DCIT 9(2), MUMBAI V. KORADIA CONSTRUCITON P.LTD, MUMBAI

ITA 2084/MUM/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8653 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV

Judgement Text

1 ITA 2084/MUM/2012 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NOS.2084/MUM/2012) (ASSESSMENT YEARS: 2006-07) DY.CIT-9(2), MUMBAI VS M/S KORADIA CONSTRUCTION PV T LTD C-402, GOKUL DIVINE, IRLA, S.V. ROAD VILE PARLE (W), MUMBAI-56 PAN : AAACK9154E APPELLANT RESPONDEDNT APPELLANT BY SHRI RAJESHKUMAR YADAV RESPONDENT BY SHRI VIMAL PUNMIYA DATE OF HEARING 21-11-2017 DATE OF PRONOUNCEMENT 21-11-2017 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-20, MUMBAI DATED 04-01-2012 AND IT PERTAINS TO AY 2006-07. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING THE PENALTY LEVIED U!S.271(I)(C) EVEN THOUGH THE ACTIVITY OF PURCHASE AND SALE OF SHARES IN SYSTEMATIC AND REGULAR MANNER WITH HIGH F REQUENCY AND VOLUMES THROUGHOUT THE YEAR WAS HELD BY THE AO & LD . CIT(A) AS BUSINESS-INCOME AS PER - EXPLANATION 1 T SECTION 271(1)(C) THE ASSESSEE HAS CONCEALED INCOME TO THE EXTENT ? 2 ITA 2084/MUM/2012 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 29-11-2006 DECLA RING TOTAL INCOME AT RS.1,57,60,580. THE ASSESSMENT WAS COMPLETED U/S 1 43(3) ON 26-12-2008 DETERMINING THE TOTAL INCOME AT RS.1,57,70,160. DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DECLARED INCOME FRO M SHARE TRANSACTION UNDER THE HEAD CAPITAL GAINS WHEREAS THE AO HAS TREATED THE INCOME FROM SALE OF SHARES UNDER THE HEAD INCOME FROM BUSINESS. THER EAFTER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY OF RS.35,48,234 BEING 100 % OF TAX SOUGHT TO BE EVADED. AGGRIEVED BY THE PENALTY ORDER, ASSESSEE P REFERRED APPEAL BEFORE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS TAKEN A PLEA THAT THE AO WAS ERRED IN LEVYING PENALTY U/S 271(1)(C) TOWARDS ADDITION M ADE ON ACCOUNT OF CHANGE IN HEAD OF INCOME FROM CAPITAL GAIN TO INCOME FROM BU SINESS. THE CIT(A), FOR THE DETAILED REASONS RECORDED IN HIS ORDER DATED 04-01- 2012 DELETED THE PENALTY LEVIED BY THE AO. AGGRIEVED BY THE ORDER OF THE CI T(A), REVENUE IS IN APPEAL BEFORE US. 3. THE LD.AR FOR THE ASSESSEE, AT THE OUTSET, SUBMITTE D THAT THE APPEAL FILED BY THE REVENUE CHALLENGING THE ORDER OF CIT(A) DELE TING THE PENALTY LEVIED U/S 271(1)(C) IS NOT SUSTAINABLE IN LAW AS THE QUANTUM APPEAL FILED BY THE ASSESSEE HAS ALREADY BEEN ALLOWED BY THE ITAT, MUMBAI BENCH A IN ITA 3 ITA 2084/MUM/2012 NO.2265/MUM/2010 DATED 28-09-2016. THE LD.AR FURTH ER SUBMITTED THAT THE ISSUE, WHETHER SURPLUS FROM SALE OF SHARES IS TAXAB LE UNDER THE HEAD INCOME FROM BUSINESS OR UNDER THE HEAD INCOME FROM CAPIT AL GAIN HAS BEEN DECIDED BY THE ITAT IN ASSESSEES FAVOUR. ONCE THE ADDITIO N ON WHICH PENALTY HAS BEEN LEVIED ITSELF HAS BEEN DECIDED IN FAVOUR OF THE ASS ESSEE, PENALTY LEVIED BY THE AO ON THE SAME ADDITION IS NOT SUSTAINABLE. 4. THE LD.DR, ON THE OTHER HAND, HAS FAIRLY ACCEPTED T HAT THE QUANTUM APPEAL HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE B Y THE ITAT IN ITA NO.2265/MUM/2010. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE CO-ORDINATE BENCH OF ITAT, MUMBAI A-BE NCH HAS ALREADY DECIDED THE ISSUE OF ADDITION MADE BY THE AO TOWARDS SURPLU S FROM SALE OF SHARES AS ASSESSABLE UNDER THE HEAD INCOME FROM CAPITAL GAIN S OR INCOME FROM BUSINESS. THE CO-ORDINATE BENCH IN ITA NO.2265/MU M/2010 DATED 29-10-2016 HELD THAT THE PROFITS ON SALE OF SHARES IS ASSESSAB LE UNDER THE HEAD SHORT TERM CAPITAL GAIN / LONG TERM CAPITAL GAIN, AS THE CASE MAY BE. ONCE THE ADDITION ON WHICH PENALTY HAS BEEN LEVIED U/S 271(1)(C) HAS BEE N DELETED BY THE ITAT, THERE IS NO SCOPE FOR THE AO TO LEVY CONCEALMENT PENALTY. THEREFORE, WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE PENALTY U/S 271(1)( C). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. 4 ITA 2084/MUM/2012 ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 21 ST NOVEMBER, 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI