DCIT CIR 3(3), MUMBAI V. REMI SALES & ENGINEERING LTD, MUMBAI

ITA 1684/MUM/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2652 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 13-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Speculation loss; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI N.V. VASUDEVAN, J.M. AND SHRI A.L. GEHL OT, A.M. ITA NO. 1684/M/09 ASSESSMENT YEAR: 2001-02 DY. COMMISSIONER OF INCOME-TAX, APPELLANT CIRCLE 3(3), MUMBAI VS. M/S REMI SALES & ENGINEERING LTD., RESPONDENT 53, MITTAL COURT, A WING, NARIMAN POINT, MUMBAI 400 021 (PAN AAACR 0421M) APPELLANT BY : MR. AARSI PRASAD RESPONDENT BY : NONE ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-XXXII, MUMBAI, ON 09.09.2008 FOR THE ASSES SMENT YEAR 2001- 02 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING PENALTY LE VIED U/S 271(1)(C) WITHOUT APPRECIATING THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. GOLD COIN HEALTH FOOD (P) LTD., 218 CTR (SC) 359 THAT PENALTY U/S 271(1)(C) CAN BE LEVI ED IN A CASE WHERE ADDITION OF CONCEALED INCOME REDUCES THE RETU RNED LOSS AND FINALLY ASSESSED INCOME IS ALSO A LOSS.. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . 2. NONE PRESENT ON BEHALF OF THE RESPONDENT-ASSESS EE. HOWEVER, AFTER HEARING THE LEARNED DR, WE PROCEED TO DECIDE THE APPEAL IN MERITS. ITA NO. 1684/M/09 M/S REMI SALES & ENGINEERING LTD. 2 3. WE FIND THAT THE REVENUE HAS RAISED THE GROUND A S IF THE CIT(A) HAS CANCELLED THE PENALTY ON THE GROUND THAT THE TH ERE WAS LOSS. ON PERUSAL OF THE ORDER OF CIT(A), WE FIND THAT THE CI T(A) HAS DECIDED THE ISSUE ON MERIT OBSERVING THAT IT IS NOT A CASE OF F URNISHING INACCURATE PARTICULARS OF INCOME. THE RELEVANT FINDING OF CIT( A) IS REPRODUCED BELOW:- 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS, THE FACTS OF THE CASE AND THE PENALTY ORDER. IT MAY BE SEEN FROM THE PENALTY ORDER THAT PENALTY PROCEEDINGS WERE INITIATED FOR F URNISHING INACCURATE PARTICULARS OF INCOME. HOWEVER, ON PERUS AL OF THE FACTS, IT WAS FOUND THAT THE APPELLANT HAD DISCLOSE D ALL THE MATERIAL FACTS, IN THE AUDITED PROFIT & LOSS ACCOUN T, SUBMITTED ALONG WITH RETURN OF INCOME PRIOR TO THE ASSESSMENT . 7. THE CONTENTION OF THE APPELLANT THAT NO PENALTY CAN BE LEVIED WHERE THE LOSS INCURRED IN TRADING OF SHARES WAS SHOWN SEPARATELY IN THE AUDITED PROFIT & LOSS ACCOUNT, SU BMITTED TO THE AO, IS COVERED BY HIGH COURT AND TRIBUNALS ORDERS ENUMERATED ABOVE AND A RECENT ORDER OF THE HON. ITAT, MUMBAI ( ITA NOS. 1160 & 1161/MUM/2006 FOR AY 2000-01 & 2001-02) IN C ASE OF NASU PROPERTIES PVT. LTD. VS. ITO WARD 7(1)(1) IS A CCEPTABLE. THE CONTENTION THAT THE CLAIM OF TRADING LOSS, DISALLOW ED AS SPECULATION LOSS DOES NOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS OF INCOME IS ALSO COVERED BY DECISION O F HON.ITAT(SB), AHMEDABAD IN THE CASE OF GUJARAT CREDIT CORPORATION LTD. VS. ASSTT. COMM. OF INCOME TAX 302 ITR 250. RESPECTFULL Y FOLLOWING THE ABOVE ITAT DECISIONS AND OTHER DECISIONS OF VAR IOUS HIGH COURTS, I HOLD THAT THERE WAS NO FURNISHING OF INAC CURATE PARTICULARS OF INCOME IN THE CASE OF THE APPELLANT AND HENCE NO PENALTY IS LEVIABLE. THE AO IS DIRECTED TO DELETE T HE PENALTY. 4. SINCE THE CIT(A) HAS DECIDED THE PENALTY MATTER ON MERIT, THEREFORE, THE JUDGMENT OF THE APEX COURT IN THE CA SE OF CIT VS. GOLD COIN HEALTH FOOD (P) LTD., 218 CTR (SC) 359 IS NOT APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. THE REVENUE HAS NOT CHALLENGED THE GROUND/ISSUE ON MERITS AND IN THE LIGHT OF THAT THE ORDER OF CIT(A) IS HEREBY UPHELD. ITA NO. 1684/M/09 M/S REMI SALES & ENGINEERING LTD. 3 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED ON THIS 22 ND DAY OF DECEMBER, 2009. SD/- SD/- (N.V. VASUDEVAN) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 22 ND DECEMBER, 2009 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, D BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV S.NO. DESCRIPTION DATE INITLS 1. DRAFT DICTATED ON 18.12.09 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 21.12.09 SR.P.S/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.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER