DCIT 8(3)(2), MUMBAI V. VINAMRA UNIVERSAL TRADERS P.LTD, MUMBAI

ITA 2018/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8790 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 08-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA; S K PODAR
• Assessee Lawyers: VIJAYA MEHTA
• Keywords: Business income; Earning of tax free income; Wrong claim; Bonafide mistake
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 2018/MUM/2015 (ASSESSMENT YEAR: 2008-09) DY. C.I.T. 8(3)(2) VS. M/S. VI NAMRA UNIVERSAL ROOM NO. 615, 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 TRADERS PVT. LTD. JAI CENTRE, 1 ST FLOOR 34, P. DMELLO RD., OPP. RED GATE MUMBAI 400009 PAN AACCV5090J APPELLANT RESPONDENT APPELLANT BY: MS. S. PADMAJA & SHRI S.K. PODAR RESPONDENT BY: SHRI VIJAYA MEHTA & SHRI GOVIND JAVE RI DATE OF HEARING: 21.12.2016 DATE OF PRONOUNCEMENT: 20.01.2017 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF THE CIT(A)-14, MUMBAI DATED 23.12.2014 DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER (AO) UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') FOR A.Y. 2008-09. 2. THE FACTS OF THE CASE, BRIEFLY STATED, ARE AS UNDER : - 2.1 THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINE SS OF TRADING IN SHARES, SECURITIES AND DERIVATIVES; INCLUDING CERTA IN SHARES AND SECURITIES IN INVESTMENT PORTFOLIO BY WAY OF STRATEGIC INVESTM ENT AND WITH A VIEW TO GAIN OUT OF CAPITAL APPRECIATION. THE RETURN OF INC OME FOR A.Y. 2008-09 WAS FILED ON 30.09.2009 DECLARING INCOME OF ` 4,27,53,170/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 29.12.2010 WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT ` 2,54,54,98,190/- IN VIEW OF, INTER ALIA, THE FOLLOWING ADDITIONS/DISALL OWANCES: - (I) DIVIDEND STRIPPING U/S. 94(7) ` 50,03,626/- (II) DISALLOWANCE U/S. 14A R.W. RULE 8D ` 18,39,11,187/- ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 2 PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE SIMULTANEOUSLY INITIATED BY THE AO FOR FURNISHING OF INACCURATE PA RTICULARS OF INCOME. 2.2 ON APPEAL, THE LEARNED CIT(A) UPHELD THE DISALL OWANCE UNDER SECTION 14A R.W. RULE 8D TO THE EXTENT OF ` 3,68,74,513/- (I.E. ` 18,39,11,187 LESS ` 14,70,25,674). THE AOS ADVERSE FINDINGS UNDER SECT ION 94(7) OF THE ACT AMOUNTING TO ` 50.03,626/- ON ACCOUNT OF DIVIDEND STRIPPING WAS NO T CHALLENGED BY THE ASSESSEE. 3.1 IN PENALTY PROCEEDINGS, THE AO VIDE ORDER DATED 25.03.2013 FOR A.Y. 2008-09 IMPOSED PENALTY OF ` 4,90,84,194/- UNDER SECTION 271(1)(C) OF THE ACT ON THE ASSESSEE ON TWO COUNTS: - (I) ADDITION OF ` 50,03,626/- UNDER SECTION 94(7) (II) DISALLOWANCE OF ` 3,68,85,513/- UNDER SECTION 14A R.W. RULE 8D 3.2 AGGRIEVED BY THE ORDER OF THE AO LEVYING PENALT Y OF ` 1,90,84,194/- UNDER SECTION 271(1)(C) OF THE ACT FOR A.Y. 2008-09 , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-16, MUMBAI. THE LEARNED CIT(A) ALLOWED THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DATED 23. 12.2014 DELETING THE PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT ON BOTH ISSUES ON WHICH THEY WERE LEVIED BY THE AO. (I) IN RESPECT OF THE ADDITION OF ` 50,03,628/- MADE UNDER SECTION 94(7) OF THE ACT, THE LEARNED CIT(A) OBSERVED THAT THE PR OVISIONS OF SECTION 94(7) OF THE ACT ARE ATTRACTED IN THE ASSESSEES CASE AND THEREFORE THE ADDITIONS WERE RIGHTLY MADE TO THE ASSESSEES INCOME. THE LEA RNED CIT(A) WAS, HOWEVER, OF THE VIEW THAT MERELY BECAUSE EXISTING D EEMING PROVISIONS WERE ATTRACTED IN THE CASE ON HAND, IT DOES NOT AUTOMATI CALLY ATTRACT THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, AS IT I S NEITHER A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF PARTICULARS OF INCOME AND THAT THE AO COULD GATHER THAT THE PROVISIONS OF SECTION 94(7) OF THE ACT WERE ATTRACTED IN THE CASE ON HAND ONLY DUE TO THE DETAILS OF THE SAME BEING AVAILABLE ON RECORD. IN T HAT VIEW OF THE MATTER AND PLACING RELIANCE ON THE DECISIONS OF THE TRIBUN AL IN THE CASE OF MR. WALTER SALDHANA VS. DCIT RANGE 8(1), MUMBAI IN ITA 444/MUM/2010 AND M/S. CROWN TRADELINK PVT. LTD. VS. ACIT (OSD), RG. 1, AHMEDABAD IN ITA NO. 2768/AHD/2012, THE LEARNED CIT(A) DELETED THE P ENALTY ON THIS ISSUE. ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 3 (II) IN RESPECT OF THE DISALLOWANCE UNDER SECTION 1 4A R.W. RULE 8D, THE LEARNED CIT(A) OBSERVED THAT SUCH DISALLOWANCES WER E ATTRACTED ONLY DUE TO EXISTING STATUTORY PROVISIONS OF SECTION 14A OF THE ACT AND CALCULATIONS OF DISALLOWANCE THEREOF HAVE UNDERGONE CHANGES BY DIFF ERENT INTERPRETATION AT ASSESSMENT/APPELLATE STAGES. THE LEARNED CIT(A) DEL ETED THE PENALTY LEVIED ON THIS ISSUE FOR THE REASON THAT SECTION 14A OF TH E ACT BEING A STATUTORY DISALLOWANCE AND AS DETAILS WERE DISCLOSED AND A WO RKING THEREOF WAS ALSO GIVEN BY THE ASSESSEE; AND WHERE THE QUANTUM OF DIS ALLOWANCE CHANGED DUE TO DIFFERENT INTERPRETATIONS MADE BY THE AO AND SUBSEQUENTLY BY THE LEARNED CIT(A). 4. AGGRIEVED BY THE ORDER OF THE CIT(A)-14, MUMBAI DAT ED 23.12.2014, DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT FOR A.Y. 2008- 09, REVENUE HAS PREFERRED THE APPEAL, RAISING THE F OLLOWING GROUNDS: - 1.(I) THE LEARNED CIT(A) HAS ERRED ON FACTS AND I N LAW IN DELETING THE PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 19 61 OF RS.1,90,84,194/- IMPOSED BY THE ASSESSING OFFICER W ITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE ASSESSING OFFICER IN THE ORDER IMPOSING PENALTY. (II) THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW WITHOUT APPRECIATING THE FACT THAT IF THE CASE OF THE ASSES SEE HAD NOT BEEN PICKED UP FOR SCRUTINY THE ASSESSEE WOULD HAVE NOT WITHDRAWN THE PATENTLY WRONG CLAIM OF DEDUCTION AND THEREFORE RATIO DECENDI OF SUPREME COURT IN CASE OF MAK DATA PVT. LTD. VS. CIT 2013) 40 SCD 925 AS REPORTED IN CIVIL APPEA L NO.9772 OF 2013 CLEARLY APPLIES. (III) THE LD. CIT APPEAL HAS ERRED IN LAW AND ON F ACTS IN NOT APPRECIATING THAT THE FURNISHING OF INACCURATE PART ICULARS /CONCEALMENT OF INCOME IS TO BE RECKONED WITH REFER ENCE TO THE RETURNED INCOME AND THE FACT OF WITHDRAWAL OF LOSS CLAIMED WAS IRRELEVANT IN THIS REGARD. 2. THE LD.CIT(A)'S ORDER IS CONTRARY TO LAW AND ON FACTS AND DESERVES TO BE SET ASIDE AND A.O 'S ORDER MAY BE RE STORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR AFTER ANY GROUND OR ADD A NEW GROUND THAT MAY BE NECESSARY. 4.1 THE LEARNED D.R. FOR REVENUE WAS HEARD IN SUPPO RT OF THE GROUNDS RAISED AND PLACED STRONG RELIANCE ON THE AOS ORDER LEVYING PENALTY OF ` 1,90,84,194/- UNDER SECTION 271(1)(C) OF THE ACT. ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 4 4.2.1 PER CONTRA, THE LEARNED A.R. OF THE ASSESSEE RELIED ON THE FINDINGS RENDERED BY THE LEARNED CIT(A) IN THE IMPUGNED ORDE R FOR DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT I N RESPECT TO BOTH ISSUES; I.E. (I) THE ADDITION UNDER SECTION 94(7) OF THE AC T AND (II) THE DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D. 4.2.2 ACCORDING TO THE LEARNED A.R. OF THE ASSESSEE , IT IS THE ASSESSEES FIRST YEAR OF OPERATIONS IN THE BUSINESS OF TRADING IN SH ARES AND SECURITIES. SINCE IN THIS ACTIVITY THERE ARE A LARGE NUMBER OF SUCH TRANSACTIONS INVOLVING THOUSANDS OF CRORES AND IN WHICH THE ASSE SSEE INCURRED HUGE LOSS, THE ASSESSEE BY OVERSIGHT DID NOT NOTICE THAT DIVIDEND WAS DECLARED BY SOME OF THE COMPANIES IN THE INTERIM PERIOD WHICH W AS HIT BY THE PROVISIONS OF SECTION 94(7) OF THE ACT. IT WAS SUBM ITTED THAT THE TRANSACTIONS ON WHICH DIVIDENDS WERE RECEIVED AND W HICH ATTRACTED THE PROVISIONS OF SECTION 94(7) OF THE ACT WAS NOT NOTI CED AT THE TIME OF FILING OF THE RETURN OF INCOME AND THE MISTAKE IN DOING SO WA S BONA FIDE AND THERE WAS NO MALAFIDE INTENTION ON THE PART OF THE ASSESS EE TO FURNISH INACCURATE PARTICULARS OF INCOME OR TO CONCEAL PARTICULARS OF INCOME. IN SUPPORT OF THIS PROPOSITION, THE LEARNED A.R. OF THE ASSESSEE PLACE D RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - (I) CITY GROUP GLOBAL MARKETS (P) LTD. VS. ACIT (IT A NO. 5352/MUM/ 2009 DATED 30.11.2012) (II) FOUR DIMENSIONS SECURITIES (INDIA) LTD. VS. AC IT (ITA NOS. 1466 & 1467/MUM/2013 DATED 26.02.2015 FOR A.Y. 2007-08 & 2009-10) (III) FOUR DIMENSIONS SECURITIES (INDIA) LTD. VS. A CIT (ITA NO. 2452/MUM/2012 DATED 16.01.2015) 4.2.3 IN RESPECT OF THE DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D, THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE ASS ESSEE HAD SUO MOTO DISALLOWED ` 21,85,29,927/- THEREUNDER IN THE RETURN OF INCOME/ COMPUTATION OF INCOME. ACCORDING TO THE LEARNED A.R . OF THE ASSESSEE THE DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D THEN UN DERWENT CHANGES DUE TO DIFFERENT FORMULAS AND VIEWS BEING ADOPTED; WITH THE AO COMPUTING THE SAME AT ` 40,24,40,674/- RESULTING IN AN ADDITIONAL DISALLOWA NCE OF ` 18,39,11,187/- AND SUBSEQUENTLY ON APPEAL BEING RED UCED TO ` 3,68,74,513/-, AFTER THE LEARNED CIT(A) DELETED THE DISALLOWANCE TO THE ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 5 EXTENT OF ` 14,70,25,674/-. IT IS CONTENDED THAT IN THE FACTUAL CIRCUMSTANCES AS LAID AT ABOVE, IT IS NOBODYS CASE THAT THIS WAS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. IN SUPPORT OF THIS PROPOSITION RELIANCE WAS ALSO PLACED ON THE DECISIO N OF THE HON'BLE APEX COURT IN THE CASE OF RELIANCE PETROPRODCUTS PVT. LT D. (2010) 332 ITR 158 (SC). IT IS SUBMITTED BY THE LEARNED A.R. OF THE AS SESSEE THAT IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION OF THE CASE, NO PE NALTY WAS LEVIABLE UNDER SECTION 271(1)(C) OF THE ACT AND PRAYED THAT THE IM PUGNED ORDER OF THE LEARNED CIT(A) IN DELETING THE PENALTY BE UPHELD. 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED. IN THE IMPUGNED ORDER, THE LEARNED CIT(A) AF TER CONSIDERING THE ASSESSEES SUBMISSIONS, THE AOS VIEW IN THE MATTER AND THE JUDICIAL PRONOUNCEMENTS CITED, DELETED THE PENALTY OF ` 1,90,84,194/- HOLDING AS UNDER AT PARAS 3 & 4 AS UNDER: - 3. BY TAKING GROUND NOS. 1 TO 4, THE APPELLANT HAVE BASICALLY AGITATED AGAINST LEVY OF PENALTY OF RS.1,90,84,194/-. I HAVE GONE THROUGH THE PENALTY ORDER DT.25.03.2013. A READING OF THE SAME MAKES IT CLEAR THAT PENALTY HAS BEEN LEVIED BY THE A.O. ON TWO ACC OUNTS; FIRSTLY FOR THE ADDITION MADE BY APPLYING PROVISIONS OF SEC.94( 7) AND SECONDLY ON ACCOUNT OF PROVISIONS OF SEC. 14A R.W. RULE 8D. I HAVE GONE THROUGH THE ORDER PASSED U/S.271(1)(C). THE A.O. HAS DISCUS SED IN HIS ORDER THAT ON BEING GIVEN THE OPPORTUNITY DURING THE PENA LTY PROCEEDINGS TO EXPLAIN WHY PENALTY SHOULD NOT BE LEVIED IN THEIR C ASE, THE ASSESSEE HAD SUBMITTED THAT THEY HAVE NEITHER CONCEALED ANY PARTICULARS OF INCOME NOR FURNISHED INACCURATE PARTICULARS OF THEI R INCOME. THEY WERE UNDER BONFIDE BELIEF THAT PROVISIONS OF SEC.94 (7) IS NOT APPLICABLE AND THEN FOR DISALLOWANCE MADE U/S. 14A R.W. RULE 8 D, THEY HAVE THEMSELVES CALCULATED DISALLOWANCE AT RS.21,85,29,4 27/-, WHICH WAS CALCULATED BY THE A.O. AT RS.40,24,40,614/-. THE AS SESSEE THEN PLEADED THAT EVEN THIS ESTIMATE OF DISALLOWANCE U/S .14A HAS VARIED AT ALL LEVELS AND HENCE PENALTY U/S. 271(L)(C) IN T HEIR CASE SHOULD NOT BE LEVIED. FOR THE SAME, THEY RELIED UPON THE DECIS ION GIVEN IN THE CASE OF 124 ITR 15 - CEMENT MARKETING CO. OF INDIA LTD. (SC), 168 ITR 705 (SC) (SIR SHADILAL SUGAR & GEN, MILLS LTD. V/S. CIT), 211 ITR 35 (ORISSA HIGH COURT), HINDUSTAN STEEL V/S. STATE OF ORISSA - 83 ITR 26 (SC), CIT VS. SMT. BIMLADEVI SHARMA - 192 ITR 482 ( PARNA), CIT VS BOMBAY PIPE TRADERS - 213 ITR 282 (BORN), ACIT VS. KALPAKA BAXAR - 46 ITD 221 - ITAT COCHIN BENCH, ADDL. CIT VS. DELHI CLOTH & GENERAL MILLS CO. LTD. 1986 (157) - ITR 0822 DEL, 181 ITR 4 10 (MP) (1990) ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 6 J.K. JAJOO VS. CIT, 190 ITR 402 (ALL) (1991) CIT VS . NEPANI BIN COMPANY TRUST, 46 ITD 331- ITAT BOMBAY BENCH D - YA ASMIN PROPERTIES (P) LTD. VS ACIT. 3.1 THE A.O. HAVING CONSIDERED THE SAME OBSERVED IN HIS ORDER AS UNDER: 'THE CONTENTION OF THE ASSESSEE IS CONSIDERED BUT F OUND NOT ACCEPTABLE BECAUSE OF THE FOLLOWING REASONS: REGARD ING DISALLOWANCE OF DIVIDEND STRIPPING U/S.94(7) AMOUNT ING TO RS.50,03,626/-, IT IS WORTHWHILE TO NOTE THAT THE A SSESSEE HAS ACCEPTED THE DECISION OF THE A.O. AND DID NOT PREFE R ANY APPEAL ON THIS GROUND. IN REPLY TO SHOW CAUSE NOTICE, THE ASSESSEE HAS STATED, AS SEEN ABOVE, THAT THE COMPANY WAS UNDER B ONAFIDE BELIEF THAT PROVISIONS OF SEC.94(7) IS NOT APPLICAB LE. FURTHER THE ASSESSEE HAS NOT GIVEN ANY REPLY REGARDING TREATING OF SHORT TERM CAPITAL GAIN AS BUSINESS INCOME BY THE ASSESSING OF FICER. IT IS, THEREFORE, PERTINENT TO NOTE THAT THE ASSESSEE HAS ACCEPTED THE DECISION TAKEN BY THE A.O. IN THIS REGARD ALSO. FURTHER THE ASSESSEE BY REPLYING UPON VARIOUS JUDGE MENTS HAS TRIED TO JUSTIFY THAT THERE WAS NO INTENTIONAL CONC EALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 3.2 THEN THE A.O. HAVING RELIED UPON DECISIONS GIVE N IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS & OTHERS (2008) 306 ITR 277 HELD THAT PENALTY BEING A CIVIL OFFENCE MENS REA IS NOT REQUIRED TO BE PROVED AND HENCE THE PLEA TAKEN BY T HE ASSESSEE THAT THE DEDUCTION CLAIMED BY THEM OR DISALLOWANCE MADE BY THEM U/S. 14A, THOUGH ON THE LOWER SIDE WERE NOT WILLFUL AND THERE IS NO FALSEHOOD IN THEIR ACCOUNTS IS NOT ACCEPTABLE. THE A.O. THEN RELYING UPON THE DECISION GIVEN IN THE CASE OF CIT VS. GATE S 91 1TR 467, CEMENT DISTRIBUTORS VS. CIT 60 ITR 586, CIT VS. PRE MIER BREWERIES 244 ITR 598, CIT VS. VILASBEN 192 ITR 214, CIT VS. ABDULGAFUR 199 ITR 827 AND CIT VS. VIDHYAGAURI 238 ITR 91, LEVIED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADE SO, AT RS. 1,90,84,19 4/-. 3.3 DURING THE APPELLATE PROCEEDINGS, APPELLANT HAV E SUBMITTED AS UNDER: APPLICABILITY OF PROVISIONS OF SECTION 94(7) WAS ACCEPTED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDIN G. ACCORDINGLY, DURING THE COURSE OF ASSESSMENT PROCEE DING, LOSS CLAIMED AMOUNTING TO RS.50,03,626/- WAS WITHDRAWN. THE CLAIM OF LOSS TO THE EXTENT OF DIVIDEND INCOME WAS MERE T ECHNICAL DEFAULT AND WITHOUT ANY MALAFIDE INTENTION. UPON RE ALIZING THE SAID MISTAKE, THE APPELLANT WITHDRAWN ITS CLAIM OF LOSS TO THE EXTENT OF RS.50,03,626/-. THE APPELLANT ON ITS OWN, SUBMITTED THE WORKING OF DISALLOWANCE U/S. 94(7). FURTHER THE YEAR UNDER REFERENCE BEING THE FIRST YEAR OF OPERATION, THE AP PELLANT HAD NO GRIP OVER THE TECHNICAL ASPECT OF INCOME-TAX ACT. I T IS RESPECTFULLY ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 7 SUBMITTED THAT 94(7) IS MORE IN THE NATURE OF DEEMI NG PROVISION AND LOSS THOUGH ACTUALLY INCURRED BY THE ASSESSEE W ILL BE IGNORED IN A GIVEN SET OF CIRCUMSTANCES. THUS APPLI CABILITY OF THE SAME IS HIGHLY TECHNICAL IN THE NATURE. VARIOUS JUDGEMENTS IN CONNECTION WITH PENALTY PROCE EDINGS WHERE PENALTY WAS DELETED BECAUSE OF BONAFIDE/INADV ERTENT MISTAKE ON THE PART OF ASSESSEE CERTAIN ADDITIONS W ERE MADE.' 3.4 THE APPELLANT FILED COPIES OF DECISIONS ALSO IN THE CASE OF MR. WALTER SALDHANA VS. DCIT RANGE-8(1), MUMBAI ITA 444 /M/2010, MISS HARRON MAHMOOD V/S. ACIT-12(3), MUMBAI ITA 1636/MUM/2013, M/S. CROWN TRADELINK PVT. LTD. V/S. ACIT (OSD) RG. I, AHMEDABAD ITA 2768/AHD/20I2 AND M/S. RELIA NCE INDUSTRIES LTD. V/S.ACIT, LTU, MUMBAI ITA 75/MUM/ 2009 3.5 I HAVE GONE THROUGH THE FACTS AND SUBMISSIONS A ND UNDISPUTEDLY ADDITIONS WERE MADE IN THE INCOME ON ACCOUNT OF PROVISIONS CONTAINED U/S.94(7) AND 14A. FOR THE SAKE OF CLARITY THE SECT ION 94 IS REPRODUCED AS UNDER : '94. (1) WHERE THE OWNER OF ANY SECURITIES (IN THIS SUB-SECTION AND IN SUB-SECTION (2) REFERRED TO AS 'THE OWNER') SELLS OR TRANSFERS THOSE SECURITIES, AND BUYS BACK OR REACQU IRED THE SECURITIES, THEN, IF THE RESULT OF THE TRANSACTION IS THAT ANY INTEREST BECOMING PAYABLE IN RESPECT OF THE SECURIT IES IS RECEIVABLE OTHERWISE THAN BY THE OWNER, THE INTERES T PAYABLE AS AFORESAID SHALL, WHETHER IT WOULD OR WOULD NOT HAVE BEEN CHARGEABLE TO INCOME TAX APART FROM THE PROVISIONS OF THIS SUB- SECTION, BE DEEMED, FOR ALL THE PURPOSES OF THIS AC T TO BE THE INCOME OF ANY OTHER PERSON. (2) XXXXXX (3) XXXXXX (4) XXXXX (5) XXXXXX (6) XXXX XXX (7) WHERE (A) ANY PERSON BUYS OR ACQUIRES ANY SECURITIES OR U NIT WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE ; (B) SUCH PERSON SELLS OR TRANSFERS (I) SUCH SECURITIES WITHIN A PERIOD OF THREE MONTH S AFTER SUCH DATE; OR (II) SUCH UNIT WITHIN A PERIOD OF NINE MONTHS AFTE R SUCH DATE (C) THE DIVIDEND OR INCOME ON SUCH SECURITIES OR UN IT RECEIVED OR RECEIVABLE BY SUCH PERSON IS EXEMPT, THEN THE LO SS, IF ANY, ARISING TO HIM ON ACCOUNT OF SUCH PURCHASE AND SALE OF SECURITIES OR UNIT, TO THE EXTENT SUCH LOSS DOES NOT EXCEED TH E AMOUNT OF DIVIDEND OF INCOME RECEIVED OR RECEIVABLE ON SUCH S ECURITIES OR UNIT SHALL BE IGNORED FOR THE PURPOSES OF COMPUTING HIS INCOME CHARGEABLE TO TAX.' 3.6 IN THIS CASE, FACTS ON RECORD SHOW THAT THE COM PANY CAME INTO EXISTENCE ON 10.07.2007, MEANING THEREBY THE FIRST YEAR OF ASSESSMENT WAS 2008-09. THE APPELLANT HAVE ALSO FUR NISHED DETAILS ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 8 OF SHARES PURCHASED BY THEM, WHICH THEY CONSIDERED AS THEIR INVESTMENT. THE RECORD DATE AND DATE OF INCORPORATI ON OF THE APPELLANT ARE VERY MUCH IN PROXIMITY, SO MUCH SO THAT ANY INT ERVAL BETWEEN THE TWO IS BARELY OF TWO MONTHS. THE APPELLANT HAVE ALS O GIVEN THE PERIOD OF HOLDING OF THESE SHARES, WHICH IN GOOD NUMBER OF CASES HAS SPREAD OVER TO THE NEXT F.Y., WITH AN AVERAGE HOLDING OF 1 50 + DAYS. THIS ALL CLEARLY SHOWS THAT THE APPELLANT PURCHASED SHARES, WHICH WERE DUE FOR DECLARATION OF DIVIDEND BY THE CONCERNED COMPAN IES AND DIVIDEND HAVING BEEN DECLARED AND RECEIVED SO, WERE REFLECTE D AS APPELLANTS' EXEMPT INCOME ALSO. THESE SHARES IN THE F.Y. WERE S OLD ATTRACTING SHORT TERM/LONG TERM LOSS/GAIN, AS THE CASE MAY BE. ON THESE GIVEN FACTS, HAVING FOUND THAT THE COMPANY HAS GAIN ED THE AMOUNT OF DIVIDEND SO DECLARED ON THESE SHARES, REFLECTED BY THEM AS THEIR INVESTMENT, HOWEVER, CLAIMING LOSS ON ACCOUNT OF SALE PRICE BELOW THE PURCHASE ACT. TO THIS EXTENT, THE ASSESSEE HAS ALSO ADMITTED THE SAME AND OFFERED THE INCOME ACCORDINGLY AND NOT EVE N PREFERRED APPEAL. ON THESE GIVEN FACTS, I AM IN AGREEMENT WIT H THE A.O. THAT PROVISIONS OF SEC.94(7) BEING ATTRACTED IN THIS CAS E, THE ADDITIONS WERE RIGHTLY MADE IN THE INCOME OF THE APPELLANT. HOWEVE R, MERELY BECAUSE OF EXISTING DEEMING PROVISIONS WERE ATTRACTED IN TH E CASE OF APPELLANT, THIS DOES NOT AUTOMATICALLY ATTRACT PENALTY U/S.271 (1)(C), AS IT IS NEITHER A CASE OF FURNISHING INACCURATE PARTICULARS NOR CONCEALING INCOME BY FURNISHING WRONG PARTICULARS. IN FACT THE A.O. COULD GATHER THE PROVISIONS ATTRACTED IN THE CASE DUE TO THESE D ETAILS BEING AVAILABLE ON RECORD. ON THE IDENTICAL FACTS, IT WAS DECIDED IN FAVOUR OF ASSESSEE IN CASE OF MR. WALTER SALDHANA AND M/S. CR OWN TRADELINK PVT. LTD., WHICH ARE RELIED UPON BY APPELLANT ALSO. THUS, I AM OF THE CONSIDERED VIEW THAT DISALLOWANCE OF LOSS U/S.94(7) MADE ON THE BASIS OF DETAILS AND PARTICULARS ALREADY FURNISHED IN RETURN BY APPELLANT CANNOT BE TAKEN AS THE BASIS FOR CONCLUDI NG THAT TAX WAS SOUGHT TO BE EVADED AND THEREBY LEVYING PENALTY U/S .271(1)(C). ON THIS GROUND, PENALTY U/S.271(1)(C) BEING NOT LEVIAB LE IS UNSUSTAINABLE AND HENCE IS DELETED. 3.6 COMING TO THE SECOND ADDITION MADE U/S.14A R.W. RULE 8D, AGAIN ADDITION BY WAY OF DISALLOWANCE WERE MADE BY WORKIN G OUT SUCH DISALLOWANCE AS PER THE FORMULA PROVIDED. SUCH DISA LLOWANCES WERE ATTRACTED AGAIN DUE TO EXISTING STATUTORY PROVISION S OF SEC. 14A ONLY. THIS IS ALSO A FACT THAT THE CALCULATION ITSELF HAS UNDERGONE A CHANGE AT DIFFERENT LEVELS. IT IS NOT A CASE OF A.O. THAT ASSESSEE CLAIMED THAT NO DISALLOWANCES ARE TO BE MADE U/S.14A, BUT THE DI SALLOWANCE MADE UNDERWENT CHANGES DUE TO DIFFERENT INTERPRETATION. AGAIN FOR THE REASON THAT SEC. 14A BEING A SECTION ATTRACTING STA TUTORY DISALLOWANCE DOES NOT ATTRACT PENALTY U/S.271(1)(C), AS ALL THE DETAILS WERE DULY DISCLOSED AND IN FACT THE WORKING WAS ALSO GIVEN BY THE APPELLANT, WHERE THE QUANTUM OF DISALLOWANCE CHANGED DUE TO DI FFERENT INTERPRETATIONS MADE BY THE A. O., WHICH WAS REDUCE D AT THE LEVEL OF 1 ST APPELLATE AUTHORITY ITSELF. ON THESE GIVEN FACTS AN D IN THESE GIVEN CIRCUMSTANCES, AGAIN 14A DISALLOWANCES BEING STATUT ORY IN NATURE, I AM OF THE VIEW THAT PENALTY U/S.271(1)(C) IS NOT LE VIABLE AND HENCE PENALTY LEVIED BY TAKING INTO ACCOUNT DISALLOWANCES MADE U/S.14A ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 9 R.W. RULE 8D ARE DELETED. THE GROUND NOS.1,2,3 AND 4 ARE ALLOWED. 4. IN THE RESULT, THE APPEAL IS ALLOWED. 4.3.2 ON AN APPRECIATION OF THE SUBMISSIONS PUT FOR TH, THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL PRONOUNCEMENTS, IT I S SEEN THAT THE YEAR UNDER CONSIDERATION WAS THE YEAR IN WHICH THE ASSES SEE COMPANY CAME INTO EXISTENCE (I.E. W.E.F. 10.07.2007) AND IT WAS ENGAGED IN THE BUSINESS OF TRADING IN SHARES AND SECURITIES, WHICH ACTIVITY WA S UNDERTAKEN IN LARGE VOLUMES. THE FACTS OF THE ACTIVITIES CARRIED OUT AN D INCOME/LOSS DECLARED IN SUCH ACTIVITIES HAS BEEN SUCCINCTLY BROUGHT OUT BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER. WE CONCUR WITH THE VIEW OF THE AUTHORITIES BELOW THAT THE PROVISIONS OF SECTION 94(7) OF THE ACT WERE CLE ARLY ATTRACTED IN THE CASE ON HAND AND THE ADDITION THEREUNDER BEING CORRECTLY MADE TO THE ASSESSEES INCOME. IT IS SEEN THAT THE ASSESSEE HAS ADMITTED AND ACCEPTED THE SAME AND NOT PREFERRED AN APPEAL IN THE MATTER. IN OUR VIEW, THE FACTS ON RECORD INDICATE THAT IN THE LIGHT OF HUGE VOLUME OF TRANSACTIONS UNDERTAKEN BY THE ASSESSEE IN ITS FIRST YEAR OF OPE RATIONS, THIS IS A BONA FIDE MISTAKE ON THE PART OF THE ASSESSEE IN COMPUTI NG/COMPILING OF VOLUMINOUS DATA. SINCE THERE IS NO MALAFIDE INTENTI ON ON THE PART OF THE ASSESSEE, WE ARE OF THE OPINION THAT THE LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE ACT ON THIS ISSUE IS NOT WARRANTE D, MERELY BECAUSE THE PROVISIONS OF SECTION 94(7) OF THE ACT WERE ATTRACT ED; FOR THE REASONS THAT THIS IS NOT A CASE OF EITHER FURNISHING OF INACCURA TE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME SINCE THE AO COULD GATHER THA T THE PROVISIONS WERE ATTRACTED IN THIS CASE ONLY DUE TO THE DETAILS BEIN G AVAILABLE ON RECORD. WE FIND THAT IN JUDICIAL PRONOUNCEMENTS RELIED ON BY T HE ASSESSEE, THAT AN IDENTICAL ISSUE WAS CONSIDERED AND ADJUDICATED BY A COORDINATE BENCH IN THE CASE OF FOUR DIMENSIONS SECURITIES (INDIA) LTD. IN ITA NO. 2542/MUM/2012 DATED 16.01.2015, WHEREIN THE BENCH F OLLOWING THE DECISION OF ANOTHER COORDINATE BENCH IN THE CASE OF CITY GROUP GLOBAL MARKETS INDIA P. LTD. IN ITA NO. 5352/MUM/2009 DATE D 13.12.2011 HAS HELD AS UNDER AT PARAS 2 TO 5 THEREOF: - 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERU SED. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS A CORPORATE MEMBER OF NSE, ENGAGED IN THE BUSINESS OF BROKING IN SHARES AND SE CURITIES AND ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 10 TRADING IN SHARES & SECURITIES AS WELL AS IN FUTURE AND OPTIONS. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD SHOWN TOTAL INCOME OF RS.13,98,55,100/-, WHICH INCLUDED RS.8,73,43,276/- FROM SHARE TRADING OPERATIONS. THE ASSESSEE CLAIMED ENTIRE AMO UNT OF STT PAID RS.2,38,83,416/- AS REBATE UNDER SECTION 88E OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE A SSESSEE HAD RECEIVED A DIVIDEND OF RS.47,16,889/- FROM INDIAN C OMPANIES AND MUTUAL FUNDS. THE A.O. ASKED THE ASSESSEE TO FURNIS H THE DETAILS OF THE PURCHASE AND SALE IN RESPECT OF COMPANIES WHICH WERE HIT BY THE PROVISIONS OF SECTION 94(7) OF THE ACT. THE ASSESSE E, IN RESPONSE, WORKED OUT THE DETAILS OF THE DISALLOWANCE AT RS.6, 70,776/- AND OFFERED THE SAME FOR TAX. AFTER MAKING THIS DISALLO WANCE, THE A.O. INITIATED THE PENALTY PROCEEDINGS AND IMPOSED THE P ENALTY OF RS.2,25,783/- @ 100% OF THE TAX AMOUNT SOUGHT TO BE EVADED. 3 . IT WAS ARGUED BY LD. AR THAT EXACTLY SIMILAR ISSU E WAS DEALT BY THE TRIBUNAL IN THE CASE OF CITY GROUP GLOBAL MARKETS INDIA PVT. LTD., ITA NO.5352/MUM/2009 , DATED 13-12-2011, WHEREIN PENALTY IMPOSED U/S.271(1)(C) FOR ADDITIONS MADE WITH REFER ENCE TO DISALLOWANCE MADE UNDER SECTION 94(7) WAS DELETED A FTER HAVING THE FOLLOWING OBSERVATIONS :- 5. IN OUR VIEW THIS DOES NOT ATTRACT PENALTY UNDER SECTION 271(1)(C). FIRST OF ALL THE ASSESSEE IS REGULARLY P URCHASING AND SELLING SHARES AS PART OF BUSINESS ACTIVITY IN LARG E VOLUMES AND ONLY IN THESE TWO CASES THERE IS A DECLARATION OF D IVIDEND AND SALE OF SHARES IMMEDIATELY THEREAFTER, WHICH ATTRAC TED THE PROVISIONS OF SECTION 94(7). BUT FOR THE DECLARATIO N OF DIVIDEND, THE LOSS WOULD HAVE BECOME BUSINESS LOSS ALLOWABLE OTHERWISE IN THE COURSE OF ITS BUSINESS ACTIVITY OF PURCHASE AND SALE OF TRANSACTIONS. EVEN THE PROFESSIONAL AUDITORS/ADVISO RS WHO EXAMINED LARGE NUMBER OF TRANSACTIONS BEFORE FILING THE RETURNS COULD NOT ADVISE THE ASSESSEE ON THE APPLICATION OF THIS PARTICULAR PROVISION INTRODUCED FROM THIS ASSESSMEN T YEAR. EVEN THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT WAS CONSIDERED ONLY THE LOSS ON VSNL SHARES ALONE OF `13,21,084/- AS ATTRACTED BY SECTION 94(7) AND DISALLOWED LOSS. AS ASSESSEE A LSO UNDERTOOK TRANSACTIONS IN INFOSYS SHARES, IN WHICH THERE WAS GAIN AND ALSO LOSS ON 5 TRANSACTIONS, THE CIT (A) A LLOWED SETOFF AND RESTRICTED TO NET AMOUNT OF RS. 12,45,342/-. IN OUR VIEW, THIS IS A BONAFIDE MISTAKE HAPPENED AT THE LEVEL OF COMP ILING THE DATA. THE APPLICATION OF PROVISIONS OF SECTION 94( 7) WERE NOT EXAMINED NOR INVOKED. SINCE THE ASSESSEE HAS DECLAR ED LARGE AMOUNT OF PROFITS IN TRANSACTIONS ON PURCHASE AND S ALE OF SHARES, THIS ASPECT COULD HAVE GENUINELY MISSED THE ATTENTI ON OF PERSONS CONCERNED. SINCE NO MALAFIDE INTENTION CAN BE ATTRI BUTED TO ASSESSEE IN CLAIMING LOSS IN THESE TRANSACTIONS, WE ARE OF THE VIEW THAT PENALTY UNDER SECTION 271(1)(C) IS NOT WA RRANTED. VARIOUS CASE LAW RELIED UPON BY THE ASSESSEE ALSO S UPPORTS THE CONTENTIONS MADE. HOWEVER, WITHOUT GETTING INTO THE LEGAL PARAMETERS, ON FACTS OF THE CASE WE ARE OF THE VIEW THAT THERE ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 11 OCCURRED A BONAFIDE MISTAKE IN NOT EXAMINING THE PR OVISIONS OF SECTION 94(7) ON THESE TRANSACTIONS. MOREOVER, THOU GH THERE ARE DISALLOWANCES IN THE COURSE OF THE ASSESSMENT PROCE EDINGS, MERE DISALLOWANCE DOES NOT ATTRACT PENALTY PROCEEDINGS U NDER SECTION 271(1)(C). ACCORDINGLY THE ASSESSEES GROUND IS ALL OWED. THE PENALTY LEVIED ON THIS DISALLOWANCE OF LOSS IS HERE BY CANCELLED. 4 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND TH AT ASSESSEE IS A SHARE BROKER AND SHARE TRADER AND HAS OFFERED A TOT AL INCOME OF RS.13,98,55,100. THE SAID INCOME INCLUDES PROFITS F ROM SHARE TRADING OF RS. 8,73,43,276/-. THE PROFIT HAS BEEN RESULTED FROM INNUMERABLE TRANSACTIONS OF PURCHASE & SALES OF SHARES, INCLUDI NG ARBITRAGE, JOBBING ETC. DURING THE YEAR UNDER CONSIDERATION, T HE ASSESSEE HAD MISSED OUT TO DISALLOW A MEAGER LOSS OF RS.6,70,776 /- U/ S 94(7) OF THE ACT, ON ACCOUNT OF DIVIDEND STRIPPING. DISALLOW ANCE U/ S 94(7) DEPENDS UPON CUMULATIVE SATISFACTION OF CERTAIN CON DITIONS PRESCRIBED IN THE ACT. THE SAME HAS BEEN REMAINED TO BE APPLIE D BY OVERSIGHT AND EVEN THE AUDITORS HAVE FAILED TO POINT IT OUT. HOWEVER AT THE TIME OF ASSESSMENT PROCEEDINGS, WHEN THE DETAILS OF PURC HASE AND SALE OF SHARES AND UNITS WERE CALLED FOR IN THE COURSE OF O RDINARY HEARING, THE ASSESSEE FURNISHED COMPLETE PARTICULARS OF TRANSACT IONS. DURING THESE PROCEEDINGS, THE SAID MISTAKE WAS REALIZED AND THE ASSESSEE AGREED BEFORE THE A.O. TO DISALLOW THE SAID AMOUNT. SINCE ASSESSEE HAS AGREED FOR DISALLOWANCE, NO SHOW CAUSE NOTICE WAS I SSUED BY THE A.O. IN THIS REGARD. THE DISALLOWANCE WAS MADE AS P ER THE WORKING SUBMITTED BY THE APPELLANT, WHICH HAS BEEN ACCEPTED BY THE A.O. ALSO, AGAINST THE SAID DISALLOWANCE, NO APPEAL IS F ILED BY THE ASSESSEE. IT IS A CASE OF AN INADVERTENT MISTAKE MA DE BY THE ASSESSEE, AND THE ASSESSEE AGREED FOR DISALLOWANCE AT THE TIME OF ASSESSMENT PROCEEDINGS. ACCORDINGLY, NO PENALTY U/S .271(1)(C) OF THE ACT WAS WARRANTED. PUTTING THESE FACTS TO THE PROPO SITION OF LAW DISCUSSED BY COORDINATE BENCH IN THE CASE OF CITY GROUP GLOBAL MARKETS INDIA PVT. LTD(SUPRA) , WE DO NOT FIND ANY MERIT IN THE PENALTY SO IMPOSED BY THE AO U/S.271(1)(C) OF THE A CT WITH RESPECT TO THE DISALLOWANCE MADE UNDER OF SECTION 94(7) OF THE ACT. 5 . SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT MUMBAI BE NCH IN THE CASE OF RAMESH DAMANI, ITA NO.1625/MUM/2012 , DATED 22-8-2014. RESPECTFULLY FOLLOWING THE JUDICIAL PRONOUNCEMENTS AS DISCUSSED ABOVE, WE DO NOT FIND ANY MERIT IN THE IMPOSITION O F PENALTY ADDITION MADE WITH REFERENCE TO THE PROVISIONS OF SECTION 94 (7). 4.3.3 IN THE FACTUAL MATRIX OF THE CASE ON HAND AS DISCUSSED ABOVE AND DRAWING SUPPORT FROM THE DECISIONS OF THE COORDINAT E BENCH CITED (SUPRA) WHICH SUPPORT THE CASE OF THE ASSESSEE, WE ARE OF T HE CONSIDERED VIEW THAT THERE WAS A BOANFIDE MISTAKE ON THE PART OF THE ASS ESSEE IN NOT EXAMINING THE PROVISIONS OF SECTION 94(7) OF THE ACT IN RESPE CT OF THE CONCERNED TRANSACTIONS. WE, THEREFORE UPHOLD THE LEARNED CIT( A)S ORDER IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE A CT FOR FURNISHING OF ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 12 INACCURATE PARTICULARS OF INCOME ON THIS ISSUE, SIN CE THE DISALLOWANCE UNDER SECTION 94(7) OF THE ACT WAS MADE ON THE BASI S OF DETAILS AND PARTICULARS ALREADY FURNISHED BY THE ASSESSEE. 4.4.1 IN RESPECT OF THE PENALTY LEVIED UNDER SECTIO N 271(1)(C) OF THE ACT ON THE DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D WE FIND FROM THE DETAILS ON RECORD THAT THE ASSESSEE ITSELF HAD SUO MOTO MAD E A DISALLOWANCE THEREUNDER OF ` 21,85,29,427/-. THE SAID DISALLOWANCE, WE OBSERVE, HAS BEEN INCREASED BY THE AO TO THE EXTENT OF ` 18,39,11,187/- AND SUBSEQUENTLY ON APPEAL HAS BEEN REDUCED BY THE LEAR NED CIT(A) TO ` 3,68,74,513/-; ALL THIS DUE TO DIFFERENT INTERPRETA TIONS AND FORMULAE ADOPTED BY THESE AUTHORITIES. IN THIS CONTEXT, WE N OTICE THAT FOR MAKING THE SAID DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D, W HICH IS A STATUTORY DISALLOWANCE, ALL DETAILS HAVE BEEN DISCLOSED BY TH E ASSESSEE AND THE QUANTUM OF DISALLOWANCE HAS VARIED ONLY DUE TO DIFF ERENT INTERPRETATIONS BY THE AO AND LEARNED CIT(A) AND NOT ON ACCOUNT OF ANY FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THIS FACTUAL M ATRIX OF THE CASE, AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE IN THE CASE ON HAND AND THEREFORE UPHOLD THE FINDING OF THE LEARNED CIT(A) IN DELETING THE P ENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT ON THIS ISSUE OF DISAL LOWANCE UNDER SECTION 14A R.W. RULE 8D OF THE ACT IN THE CASE ON HAND. 4.5 CONSEQUENTLY FINDING NO MERIT IN THE GROUNDS NO . 1 TO 3 RAISED BY REVENUE, WE DISMISS THE SAME. 5. IN THE RESULT, REVENUES APPEAL FOR A.Y. 2008-09 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2017. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 20 TH JANUARY, 2017 ITA NO. 2018/MUM/2015 M/S. VINAMRA UNIVERSAL TRADERS PVT. LTD. 13 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -14, MUMBAI 4. THE CIT - 8, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.