Shri Rajiv S.Mardia, Ahmedabad V. The Income tax Officer,Ward-10(4), Ahmedabad

ITA 1970/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0356 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-08-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 16-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1970/AHD/2009 ASSESSMENT YEAR:2003-04 DATE OF HEARING: 19.8.09 DRAFTED:20.8.09 RAJIV S MARDIA, MEHTA LODHA & CO. CHARTERED ACCOUNTANTS 105, SAKAR- 1, ASHRAM ROAD, AHMEDABAD-380 009 PAN NO.AAPPM5975K V/S . INCOME TAX OFFICER, WARD-10(4), AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI PRAKASH D SHAH, AR RESPONDENT BY:- SHRI C.K. MISHRA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD IN APPEAL NO. C IT(A) XVI/ WARD.10(4)/0125/2007-08 DATED 08-05-2009. THE ASSES SMENT WAS FRAMED BY THE ITO, WARD-10(4), AHMEDABAD U/S. 143(3) OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 20-0 1-2006 FOR THE ASSESSMENT YEAR 2003-04. THE PENALTY UNDER DISPUTE WAS LEVIED BY TH E ITO WARD-10(4), AHMEDABAD U/S.271(1)(C) OF THE ACT VIDE HIS ORDER DATED 07-03 -2008. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AS REGARDS TO THE ORDER OF CIT(A) IN CONFIRMING THE PENALTY LEVIED BY THE ASSE SSING OFFICER U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.36,240/-. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE NARR ATED THE FACTS THAT THIS PENALTY IS LEVIED BY THE ASSESSING OFFICER ON THE GROUND TH AT THE INTEREST INCOME OF RS.1,20,799/- ON REFUND RECEIVED FROM INCOME-TAX DE PARTMENT WAS DECLARED BY THE ITA NO.1970/AHD/2009 A.Y. 2003-04 RAJIV S MARDIA V. ITO, WD-10(4) ABD PAGE 2 ASSESSEE UNDER THE HEAD BUSINESS INCOME TO CLAIM SET OFF OF BROUGHT FORWARD LOSS, WHEREAS ASSESSING OFFICER ASSESSED THE SAME UNDER T HE HEAD INCOME FROM THE OTHER SOURCE. LD. COUNSEL FOR THE ASSESSEE STATED THAT THE INTEREST INCOME ON REFUND FROM INCOME-TAX DEPARTMENT WAS ASSESSED BY THE SAME ASSESSING OFFICER IN ASSESSMENT YEAR 2002-03 UNDER THE HEAD BUSINESS IN COME AND THE SAME WAS ACCEPTED BY THE REVENUE. FOR THIS FACT, LD. COUNSE L DRAWN OUR ATTENTION TO THE ORDER OF CIT(A) AT PAGE-5 PARA-4 THE RELEVANT EXPLANATION OF THE ASSESSEE WA S CONSIDERED BY THE CIT(A), WHICH IS REPRODUCED AS UNDER:- I HAVE PERUSED THE ASSESSMENT ORDER FOR A.Y. 2002 -03. IN THE SAID ORDER THERE IS NO SEPARATE INDICATION ABOUT THE NATURE OF INTEREST INCOME. IN THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 30-3-2005 FOR A.Y. 2002-03, THE ASSESSING OFFICER HAS TAXED ALL THE IN TEREST INCOME APPEARING IN THE P & L A/C. UNDER THE HEAD OF BUSINESS INCOME. I N THE P & L ACCOUNT THERE IS NO SEPARATE SUB HEAD OF INTEREST ON REFUND FROM INCOME TAX DEPARTMENT. EVEN IF THE DETAILS OF INTEREST INCOME WERE SUBMITT ED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY THE APPELLANT AND THE ASS ESSING OFFICER WITHOUT DISCUSSION HAS ASSESSED THE SAME UNDER THE HEAD OF BUSINESS INCOME THE APPELLANT CANNOT TAKE THIS PLEA THAT SINCE IN A.Y. 2002-03 THE INTEREST ON REFUND FROM INCOME TAX DEPARTMENT HAS BEEN ASSESSED UNDER BUSINESS INCOME THEREFORE, HE WAS UNDER BONA FIDE BELIEF THA T IT WAS ASSESSABLE UNDER THAT HEAD ONLY BECAUSE THE ASSESSMENT ORDER WAS PAS SED ON 30-3-2005 WHEREAS THE RETURN OF INCOME FOR A.Y. 2003-04 WAS F ILED ON 24-9-2003 I.E. MUCH BEFORE THE ORDER OF THE ASSESSING OFFICER. IN VIEW OF THIS, LD. COUNSEL URGED THE BENCH TO DEL ETE THE PENALTY. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 4. AFTER HEARING THE RIVAL CONTENTIONS AND GOING TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO PERUSED THE ASSE SSMENT ORDER, ORDER OF CIT(A) AND PENALTY ORDER. I FIND THAT THE ASSESSEE HAS DE CLARED THE FACTS RELATING TO INTEREST INCOME IN ITS PROFIT & LOSS A/C. AND BALANCE-SHEET BUT THE SAME WAS CLAIMED UNDER THE HEAD BUSINESS INCOME. THE ASSESSEE HAS NOT CO NCEALED THE PARTICULARS OF INCOME BUT HE HAS MADE A CLAIM BASED ON EARLIER YEA RS ASSESSMENT WHICH WAS ACCEPTED BY THE REVENUE. LD. COUNSEL HAS RELIED ON IN THE CASE OF CIT V. VAZIR GLASS WORKS LTD. ITA NO.332/MUM/2007 ASSESSMENT YEAR 2001-02 DATED 24-11- 2008 BCAJ P. 671, VOL.40-B, PART 5, FEBRUARY 2009, WHEREIN THE TRIBUNAL HAS DECIDED THAT NO PENALTY CAN BE LEVIED IN A CASE WHE RE RENTAL INCOME IS ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS AGAI NST INCOME FROM BUSINESS. HERE ALSO DECLARING THE INTEREST INCOME AS BUSINES S INCOME IS A CLAIM MADE BY THE ITA NO.1970/AHD/2009 A.Y. 2003-04 RAJIV S MARDIA V. ITO, WD-10(4) ABD PAGE 3 ASSESSEE AND THE ASSESSEES EXPLANATION SEEMS TO BE A BONA FIDE ONE. ACCORDINGLY, WE DELETE THE PENALTY AND THIS ISSUE O F THE ASSESSEES APPEAL IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09/10/2009 SD/- (MAHAVIR SING H) (JUDICIAL MEMBER) AHMEDABAD, DATED : 09/10/2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- V, SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD