ACIT CIR 4(2), MUMBAI V. RAMESH M DAMANI, MUMBAI

ITA 1625/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8335 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKASH KUMAR AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI .. , , BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ I.T.A. NO. 1625/MUM/2012 ( / ASSESSMENT YEAR: 2006-07) ASST. CIT, CIRCLE 4(2), ROOM NO. 642, 6 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 / VS. RAMESH M. DAMANI 7 TH FLOOR, MOTI MAHAL BUILDING, 195, JAMSHEDJI TATA ROAD, CHURCHGATE, MUMBAI-400 020 ! ./' ./PAN/GIR NO. ADJPD 2551 P ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !# & ' / APPELLANT BY : SHRI VIKASH KUMAR AGARWAL $%!# & ' / RESPONDENT BY : SHRI HIRO RAI ( )* & +, / DATE OF HEARING : 16.07.2014 -./0 & +, / DATE OF PRONOUNCEMENT : 22.08.2014 1 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, MUMBAI (CI T(A) FOR SHORT) DATED 19.02.2011. 2. THE REVENUE THROUGH ITS GROUNDS HAS AGITATED THE ACTION OF THE LD. CIT(A) IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICE R (A.O.) U/S.271(1)(C) OF THE INCOME 2 ITA NO. 1625/MUM/2012 (A.Y. 2006-07) ASST. CIT VS. RAMESH D. DAMANI TAX ACT, 1961 (THE ACT HEREINAFTER) IN RESPECT TO DIVIDEND STRIPING U/S. 94(7) OF THE ACT. THE ASSESSEE IS A SHARE BROKER AND A SHARE TRADER. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAD RECEIVED A DIVID END OF RS.47,16,889/- FROM INDIAN COMPANIES AND MUTUAL FUNDS. THE A.O. ASKED THE ASSE SSEE TO FURNISH THE DETAILS OF THE PURCHASE AND SALE IN RESPECT OF COMPANIES WHICH WER E HIT BY THE PROVISIONS OF SECTION 94(7) OF THE ACT. THE ASSESSEE, IN RESPONSE, WORKED OUT THE DETAILS OF THE DISALLOWANCE AT RS.14,07,826/- AND OFFERED THE SAME FOR TAX. THE A. O. FURTHER INITIATED THE PENALTY PROCEEDINGS AND IMPOSED THE PENALTY @ 100% OF THE T AX AMOUNT SOUGHT TO BE EVADED. IN APPEAL, IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAD NOT FURNISHED ANY INACCURATE PARTICULARS OF INC OME FOR THE PURPOSE OF CONCEALMENT OF ANY INCOME. IT WAS FURTHER SUBMITTED THAT THE A.O. DID NOT DETECT ANY CONCEALMENT OF INCOME. THE DETAILS RELATING TO THE DISALLOWANCE U/ S.94(7) WERE SOUGHT BY THE A.O. IN ORDINARY COURSE OF HEARING AND WHEN THE ASSESSEE RE ALIZED HIS BONA FIDE ERROR, HE IMMEDIATELY BROUGHT THE SAID ERROR INTO THE NOTICE OF THE A.O. AND VOLUNTARILY OFFERED THE SAID DISALLOWANCE FOR TAXATION. AFTER HEARING THE L D. REPRESENTATIVE OF THE ASSESSEE, THE LD. CIT(A) DELETED THE PENALTY OBSERVING AS UNDER: 2.7 SO FAR AS PENALTY ON ACCOUNT OF DISALLOWANCE O F LOSS U/S.94(7) IS CONCERN, THE CONTENTIONS OF THE LD. AR HAVE BEEN EX AMINED. IT IS TRUE THAT THE APPELLANT NOT DISALLOWED THE SAME IN THE RETURN OF INCOME. THE DETAILS WERE SOUGHT BY THE A.O. IN THE ORDINARY COURSE OF H EARING. THE APPELLANT ON REALIZING THE ERROR FILED THE DETAILS AND VOLUNT ARILY OFFERED THE SAME FOR TAXATION VIDE LETTER DATED 18 MARCH, 2008. IT IS SE EN THE A.O. NEVER ISSUED SHOW CAUSE FOR MAKING ADDITION U/S.94(7) BUT THE AD DITION WAS MADE ON THE BASIS OF OFFER GIVEN BY THE APPELLANT. THEY DID NOT CONCEAL THE PARTICULARS OF INCOME NOR WAS IT WAS IT CASE OF DETECTION OF CO NCEALMENT BY A.O. THE APPELLANT DID NOT AGITATE THIS ADDITION. CONSIDERIN G THE FACTS, CIRCUMSTANCES AND THE ATTITUDE OF THE APPELLANT IT IS NOT A FIT A CASE FOR CONCEALMENT PENALTY. THUS THE PENALTY LEVIED ON THIS ISSUE IS D ELETED. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND HAVE ALSO GONE THROUGH THE RECORD. THE LD. CIT(A) AFTER GOING THROUGH THE EXPLANATION SUBMITTED BY THE ASSESSEE HAS OBSERVED THAT IT WAS NOT A CASE OF CONCEALMENT OF INCOME RATHER OF BONA FIDE MISTAKE. THE A.O. HAD NOT DETECTED ANY CONCEALMENT OF INCOME BUT HAD SOUGHT THE DETAILS OF 3 ITA NO. 1625/MUM/2012 (A.Y. 2006-07) ASST. CIT VS. RAMESH D. DAMANI DISALLOWANCE U/S. 94(7) IN ORDINARY COURSE OF ASSES SMENT PROCEEDINGS. THE LD. CIT(A), THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES HAS HELD THAT IT WAS NOT A FIT CASE FOR LEVY OF PENALTY. 4. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESSE E HAS RETURNED A TOTAL INCOME OF RS.12.25 CRORES. HE, FURTHER, SUBMITTED THAT THE DI SALLOWANCE PRESCRIBED U/S.94(7) IS A STATUTORY DISALLOWANCE ONLY. ACCORDINGLY, HE SUBMIT TED THAT THERE IS NO CONCEALMENT OF PARTICULARS OF INCOME ON FURNISHING OF INACCURATE P ARTICULARS OF INCOME. WE FIND FORCE IN THE SUBMISSIONS OF THE LD. AR. THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A ). ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS HEREBY DISMISSED. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 20+3 ) & 2 & + 45 ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 22, 20 14 SD/- SD/- (B. R. BASKARAN) (SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( * MUMBAI; 6 DATED : 22.08.2014 ). ../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( 7+ ( ) / THE CIT(A) 4. ( 7+ / CIT - CONCERNED 5. :) $+ ;< , , ;< 0 , ( * / DR, ITAT, MUMBAI 6. =* / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ( * / ITAT, MUMBAI