ANILKUMAR SHROFF, MUMBAI V. ITO 2(2)(3), MUMBAI

ITA 2015/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8153 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 06-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 24-03-2014
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.2015/MUM./2014 ( ASSESSMENT YEAR :2008 - 09 ) ANIL KUMAR SHROFF , 228 - 231 KALINDAS UDYOG BHAVAN, CENTURY BAZAR LANE, PRABHADEVI MUMBAI 400 025 PAN AAJPS1929B . APPELLANT V/S ITO 2(2)(3 ), MUMBAI. . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI. RAJESH KUMAR YADAV DATE OF HEARING - 07.03.2017 DATE OF ORDER 16.03.2017 O R D E R PER: SHAMIM YAHYA THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF LD. CIT - A DATED. 27.12.2013 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09 . 2. THE GROUNDS OF APPEAL READ AS UNDER: 1 . ON THE FACTS OF THE CASE AND CORRECT CONSTRUCTION OF LAW LD. CIT - A ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY OF RS . 1,81,043/ - U/S. 271 (1)(C). THE A.O. WHILE PASSING ORDER U/S. 271 (1)(C), IGNORED THE FACT THAT ADDITION WAS MADE ON DISPUTED POINT ANIL KUMAR SHROFF ITA NO.2015/MUM./2014 2 OF SHARE OF PROFIT EXEMPT IN THE HAND OF PARTNER U/S. 10(2A) AND THE APPEAL AGAINST THE SAID POINT IS PENDING BEFORE HONB LE ITAT. 2 . ON THE FACT OF THE CASE AND CORRECT CONSTRUCTION OF LAW LD. CIT - A ERRED IN UPHOLDING THE ORDER OF A.O. STATING THAT APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME, AS NONE OF THE FACTS WERE CONCEALED NOR ANY INACCURATE PARTICULAR S WERE SUBMITTED BY THE APPELLANT. 3. THE APPELLATE CRAVES LEAVE TO ADD AND/OR AMEND ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 3. IN THIS CASE ASSESSEE IS A PARTNER IN THE PARTNERSHIP FOR. HE HAS CLAIMED THE INCOME FROM THE PARTNERSHIP FORM AS EXEMPT. HOWEVER, THE A.O. NOTED THAT ASSESSE E HAS CLAIMED INCOME FROM THE FI RM EXEMPT IN EXCESS OF WHAT WAS PERMISSIBLE U/S. 10 (2) A. THE A.O. OBSERVED THAT IT WAS THE SHARE OF PROFIT THAT WAS EXEMPT AND NOT OTHER INCOMES OF THE FI RM. HENCE THE A.O. MADE A DISALL OWANCE OF RS. 5,32,638/ - . UPON THIS ADDITION PENALTY WAS ALSO LEVIED AMOUNTING TO RS. 1,81,043/ - . IN THE PENALTY ORDER THE A.O. DID NOT BOTHER TO BRING ON RECORD ASSESSEE S SUBMISSIONS. HE HELD THAT ASSESSEE SUBMISSIONS HAVE BEEN CONSIDERED AND WERE NOT AC CEPTABLE. UP ON ASS ESSEES APPEAL LD. CIT - A CONFI RMED THE LEVY OF PENALTY. 4. AGAINST ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE US . W E HAVE HEARD THE LD. DR. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, IN OUR CONSIDERED OPINION THE ISSUE CAN BE ADJUD ICATED UPON HEARING THE LD. DR AND PERUSING THE RECORDS. ANIL KUMAR SHROFF ITA NO.2015/MUM./2014 3 5. WE FIND THAT IN THIS CASE ADDITION HAS BEEN MADE DUE TO THE REASON THAT ASSESSEE HAS CLAIMED EXEM PTION FOR THE ENTIRE SHARE OF INCOME OF THE PARTNERSHIP FORM. HOWEVER, THE REVENUE HAS FOUND THAT THE ACT ONLY POSTULATES EXEMPTION OF THE SHARE OF PROFIT OF THE FIRM. HENCE, ASSESSEES CLAIM OF EXEMPTION QUA THE RENTAL INCOME OF THE FIRM WAS DENIED . IN THIS FACTUAL SCENARIO WE ARE OF THE CONSIDERED OPINION THAT ASSESSEE CAN BE CONSIDERED TO BE UNDER A BONA FIDE BELIEF THAT THE ENTIRE INCOME FROM THE FIRM IS EXEMPT. SUCH A BELIEF OF THE ASSESSEE CANNOT BE HELD TO BE CONTUMACIOUS WARRANTING LEVY OF PENALTY U/S. 271 (1) C . FOR THIS PROPOSITION WE PLACE RELIANCE UPON THE DECISION OF A LARGER BENCH OF THE HONBLE APEX COURT IN THE CASE OF A HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 6. IN THE BACKGROUND OF AFOR ESAID DISCUSSION AND PRECEDENT W E SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. IN THE RESULT THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 16.03.2017 SD/ - SD/ - RAVISH SOOD SHAMIM YAHIYA JUDICIAL MEMBER ACCOUNTANT MEMBER ANIL KUMAR SHROFF ITA NO.2015/MUM./2014 4 MUMBAI, DATED: 16.03.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER NISHANT VERMA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI