GOBIND SINGH N SANI, MUMBAI V. ITO, 26(1)(5), MUMBAI

ITA 1509/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5603 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 13-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Keywords: Set aside
• Section: 271(1)(c); 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) I.T.A. NO. 1509/MUM/2019 (ASSESSMENT YEAR 2013-14 ) SHRI GOBIND SINGH N. SAINI 5/154,C/O. NIRMAL PUNJAB HOTEL, WADIA ESTATE BAIL BAZAR, KURLA-WEST MUMBAI-400 070. PAN : APOPS7108E VS . ITO-26(1)(5) PRATYAKSHAKAR BHAVAN,C-11, 7 TH FLOOR, ROOM NO. 708, BANDRA KURLA COMPLEX BANDRA EAST MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY NONE DEPARTMENT BY SHRI AKHTAR H. ANSARI DATE OF HEARING 17.09.2020 DATE OF PRONOUNCEMENT 22.09.2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED CIT(A) DATED 23.10.2018 AND PERTAINS TO A.Y. 2013-1 4. 2. GROUNDS OF APPEAL READ AS UNDER :- CONFIRMATION OF PENALTY U/S 271(L)(C) OF THE INCOME TAX ACT 1961 OF RS. 80.000/- :- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING PENALTY U /S. 271(L)(C) OF THE INCOME TAX ACT 1961 OF RS. 80,000/- BEING 100% OF TAX ON ACC OUNT OF DISALLOWANCES MADE FOR; A) INTEREST EXPENSES OF RS. 4,28,981/- B) SOCIETY CHARGES OF RS. 18,348/- 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT ADD ITIONS ON ACCOUNT OF INTEREST EXPENSES AND SOCIETY CHARGES WAS AGREED TO BY THE APPELLANT DURING THE COURSE OF THE ASSESSMENT. IN CASE OF INTEREST EXPE NSES AND SOCIETY CHARGES, IT WAS MERE DISALLOWANCE OF EXPENSES CLAIM ED BY THE APPELLANT. 3. THE LEARNED CIT(A) OUGHT NOT TO HAVE CONFIRMED LE VY OF PENALTY U/S. 271(L)(C) OF THE INCOME TAX ACT 1961 OF RS. 80,000/ -. 4. PENALTY LEVIED OF RS 80,000/- U/S 271(L)(C) OF INCOME TAX ACT, 1961 REQUIRES TO BE DELETED. 2 3. BRIEF FACTS OF THE CASE THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013 -14 WAS E-FILED ON 03.01.2014 DECLARING TOTAL INCOME AT RS.3,71,ISO/-. IN THIS CASE, ASSESSMENT ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 WAS PA SSED ON 16.03.2016 ASSESSING THE TOTAL INCOME AT RS.8,18,480/- AFTER M AKING AN ADDITION OF RS.4,47,329/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS FOUND THAT THE ASSESSEE HAD SHOWN INCOME FROM OTHER SOURCES TO THE TUNE OF RS.4,41,372/- AS PER COMPUTATION ENUMERATED BELOW:- SR. NO. PARTICULARS AMOUNT (IN RS.) AMOUNT (IN RS.) 1. INTEREST INCOME BANK INTEREST 6,037 2. OTHER INCOME RENT INCOME 9,41,583 LESS: EXPENSES INCURRED 5,06,248 4,35,335 TAXABLE INCOME FROM OTHER SO URCES 4,41,372 4. ON PERUSAL OF THE INCOME & EXPENDITURE A/C. AO F OUND THAT THE SUM OF RS.9,41,583/- DECLARED AS INCOME FROM 'OTHER REVENU E' CONSISTED OF RENTAL INCOME FROM VARIOUS PROPERTIES, AGAINST WHICH THE E XPENSES, COMPRISING OF (I) INTEREST ON LOAN RS. 4,28,981/- & (II) SOCIETY CHAR GES OF RS. 18.348/-, AGGREGATING TO RS.5,06,248/-, ARE DEDUCTED. FURTHER , THE AO NOTICED FROM THE DETAILS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS THAT BOTH THESE EXPENSES PERTAIN TO HOUSING LOAN INTEREST & SOCIETY MAINTENA NCE CHARGES OF ASSESSEE'S RESIDENTIAL PREMISES. ACCORDINGLY, THE SUM OF RS.4, 47,329/- WAS ADDED TO THE TOTAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURC ES', AS THE INTEREST ON LOAN & SOCIETY CHARGES WERE NOT PAID FOR EARNING TH E INCOME FROM OTHER SOURCES. 5. AGAINST THE ABOVE ADDITION/DISALLOWANCE PENALTY WAS ALSO LEVIED. 3 6. UPON ASSESSEES APPEAL LEARNED CIT(A) REJECTED T HE CONTENTION THAT THERE WAS NO CONCEALMENT IN AS MUCH AS ALL THE PARTICULAR S WERE AVAILABLE. ACCORDINGLY, LEARNED CIT(A) CONFIRMED THE PENALTY . 7. AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE THE ITAT. 8. I HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. I FIND THAT THE CLAIM OF THE ASSESSEE REGAR DING INTEREST ON LOANS AND SOCIETY CHARGES WERE DULY GIVEN. HENCE, THE ASSESSE E CANNOT BE HELD GUILTY OF CONCEALMENT. AS HELD BY HON'BLE SUPREME COURT IN TH E CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158), WHEN A CLAIM IS M ADE AND THE SAME DOES NOT ACCEPTED THE SAME IS NOT IPSO FACTO LEAD TO THE PRE SUMPTION THAT PENALTY U/S. 271(1)(C) OF THE ACT IS LEVIABLE. FURTHER IN MY CO NSIDERED OPINION CONDUCT OF THE ASSESSEE IS NOT CONTUMACIOUS SO AS TO WARRANT L EVY OF PENALTY. IT WAS ALSO HELD BY HON'BLE SUPREME COURT IN THE CASE OF HINDUS TAN STEEL VS. STATE OF ORISSA VS. (83 ITR 26). ACCORDINGLY, I SET ASIDE TH E ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY IN THIS CASE. 9. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITAT RULE S ON 22.9.2020. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI; DATED : 22/09/2020 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI