FOUR DIMENSIONS SECURITIES (I) LTD, MUMBAI V. ASST CIT RG 4(1), MUMBAI

ITA 1466/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88473 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 26-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KUKMAR BEERLA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , ! '#$% , & '( BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./I.T.A. NOS. 1466 & 1467/MUM/2013 ( ) ) ) ) / ASSESSMENT YEARS : 2009-10 & 2007-08 M/S. FOUR DIMENSIONS SECURITIES (INDIA) LTD., 209-210, 2 ND FLOOR, ARCADIA BLDG. 195, NARIMAN POINT, MUMBAI-400 021 THE ACIT, RANGE 4(1), AAYAKAR BHAVAN, MUMBAI-400 020 (* & ./ +, ./PAN/GIR NO. : AAACF 1734F ( *- /APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : ` SHRI VIJAY MEHTA ./*- 1 0 /RESPONDENT BY : SHRI PAWAN KUKMAR BEERLA 1 23& / DATE OF HEARING :26.2.2015 45) 1 23& / DATE OF PRONOUNCEMENT :26.2.2015 ' 6 / O R D E R PER N.K. BILLAIYA, AM: THESE TWO APPEALS BY THE ASSESSEE ARE PREFERRED AGA INST TWO SEPARATE ORDERS OF THE LD. CIT(A)-8, MUMBAI DT. 13.12.12 &7. 1.2013 RESPECTIVELY PERTAINING TO ASSESSMENT YEARS 2009-10 & 2007-08. BOTH THESE APPEALS BY THE ASSESSEE HAVE COMMON GROUND, THEREFORE, THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE O F CONVENIENCE. ITA NOS.1466 & 1467/M/13 2 2. THE COMMON GRIEVANCE IN BOTH THE YEARS IS THAT T HE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S. 271(1)(C) OF THE ACT ON THE DISALLOWANCE MADE U/S. 94(7) OF THE AC T. THE QUANTUM OF DISALLOWANCE AND THE QUANTUM OF PENALTY MAY DIFFER. 3. WHILE SCRUTINIZING THE RETURN OF INCOME FOR THE YEARS UNDER CONSIDERATION, THE ASSESSING OFFICER NOTICED THAT D IVIDEND STRIPPING U/S. 94(7) OF THE ACT CLEARLY APPLY ON THE FACTS OF THE CASE. AFTER VERIFICATION, RS. 16,40,149/- WAS DISALLOWED IN A.Y. 2007-08 AND RS. 14,33,110/- WAS DISALLOWED IN A.Y. 2009-10. THE PENALTY HAS BEEN L EVIED ON THESE DISALLOWANCES U/S. 271(1)(C) OF THE ACT. 4. WHEN THE MATTER WAS CARRIED BEFORE THE LD. CIT(A ), IT SO HAPPENED THAT THE LD. CIT(A) DECIDED THE APPEAL FOR A.Y. 200 9-10 FIRST WHEREIN THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY AND WHILE DECIDING THE APPEAL FOR A.Y. 2007-08, THE LD. CIT(A) FOLLOWED HIS OWN O RDER FOR A.Y. 2009- 10. 5. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASS ESSEE STATED THAT ON IDENTICAL GROUND OF APPEAL FOR A.Y. 2006-07, THE TR IBUNAL IN ASSESSEES OWN CASE IN ITA NO. 2542/M/2012 HAS DELETED THE PE NALTY. THE LD. COUNSEL PLACED THE ORDER OF THE TRIBUNAL BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BR ING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE DECISION OF THE TRIBUNAL IN ITA NO. 2542/M/12 P ERTAINING TO ASSESSMENT YEAR 2006-07. WE FIND THAT THE TRIBUNAL HAD CONSIDERED THE FOLLOWING GROUND VIDE GROUND NO. 1 IN A.Y. 2006-07 . ITA NOS.1466 & 1467/M/13 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE CIT(A) ERRED IN CONFIRMING THE PEN ALTY LEVIED BY THE LD. AO U/S. 271(1)(C) OF THE I.T. ACT, 1961 AMO UNTING TO RS. 2,25,783/- ON THE DISALLOWANCE MADE U/S. 94(7). TH E APPELLANT PRAYS THAT THE SAME MAY PLEASE BE DELETED. 8. WHILE DECIDING THE APPEAL AT PARA-3 OF ITS ORDER , THE TRIBUNAL HAS CONSIDERED THE DECISION IN THE CASE OF CITY GROUP GLOBAL MARKETS INDIA PVT. LTD. IN ITA NO. 5352/M/09 AND FINALLY HELD AS UNDER: WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THA T ASSESSEE IS A SHARE BROKER AND SHARE TRADER AND HAS OFFERED A TOTAL INCOME OF RS.13,98,55,100. THE SAID INCOME IN CLUDES PROFITS FROM SHARE TRADING OF RS. 8,73,43,276/-. THE PROFIT HAS BEEN RESULTED FROM INNUMERABLE TRANSACTIONS OF PURCHASE & SALES OF SHARES, INCLUDING ARBITRAGE, JOBBING ETC. DURING TH E YEAR UNDER CONSIDERATION, THE ASSESSEE HAD MISSED OUT TO DISAL LOW A MEAGER LOSS OF RS.6,70,776/- U/ S 94(7) OF THE ACT, ON ACC OUNT OF DIVIDEND STRIPPING. DISALLOWANCE U/ S 94(7) DEPENDS UPON CUM ULATIVE SATISFACTION OF CERTAIN CONDITIONS PRESCRIBED IN TH E ACT. THE SAME HAS BEEN REMAINED TO BE APPLIED BY OVERSIGHT AND EV EN THE AUDITORS HAVE FAILED TO POINT IT OUT. HOWEVER AT TH E TIME OF ASSESSMENT PROCEEDINGS, WHEN THE DETAILS OF PURCHAS E AND SALE OF SHARES AND UNITS WERE CALLED FOR IN THE COURSE O F ORDINARY HEARING, THE ASSESSEE FURNISHED COMPLETE PARTICULAR S OF TRANSACTIONS. DURING THESE PROCEEDINGS, THE SAID MI STAKE WAS REALIZED AND THE ASSESSEE AGREED BEFORE THE A.O. TO DISALLOW THE SAID AMOUNT. SINCE ASSESSEE HAS AGREED FOR DISALLOW ANCE, NO SHOW CAUSE NOTICE WAS ISSUED BY THE A.O. IN THIS RE GARD. THE DISALLOWANCE WAS MADE AS PER THE WORKING SUBMITTED BY THE APPELLANT, WHICH HAS BEEN ACCEPTED BY THE A.O. ALSO , AGAINST THE SAID DISALLOWANCE, NO APPEAL IS FILED BY THE ASSESS EE. IT IS A CASE OF AN INADVERTENT MISTAKE MADE BY THE ASSESSEE, AND THE ASSESSEE AGREED FOR DISALLOWANCE AT THE TIME OF ASS ESSMENT PROCEEDINGS. ACCORDINGLY, NO PENALTY U/S.271(1)(C) OF THE ACT WAS WARRANTED. PUTTING THESE FACTS TO THE PROPOSITION O F LAW DISCUSSED BY COORDINATE BENCH IN THE CASE OF CITY GROUP GLOBAL MARKETS INDIA PVT. LTD(SUPRA) , WE DO NOT FIND ANY MERIT IN THE PENALTY SO IMPOSED BY THE AO U/S.271(1)(C) OF THE ACT WITH RES PECT TO THE DISALLOWANCE MADE UNDER OF SECTION 94(7) OF THE ACT . ITA NOS.1466 & 1467/M/13 4 SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT MUMBAI BENC H IN THE CASE OF RAMESH DAMANI, ITA NO.1625/MUM/2012 , DATED 22- 8-2014. RESPECTFULLY FOLLOWING THE JUDICIAL PRONOUN CEMENTS AS DISCUSSED ABOVE, WE DO NOT FIND ANY MERIT IN THE IM POSITION OF PENALTY ADDITION MADE WITH REFERENCE TO THE PROVISI ONS OF SECTION 94(7). 9. FACTS AND ISSUES BEING IDENTICAL, RESPECTFULLY F OLLOWING THE DECISION OF THE CO ORDINATE BENCH, WE SET ASIDE THE ORDERS O F THE LD. CIT(A) FOR BOTH THE YEARS UNDER CONSIDERATION AND DIRECT THE A O TO DELETE THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 10. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. ' 6 1 5) & 7 8'9 26.2.2015 5 1 : ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 26TH FEBRUARY, 2015. SD/- SD/- (H.L. KARWA ) (N.K . BILLAIYA ) / PRESIDENT & '( / ACCOUNTANT MEMBER MUMBAI; 8' DATED 26 TH FEBRUARY, 2015 . . ./ RJ , SR. PS ITA NOS.1466 & 1467/M/13 5 ' 6 ' 6 ' 6 ' 6 1 11 1 .2' .2' .2' .2' ; ')2 ; ')2 ; ')2 ; ')2 / COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. < ( ) / THE CIT(A)- 4. < / CIT 5. '=: .2 , , / DR, ITAT, MUMBAI 6. :> / GUARD FILE. ' 6 ' 6 ' 6 ' 6 / BY ORDER, /'2 .2 //TRUE COPY// ? ?? ? / @ @ @ @ + + + + (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI