARGUMENTS, WHICH ARE IDE NTICAL TO THE GROUND RAISED. ON THE OTHER HAND, THE LD. C OUNSEL FOR THE ASSESSEE, SHRI RAMESH JAIN, CONTENDED THAT IN B OTH THE APPEALS, QUANTUM ADDITION HAS BEEN DELETED BY THE T RIBUNAL FOR WHICH OUR ATTENTION WAS INVITED TO THE ORDER DA TED 22/03/2013 (ITA NO.8237/MUM/2011, ETC) AND IN THE C ASE OF M/S HITA LAND PVT. LTD. (ITA NO.8247/MUM/2011) A ND IN THE CASE OF M/S HOME REALITY PVT. LTD. VS DCIT (ITA HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 3 NO.8246/MUM/2011). THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE, ID ENTICAL ISSUE ARE INVOLVED AND THE TRIBUNAL HAS DISPOSED OF F THE APPEALS BY A CONSOLIDATED ORDER WHILE DELIBERATING UPON QUANTUM ADDITION, WE TEND TO DISPOSE OFF BOTH THESE APPEALS BY A CONSOLIDATED ORDER, BEING ISSUE INVOLVED IS ID ENTICAL IN BOTH THE APPEALS. IN VIEW OF THE ABOVE, WE ARE REPR ODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID O RDER DATED 22/03/2013 FOR READY REFERENCE:- 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON ME RITS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE EN TIRE ASSESSMENT REVOLVES AROUND THE STATEMENT OF SHRI DI LIP DHERAI RECORDED U/S. 132(4) OF THE ACT ON THE DATE OF SEAR CH I.E. 5.3.2009. THE RELEVANT QUESTION WHICH HAS BEEN RELI ED UPON BY THE AO AND THE LD. CIT(A) IS AS UNDER: Q. 24.PLEASE NOTE PAGE NO. 22 AND PAGE NO. 23 WHIC H IS KEPT BEFORE YOU. AS I UNDERSTAND THESE ARE THE STATEMENT AS ON 28TH NOVEMBER, 2008 FOR THE LAND PURCHASED HEREIN LIST O F ACCOUNTED PAYMENTS ARE PROVIDED AGAINST EACH VILLAGE. PLEASE CLARIFY THE SAME.? ANS. THESE DOCUMENTS REFLECT TOTAL AMOUNTS DISBURSE D FOR PURCHASE OF LAND. THE DETAILS OF AREA, VILLAGE, PAY MENTS MADE THROUGH CHEQUE ALONGWITH PAYMENTS MADE THROUGH CAS H IS SHOWN VERY CLEARLY IN THE CHART. THE HIGHLIGHTED PO RTION REFLECTS HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 4 THE CASH PAYMENTS DISBURSED THROUGH JAICORP OFFICE AT MAKER AND JAI TOWERS. THE SAME HAS BEEN MENTIONED SEPARAT ELY. THE CASH PAYMENT FROM MAKER ADDS UPTO RS. 28.01 CR AND CASH PAYMENT FROM JAI TOWERS ADDS UPTO RS. 10.43 CR. ALL THESE CASH WERE RECEIVED FOR THESE PROJECTS FROM JAICORP LTD. AND THE TOTAL OF ALL THESE AMOUNTS WORKS OUT TO RS. 38.45 CR IN C ASH. IWAS PROVIDED WITH THESE CASH AS AND WHEN REQUIRED BY SH RI SANJAY PUNKHIA 22. HOWEVER, SUBSEQUENTLY SHRI DILIP DHERAI HAS RET RACTED FROM HIS STATEMENT WHICH HAS BEEN STRONGLY OBJECTED BY T HE LD. DR IN HIS SUBMISSION. THE ENTIRE DISPUTE REVOLVES AROUND THE ALLEGED CASH PAYMENT AMOUNTING TO RS. 43 CRORES APPROX. AND WHICH HAS BEEN ADDED U/S. 69C OF THE ACT. SEC. 69C OF THE ACT READS AS UNDER: WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURR ED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATIO N, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SA TISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSES SEE FOR SUCH FINANCIAL YEAR. 23. A PERUSAL OF THE AFOREMENTIONED SECTION SHOWS T HAT THE REQUIREMENT OF THE SECTION IS THAT AN EXPENDITURE H AS BEEN FOUND TO HAVE BEEN INCURRED BY AN ASSESSEE IN ANY FINANCI AL YEAR. CONSEQUENTLY, THE ASSESSEE FAILS TO INDICATE SATISF ACTORILY THE SOURCE OF SUCH EXPENDITURE OR ANY PART THEREOF. THE N SECTION 69C IS ATTRACTED IN SUCH CIRCUMSTANCES. THE EMPHASIS IS ON THE FACT HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 5 THAT AN ASSESSEE HAS INCURRED ANY EXPENDITURE. TH IS ITSELF SHOW THAT THE ASSESSEE MUST HAVE BEEN FOUND TO HAVE INCU RRED ANY EXPENDITURE TO INVOKE THE PROVISIONS OF SEC. 69C OF THE ACT. EVEN IF FOR THE SAKE OF ARGUMENTS, THE RETRACTION OF SHR I DILIP DHERAI IS IGNORED , IN HIS REPLY TO QUESTION NO. 24 ON THE DA TE OF SEARCH, SHRI DILIP DHERAI HAS CATEGORICALLY MENTIONED THAT CASH PAYMENT FROM MAKERS IS AT RS. 28.01 CRORES AND CASH PAYMENT FROM JAI TOWERS IS AT RS. 10.43 CRORES, TOTAL OF THESE AMOUN TS WORKS OUT AT RS. 38.45 CRORES WHICH WAS PROVIDED TO SHRI DILIP D HERAI BY ONE SHRI SANJAY PUNKHIA CEO OF SEZ PROJECT. SHRI DILIP DHERAI IS NOT EVEN REMOTELY RELATED TO THE ASSESSEE COMPANY . IT IS ALSO NOT THE CASE OF THE REVENUE THAT DILIP DHERAI WAS ACTIN G AS AGENT OF THE ASSESSEE COMPANY. MERELY ON THE STRENGTH OF THI S ADMISSION, IT CANNOT BE SAID THAT THE ASSESSEE HAS INCURRED CE RTAIN EXPENDITURE OVER AND ABOVE WHAT HAS BEEN RECORDED I N ITS BOOKS OF ACCOUNT. WE FIND THAT THE ULTIMATE CONCLUSIONS D RAWN BY THE AO AND THE LD. CIT(A) HAVE BEEN REACHED MERELY ON T HE ENTRIES FOUND ON LOOSE SHEET OF PAPERS FOR WHICH SHRI DILIP DHERAI HAS STATED THAT THEY ARE ONLY ESTIMATS / BUDGETARY FIGU RES. HOWEVER, THE ALLEGATIONS MADE BY THE LOWER AUTHORITIES ARE N OT SUPPORTED BY ACTUAL CASH PASSING HANDS. THE ENTIRE ADDITIONS ARE BASED ON THE SEIZED DOCUMENTS AND NO OTHER MATERIAL HAS BEEN ADVERTED TO AND WHICH COULD CONCLUSIVELY SHOW THAT THE HUGE AMO UNT OF THE MAGNITUDE MENTIONED IN THE SEIZED DOCUMENTS TRAVELL ED FROM, ONE SIDE TO THE OTHER. THE REVENUE AUTHORITIES HAVE NOT BROUGHT A SINGLE STATEMENT ON RECORD OF THE VENDORS OF LAND I N DIFFERENT VILLAGES. NONE OF THE SELLER HAS BEEN EXAMINED TO S UBSTANTIATE THE CLAIM OF THE REVENUE THAT EXTRA CASH HAS ACTUALLY C HANGED HANDS. HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 6 24. OUR VIEW IS FORTIFIED BY THE DECISION OF THE DE LHI HIGH COURT IN THE CASE OF MALIK BROTHERS PVT. LTD. VS CIT 162 TAXMANN 43 WHICH IS RELIED UPON BY THE LD. DR. IN THAT CASE, T HE ASSESSEE PURCHASED THE PROPERTY ALLEGEDLY FOR RS. 6 LAKHS. T HE VENDOR IN HER STATEMENT CONFIRMED THAT THE SALE CONSIDERATION OF SAID PROPERTY WAS RS. 45 LAKHS AND PAID TAX THEREON. IN VIEW OF VENDORS STATEMENT, THE AO MADE AN ADDITION OF RS. 39 LAKHS TO THE INCOME OF THE ASSESSEE TOWARDS UNEXPLAINED INVE STMENT. THE ACTION OF THE AO WAS JUSTIFIED AND THE ADDITIONS WE RE CONFIRMED. THUS IN VIEW OF THE AFORESAID DECISION, IN THE PRES ENT CASE, NONE OF THE SELLERS HAVE BEEN EXAMINED BY THE AO TO STRE NGTHEN HIS VIEWS THAT CASH HAS BEEN PAID OVER AND ABOVE THE RE GISTERED AMOUNT. THERE IS NOT EVEN A SINGLE DOCUMENT/EVIDENC E OF PARTIES INVOLVED IN THE SALE OF LAND AT DIFFERENT VILLAGES BROUGHT ON RECORD TO SHOW THAT AN AMOUNT OTHER THAN THE PAYMEN T OF CONSIDERATION HAS EXCHANGED HANDS. NO CONFESSION FR OM THE SELLERS HAVE BEEN BROUGHT ON RECORD. THE ENTIRE ADD ITIONS HAVE BEEN MADE MERELY ON THE STRENGTH OF LOOSE PAPERS FO UND DURING THE COURSE OF THE SEARCH NOT SUPPORTED BY ANY INDEP ENDENT AUTHORITY. CONSIDERING THE ENTIRE ADDITION, IN THE LIGHT OF THE PROVISIONS OF SEC. 69C, AS PER A.OS OWN INTERPRETA TION, INVESTMENTS IN PURCHASE OF LAND HAVE BEEN FULLY FIN ANCED BY SOME OTHER PERSONS, THEREFORE, THE ADDITION IN THE HANDS OF THE ASSESSEE CANNOT BE JUSTIFIED AS THE ASSESSEE HAS NOT INCURRE D ANY EXPENDITURE. THERE MAY BE ONE MORE POSSIBILITY THAT THE PERSONS WHO WERE DOING LAND PURCHASE MIGHT HAVE INFLATED TH E SALE PRICE IN THESE LOOSE SHEETS JUST TO EXTRACT MONIES FROM T HEIR HIGHER AUTHORITIES IN THE GUISE OF ON-MONEY TO BE PAID TO THE VENDORS. HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 7 MAY BE BECAUSE OF HIS POSSIBILITY NO DOCUMENTS WERE FOUND TO SHOW THAT THE MONEY ACTUALLY CHANGED HANDS. 25. A PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE SHOW THAT THE AUTHORIZED, ISSUED AND SUBSCRIBED PAID UP CAPITAL I S AT RS. ONE LAKH AND THE ASSESSEE HAD NOT DONE ANY BUSINESS DUR ING THE YEAR UNDER CONSIDERATION. WITH SUCH A SMALL CORPUS AND N O BUSINESS ACTIVITY, NOR ANY HAS BEEN BROUGHT ON RECORD BY THE REVENUE, IT IS NOT ACCEPTABLE THAT THE COMPANY MAY HAVE INCURRED S UCH HUGE EXPENDITURE OUTSIDE ITS BOOKS OF ACCOUNT. FURTHER I N HIS ENTIRE ASSESSMENT ORDER, THE AO HIMSELF HAS POINTED OUT TI ME AND AGAIN DIFFERENT PERSONS, WHO ARE ALLEGED, TO HAVE MADE CA SH PAYMENTS. EVEN ON THAT COUNT, THE ADDITIONS CANNOT BE SUSTAIN ED IN THE HANDS OF THE ASSESSEE. IN OUR CONSIDERATE VIEW, THE RE BEING NO EVIDENCE TO SUPPORT THE REVENUES CASE THAT A HUGE FIGURE, WHATEVER BE ITS QUANTUM , OVER AND ABOVE THE FIGURE BOOKED IN THE RECORDS AND ACCOUNTS CHANGED HANDS BETWEEN THE PARTIES, NO ADDITION COULD THEREFORE BE MADE U/S. 69C OF THE AC T TO THE INCOME OF THE ASSESSEE. CONSIDERING THE ENTIRE FACT S BROUGHT ON RECORD, WE HAVE NO HESITATION TO HOLD THAT EVEN ON MERITS, NO ADDITION COULD BE SUSTAINED. 26. SINCE WE HAVE ALLOWED THE ISSUE IN THE CASE OF THE PRESENT ASSESSEE ON BOTH COUNTS I.E. ON LEGAL ISSUE AND ON MERIT AND THE ISSUES INVOLVED IN ALL OTHER APPEALS OF OTHER ASSES SEES ARE SIMILAR AND IDENTICAL, THOUGH QUANTUM MAY DIFFER, FOR SIMIL AR REASONS, WE QUASH THE ASSESSMENTS AND DELETE THE ADDITIONS O N MERIT AS WELL AS ON POINT OF LAW IN ALL OTHER CASES ALSO. 27. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES ARE ALLOWED. HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 8 2.3. THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF NORWAY CONSTRUCTION COM PANY (ITA NO.3341/MUM/2013) WHICH IS REPRODUCED HEREUNDE R FOR READY REFERENCE:- THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 11/02/2013 OF THE LD. CIT(A), MUMBAI DELETING THE P ENALTY IMPOSED U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINA FTER THE ACT) MERELY BECAUSE QUANTUM ADDITION WAS DELETED BY THE TRIBUNAL AND THE DEPARTMENT IS IN APPEAL BEFORE THE HONBLE HIGH COURT. 2. DURING HEARING OF THIS APPEAL, THE LEARNED DR SH RI CHANDIP SINGH, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL T O THE GROUND RAISED. ON THE OTHER HAND, SHRI NISHIT GANDHI, LD. COUNSEL FOR THE ASSESSEE, CONTENDED THAT THE TRIBUNAL IN THE CASE O F ASSESSEE FOR A.Y. 2002-03 QUASHED THE ASSESSMENT. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY LD. DR. 3. WE HAVE CONSIDERED THE SUBMISSIONS PUT FORTH BY THE LEARNED DR AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. WE NOTE THAT WHEN QUANTUM ADDITION HAS ALREADY BEEN QUASHED BY THE TRIBUNAL, THEREFORE, THE PENALTY CANNOT SURVIVE. OU R VIEW FINDS SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CA SE OF ITO VS. M/S FOBEOZ INDIA PVT. LTD.(ITA NO. 4378/MUM/2012 ORDER DATED 28.11.2014. THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER FOR READY REFERENCE: HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 9 THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 10/04/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. THE ONLY GROUND RAISED PERTAINS TO DELETING THE PENALTY OF RS.1,77,98,081/- LEVIED U/S 271(1)(C ) OF THE INCOME-TAX ACT 1961(HEREINAFTER THE ACT). 2. DURING HEARING, THE LD. DR SHRI PAWAN KUMAR BEE RLA CONTENDED THAT THE PENALTY HAS BEEN DELETED WITHOUT ASSIGNING A VA LID REASON OVERLOOKING THE FACT THAT APPEAL U/S 260A OF THE ACT HAS BEEN FILED AGAINST THE DECISION OF THE TRIBUNAL, DELETING QUANTUM ADDITION, BEFORE THE HON BLE HIGH COURT. ON THE OTHER HAND, NONE APPEAR ON BEHALF OF THE ASSESSEE, THEREFORE, WE HAVE NO OPTION TO PROCEED EX-PARTE QUA THE ASSESSEE AND DIS POSED OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DERIVED ITS INCOME FROM LOCAL AND EXPORT SALE, INTEREST ON DEPO SIT ETC. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT WITH RESPECT TO NON DEDUCTION OF TDS ON THE CLAIMED EXPENSES IN ITS PROFIT AND LOSS ACCOUNT , CAPITALIZATION OF AMOUNT PAID TOWARD DEVELOPMENT AGREEMENT, WORK IN PROGRESS , TAXABILITY OF INTEREST ON PROJECT ADVANCES UNDER THE HEAD INCOME FROM OTHE R SOURCES ETC. ASSESSING THE TAXABLE INCOME AT RS.1,80,05,214/-. THE ASSESSI NG OFFICER THEREAFTER IMPOSED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE AC T. HOWEVER, THE APPEAL ON QUANTUM ADDITION WAS DECIDED IN FAVOUR OF THE ASSES SEE DELETING THE ALLEGED ADDITION. THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) DELETED THE PENALTY ON THE GROUND THAT SINCE THE TRIBUNAL HAS DELETED THE ADDITION, THEREFORE, THE PENALTY SO IMPOSED U/S 271(1)(C) OF THE ACT CANNOT SURVIVE AGAINST WHICH THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS T RIBUNAL. THE SUM AND SUBSTANCE OF THE ARGUMENTS ADVANCED BY THE LD. DR I S THAT THE DEPARTMENT HAS FILED APPEAL U/S 260A OF THE ACT BEFORE THE HONBLE HIGH COURT. WE ARE REPRODUCING HEREUNDER THE RELEVANT CONCLUDING PORTI ON FROM THE IMPUGNED ORDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , THE SUBMISSIONS OF THE APPELLANT AND PENALTY ORDER. THERE ARE TWO ISSUES ON WHICH PENALTY IS LEVIED. HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 10 THE FIRST ISSUE IS AN ADDITION MADE OF RS.1,77,98,0 81 ON ACCOUNT OF ACCRUAL OF INTEREST ON ADVANCE GIVEN TO M/S KUBER DEVELOPERS. THE HONBLE ITAT HAS DELETED THIS ADDITION IN PARA 12 OF THE ORDER AND H AS HELD INTERALIA THAT THE INCOME ON NOTIONAL BASIS CANNOT BE BROUGHT TO TAX. SINCE, THE QUANTUM ADDITION HAS BEEN DELETED BY HONBLE ITAT, MUMBAI, THE PENALTY LEVIED ON THIS GROUND ALSO IS DELETED. 2.2. THERE IS NO DISPUTE THAT QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL, THEREFORE, IN OUR HUMBLE OPINION, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED IN REACHING TO A PARTICULAR CONCLUSION. OUR VIEW FURTHER FINDS SUPPORT FROM THE DECISION AND THE RATIO LAID DOWN IN CIT VS S.P VIZ CONSTRUCTION COMPANY 176 ITR 47 (PATNA) AND K.C. BU ILDERS VS ACIT 265 ITR 562 (SUPREME COURT). WE ARE OF THE VIEW WHERE THE P ENALTY FOR CONCEALMENT OR FURNISHING INACCURATE PARTICULARS WAS LEVIED AND AFTER DELETING THE QUANTUM ADDITION, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY. ORDINARILY, PENALTY CANNOT STAND IN ITSELF IF THE ADDITION MADE IN THE ASSESSMENT ITSELF IS SET ASIDE OR CANCELLED BY THE SUPERIOR AUTHORITY/CO URT. THE PENALTY CANNOT STAND BY ITSELF BECAUSE FALSE RESULT MAY BE PRODUCE D BY THE FALSITY OF ONE OR MORE OF THE CONSTITUENT ITEMS IN THE RETURN. THE W ORD INACCURATE PARTICULARS WOULD COVER FALSITY IN THE FINAL FIGURE AND ALSO TH E CONSTITUENT ELEMENTS OR ITEMS. THEY SIMPLY WOULD MEAN INACCURATE IN SOME S PECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR SUBORDINATE ITEMS OF INCOME OR THE END RESULT. CONCEALMENT OR FURNISHING INACCURATE PARTICULARS IM PLIES SOME DELIBERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUTHORITIES. SINCE, THE BASIS OF LEVYING PENALTY REMAINS NO MORE IN EXISTENCE, AFTER DELETION OF QUANTUM ADDITION, THEREFORE, FROM THIS ANGLE THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED. 2.3. SO FAR AS, THE CONTENTION OF THE LD. DR THAT A PPEAL U/S 260A OF THE ACT HAS BEEN FILED BEFORE THE HONBLE HIGH COURT AGAINS T THE DELETION OF QUANTUM ADDITION BY THE TRIBUNAL, IS CONCERNED, NO ORDER HA S BEEN PRODUCED BEFORE US REVERSING/STAYING THE ORDER OF THE TRIBUNAL, THEREF ORE, AS ON TODAY, THE ORDER OF THE TRIBUNAL STANDS, CONSEQUENTLY, MERE FILING O F APPEAL IS NOT ENOUGH. HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 11 HOWEVER, IF AT ANY STAGE, THE ORDER OF THE TRIBUNAL IS REVERSED, THE CONSEQUENCES MAY FOLLOW AND THE DEPARTMENT IS FREE TO TAKE THE LEGAL RECOURSE. THEREFORE, WE FIND NO FORCE IN THE ARGUM ENT OF THE LD. DR FROM THIS ANGLE ALSO. 4 . THERE IS NO DISPUTE THAT QUANTUM ADDITION HAS BEE N DELETED BY THE TRIBUNAL, THEREFORE, IN OUR HUMBLE O PINION, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED I N REACHING TO A PARTICULAR CONCLUSION. OUR VIEW FURTHER FINDS SUPP ORT FROM THE DECISION AND THE RATIO LAID DOWN IN CIT VS S.P VIZ CONSTRUCTION COMPANY 176 ITR 47 (PATNA) AND K.C. BUILDERS VS ACI T 265 ITR 562 (SUPREME COURT). WE ARE OF THE VIEW WHERE THE PENAL TY FOR CONCEALMENT OR FURNISHING INACCURATE PARTICULARS WA S LEVIED AND AFTER DELETING THE QUANTUM ADDITION, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY. ORDINARILY, PENALTY CANNO T STAND IN ITSELF IF THE ADDITION MADE IN THE ASSESSMENT ITSELF IS SET A SIDE OR CANCELLED BY THE SUPERIOR AUTHORITY/COURT. THE PENALTY CANNO T STAND BY ITSELF BECAUSE FALSE RESULT MAY BE PRODUCED BY THE FALSITY OF ONE OR MORE OF THE CONSTITUENT ITEMS IN THE RETURN. THE WORD INACCURATE PARTICULARS WOULD COVER FALSITY IN THE FINAL FIGUR E AND ALSO THE CONSTITUENT ELEMENTS OR ITEMS. THEY SIMPLY WOULD M EAN INACCURATE IN SOME SPECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR SUBORDINATE ITEMS OF INCOME OR THE END RESULT. CON CEALMENT OR FURNISHING INACCURATE PARTICULARS IMPLIES SOME DELI BERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUTHORITIES. SINCE, THE BASIS OF LEVYING PENALTY R EMAINS NO MORE IN EXISTENCE, AFTER DELETION OF QUANTUM ADDITION, THER EFORE, FROM THIS HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 12 ANGLE THE STAND OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS) IS JUSTIFIED. 4.1. SO FAR AS, THE CONTENTION OF THE LD. DR THAT A PPEAL U/S 260A OF THE ACT HAS BEEN FILED BEFORE THE HONBLE HIGH C OURT AGAINST THE DELETION OF QUANTUM ADDITION BY THE TRIBUNAL, IS CO NCERNED, NO ORDER HAS BEEN PRODUCED BEFORE US REVERSING/STAYING THE ORDER OF THE TRIBUNAL, THEREFORE, AS ON TODAY, THE ORDER OF THE TRIBUNAL STANDS, CONSEQUENTLY, MERE FILING OF APPEAL IS NOT ENOUGH. HOWEVER, IF AT ANY STAGE, THE ORDER OF THE TRIBUNAL IS REVERSED, THE CONSEQUENCES MAY FOLLOW AND THE DEPARTMENT SHALL BE AT LIBERTY TO PROSECUTE ITS APPEAL BEFORE US ON MERITS. FINALLY, WE FIND NO INFIRMITY IN THE STAND OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS), CONSEQUENTLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT THE CONCLUSION OF HEARING ON 27/07/2015. 2.4 . THERE IS NO DISPUTE THAT QUANTUM ADDITION HAS BEE N DELETED BY THE TRIBUNAL, THEREFORE, IN OUR HUMBLE O PINION, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFI ED IN REACHING TO A PARTICULAR CONCLUSION. OUR VIEW FURT HER FINDS SUPPORT FROM THE DECISION AND THE RATIO LAID DOWN I N CIT VS S.P VIZ CONSTRUCTION COMPANY 176 ITR 47 (PATNA) AND K.C . BUILDERS VS ACIT 265 ITR 562 (SUPREME COURT). WE AR E OF THE VIEW WHERE THE PENALTY FOR CONCEALMENT OR FURNISHIN G HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 13 INACCURATE PARTICULARS WAS LEVIED AND AFTER DELETIN G THE QUANTUM ADDITION, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY. ORDINARILY, PENALTY CANNOT STAND IN ITSEL F IF THE ADDITION MADE IN THE ASSESSMENT ITSELF IS SET ASIDE OR CANCELLED BY THE SUPERIOR AUTHORITY/COURT. THE PENALTY CANNO T STAND BY ITSELF BECAUSE FALSE RESULT MAY BE PRODUCED BY THE FALSITY OF ONE OR MORE OF THE CONSTITUENT ITEMS IN THE RETURN. THE WORD INACCURATE PARTICULARS WOULD COVER FALSITY IN THE FINAL FIGURE AND ALSO THE CONSTITUENT ELEMENTS OR ITEMS. THEY S IMPLY WOULD MEAN INACCURATE IN SOME SPECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR SUBORDINATE ITEMS OF INCOME OR THE END RESULT. CONCEALMENT OR FURNISHING INACCURA TE PARTICULARS IMPLIES SOME DELIBERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUT HORITIES. SINCE, THE BASIS OF LEVYING PENALTY REMAINS NO MORE IN EXISTENCE, AFTER DELETION OF QUANTUM ADDITION, THER EFORE, FROM THIS ANGLE THE STAND OF THE LD. COMMISSIONER OF INC OME TAX (APPEALS) IS JUSTIFIED. 2.5. SO FAR AS, THE CONTENTION OF THE LD. DR THAT A PPEAL U/S 260A OF THE ACT HAS BEEN FILED BEFORE THE HONBLE H IGH COURT AGAINST THE DELETION OF QUANTUM ADDITION BY THE TRI BUNAL, IS CONCERNED, NO ORDER HAS BEEN PRODUCED BEFORE US REVERSING/STAYING THE ORDER OF THE TRIBUNAL, THEREF ORE, AS ON TODAY, THE ORDER OF THE TRIBUNAL STANDS, CONSEQUENT LY, MERE FILING OF APPEAL IS NOT ENOUGH. IN VIEW OF THESE FA CTS, WE FIND NO MERIT IN THE APPEALS OF THE REVENUE, THEREFORE, DIS MISSED. HITA LAND PVT. LTD. & M/S HOME REALITY PVT. LTD. ITA NO.1362 & 1371/MUM/2014 14 FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 16/09/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; * ! DATED : 29/09/2015 F{X~{T? P.S/. !.. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 3% ( ,- ) / THE CIT, MUMBAI. 4. 2 2 3% / CIT(A)- , MUMBAI 5. 5 6 0%!' , 2 ,-( ,' 7 , & / DR, ITAT, MUMBAI 6. 8# 9& / GUARD FILE. / BY ORDER, 15-% 0% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI