VOLKART FLEMING SHIPPING AND SERVICES LTD, MUMBAI V. ACIT RG 2(3), MUMBAI

ITA 1405/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75280 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 21-01-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 19-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH DAVE IZRFKHZ DH LS
• Keywords: Question of law; Difference of opinion

Judgement Text

- 1 - VK;DJ VIHYH; VF/KDJ.K ,Q U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI JH VKJ JH VKJ JH VKJ JH VKJ- -- - LH LHLH LH- -- - 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA JH VFER 'KQDYK JH VFER 'KQDYK JH VFER 'KQDYK JH VFER 'KQDYK] U;KF;D LNL; ] U;KF;D LNL; ] U;KF;D LNL; ] U;KF;D LNL; DS LE{K DS LE{K DS LE{K DS LE{K BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER VK;DJ VIHY LA[;K /ITA NO.1405/MUM/2010 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR 2003-04 VOLKART FLEMING SHIPPING AND SERVICES LTD. CASSINATH BUILDING 21, A.K. NAYAK MARG, FORT, MUMBAI 400001. CUKE@ VS. THE ASSISTANT CIT RANGE 2(3) MUMBAI VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VIHYKFKHZ DH VKSJ LS @ ASSESSEE BY SHRI GIRISH DAVE IZR;FKHZ DH VKSJ LS @ REVENUE BY RAVI PRAKASH VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER R.C. SHARMA, AM. THIS IS AN APPEAL, FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 5.11.2009 FOR A.Y. 2003-04, IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1) (C) WITH RESPECT TO DISALLOWANCE OF DELA YED PAYMENT OF STAMP DUTY. AO HAS ALSO LEVIED PENALTY WITH RESPECT TO TH E DISALLOWANCE OF HOUSE PROPERTY MAINTENANCE EXPENSE OF RS. 1,40,393/ - LQUOKBZ DH RKJH[K@ DATE OF HEARING 21 - 01 - 2014 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 21 - 01 - 2014 - 2 - 2. FACTS IN BRIEF ARE THAT DURING THE COURSE OF SCR UTINY ASSESSMENT, THE AO DISALLOWED THE ASSESSEES CLAIM OF PAYMENT O F STAMP DUTY, ON THE PLEA THAT IT WAS IN THE NATURE OF PENALTY. IT W AS ARGUED BY LD. AR THAT ADDITION MADE WITH RESPECT TO DISALLOWANCE OF PENAL TY FOR DELAY IN PAYMENT OF STAMP DUTY WAS CHALLENGED BY THE ASSESSE E BEFORE THE HONBLE HIGH COURT U/S 260A, AND THE HIGH COURT HAV E ACCEPTED THE SUBSTANTIAL QUESTION OF LAW ON THE ISSUE. AS PER LD . AR WHEN THE SUBSTANTIAL QUESTION OF LAW HAS BEEN ADMITTED THE I SSUE BECOMES DEBATABLE, AFTER REFERRING TO THE VARIOUS DECISIONS OF BENCHES AS WELL AS THE DECISION OF HONBLE HIGH COURT OF DELHI, IT WAS CONTENDED THAT NO PENALTY WAS IMPOSABLE WITH REFERENCE TO THE DEBATAB LE ISSUES. 3. ON THE OTHER HAND LD. DR RELIED ON THE ORDERS OF LOWER AURHORITIES. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED . WE FIND THAT AGAINST THE ORDER OF TRIBUNAL CONFIRMING THE D ISALLOWANCE OF PAYMENT MADE FOR STAMP DUTY, HONBLE HIGH COURT OF BOMBAY HAS ACCEPTED THE SUBSTANTIAL QUESTION OF LAW VIDE ITS O RDER DATED 26 TH FEBRUARTY 2013 AFTER HAVING FOLLOWING OBSERVATION. HEARD. ADMIT ON THE FOLLOWING SUBSTANTIAL QUESTI ON OF LAW;- WHETHER ON THE FACTS AND IN LAWA, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE AMOUNT PAID TO THE STAMP AUTHORITIES FOR DELAY IN PAYMENT OF STAMP DUTY WAS NOT ALLOWABLE EXPENDITURE UNDER THE ACT ON THE GROUND THAT THE SA ME WAS PENIAL IN NATURE. 4. ONCE THE SUBSTANTIAL QUESTION OF LAW HAS BEEN AD MITTED, THE JUDICIAL PRONOUNCEMENTS CITED BY LD. AR CLEARLY IND ICATES THAT NO PENALTY WAS IMPOSABLE IN SO FAR AS AFTER ACCEPTANCE BY HON BLE HIGH COURT U/S - 3 - 260A, THE ISSUE BECOMES DEBATABLE AND NO PENALTY CA N BE IMPOSED. HON'BLE SUPREME COURT IN THE CASE OF SANTOSH HOSIER Y, 3 SCC 179, OBSERVED THAT TO BE SUBSTANTIAL A QUESTION OF LAW MUST BE DEBATABLE. OBSERVATION OF HON'BLE SUPREME COURT IN THE CASE OF HERO VINOD VS. SHESHAMAL, AIR 2006 S.C. 2234, WAS THAT SUBSTANTIA LLY QUESTION OF LAW INVOLVES A DEBATABLE LEGAL ISSUE. 5. AS PER OUR CONSIDERED VIEW WHEN AN APPEAL IS AD MITTED AS SUBSTANTIAL QUESTION OF LAW, THERE HAS TO BE TWO VI EWS. WHEN TWO VIEWS ARE THERE PENALTY CANNOT BE LEVIED. A POINT OF LA W WHICH ADMITS OF NO TWO OPINIONS MAY BE A PROPOSITION OF LAW BUT CANNOT BE A SUBSTANTIAL QUESTION OF LAW. SANTOSH HAZARI V. PURSHOTTAM TI WARI ( 3 SCC 179) (FULL BENCH) S. C. A QUESTION OF LAW ON WHICH THE RE IS GREAT DIVERGENCE OF JUDICIAL OPINION WILL BE SUBSTANTIAL QUESTION OF LAW.(PARA 6)- RIMMALAPUDI S. RAO ( AIR 1951 MAD 969) (MAD H.C.). IF THERE IS ROOM FOR REASONABLE DOUBT OR DIFFERENCE OF OPINION ON TH E QUESTION, THEN IT WOULD BE A SUBSTANTIAL QUESTION OF LAW. (PARA 11) RIMMALAPUDI S. RAO ( AIR 1951 MAD 969) (MAD H.C.). IN SIR CHUNILALA CA SE, THE CONSTITUTION BENCH EXPRESSED AGREEMENT WITH THE FOLLOWING VIEW T AKEN BY A FULL BENCH OF THE MADRAS HIGH COURT IN RIMMALAPUDI SUBBA RAO VS. NOONY VEERAJU (SIR CHUNILAL CASE, SCR P. 557) AIR 1951 MA D 969, (1951) WHEN A QUESTION OF LAW IS FAIRLY ARGUABLE, WHERE THERE I S ROOM FOR DIFFERENCE OF OPINION ON IT OR WHERE THE COURT THROUGH IT NECESSA RY TO DEAL WITH THAT QUESTION AT SOME LENGTH AND DISCUSS ALTERNATIVE VIE WS, THEN THE QUESTION WOULD BE A SUBSTANTIAL QUESTION OF LAW. IN ASSESSEES CASE THE ISSUES ARE SUBSTANTIAL QUESTION OF LAW AS PER BOMBA Y HIGH COURT, THEREFORE, IT IS EVIDENT THAT THERE ARE DIFFERENT V IEWS POSSIBLE. RELIANCE - 4 - CAN ALSO BE PLACED ON FOLLOWING CASES WHERE IT IS H ELD THAT NO PENALTY IS LEVIABLE WHERE TWO VIEWS AREA POSSIBLE : CIT VS. LATE G. D. NAIDU AND OTHERS, (165 ITR 63 ) (MAD). CIT VS. CALCUTTA CREDIT CORPORATION, (166 ITR 29) (CAL) CIT VS. AMARNATH, (143 CTR 148 (ALL). ALPHA ASSOCIATES VS. DCIT (66 TTJ 758) (BOM) DCIT VS. RAHOUL SIEMENS ENGG. (P) LTD. (140 TAXMAN 100) (DEL). 7. IN VIEW OF THE ABOVE DISCUSSION, RESPECTFULLY FO LLOWING THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE, WE CANCEL THE PENALTY IMPOSED BY THE AO. EVEN ON MERITS, PENALTY IS NOT IMPOSABLE WITH RESPECT TO DISALLOWANCE OF ALLEGED PAYMENT OF STAMP DUTY. WE D IRECT ACCORDINLGY. GROUND WITH REGARD TO THE PENALTY IMPOSED FOR HOUSE PROPERTY MAINTENANCE EXPENSE OF RS. 1,40,393/- WAS NOT PRESS ED BY LD. AR AT THE TIME OF HEARING, AND THE SAME IS DISMISSED AS IN LIMINE. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART IN TERMS INDICATED ABOVE. ORDER PRONOUNCED ON 21 /01/2014 SD/- SD/- ( AMIT SHUKLA ) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 21 /01/2014 SKS SR. P.S - 5 - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI