ASHA LAXMIKANT BABLADI, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 1733/MUM/2010

• Counselvise Citation: 173319914 RSA 2010
• Duration Of Justice: 4 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 05-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S D SHRIVASTAVA; S SENT H IL KUMARAN
• Assessee Lawyers: K SHIVRAM
• Keywords: Gift
• Section: 68; 132; 15; 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI , BEFORE SHRI R.C.SHARMA , A M & VIVEK VARMA , J M ITA NO. 1733 , 1734 &2110 / MUM/20 1 0 ( ASSESSMENT YEAR : 200 1 - 02 , 2004 - 05 & 2006 - 07 ) SMT. ASHA LAXMIKANT BABLADI, A/16, NAVSHILPAVANI CHS, LALLUBHAI PARK, ROAD NO.1, VILE PARLE (W), MUMBAI - 56 VS. DCIT, CC - 36, MUMBAI PAN/ GIR NO. : A GSPB 1432 B ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 2526 / MUM/20 1 1 ( ASSESSMENT YEAR :200 6 - 07 ) DCIT, CC - 36, MUMBAI VS. SMT. ASHA LAXMIKANT BABLADI, A/16, NAVSHILPAVANI CHS, LALLUBHAI PARK, ROAD NO.1, VILE PARLE (W), MUMBAI - 56 PAN/GIR NO. : A GSPB 1432 B ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. K.SHIVRAM /REVENUE BY : MR. S.D.SHRIVASTAVA & MR. S.SENT H IL KUMARAN DATE OF HEARING : 10 TH JUNE , 201 4 DATE OF PRONOUNCEMENT : 10 TH JUNE , 201 4 O R D E R PER BENCH : TH ESE ARE THE APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE OR DER OF CIT(A) FOR THE ASSESSMENT YEAR S 2001 - 02, 2004 - 05 & 2006 - 07 . ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 2 ITA NO. 1733 & 1734/MUM/ 2010 (AY : 2001 - 02 & 2004 - 05) 2 . IN BOTH THESE APPEALS COMMON GRIEVANCE OF ASSESSEE RELATES TO THE ADDITION MADE U/S. 68. AT THE OUTSET, LEARNED AR FAIRLY CONCEDED THA T ISSUE UNDER CONTROVERSY IS COVERED BY THE ORDER OF THE TRIBUNAL IN ONE OF THE GROUP MEMBER OF THE ASSESSEE IN CASE OF SATISH BABLADI IN ITA NOS.1732 & 2109/MUM/2010, DATED 19 - 3 - 2013. WE HAVE GONE THROUGH THE ORDER OF THE LOWER AUTHORITIES AND FOUND THAT ADDITION WAS MADE U/S. 68 IN RESPECT OF BOGUS GIFT RECEIVED BY THE ASSESSEE. THE ADDITION SO MADE IN BOTH THE YEARS WERE CONFIRMED BY CIT(A) AFTER GIVING DETAILED FINDINGS . IN VIEW OF THE ARS AGREEMENT THAT ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRI BUNAL IN OTHER GROUP MEMBERS OF THE ASSESSEE, RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A) FOR CONFIRMING THE ADDITION MADE U/S. 68. 2.1 IN BOTH THE APPEALS, ASSESSEE HAS TAKEN ADDITIONAL GROUND TO THE EFFECT THAT ASSESSMENT MADE U/S. 143 READ WITH SECTION 1 5 3A ON THE BASIS OF SEARCH UNDER SECTION 132 IS NOT A DE NOVO ASSESSMENT AS POWER OF REVIEW IS NOT AVAILABLE UNDER THE ACT . THE ASSESSEE HAS ALSO TAKEN A LEGAL GROUND TO THE EFFECT THAT WARRANT OF AUTH ORIZATION ISSUED FOR THE SEARCH WAS IN JOINT NAMES OF VARIOUS INDIVIDUALS BUT SEPARATE ORDER OF ASSESSMENT WAS PASSED FOR THE ASSESSEE IN WHOSE NAME ALONE THERE WAS NO SEARCH WARRANT THEREBY RENDERING THE ORDER OF ASSESSMENT AS INVALID. ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 3 2.2 WE FOUND THAT SIMILAR PLEA WAS TAKEN BY THE ASSESSEE IN CASE OF SATISH L. BABLADI AND THE TRIBUNAL VIDE ORDER DATED 19 - 3 - 2013 HELD AS UNDER : - 4.2 COMING TO THE DECISIONS CITED BY THE PARTIES, WE FIND THAT THE PREPONDERANCE OF THE JUDICIAL VIEW IS IN THE FAVOUR OF THE VALIDITY OF THE ASSESSMENT MADE ON AN INDIVIDUAL PURSUANT TO SEARCH BEING AUTHORIZED IN THE NAME OF MORE THAN ONE PERSON, WITH THE HONBLE HIGH COURT IN THE CASE OF RAGHU RAJ PRATAP SINGH (SUPRA) ALSO DRAWING ON THE DECISION IN THE CASE OF MADHUPURI CORPN . V. DY. CIT (2002) 256 ITR 498 (GUJ.). THE BASIS OF ALL THESE DECISIONS IS THAT THERE IS NO RESTRICTION PLACED BY LAW ON THE ISSUANCE OF A COMMON AUTHORIZATION, WHICH IS OF COURSE TO BE BASED ON REASON/S TO BELIEVE, ON THE STRENGTH OF MATERIALS AND INFORM ATION WITH REGARD TO THE CONCEALED INCOME OR ASSETS OF PERSONS IN RESPECT OF WHOM SEARCH ACTION IS INITIATED. AS EXPLAINED, THE SEARCH IS OF A PREMISES, ETC., SO THAT THE WARRANT OF AUTHORIZATION IS ISSUED QUA A PREMISES, I.E., A DIFFERENT WARRANT WOULD ST AND TO BE ISSUED FOR EACH DIFFERENT PLACE WHICH IS TO BE SUBJECT TO SEARCH, OF COURSE IN RESPECT OF THE PERSONS WHOSE INCOME/ASSETS ARE SUSPECTED TO BE SECRETED OR HELD AT THE SAID PLACE. FURTHER, AS THE SAID PERSON/S MAY NOT BE AVAILABLE AT THE SAID PREMI SES AT THE TIME OF SEARCH, THE OBLIGATION ON THE SEARCH PARTY TO PRODUCE AND SHOW THE SEARCH WARRANT IS TO THE PERSON WHO IS AT THE TIME RELEVANT TIME IN CHARGE OF THE SAID PREMISES; THE SEARCH IN THE CASE OF RAGHU RAJ PRATAP SINGH (SUPRA) BEING ON A BANK, WHICH WAS BELIEVED TO HOLD UNDISCLOSED DEPOSITS (IN THE FORM OF FDRS) OF THE PERSONS IN RESPECT OF WHOM THE SEARCH HAD BEEN AUTHORIZED. IN OTHER WORDS, IF THE SEARCH AT A PLACE IS LIKELY TO YIELD EVIDENCE IN RELATION TO THE UNDISCLOSED INCOME OR ASSETS OF MORE THAN ONE PERSON, IT IS NOT NECESSARY TO ISSUE SEPARATE WARRANTS, AUTHORIZING THE AUTHORIZED OFFICER SEPARATELY FOR SUBJECTING THE SAME PLACE TO SEARCH AT THE SAME TIME QUA SUCH PERSONS. A VALID SEARCH COULD THUS BE MADE ON THE BASIS OF SUCH COMMON AUTHORIZATION FOR EACH OF THOSE PERSONS. 4.3 IT IS NOT THE ASSESSEES CASE THAT THE SEARCH ACTION OR PROCEEDINGS ARE VITIATED ON ACCOUNT OF A COMMON WARRANT OF AUTHORIZATION (WOA) AND, THEREFORE, THE ASSESSMENT/S FRAMED PURSUANT THERETO IS BAD IN LAW. TH E LD. AR WAS SPECIFICALLY QUESTIONED BY THE BENCH ON THIS, AND HE CLARIFIED THAT THE ASSESSEE DOES NOT DISPUTE THE VALIDITY OF THE SEARCH, BUT THAT THE WOA BEING IN JOINT NAMES, THE ASSESSMENT/S COULD NOT BE FRAMED ON THE ASSESSEE AS AN INDIVIDUAL, BUT ONL Y JOINTLY WITH OTHERS NAMED IN THE SAID WOA. WE ARE UNABLE TO APPRECIATE THE ASSESSEES PLEA. IF THE SEARCH IS LEGALLY VALID, AS INDEED IT IS, AND, FURTHER, UNDISPUTEDLY, HOW IS THE ASSESSMENT/S IN THE INDIVIDUAL NAME OF THE ASSESSEE, ONE OF THE PERSONS IN RESPECT OF WHOM THE SEARCH IS CONDUCTED OR CARRIED OUT, NOT SO? MERELY BECAUSE A COMMON WOA IS ISSUED IN RESPECT OF MORE THAN ONE PERSON, DOES NOT IMPLY EXISTENCE OF A JOINT ENTITY OR AN ASSOCIATION OF PERSONS (AOP) COMPRISING THEM. THE WOA ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 4 NAMES FOUR PERSONS, WHOSE NAMES ARE SEPARATELY MENTIONED, WITH A COMMA IN BETWEEN. THAT WOULD SIGNIFY OF IT BEING A WARRANT AUTHORIZING A SEARCH AT THE PREMISES/LOCATION/ADDRESS MENTIONED THEREIN IN RESPECT OF THE FOUR NAMED PERSONS, IN THE SAME MANNER AS IF THEIR NAMES WERE WRITTEN IN A MORE FORMAL FORMAT, AS (REFER PB PGS. 5 - 6): 1) SATISH BABLADI, 2) RAJESH BABLADI, 3) ASHA BABLADI, AND 4) LAXMIKANT BABLADI. THE WOA IS, AS ALREADY NOTED EARLIER, ISSUED PLACE - WISE. AS SUCH, IF THE UNDISCLOSED INCOME OR ASSETS OF MORE THAN ONE PERSON/INDIVIDUAL ARE EXPECTED TO BE FOUND AT A PARTICULAR PLACE, A SINGLE WARRANT FOR ITS SEARCH, MENTIONING THEIR INDIVIDUAL NAMES, CAN BE ISSUED, EVEN AS EXPLAINED BY THE HON'BLE COURT IN THE CASE OF RAGHU RAJ PRATAP SINGH (SUPRA), NOTING THAT THE RELEV ANT COLUMN (FOR MENTIONING THE NAMES OF THE PERSONS BEING SUBJECT TO SEARCH) IN THE RELEVANT FORM (FORM NO.45 / PB PGS. 5 - 6) BEGINS WITH THE WORDS SARVSHRI, INDICATING PLURALITY OF NAMES. IT DOES NOT IN ANY MANNER INDICATE AN AOP COMPRISED OF THE SAID P ERSONS. IT WOULD BE A DIFFERENT MATTER IF THE MATERIALS WITH THE REVENUE ARE FOR THE UNDISCLOSED INCOME/ASSETS OF AN AOP COMPRISING THEM, BUT THE SUBSEQUENT ASSESSMENT/S IS FRAMED IN THEIR INDIVIDUAL NAMES ON THE STRENGTH OF EVIDENCE FOUND WITH REGARD TO THEIR INDIVIDUAL ASSETS IN SEARCH. THE ASSESSEE HAS NO SUCH CASE, WHICH, WHERE SO, COULD ONLY BE ON THE BASIS OF THE FACTS AND NOT A BALD STATEMENT/S. IN FACT, EVEN IN SUCH A CASE, THERE IS NO BAR IN LAW FOR FRAMING ASSESSMENTS IN THE NAMES OF DIFFERENT IN DIVIDUALS OR, EVEN FOR THAT MATTER, WHOSE NAMES ARE NOT MENTIONED BUT QUA WHOM MATERIAL AS TO UNDISCLOSED INCOME STANDS FOUND, THOUGH THE SAME WOULD BE U/S.153C AND NOT SECTION 153A. IN THE INSTANT CASE, THERE IS NO IOTA OF EVIDENCE, NOR IS IT THE ASSESSE ES CASE OF IT BEING SO, OF ANY JOINT ECONOMIC OR COMMERCIAL ACTIVITY BY THE FOUR NAMED PERSONS, TO SUGGEST EVEN REMOTELY OF INCOME/ASSETS OF AN AOP. IN FACT, BY ALL AVAILABLE COUNTS, THE INFORMATION, OR AT LEAST ONE OF THE INFORMATIONS, LEADING TO THE SEA RCH ACTION, IS THE MONIES RECEIVED FROM ANL UNDER THE ARBITRATION AWARD DATED 26.11.2005; THE SAME HAVING NOT BEEN DISCLOSED IN THE RETURNS FOR THE RESPECTIVE YEARS. THE SAID INCOME, ARISING FROM THE JOINT OWNERSHIP OF THE PROPERTY, IN DEFINED RATIOS, IS A SSESSABLE ONLY SEPARATELY IN THEIR INDIVIDUAL NAMES. RATHER, WE HAVE ALREADY CLARIFIED THAT EVEN ASSESSMENT IN THE HANDS OF THE PERSON/S OTHER THAN WHOSE NAMES STAND MENTIONED IN THE WOA, AS FOR EXAMPLE AOP COMPRISING SOME SUCH PERSONS, CAN ALSO BE VALIDLY MADE IF MATERIAL AS TO ITS UNDISCLOSED INCOME IS FOUND IN THE SEARCH, THUS INITIATED. THAT IS, IN CASE OF MIS - MATCH BETWEEN THE PERSON/S IN RESPECT OF WHOM SEARCH IS INITIATED AND IN RESPECT OF WHOM ASSETS/INCOME IS (ALSO) FOUND. THE LAW IS COMPREHENSIVE AND CONTEMPLATES SUCH A SITUATION, PRESCRIBING A SEPARATE PROCEDURE FOR SUCH CASES PER SECTION 153C. WE ARE, THEREFORE, WITH RESPECT, UNABLE TO SUBSCRIBE TO THE VIEW ADVOCATED BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF VANDANA VERMA (SUPRA) THAT A WOA IN JOINT NAMES OF DIFFERENT INDIVIDUALS CAN LEAD TO A VALID ASSESSMENT/S ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 5 U/S.153A ONLY IN THE HANDS OF THE AOP OR BODY OF INDIVIDUALS (BOI) COMPRISING THEM, AND ARE INCLINED TO FAVOUR THE PRE - DOMINANT JUDICIAL VIEW AS EXPRESSED BY THREE HIGH COURTS, I NCLUDING THE ALLAHABAD HIGH COURT ITSELF. THE ASSESSEES LEGAL PLEA IS, ACCORDINGLY, DISMISSED, DISPOSING ITS GROUND NO. 1 AS WELL AS THE ADDITIONAL GROUND NO. 1. 2.3 IN VIEW OF THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF ONE OF THE G ROUP MEMBERS OF THE ASSESSEE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE FOR HOLDING THAT THE ORDER OF ASSESSMENT WAS INVALID ON THE PLEA THAT WARRANT OF AUTHORIZATION ISSUED FOR THE SEARCH WAS IN JOINT NAMES OF VARIOUS INDIVIDUALS BUT SEPA RATE ORDER OF ASSESSMENT WAS PASSED FOR THE ASSESSEE. 2. 4 IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ITA NO.2110/MUM/2010(AY : 2006 - 07) 3 . IN THIS CASE THE GRIEVANCE OF THE ASSESSEE RELATES TO ADDITION OF RS. 27,50,000/ - ON ACCOUNT LONG TERM CAPITAL GAINS. LEARNED AR FAIRLY CONCEDED THAT THIS ISSUE IS ALSO COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE COORDINATE BENCH IN THE CASE OF GROUP MEMBER SHRI SATISH L. BABLADI, ITA NO.1732&2109/M/2010, ORDER DATED 19 - 3 - 2013 . COPY OF THE ORDER WAS ALSO FILED BY THE LEARNED AR . RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR CONFIRMING THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN. 3.1 IN THIS APPEAL, ASSESSEE HAS TAKEN ADDITIONAL GROUND TO T HE EFFECT THAT ASSESSMENT MADE U/S.143 READ WITH SECTION 153A ON THE BASIS OF SEARCH UNDER SECTION 132 IS NOT A DE NOVO ASSESSMENT AS POWER OF ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 6 REVIEW IS NOT AVAILABLE UNDER THE ACT. THE ASSESSEE HAS ALSO TAKEN A LEGAL GROUND TO THE EFFECT THAT WARRANT OF A UTHORIZATION ISSUED FOR THE SEARCH WAS IN JOINT NAMES OF VARIOUS INDIVIDUALS BUT SEPARATE ORDER OF ASSESSMENT WAS PASSED FOR THE ASSESSEE IN WHOSE NAME ALONE THERE WAS NO SEARCH WARRANT THEREBY RENDERING THE ORDER OF ASSESSMENT AS INVALID. 3 .2 WE FOUND T HAT SIMILAR PLEA WAS TAKEN BY THE ASSESSEE IN CASE OF SATISH L. BABLADI AND THE TRIBUNAL VIDE ORDER DATED 19 - 3 - 2013 HAS DECIDED THE ISSUE IN PARA 4.2 & 4.3 OF ITS ORDER, WHICH HAVE ALREADY BEEN REPRODUCED ABOVE. THEREFORE, I N VIEW OF THE DECISION OF THE C OORDINATE BENCH OF THE TRIBUNAL IN CASE OF ONE OF THE GROUP MEMBERS OF THE ASSESSEE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE FOR HOLDING THAT THE ORDER OF ASSESSMENT WAS INVALID ON THE PLEA THAT WARRANT OF AUTHORIZATION ISSUED FOR THE SE ARCH WAS IN JOINT NAMES OF VARIOUS INDIVIDUALS BUT SEPARATE ORDER OF ASSESSMENT WAS PASSED FOR THE ASSESSEE. 3 . 3 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 2526/MUM/2011 (AY : 2006 - 07) 4. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) , DATED 27 - 1 - 2011 FOR THE A.Y. 2006 - 07 IN THE MATTER OF IMPOSITION OF PENALTY U/S. 271(1)(C) . 4.1 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT ASSESSEE HAS SHOWN SHORT TERM CAPITAL GAIN ON MUTUAL ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 7 FUNDS OF RS. 3,61,729/ - IN THE RETURN OF INCOME. THE ASSESSING OFFICER HAS ASSESSED AT RS. 3,64,721/ - AND MADE ADDITION OF RS. 2,992/ - . HOWEVER, PENALTY HAS BEEN LEVIED ON THE FULL AMOUNT OF RS. 3,64,721/ - . THE SECOND ISSUE IS THAT IN THE ASSESSMENT ORDER, THE ASSESSIN G OFFICER HAS NOTICED THAT FAMILY MEMBERS OF THE ASSESSEE HAVE RECEIVED ARBITRATION AWARD AMOUNTING TO RS. 4,60,00,000 / - , OUT OF WHICH THE ASSESSEE HAS RECEIVED HER SHARE OF RS. 1,65,00,000 / - . THE ASSESSING OFFICER HAS OBSERVED THAT THE COMPENSATION WAS AW ARDED ON TRANSFER OF ASSET WHICH TOOK PLACE IN THE FY 2005 - 06, THEREFORE, THE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS. 27,50,0001 - AFTER ALLOWING EXEMPTION U/S. 54EC AT RS. 1,37,00,000 / - IN THE A.Y.2006 - 07 . HOWEVER, ON THE OTHER HAND, THE APPELLANT HAS A RGUED THAT THE POSSESSION WAS TAKEN IN' THE FY 2006 - 07, THEREFORE, THE AMOUNT OF CAPITAL GAIN WAS SHOWN IN THE A Y 2007 - 08 FOR TAXATION. IN THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER HAS GIVEN SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN WHY PENALTY MA Y NOT BE LEVIED FOR SUBMITTING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME U/S. 271 (1 )(C). IN RESPONSE TO THIS SHOW CAUSE NOTICE, THE APPELLANT HAS NOT SUBMITTED ANY REPLY BEFORE THE ASSESSING OFFICER, THEREFORE, THE ASSESSING OFFICER HAS LEVIED A M INIMUM PENALTY @ 100% . 4.2 BY THE IMPUGNED ORDER, CIT(A) DELETED THE PENALTY AFTER HAVING FOLLOWING OBSERVATIONS : - 2.4 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE IN BRIEF ARE THAT THE ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 8 ASSESSEE FAMILY HAS RECEIVED ARBITRATION AWARD AMOUNTING TO RS. 4,60,00,0001 - , OUT OF WHICH THE ASSESSEE'S SHARE WAS OF RS. 1,65,00,0001 - . THE ASSESSING OFFICER HAS OBSERVED THAT TRANSFER OF ASSET TOOK PLACE IN THE FY 2005 - 06 AND COMPUTED LONG TERM. CAPITAL GAIN A T RS. 27,50,0001 - AFTER ALLOWING EXEMPTION U/S. 54EC. ON THE OTHER HAND, THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT HAS SUBMITTED THAT ENTIRE CAPITAL GAIN WAS OFFERED FOR TAXATION IN THE A Y 2007 - 08 AS POSSESSION OF, THE PROPERTY WAS RECEIVED IN THE F Y 2006 - 07. THE APPELLANT HAS ALSO SUBMITTED THAT OUT OF THE TOTAL AMOUNT OF RS. 1,65,00,000/ - , A SUM OF RS. 82,50,000/ - RECEIVED IN FY 2005 - 06 AND RS. 55,00,000/ - WAS INVESTED IN BONDS FOR CLAIMING EXEMPTION U/S. 54EC SINCE THE POSSESSION WAS RECEIVED IN F Y 2006 - 07, THEREFORE, CAPITAL GAIN WAS SHOWN IN AY 2007 - 08. IN THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER FOR AY 2007 - 08, IT IS HELD AS UNDER: 'THE LONG TERM CAPITAL GAINS AMOUNTING TO RS. 27,50,0001 - ,DECLARED BY THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION, IS ALREADY BROUGHT TO TAX IN THE COURSE OF ASSESSMENT FOR THE A Y 2006 - 07. HOWEVER, THE SAME IS NOT REDUCED FROM THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION TO PROTECT THE INTEREST OF REVENUE. ACCORDINGLY, THE SAM E IS ASSESSED TO THE INCOME OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION ON PROTECTIVE BASIS. THE CASE OF THE ASSE SSEE IS ASSESSED ACCORDINGLY. FROM THESE FACTS, IT IS CLEAR THAT THE APPELLANT HAS DECLARED THE ARBITRATION AWARD OF RS. 1,65,00,000/ - IN THE RETURN FILED IN AY 2006 - 07 AND AY 2007 - 08. HOWEVER, THE DISPUTE IS REGARDING THE TAXABILITY OF CAPITAL GAIN IN AY 2006 - 07 OR 2007 - 08. THE ASSESSING OFFICER HAS ASSESSED THE CAPITAL GAIN IN THE A Y 2006 - 07 AND PROTECTIVE ASSESSMENT HAS BEEN MADE IN THE ASSESSMENT ORDER FOR A Y 2007 - 08 AND HAD SHOWN THAT THE ISSUE IS DEBATABLE AND THE ASSESSING OFFICER IS ALSO NOT SURE WHETHER THE CAPITAL GAIN IS TO BE ASSESSED IN AY 2006 - 07 OR 2007 - 08. THE APPELLANT HAS NOT CONCEALED THE FACTS FOR THE AMOUNT OF CAPITAL GAIN WHICH IS DECLARED IN AY 2007 - 08 WITH AN ARGUMENT THAT THE POSSESSION WAS RECEIVED IN FY 2006 - 07. ON THE OTHER HAND, THE ASSESSING OFFICER HAS HELD THAT THE TRANSFER OF ASSET WAS IN AY 2006 - 07 AND CAPITAL GAIN SHOULD BE ASSESSED IN THIS YEAR ONLY. IN V IEW OF THESE FACTS AND CIRCUMSTANCES, IT IS HELD THAT THERE IS NO CONCEAL MENT OF INCOME BUT ISSUE IS DEBATABLE AND TWO OPINION ARE POSSIBLE AS ADMITTED BY THE ASSESSING OFFICER. SECONDLY, THE APPELLANT HAS SHOWN SHORT TERM CAPITAL GAIN ON MUTUAL FUNDS AT R S. 3,61,729/ - AGAINST WHICH THE ASSESSING OFFICER HAS ASSESSED IT AT RS. 3,64,721/ - . THUS THERE WAS AN ADDITION OF RS. 2,992/ - . SINCE THE AMOUNT IS TOO SMALL, THEREFORE, PENALTY LEVIED IS DELETED. IN THE VIEW OF THE DECISIONS OF HON BLE SUPREME COURT AS RE LIED UPON BY THE APPELLANT SUPRA , I T IS HELD THAT PENALTY U/S. 271(1)(C) IS NOT LEVIABLE HENCE, DELETED. ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 9 4.3 AGAINST THE ABOVE ORDER OF CIT(A), REVENUE IS IN FURTHER APPEAL BEFORE US. 4.4 WE HAVE CONSIDERED RIVAL CONTENTION S AND FOUND FROM RECORD THAT FAMI LY MEMBERS OF ASSESSEE HAVE RECEIVED ARBITRATION AWARD AMOUNTING TO RS. 4.60 CRORES, OUT OF WHICH ASSESSEES SHARE WAS 1.65 CRORES. AS THE COMPENSATION WAS AWARDED FOR TRANSFER OF ASSET IN THE FINANCIAL YEAR 2005 - 06 , THE AO COMPUTED LONG TERM CAPITAL GAIN I N THE ASSESSMENT YEAR 2006 - 07 AMOUNTING TO RS. 27,50,000/ - AFTER ALLOWING EXEMPTION U/S. 54EC. THE CONTENTION OF THE ASSESSEE WAS THAT POSSESSION WAS TAKEN IN THE FINANCIAL YEAR 2006 - 07, THEREFORE, AMOUNT OF CAPITAL GAIN WAS SHOWN IN THE ASSESSMENT YEAR 2007 - 08 FOR TAXATION. WE FOUND THAT ON PROTECTIVE BASIS, THE AO HAS ALSO ASSESSED THE CAPITAL GAIN IN THE ASSESSMENT YEAR 2007 - 08, SINCE THE AMOUNT WAS ADDED IN THE ASSESSMENT YEAR 2006 - 07, THE AO IMPOSED PENALTY FOR CONCEALMENT OF PARTICULARS IN THE ASSESSMEN T YEAR 2006 - 07. IT IS CLEAR FROM THE RECORD THAT ASSESSEE HAD DECLARED ARBITRATION AWARD IN THE RETURN FILED IN ASSESSMENT YEAR IN ASSESSMENT YEAR 2006 - 07 AND 2007 - 08. DUE TO DISPUTE REGARDING TAXABILITY OF CAPITAL GAIN IN ASSESSMENT YEAR 2006 - 07 & 2007 - 08 , THE AO HAS ASSESSED THE CAPITAL GAIN IN ASSESSMENT YEAR 2006 - 07 AND ALSO ON PROTECTIVE BASIS IN THE ASSESSMENT YEAR 2007 - 08 AND AO ALSO OBSERVED THAT THE ISSUE IS DEBATABLE AND THE AO HIMSELF WAS NOT SURE AS TO WHETHER THE CAPITAL GAIN IS TO BE ASSESSED IN ASSESSMENT YEAR 2006 - 07 & 2007 - 08. IN VIEW OF THESE FACTS, THE CIT(A) RECORDED A FINDING TO THE EFFECT THAT THE ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 10 ASSESSEE HAS NOT CONCEALED THE AMOUNT OF CAPITAL GAIN WHIC H IS DECLARED IN THE AY 2007 - 08 I N VIEW OF THE FACT THAT POSSESSION WAS RECEIVED I N FINANCIAL YEAR 2006 - 07 ONLY. SINCE THE AO HAS TAKEN THE VIEW THAT TRANSFER OF ASSETS WAS IN THE AY 2006 - 07, CAPITAL GAINS WAS ALSO ASSESSED IN THE AY 2006 - 07. SINCE THERE WAS NO CONCEALMENT OF PARTICULARS IN THE RETURN BUT THE ISSUE WAS DEBATABLE AND TWO OPINIONS WERE POSSIBLE AS ADMITTED BY THE AO, THE CIT(A) HAS DELETED THE PENALTY. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE PENALTY INSOFAR AS ISSUE WAS DEBATABLE AS PER THE OBSERVATION OF THE AO HIMSELF AND SINCE THE POS SESSION WAS RECEIVED IN THE FINANCIAL YEAR 2006 - 07, CAPITAL GAIN WAS OFFERED IN THE ASSESSMENT YEAR 2007 - 08. 4.5 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 5 . IN THE RESULT, ALL APPEAL FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED , IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH JUNE, 201 4 . 10 TH JUNE ,2014 SD/ - SD/ - ( ) ( VIVEK VARMA ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 10 /06 /2014 /PKM , PS ITA NO S . 1733& 1734 /1 0 , 2110/10 & 2526/11 11 COPY OF THE ORD ER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//