Anil Hiralal Birla, Pune V. Asst.. Comm. of Income-tax, Pune

ITA 1369/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9770 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 04-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Revised return; Penny stocks

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1369/PN/2011 (ASSTT. YEAR : 2003-04) SHRI ANIL HIRALAL BIRLA, 452, SHIVAJI NAGAR, PUNE - 411005 .. APPELLANT PAN: ABBHB2035H VS. ACIT, CIRCLE-3, PUNE. .. RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 12.11.2012 DATE OF PRONOUNCEMENT : 20.11.2012 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 25.08.2011 BY THE CIT(A)-II, PUNE, RELATING T O A.Y. 2003-04. LEVY OF PENALTY OF RS.2,45,920/- U/S.271(1)(C) OF T HE INCOME TAX ACT, 1961 BY THE ASSESSING OFFICER AND UPHELD BY T HE CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE HAD FILED ORIGINAL RETURN OF INCOME ON 22.09.2003 WHICH INCLU DED LONG TERM CAPITAL GAINS ON SALE OF 1400 SHARES OF M/S.DATAMAT IC FINANCE LTD., WHICH WAS SUBJECT TO 10% RATE OF TAX. IN THE STATEMENT RECORDED ON OATH DURING THE INVESTIGATION PROCEEDIN GS BY THE INVESTIGATION WING OF THE I.T.DEPARTMENT REGARDING MANIPULATION OF SHARE PRICES OF SO CALLED PENNY STOCKS, WHICH RELAT ED TO NON- EXISTENT SHARE TRANSACTIONS, THE ASSESSEE COULD NOT EXPLAIN WHY THESE SHARES WERE SENT FOR DEMAT 16 MONTHS AFTER IT S PURCHASE AND ALSO COULD NOT GIVE DETAILS OF THE PURCHASERS. THE SE MANIPULATIONS IN THE SHARE PRICES WERE IN RESPECT OF SHARES OF M/ S.DATABASE FINANCE LTD., AND M/S.FAST TRACK ENTERTAINMENT LTD. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN ON 18.07.2006 2 DECLARING THE INCOME FROM SALE OF ABOVE SHARES AS S HORT TERM CAPITAL GAIN. THUS, THE ASSESSEE ACCORDING TO THE ASSESSIN G OFFICER HAD FILED THE REVISED RETURN AFTER THE ISSUE WAS ALREAD Y UNEARTHED BY THE DEPARTMENT. THE ASSESSING OFFICER, THEREFORE, INIT IATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. REJECTING THE EXPLANATION OFFERED BY THE ASSESSEE AND RELYING ON VARIOUS DECI SIONS THE ASSESSING OFFICER LEVIED PENALTY OF RS.3,90,898/- U /S. 271(1)(C) BEING THE MINIMUM PENALTY OF 100% OF THE TAX SOUGHT TO BE EVADED. 2.1. IN APPEAL, THE LD. CIT(A) UPHELD THE PENALTY L EVIED BY THE ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF TH E CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING FILED THE COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE O F NANDKISHORE HIRALAL BIRLA (HUF) VIDE ITA.NO.1270/PN/2010 DATED 13.04.2012 FOR THE A.Y. 2003-04 AND SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE PENALTY LEVIED BY THE ASSESSING O FFICER AND UPHELD BY THE CIT(A) WAS CANCELLED BY THE TRIBUNAL. HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MATTER, THE PEN ALTY LEVIED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) SHOU LD BE DELETED. 3.1. THE LD. DR ON THE OTHER HAND, WHILE SUPPORTING THE ORDER OF THE CIT(A), FAIRLY CONCEDED THAT THE TRIBUNAL HAS D ELETED THE PENALTY UNDER IDENTICAL FACTS AND CIRCUMSTANCES. 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE ASSESSING OFFIC ER AND THE CIT(A). WE FIND UNDER IDENTICAL FACTS AND CIRCUMSTA NCES THE TRIBUNAL IN THE CASE OF NANDKISHORE HIRALAL BIRLA ( HUF) (SUPRA) HAS DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) BY HOLDING AS UNDER: 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE HAS COME UP F OR CONSIDERATION BEFORE A CO-ORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF DHANANJAY VILAS JADHAV IN ITA NO. 417/PN/20 09 FOR A.Y. 2003-04 WHEREIN VIDE ITS ORDER DATED 8-12-2010 THE 3 TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE BY OBSERVING ASUNDER: CONSIDERING THE FACT THAT ASSESSEE CAME FORWARD TO UNDO THE CLAIM MADE IN THE ORIGINAL RETURN BY FILING THE BELATED RETURN OF INCOME, THE OFFER OF THE IMPUGNED GAINS U NDER THE HEAD SHORT TERM CAPITAL GAIN WHICH IS HELD BY THIS BENCH OF THE TRIBUNAL AS PROPER, WE ARE OF THE OPINION THAT THE ASSESSEES CASE IS COVERED BY THE ABOVE REFERRED DE CISIONS OF THE TRIBUNAL OF BOTH LUCKNOW AND DELHI BENCHES. IN ANY CASE, THIS IS THE CASE WHERE ASSESSEE CAME FORWARD TO UNDO THE CLAIM MADE IN THE ORIGINAL RETURN AND IN T HIS DECISION OF THE TRIBUNAL, WE FIND THERE IS AN ELEME NT OF VOLUNTARY ACT ON PART OF THE ASSESSEE, THOUGH IT IS DONE BELATEDLY. IN ANY CASE, THE DEPARTMENT HAS NOT BRO UGHT OUT ANY INCRIMINATING MATERIAL TO DEMONSTRATE THE IMPUGNED PENNY STOCKS IN QUESTION WERE PURCHASED FO R CONVERTING THE UNACCOUNTED MONEY INTO ACCOUNTED MON EY. ACCORDINGLY, WE ARE OF THE OPINION THIS IS NOT A FI T CASE FOR LEVY OF PENALTY. 4. FACTS BEING SIMILAR, SO FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, THE ORDERS OF AUTHORITIES BELOW ARE SET A SIDE AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 5. SINCE FACTS IN THE INSTANT CASE ARE IDENTICAL TO THE FACTS IN THE CASE CITED SUPRA, THEREFORE, IN ABSENCE OF ANY CONT RARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE TRIB UNAL WE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF NANDKISHORE HIRALAL BIRLA (HUF) (SUPRA), SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE T HE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. THE GROUND RAISED BY TH E ASSESSEE IS ACCORDINGLY ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF NOVEMBER, 2012. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) ( R.K.PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER GSPS PUNE, DATED THE 20 TH NOVEMBER, 2012 4 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ACIT, CIRCLE-3, PUNE. 3. THE CIT(A)-II, PUNE. 4. THE CIT-II PUNE. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// SR.PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.