ITO 9(1)(1), MUMBAI V. A.N. CORPORATION P. LTD, MUMBAI

ITA 1523/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1750 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 05-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJT PATANKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI B. RAMAKOT AIAH,(AM) ITA NO.1523/MUM/2009 ASSESSMENT YEAR :2001-02 INCOME TAX OFFICER-9(1)(1) ROOM NO.226, AAYAKAR BHAVAN MUMBAI-400 020. ..( APPELLANT ) VS. M/S. A.N. CORPORATION PVT. LTD. A.N. HOUSE, 1 ST FLOOR, 31 ST ROAD T.P.S. III, BANDRA (W) MUMBAI-400 050. ..( RESPONDENT ) P.A. NO. (AAACA 4411 C) APPELLANT BY : SHRI ABHIJT PATANKAR RESPONDENT BY : NONE O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 22.12.2008 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2001-02. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE. IT WAS, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL EXPARTE, Q UA THE ASSESSEE ON MERITS AFTER HEARING THE LD. DR. ITA NO.1523/M/09 A.Y:01-02 2 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION. IT FILED RET URN DECLARING TOTAL LOSS OF RS.10,09,090/-. HOWEVER, THE ASSESSMENT WAS COMPLET ED AT AN INCOME OF RS.4,37,300/- INCLUDING THE DISALLOWANCE O F LOSS ON SALE OF FLAT RS.13.00 LACS ( FLAT AT BANDRA RED ROSE, CHS LTD . PURCHASED ON 28.10.97 FOR RS.18.00 LACS SOLD ON 7.6.2000 TO MRS. GA URI A. DUKLE & MS. ASMITA G. DUKLE FOR RS.5.00 LACS) AND INFLATION OF COST RS.1,46,390/-, VIDE ORDER DATED 21.1.2004 PASSED U/S.14 3(3) OF THE INCOME TAX ACT, 1961 (THE ACT). ON APPEAL THE LD. CIT (A), WHILE CONFIRMING THE ADDITION WITH REGARD TO LOSS ON SALE OF FLAT RS.13.00 LACS DELETED THE OTHER ADDITION OF RS.1,46,390/- MADE ON ACCOUNT OF INFLATION OF COST. WHILE MAKING THE ASSESSMENT THE ASSESSI NG OFFICER ALSO INITIATED PENALTY PROCEEDING U/S.271(1)(C) OF THE ACT AND ACCORDINGLY THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY PEN ALTY U/S.271(1)(C) SHOULD NOT BE IMPOSED. IN RESPONSE IT WAS INTERALIA SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE DID NOT SELL THE SAID FLAT VOLUNTARILY FOR THE LOW PRICE OF RS.5.00 LACS, BUT WAS FORCED BY ADVERSE CIRCUMSTANCES TO SELL THE SAID FLAT FOR THE AMOUNT. SALE OF THE SAID FLAT TO GURUDAS DUKLE WAS THUS IN THE NATURE OF A DISTRESS SALE . IT WAS A PURE BUSINESS TRANSACTION WHERE THEY HAD TO MAKE DISTRESS SALE TO CUT LOSSES. IT WAS FURTHER SUBMITTED TO KEEP IN ABEYANCE TIL L THE DISPOSAL OF APPEAL BY THE TRIBUNAL. HOWEVER, THE ASSESSING OFFI CER DID NOT ITA NO.1523/M/09 A.Y:01-02 3 ACCEPT THE ASSESSEE'S EXPLANATION. ACCORDING TO THE ASSESSING OFFICER IT IS CLEAR THAT THE ASSESSEE COMPANY HAS CONCEALED PARTICULAR S OF ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF THE SAME A ND ACCORDINGLY HE IMPOSED PENALTY OF RS.4,60,000/- VIDE ORDER DATED 22.3.2007 PASSED U/S.271(1)(C) OF THE ACT. ON APPEAL THE LD. CIT (A) FOLLOWING THE ORDER OF THE TRIBUNAL WHEREIN THE TRIBUNAL HAS D ELETED THE ADDITION IN ITA NO.3960/M/05 VIDE ORDER DATED 30.4.2008, WHI LE OBSERVING THAT WHERE AN ADDITION ON THE BASIS OF WHICH THE PENALTY IS IMPOSED IS DELETED, HELD THAT THE PENALTY CANNOT BE SUSTAINED. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETI NG THE PENALTY OF RS.4,60,000/- U/S.271(1)(C) OF THE I.T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE REVENUE HAS FILED APPEAL AGAI NST THE ITATS ORDER DATED 30.4.2008 DELETING THE ADDITION OF RS.13,00,000/- ON WHICH THE PENALTY U/S.271(1)(C) W AS IMPOSED. 5. AT THE TIME OF HEARING THE LD. DR SUPPORTS THE OR DER OF THE ASSESSING OFFICER. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD . DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THA T THERE IS NO ITA NO.1523/M/09 A.Y:01-02 4 DISPUTE THAT THE LD. CIT(A) HAS DELETED THE PENALTY O N THE GROUND THAT THE TRIBUNAL IN ASSESSEE'S OWN CASE IN ITA NO.3966/M/05 DA TED 30.4.2008 HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE I N DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. IN THE ABSENCE O F ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE WE A RE OF THE VIEW THAT SINCE THE ADDITION ON WHICH PENALTY WAS IMPOSED BY THE ASSESSING OFFICER HAS BEEN DELETED, THE PENALTY HAS NO LEGS TO STA ND AND ACCORDINGLY WE ARE INCLINED TO UPHOLD THE FINDING OF T HE LD. CIT(A) IN DELETING THE PENALTY IMPOSED BY THE ASSESSING OFFICER. T HE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, REJECTED. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.6.2010. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 11.6.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.