ANAND AUTOMOBILES, MUMBAI V. ACIT CIRCLE 23(2), MUMBAI

ITA 2533/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59907 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-03-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K MEHTA
• Assessee Lawyers: DEVDATTA MAINK
• Keywords: Business income; Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, A, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (JM) AND SHRI N.K .BILLAIYA (AM) ITA NO.2533/MUM/2010 (ASSESSMENT YEAR: 2004-05) ANAND AUTOMOBILES, C/O B.K.KHARE & COMPANY, CHARTERED ACCOUNTANTS, 706/708, SHARDA CHAMBERS, NEW MARINE LINES, MUMBAI-400020. PAN:AADFA9171D ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 23(2), MUMBAI. APPELLANT V/S RESPONDENT DATE OF HEARING : 21.3.2012 DATE OF PRONOUNCEMENT : 29.3.2012 APPELLANT BY : SHRI DEVDATTA MAINK AR RESPONDENT BY : SHRI N.K.MEHTA O R D E R PER DINESH KUMAR AGARWAL (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 22.1.2010 PASSED BY THE LD. CIT(A ) FOR THE ASSESSMENT YEAR 2004-05 CONFIRMING THE PENALTY OF RS.55,98,385/-IMPOSED BY THE AO U/S 271(1)(C) OF T HE INCOME TAX ACT, 1961 (THE ACT). ITA NO.2533/MUM/2010 (ASSESSMENT YEAR: 2004-05) 2 2. THE GROUND TAKEN BY THE ASSESSEE READS AS UNDER : THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY LEV IED U/S 271(1)(C) AMOUNTING TO RS.55,98,385/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NEITHER CONCEALED ANY PARTICULARS NOR FURNISHED ANY INACCUR ATE DETAILS OF INCOME . 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL IN THE QUANTUM APPEAL IN ACIT V/S ANAND AUTOMOBILES AND VICEVERSA IN ITA NO.6167/MUM/ 2007 AND ITA NO.5984/MUM/2007 (AY-2004-05) ORDER DATED 15.7.2011 HAS SET ASIDE THE ASSESSMENT TO THE FILE OF THE AO FOR DENOVO ADJUDICATION AND THEREFORE, THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) CONFIRMING THE PENALTY IM POSED BY THE AO BE SET ASIDE TO THE FILE OF THE AO WHICH WA S NOT OBJECTED TO BY THE LD. DR. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF TRADING OF FILTERS AND ALSO DERIVES INCOME FROM INVESTMENTS AND LETTIN G OUT OF PROPERTY. THE AO WHILE COMPLETING THE ASSESSMENT T REATED THE COMPENSATION RECEIVED BY THE ASSESSEE UNDER THE HEA D INCOME FROM HOUSE PROPERTY INSTEAD OF ASSESSEES CLAIM THAT THE SAME IS BUSINESS INCOME. HE FURTHER DISALLOWE D CERTAIN EXPENSES CLAIMED WHILE WORKING OUT THE BUSINESS I NCOME AS ITA NO.2533/MUM/2010 (ASSESSMENT YEAR: 2004-05) 3 ACCORDING TO THE AO THE SAID EXPENDITURE RELATED TO COMPENSATION RECEIVED BY THE ASSESSEE. THE AO ALL OWED THE RENT PAID AND DEDUCTION U/S 24(1) OF THE ACT @30% WHILE COMPUTING THE PROPERTY INCOME AS PER STATUTORY PR OVISIONS. HOWEVER, THE AO WHILE COMPUTING THE PROPERTY INCOM E ADDED RS.55,23,000/- BEING 10% OF THE SECURITY DEPOSITS A MOUNTING TO RS.55,23,00,000/- BEING NOTIONAL INTEREST ON SU CH DEPOSITS. ON APPEAL, THE LD. CIT(A) PARTLY ALLOWED THE ASSESS EES APPEAL. ON FURTHER APPEAL BY THE ASSESSEE AND THE REVE NUE, THE TRIBUNAL WHILE SUSTAINING THE DISALLOWANCE OF REPA IR EXPENSES AND LEGAL AND PROFESSIONAL FEES, SET ASIDE THE OTH ER ISSUES TO THE FILE OF THE AO FOR DENOVO ADJUDICATION VIDE ORDER DATED 15.7.2011 (SUPRA). SINCE THE TRIBUNAL HAS SET ASI DE THE ISSUE TO THE FILE OF THE AO, THEREFORE, IN THE INTEREST OF JUSTICE WE CONSIDER IT FAIR AND REASONABLE THAT THE MATTER OF IMPOSITION OF PENALTY BE ALSO SET ASIDE TO THE FILE OF THE AO AND ACCORDINGLY, WE SET ASIDE THE SAID ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATIS TICAL PURPOSES. ITA NO.2533/MUM/2010 (ASSESSMENT YEAR: 2004-05) 4 5. IN THE RESULT, THE ASSESSEES APPEAL STANDS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH MAR., 2 012. SD SD (N.K.BILLAIYA) (DINESH KUMA R AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, 29 TH MARCH, 2012 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI