DCIT RG 9(1), MUMBAI V. M/s. CHITRA HOLDINGS P. LTD, MUMBAI

ITA 152/MUM/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2756 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 07-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Business expenditure
• Section: 271(1)(c); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: MUMBAI BEFORE SHRI R S SYAL, ACCOUNTANT MEMBER AND SHRI V D RAO, JUDICIAL MEMBER ITA NO 152/MUM/2009 (ASSESSMENT YEAR: 2003-04) DCIT RG -9(1), ROOM NO. 223, AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 VS M/S CHAITRA HOLDINGS PVT LTD, A-101, VINTAGE PAREL, 29TH ROAD, TPS III, BANDRA (W), MUMBAI -400 012 PAN: AAACP 8989 J APPELLANT RESPONDENT APPELLANT BY: SHRI SANJEEV JAIN RESPONDENT BY: SHRI MANISH SHAH ORDER PER V D RAO, JUDICIAL MEMBER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE CIT (A) IX DATED 20.10.2008 FOR THE ASSESSMENT YEAR 2003-04. THE ON LY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING PENALTY LEVIED U/S 271(1)(C) IN RESPECT OF DISALLOWANCE OF EXPENSES CLAIMED AS BUSINESS EXPENSES WITHOUT APPRE CIATING THE FACTS THAT THE ASSESSEE DID NOT CARRY ANY BUSINESS DURING THE YEAR AS THE INCOME FROM COMMISSION AND HIRE CHARGES ARE HELD TO BE INCOME F ROM OTHER SOURCES. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF INVESTMENT, LEASING AND CONSULTATION IN THE BUSINES S OF ADVERTISEMENT. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS FILED RETURN OF INCOME AT RS 50,16,800/-. THE ASSESSMENT WAS COMPLETED U/S 143(3), THE ASSESSING OFFICER HAS MADE AN ADDITION ON ACCOUNT OF COMMISSION INCOME AT RS 87.5 LAKHS RE CEIVED BY THE ASSESSEE AND TREATED IT AS INCOME FROM OTHER SOURCES AGAINST T HE BUSINESS INCOME. SUBSEQUENTLY, THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S 27 1(1)(C) OF THE ACT. THE LEARNED CIT (A) DELETED THE PENALTY BY FOLLOWING EARLIER YE ARS ORDER I.E. FOR ASSESSMENT YEARS 2000-01 AND 2001-02 AS AGAINST THE ORDER PASSED BY THE CIT (A). THE REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. ITA 152/M/09 M/S CHAITRA HOLDINGS PVT LTD 2 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL OF T HE ASSESSEE HAS SUBMITTED THAT THE QUANTUM APPEAL FILED BY THE ASSESSEE IN ITA NO. 6908/MUM/2006 FOR ASSESSMENT YEAR 2003-04. THE TRIBUNAL BY FOLLOWING THE ASSESS EES OWN CASE IN ITA NOS 6071 & 6072/MUM/04 ALLOWED THE ASSESSEES APPEAL AND HELD THAT THE INCOME RECEIVED BY THE ASSESSEE IS INCOME FROM BUSINESS, THE COMMISSIO N RECEIVED BY THE ASSESSEE IS INCOME FROM BUSINESS AND NOT FROM OTHER SOURCES. O N THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED THAT QU ANTUM APPEAL IS IN FAVOUR OF THE ASSESSEE. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE VERY BASIS FOR THE IMPOSITION OF THE PENALTY WAS ALLOWED IN FAVOUR OF THE ASSESSEE. WE, THEREFORE OF THE OPINION THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1) (C) HAVE NO LEGS TO STAND. WE FIND NO INFIRMITY IN THE ORDER BY LEARNED CIT (A). ACCORDINGLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 4TH DAY OF DECEMBER 2009. SD/- (R S SYAL) ACCOUNTANT MEMBER SD/- (V D RAO) JUDICIAL MEMBER MUMBAI, DATE: 4TH DECEMBER 2009 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -XIX, MUMBAI. 4) THE CIT-CITY-VII, MUMBAI. 5) THE D.R. C BENCH, ITAT, MUMBAI BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI ITA 152/M/09 M/S CHAITRA HOLDINGS PVT LTD 3 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 02.12.09 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 03.12.09 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER