ITO 16(3)(3), MUMBAI V. YASHASWI BUILDERS, MUMBAI

ITA 2527/MUM/2010

• Counselvise Citation: 252719914 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 20-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: TARUN GHIA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI D.K.AGARWAL, JM ITA NO.2527/MUM/2010 : ASST. YEAR 2005-2006 THE INCOME TAX OFFICER WARD 16(3)(3) MUMBAI. M/S.YASHASWI BUILDERS 457 PHOENIX BUILDING S.V.P.ROAD, MUMBAI 400 004. PAN : AAAFY0023F. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI A.K.NAYAK RESPONDENT BY : SHRI TARUN GHIA DATE OF HEARING : 20.12.2011 DATE OF PRONOUNCEMENT :23.12.2011 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 14.01.2010 DELETING THE PENALTY OF ` 20 LAKH IMPOSED BY THE ASSESSING OFFICER U/S 271(1) (C) IN RELATION TO THE ASSESSMENT YEAR 2005-2006. 2. THIS APPEAL IS TIME BARRED BY 16 DAYS. THE LEARN ED D.R. EXPLAINED THE REASON FOR THE DELAY. WE ARE SATISFIED WITH SUCH RE ASONS LEADING TO THE DELAY IN FILING THE APPEAL. NO SERIOUS OBJECTION WAS TAKEN B Y THE LEARNED AR. WE, THEREFORE, CONDONE THE DELAY AND ADMIT THIS APPEAL FOR HEARING ON MERITS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF ` 8,67,470 AND THE ASSESSMENT WAS COMPLETED AT ` 33,40,070. THE MAIN ADDITION ON WHICH CONCEALMENT P ENALTY HAS BEEN IMPOSED IS ABOUT THE RENTAL INCOME OF ` 46.61 LAKH WHICH WAS CLAIMED BY THE ASSESSEE AS `BUSINESS INCOME INSTEAD OF `INCOME FROM HOUSE PRO PERTY ASSESSED BY THE ITA NO.2527/MUM/2010. M/S.YASHASWI BUILDERS. 2 REVENUE. THE ASSESSING OFFICER HELD THAT THE ASSESS EE INTENTIONALLY CLAIMED RENTAL INCOME UNDER THE HEAD `PROFITS AND GAINS OF BUSINESS OR PROFESSION FOR CLAIMING DEDUCTION TOWARDS VARIOUS EXPENSES. THAT I S HOW THE PENALTY OF ` 20 LAKH WAS IMPOSED, WHICH CAME TO BE DELETED IN THE FIRST APPEAL. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED THAT THE ONLY BASIS FOR AD DITION LEADING TO THE PENALTY IS THE TRANSFER OF RENTAL INCOME FROM THE HEAD `PROFIT S AND GAINS OF BUSINESS OR PROFESSION AS DECLARED BY THE ASSESSEE TO THE `INC OME FROM HOUSE PROPERTY AS HELD BY THE ASSESSING OFFICER AND THE RESULTANT DI SALLOWANCE OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD `BUSINESS IN COME AND GRANTING OF ELIGIBLE EXPENSES UNDER THE HEAD `INCOME FROM HOUSE PROPERTY. APART FROM THAT THERE IS NOTHING TO INDICATE THAT THERE WAS ANY VAR IATION IN THE GROSS AMOUNT OF RENT RECEIVED BY THE ASSESSEE AND SO DECLARED. THE ASSESSEE CANVASSED THE VIEW THAT THE RENTAL INCOME WAS ASSESSABLE UNDER THE HEA D `PROFITS AND GAINS OF BUSINESS OR PROFESSION AS IT WAS BEING DONE IN THE EARLIER YEARS ALSO, WHICH POSITION ACCEPTED BY THE REVENUE ALBEIT IN ASSESSME NTS MADE U/S 143(1)(A). THE MERE FACT THAT IN THE CURRENT YEAR THE ASSESSING OF FICER SHIFTED THE HEAD UNDER WHICH THE RENTAL INCOME WAS ASSESSABLE, CANNOT BE C ONSIDERED AS A CASE FOR IMPOSITION OF PENALTY U/S 271(1)(C). THE HONBLE SU PREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. [(2010) 3 22 ITR 158 (SC)] HAS HELD THAT SIMPLY FOR THE REASON THAT THE ASSESSING OFFIC ER DID NOT FIND THE CLAIM OF THE ASSESSEE TO BE SUSTAINABLE IN LAW UP TO A CERTAIN E XTENT, IT CAN NOT BE A CASE FOR PENALTY U/S.271(1)(C) MORE SO WHEN THE PARTICULARS FURNISHE D BY THE ASSESSEE WERE NOT INACCURATE. THE FACTS OF OUR CASE ARE SIMILAR INASM UCH AS THE ASSESSEE DECLARED THE RENTAL INCOME UNDER THE HEAD `BUSINESS INCOME FOLL OWING THE VIEW TAKEN BY IT IN THE EARLIER YEARS AND ALL THE NECESSARY PARTICULARS WER E DULY DISCLOSED. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE IMPUGNED ORDER. ITA NO.2527/MUM/2010. M/S.YASHASWI BUILDERS. 3 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF DECEMBER, 2011. SD/- SD/- (D.K.AGARWAL) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 23 RD DECEMBER, 2011. DEVDAS* SD/- (R.K.PANDA) AM (NOMINATED) COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A)-XVII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.