ASSTT. CIT, CENTRAL CIRCLE-1(3), MUMBAI V. M/S. POONAM SKYLINE CONSTRUCTION, MUMBAI

ITA 1985/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3988 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 09-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus loan
• Section: 271(1)(c); 143(2)

Judgement Text

ITA NO. 1985/MUM/2020 A.Y. 2013 - 14 ACIT, CC - 1(3) VS. M/S POONAM SKYLINE CONSTRUCTION 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.1985/MUM/2020 (ASSESSMENT YEAR: 2013 - 14) 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 POONAM SKYLINE CONSTRUCTION, 66B, 3 RD FLOOR, PODDAR CHAMBERS, MUMBAI SAMACHAR MARG, FORT, MUMBAI 400 001 PAN NO. AAHFP4019R ( 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 PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 47, MUMBAI, DATED 21.09.2020, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 27.03.2019 FOR A.Y 2013 - 14. THE REVENUE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOW ING GROUNDS BEFORE US: 1. WHETHER O THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY OF RS.1,16,66,532/ - LEVIED ON ACCOUNT OF BOGUS LOAN AND INTEREST PAID ON BOGUS LOANS WITHOUT APPRECIATING THE FACT THAT THE DELETION O F SUCH QUANTUM ADDITION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPEAL IS PREFERRED TO HONBLE HIGH COURT AGAINST DELETION OF SUCH QUANTUM ADDITION WHICH IS PENDING FOR ADJUDICATION. ITA NO. 1985/MUM/2020 A.Y. 2013 - 14 ACIT, CC - 1(3) VS. M/S POONAM SKYLINE CONSTRUCTION 2 2. BRIEFLY STATED, THE ASSESSEE FIRM HAD FILED ITS RETURN OF INCO ME FOR A.Y 2013 - 14 ON 20.09.2013, DECLARING A TOTAL INCOME OF RS.4,90,990/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(2) OF THE ACT. 3. ASSESSMENT WAS THEREAFTER FRAMED BY THE A.O VIDE HIS ORDER PASSED U/S 143(3), DATED 14.03.2016, WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.3,48,14,421/ - AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCES: SR. NO. PARTICULARS AMOUNT 1. ADDITION O F BOGUS LOANS RS.3,19,00,000/ - 2. ADDITION O F INTEREST O N BOGUS LOANS RS. 20,05,631/ - 3. ADDITION OF COMMISSION PAID ON BOGUS LOANS RS. 3,17,800/ - 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.1,16,66,532/ - ON THE ASSESSEE FIRM. 4. AGGRIEVED, THE ASSESSEE ASSAILED THE IMPUGNED ORDER PASSED BY THE A.O U/S 271(1)(C), DATED 27.03.2019 BEFORE THE CIT(A). OBSERVING THAT THE ADDITIONS THAT WERE MADE BY T HE A.O HAD BEEN VACATED BY THE TRIBUNAL, THE CIT(A) DELETED THE PENALTY IMPOSED BY THE A.O U/S 271(1)(C) OF THE ACT AND ALLOWED THE APPEAL. 5. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SUBMI TTED BY THE LD. A.R THAT AS THE ADDITIONS MADE BY THE A.O HAD BEEN VACATED BY THE TRIBUNAL VIDE ITS ORDER PASSED IN ITA NO. 2694/MUM/2018, DATED 03.05.2019 , THEREFORE, THE CIT(A) HAD RIGHTLY QUASH ED THE PENALTY IMPOSED BY THE A.O U/S 271(1)(C) OF THE ACT. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER PASSED BY THE A.O U/S 271(1)(C) OF THE ACT . 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 AC CEPTED BY THE DEPARTMENT AND HAVE BEEN ASSAILED BEFORE THE HONBLE HIGH COURT. HOWEVER, THE LD. D.R COULD NOT REBUT THE AFORESAID CLAIM OF ITA NO. 1985/MUM/2020 A.Y. 2013 - 14 ACIT, CC - 1(3) VS. M/S POONAM SKYLINE CONSTRUCTION 3 THE COUNSEL FOR THE ASSESSEE THAT THE IMPUGNED ADDITIONS AS REGARDS WHICH PENALTY WAS IMPOSED U/S 271(1)(C) HAD BEEN VACATED BY THE TRIBUNAL. 7. 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 S QUA WHICH THE PENALTY HAD THEREAFTER BEEN IMPOSED BY THE A.O U/S 271(1)(C) OF THE ACT HAD BEEN VACATED BY THE TRIBUNAL, THEREFORE, PENALTY IMPOSED BY THE A.O U/S 271(1)(C) CANNOT SURVIVE ON A STANDALONE BASIS AND HAS TO MEET THE SAME FATE. ON A PERUSAL O F 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, THEREIN, VACATED THE PENALTY IMPOSED BY THE A.O U/S 271(1)(C) O F THE ACT, OBSERVING AS UNDER: 6.1 I HAVE GONE THROUGH THE SUBMISSION, ORDER OF 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 PAT OF THE ORDER IS ALREADY REPRODUCED IN THE ABOVE SUBMISSION. THEREFORE, ONCE THE QUANTUM ADDITIONS HAS BEEN DELETED, THE PENALTY DOESNT STANDS. AS OBSERVED BY US HEREINABOVE, NOW WHEN THE IMPUGNED ADDITIONS ON THE BASIS OF WHICH THE PENALTY HAD BEEN IMPOSED BY THE A.O U/S 271(1)(C) HAD BEEN DELETED BY THE TRIBUNAL, THEREFORE, THE CONSEQUENTIAL PENALTY THAT WAS IMPOSED BY THE A.O U/S 271(1)(C) OF THE ACT HAD RIGHTLY BEEN VACATED BY THE CIT(A) . WE, THUS, FINDING NO INFIRMITY IN THE VIEW TAKEN BY THE CIT(A) UPHOLD HIS ORDER. 8. RESULTANTLY, THE APPEAL FILED BY THE REVENUE IS 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 ITA NO. 1985/MUM/2020 A.Y. 2013 - 14 ACIT, CC - 1(3) VS. M/S POONAM SKYLINE CONSTRUCTION 4 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