ACIT CENRAL CIRCLE-1(3), MUMBAI V. M/S. PABAL HOUSING P. LTD., MUMBAI

ITA 1963/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3989 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus loan
• Section: 271(1)(c); 143(2); 13

Judgement Text

ITA NOS. 1963 & 1977/MUM/2020 A.YS. 2012 - 13 & 2014 - 15 ACIT, CC - 1(3) VS. M/S PABAL HOUSING PVT.LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI PRAMOD KUMAR (VICE PRESIDENT) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO S.1963 & 1977 /MUM/2020 (ASSESSMENT YEAR S: 2012 - 13 & 2014 - 15 ) ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1(3), 905, 9 TH FLOOR, PRATISHTHA BHAVAN, OLD CGO BLDG. (ANNEXE), M.K. ROAD, MUMBAI 400 020 VS. M/S PABAL HOUSING PVT. LTD. , 66B, 3 RD FLOOR, PODDAR CHAMBERS, MUMBAI SAMACHAR MARG, MUMBAI 400 001 PAN NO. AABCP9574G (REVENUE) (ASSESSEE) ASSESSEE BY : SHRI PRATEEK JAIN, A.R REVENUE BY : SHRI SHREEKALA PARDESHI, D.R DATE OF HEARING : 04/10/2021 DATE OF PRONOUNCEMENT : 06 /10/2021 ORDER PER RAVISH SOOD, J.M: THE CAPTIONED APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDER S PASSED BY THE CIT(A) - 47, MUMBAI, FOR A.Y. 2012 - 13 AND A.Y. 2014 - 15, WHICH IN TURN ARI SES FROM THE RESPECTIVE ORDERS PASSED BY THE A.O U/S 271(1)(C) OF THE ACT, DATED 27.03.2019. AS A COMMON ISSUE IS INVOLVED IN THE PRESENT APPEALS, THEREFORE, THE SAME ARE BEING TAKEN UP AND DISPOSED OFF BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST TAKE U P THE APPEAL FILED BY THE REVENUE FOR A.Y. 2012 - 13. THE REVENUE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLO WING GROUNDS BEFORE US: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT( A) WAS JUSTIFIED IN DELETING THE PENALTY OF RS.82,35,693/ - LEVIED ON ACCOUNT OF BOGUS LOAN AND INTEREST PAID ON BOGUS LOANS WITHOUT APPRECIATING THE FACT THAT THE DELETION OF SUCH QUANTUM ADDITION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPEAL IS PR EFERRED ITA NOS. 1963 & 1977/MUM/2020 A.YS. 2012 - 13 & 2014 - 15 ACIT, CC - 1(3) VS. M/S PABAL HOUSING PVT.LTD. 2 TO HONBLE HIGH COURT AGAINST DELETION OF SUCH QUANTUM ADDITION WHICH IS PENDING FOR ADJUDICATION. 2. BRIEFLY STATED, THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME FOR A.Y. 2012 - 13 ON 28.09.2012, DECLARING A TOTAL INCOME OF RS.6,09,830/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(2) OF THE ACT. 3. ASSESSMENT WAS FRAMED BY THE A.O VIDE H IS ORDER PASSED U/S 143(3), DATED 30.03.2015, WHEREIN THE INCOME OF THE ASSESSEE COMPANY WAS ASSESSED AT RS.2,48,39,580/ - AFTER MAKING THE FOLLOWING ADDITIONS: SR. NO. PARTICULARS AMOUNT 1. ADDITION OF BOGUS LOANS RS.2,40,00,000/ - 2. ADDITION ON INTER EST OF BOGUS LOANS RS.1,37,750/ - 3. ADDITION ON COMMISSION PAID OF BOGUS LOANS RS.92,000/ - 4. THEREAFTER, THE A.O VIDE HIS ORDER PASSED U/S 271(1)(C) R.W.S 274, DATED 27.03.2019 IMPOSED A PENALTY OF RS.82,35,693/ - ON THE ASSESSEE. 5. AGGRIEVED, THE ASSESSEE ASSAILED THE ORDER PASSED BY THE A.O U/S 271(1)(C) , DATED 27.03.2019 . 6. AGGRIEVED, THE ASSESSEE ASSAILED THE ORDER PASSED BY THE A.O U/S 271(1)(C) , DATED 27.03.2019 IN APPEAL BEFORE THE CIT(A). OBSERVING, THAT THE ADDITIONS/DISALLOWANCES THAT WE RE MADE BY THE A.O HAD BEEN VACATED BY THE TRIBUNAL, THE CIT(A) DELETED THE PENALTY THAT WAS IMPOSED BY HIM U/S 271(1)(C) OF THE ACT. 7. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SUBMITTED BY THE LD. A.R THAT AS THE IMPUGNED ADDITIONS QUA WHICH THE PENALTY WAS IMPOSED BY THE A.O U/S 271(1)(C) OF THE ACT ITA NOS. 1963 & 1977/MUM/2020 A.YS. 2012 - 13 & 2014 - 15 ACIT, CC - 1(3) VS. M/S PABAL HOUSING PVT.LTD. 3 HAD BEEN VACATED BY THE TRIBUNAL, THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY THAT WAS IMPOSED BY THE A.O U/S 271(1)(C) OF THE AC T. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER OF THE A.O. IT WAS SUBMITTED BY THE LD. D.R THAT THE ORDER PASSED BY THE TRIBUNAL IN THE QUANTUM APPEAL OF THE ASSESSEE HAD NOT BEEN ACCEPTED BY THE DEPARTMENT AND HAVE BEEN ASSAILED BEFORE THE HONBLE HIGH COURT. HOWEVER, THE LD. D.R COULD NOT REBUT THE FACT THAT THE IMPUGNED ADDITIONS AS REGARDS WHICH THE PENALTY WAS IMPOSED BY THE A.O U/S 271(1)(C) OF THE ACT HAD BEEN DELETED BY THE TRIBUNAL. 9. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. AS STATED BY THE LD. A.R, AND RIGHTLY SO, NOW WHEN THE IMPUGNED ADDITION THAT HAD FOUND THE VERY BASIS FOR IMPOSING PENA LTY U/S 271(1)(C) OF THE ACT HAD BEEN VACATED BY THE TRIBUNAL, VIDE ITS ORDER PASSED IN ITA NO. 2687/MUM/2018, DATED 03.05.2019, THEREFORE, THE CONSEQUENTIAL PENALTY IMPOSED BY THE A.O CANNOT SURVIVE ON A STANDALONE BASIS AND HAS TO MEET THE SAME FATE. ON A PERUSAL OF THE ORDER OF THE CIT(A), WE FIND THAT HE HAD AFTER TAKING COGNIZANCE OF THE FACT THAT THE IMPUGNED ADDITIONS HAD BEEN VACATED BY THE TRIBUNAL STRUCK DOWN THE THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) OF THE ACT, OBSERV ING AS UNDER: I HAVE GONE THROUGH THE SUBMISSION, ORDER OF THE HONBLE ITAT AND FACTS ON RECORD. IT IS CLEAR THAT THE ADDITION/DISALLOWANCE IN RESPECT OF UNSECURED LOANS, INTEREST AND COMMISSION HAS BEEN DULY DELETED BY THE ITAT. THE RELEVANT PART OF THE ORDER IS ALRE ADY REPRODUCED IN THE ABOVE SUBMISSION. THEREFORE, ONCE THE QUANTUM ADDITIONS HAS BEEN DELETED, THE PENALTY HAS NO LEGS TO STAND AND HAS BECOME UNSUSTAINABLE IN LAW. IN THE BACKDROP OF THE AFORESAID FACTS FINDING NO INFIRMITY IN THE VIEW TAKEN BY THE CIT (A), WE UPHOLD HIS ORDER. 10. THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NOS. 1963 & 1977/MUM/2020 A.YS. 2012 - 13 & 2014 - 15 ACIT, CC - 1(3) VS. M/S PABAL HOUSING PVT.LTD. 4 ITA NO. 1977/MUM/2020 A.Y. 2014 - 15 11. AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL REMAINS THE SAME AS WERE THERE BEFORE US IN THE APPEAL OF THE REVENUE FOR A.Y.2012 - 13 IN ITA NO. 1963/MUM/2020, THEREFORE, OUR ORDER THEREIN PASSED SHALL APPLY MUTATIS MU T ANDIS FOR THE PURPOSE OF DI SPOS ING OFF THE PRESENT APPEAL. ACCORDINGLY, ON THE SAME TERMS THE PRESENT APPEAL FILED BY THE REVENUE BEING DEVOID AND BEREFT OF ANY MERIT IS DISMISSED. 12. RESULTANTLY, BOTH THE APPEALS FILED BY THE REVENUE I .E ITA FOR A.Y 2012 - 13 IN NO.1963/MUM/2020 AN D ITA NO.1977/MUM/2020 FOR A.Y 2014 - 15 ARE DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 06. 10.2021 SD/ - SD/ - (PRAMOD KUMAR) (RAVISH SOOD) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; DATED: 06 .10.2021 * PS: ROHIT COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI