Jayraj Estate Pvt.Ltd., Baroda V. The Dy.CIT.,Circle-5, Baroda

ITA 2048/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9272 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: P M MEHTA WITH SHRI G M THAKOR
• Keywords: Deemed dividend
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, A HMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) ( , !'# $ , ! %& ) ITA NO. 2048/AHD/2014 (ASSESSM ENT YEAR: 2007-08) JAYRAJ ESTATE PVT. LTD. GF-26/2, SILVER ARCADE, AKOTA-MUNJ MAHUDA ROAD, NR. SAMRAJYA-II, BARODA- 390020 VS. THE DCIT, CIRCLE-5, BARODA PAN NO. AAACJ5505E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P. M. MEHTA WITH SHRI G. M. THAKOR, A.R. RESPONDENT BY : SMT. SONIA KUMAR, SR. D.R. DATE OF HEARING : 09 -03-2 016 DATE OF PRONOUNCEMENT : 10 -03-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF CIT(A)-V, BARODA, DATED 28.03.2014 FOR THE ASSESSMENT YEAR 2007-08 , WHEREBY LEVY OF PENALTY LEVIED U/S.271(1)(C) OF THE ACT BY A.O. WAS UPHELD BY THE LD. CIT(A). 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF LAND DEVELOPING LAND DEVELOPERS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2007- 08 ON 15.11.2007 DECLARING TOTAL INCOME AT RS.NIL. THE CASE WAS SELECTED FOR ITA NO.2048/AHD/14 A.Y. 2007-08 (JAYRAJ ESTATE PVT . LTD. VS. DCIT) 2 SCRUTINY AND THEREAFTER, ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT VIDE ORDER DATED 24.12.2009 AND THE TOTAL INCOME WAS DETERMINE D AT RS. 2,04,58,290/-, INTER ALIA, BY MAKING ADDITION ON ACCOUNT OF DEEMED DIVID END U/S.2(22)(E) OF THE ACT OF RS.3,81,48,023/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO CONFIRMED THE ADDITION O F DEEMED DIVIDEND MADE BY A.O. ON THE AFORESAID ADDITION OF DEEMED DIVIDEND, A.O. VIDE ORDER DATED 29.03.2012 HELD THAT ASSESSEE HAD FURNISHED INACCUR ATE PARTICULARS OF INCOME AND THEREFORE LIABLE FOR PENALTY U/S.271(1)(C) OF THE A CT AND ACCORDINGLY LEVIED PENALTY OF RS.1,28,40,640/- U/S. 271(1)(C) OF THE ACT. AGG RIEVED BY THE PENALTY ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CI T(A) WHO VIDE ORDER DATED 28.03.2014 (IN APPEAL NO. CAB(A)-V/01/12-13) UPHELD THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT AND THUS DISMISSED THE APP EAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUND: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALT Y U/S.271(1)(C) OF THE ACT RS.1,28,40,640/- IMPOSED BY THE ASSESSING OFFICER O N ADDITION OF RS.3,81,48,023/- MADE AS DEEMED DIVIDEND BY INVOKIN G THE PROVISIONS OF SECTION2(22)(E) OF THE ACT. 4. BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THA T THE ADDITION OF DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT, WHICH WAS THE BAS IS FOR LEVY OF PENALTY HAS ITSELF BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO-OR DINATE BENCH OF TRIBUNAL IN ITA NO.15/AHD/2011 ORDER DATED 11.09.2015. HE PLAC ED ON RECORD THE COPY OF THE AFORESAID ORDER AND POINTED TO THE RELEVANT FIN DING OF THE CO-ORDINATE BENCH OF TRIBUNAL AT PARA 18 PAGE 16 OF THE ORDER. HE, THER EFORE, SUBMITTED THAT SINCE THE GROUND ON WHICH THE PENALTY U/S.271(1)(C) OF THE AC T WAS LEVIED, ITSELF HAS BEEN DECIDED IN FAVOUR OF ASSESSEE, THE PENALTY ON ACCOU NT OF CONCEALMENT OF INCOME DOES NOT SURVIVE. HE, THEREFORE, SUBMITTED THAT TH E PENALTY BE DELETED. LD. D.R., ON THE OTHER HAND, SUPPORTED THE ORDERS OF LOWER AU THORITIES. ITA NO.2048/AHD/14 A.Y. 2007-08 (JAYRAJ ESTATE PVT . LTD. VS. DCIT) 3 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LE VY OF PENALTY U/S.271(1)(C) OF THE ACT ON THE ADDITION OF DEEMED DIVIDEND OF RS.3,81,4 8,023/- MADE U/S.2(22)(E) OF THE ACT. WE FIND THAT THE AFORESAID ADDITION HAS B EEN DELETED BY THE CO-ORDINATE BENCH OF TRIBUNAL VIDE ORDER DATED 11/09/2015, WHER EIN INTER ALIA IT HAS BEEN HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE HAS BEEN W RONGLY TREATED AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT. IN SUCH A SITUAT ION, WE ARE OF THE VIEW THAT SINCE THE QUANTUM ADDITION ITSELF HAS BEEN DELETED, PENAL TY U/S.271(1)(C) OF THE ACT ON SUCH ADDITION DOES NOT SURVIVE BECAUSE THE VERY BAS IS ON WHICH PENALTY PROCEEDING HAS BEEN INITIATED HAS NOT REMAINED. W E, THEREFORE, DIRECT THE DELETION OF PENALTY LEVIED U/S.271(1)(C) OF THE ACT. THUS, THIS GROUND OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 10 - 03 - 2016. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 10/03/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD