SHRI. SATISH P. MALHOTRA, Mumbai V. ITO 19(3)(2), Mumbai

ITA 186/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8495 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Assessee Lawyers: AVINASH A MEHTA
• Section: 271(1)(c); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.186/MUM/2019 ( ASSESSMENT YEAR: 2009-10) SHRI SATISH P MALHOTRA, FLAT NO. 16, 4 TH FLOOR, ROCK HOUSE, WORLI HILL ROAD, WORLI, MUMBAI- 400018. VS. I.T.O. WARD 19(3)(2), R. NO. 224, 2 ND FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI-400007. PAN/GIR NO. AWQPM 6356 H (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI AVINASH A MEHTA (AR) REVENUE BY SHRI AKHTAR H ANSARI (DR) DATE OF HEARING 15/01/2020 DATE OF PRONOUNCEMENT 20/01/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 09/10/2018 OF LD. CIT(A)-30, MUMBAI FOR THE A.Y. 20 09-10 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOM E TAX ACT, 1961 (IN SHORT, THE ACT). 2. AT THE OUTSET, THE LD AR OF THE ASSESSEE PLACED ON RECORD THE QUANTUM ORDER OF THE TRIBUNAL DATED 29/11/2017 IN I TA NO. 6877/MUM/2014 WHEREIN ADDITION MADE BY DISALLOWING CLAIM OF DEDUCTION U/S 54F WAS ALLOWED IN FAVOUR OF THE ASSE SSEE. THE LD AR HAS ITA NO. 186/MUM/2019 SHRI SATISH P MALHOTRA VS ITO 2 CONTENDED THAT SINCE THE QUANTUM ADDITION HAS ALREA DY BEEN DELETED, THEREFORE, THE PENALTY IMPOSED HAS NO LEGS TO STAND . 3. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDERS OF THE AUTHORITIES BELOW BUT CONCEDED THE FACT THAT THE TR IBUNAL HAVE DELETED THE QUANTUM ADDITION MADE BY THE A.O. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE PENALTY HAS BEEN LEVIED BY DISALLOWING CLAIM OF DEDUCTION U/S 54F OF THE ACT. THE TRIBUNAL VIDE ORDER DATED 29/11/2017 HAS DELETED THE QUANTUM ADDITION BY OBSERVING AS UNDER: 10. AS PER OUR CONSIDERED VIEW SEC.54 IS AN INCENT IVE PROVISIONS AND IT SHOULD BE INTERPRETED AND APPLIED LIBERALLY AS HELD BY THE HO NOURABLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. VS. C.I.T. (196 ITR 188). THE HONOURABLE SUPREME COURT ALSO HELD IN THE CASE OF C.I.T. VS. G WALIOR RAYON SILK MANUFACTURING CO. LTD. (196 ITR 149) THAT THE EXPRE SSION USED IN THE TAXING STATUTES WOULD PRIMARILY BE UNDERSTOOD IN TH E SENSE IN WHICH IT IS HARMONIOUS WITH THE OBJECT OF THE STATUTE TO EFFECT UATE THE LEGISLATIVE INTENTION. 11. FURTHERMORE HONBLE SUPREME COURT IN CASE OF S ANJEEV LAL 365 ITR 389 OBSERVED AS UNDER:- INCOME-TAX ON THE LONG-TERM CAPITAL GAIN. THE INTE NTION OF THE LEGISLATURE OR THE PURPOSE WITH WHICH THE SAID PROV ISION HAS BEEN INCORPORATED IN THE ACT IS ALSO VERY CLEAR THAT THE ASSESSEE SHOULD BE GIVEN SOME RELIEF. THOUGH IT HAS BEEN VERY OFTEN SA ID THAT COMMON SENSE IS A STRANGER AND AN INCOMPATIBLE PARTNER TO THE INCOME-TAX ITA NO. 186/MUM/2019 SHRI SATISH P MALHOTRA VS ITO 3 ACT AND IT IS ALSO SAID THAT EQUITY AND TAX ARE STR ANGERS TO EACH OTHER, STILL THIS COURT HAS OFTEN OBSERVED THAT PURPOSIVE INTERPRETATION SHOULD BE GIVEN TO THE PROVISIONS OF THE ACT. IN TH E CASE OF OXFORD UNIVERSITY PRESS V. CIT [2001] 3 SCC 3591 THIS COUR T HAS OBSERVED THAT A PURPOSIVE INTERPRETATION OF THE PROVISIONS OF THE ACT SHOULD BE GIVEN WHILE CONSIDERING A CLAIM FOR EXEMPTION FROM TAX. IT HAS ALSO BEEN SAID THAT HARMONIOUS CONSTRUCTION OF THE PROVI SIONS WHICH SUBSERVE THE OBJECT AND PURPOSE SHOULD ALSO BE MADE WHILE CONSTRUING ANY OF THE PROVISIONS OF THE ACT AND MOR E PARTICULARLY WHEN ONE IS CONCERNED WITH EXEMPTION FROM PAYMENT O F TAX. CONSIDERING THE AFORESTATED OBSERVATIONS AND THE PR INCIPLES WITH REGARD TO THE INTERPRETATION OF STATUTE PERTAINING TO THE TAX LAWS, ONE CAN VERY WELL INTERPRET THE PROVISIONS OF SECTI ON 54 READ WITH SECTION 2(47) OF THE ACT I.E., THE DEFINITION OF 'T RANSFER', WHICH WOULD ENABLE THE APPELLANTS TO GET THE BENEFIT UNDER SECT ION 54 OF THE ACT. 12. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN BY HONBLE HIGH COURT AND SUPREME COURT AS STATED ABOVE, WE DO NOT FIND ANY MERIT IN THE ACTION OF AO FOR DECLINING ASSESSEES CLAIM OF EXEM PTION U/S.54 OF THE IT ACT. 5. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, SI NCE THE QUANTUM ADDITION HAS ALREADY BEEN DELETED BY THE TRIBUNAL, THEREFORE, THE PENALTY LEVIED HAS NO LEGS TO STAND, THEREFORE, I DIRECT TH E A.O. TO DELETE THE SAME. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 20/01/2020 *RANJAN ITA NO. 186/MUM/2019 SHRI SATISH P MALHOTRA VS ITO 4 COPY OF THE ORDER 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//