SANIKA SHILOTRI, MUMBAI V. ACIT 20(3), MUMBAI

ITA 2623/MUM/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6721 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-06-2011
• Assessment Year: misc
• Appeal Filed On: 06-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI V.DURGA RAO, JM ITA NO.2623/MUM/2010 : ASST.YEAR 2003-2004 MRS.SANIKA SHILOTRI 102 VARUN J.P.ROAD, VERSOVA, ANDHERI (WEST), MUMBAI 400 061. PAN :AMNPS1176K. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 20(3) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JAYANT BHATT RESPONDENT BY : SHRI G.P.TRIVEDI O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-T AX (APPEALS) ON 18.02.2010 UPHOLDING PENALTY OF RS.1,91,527 IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE ACT, IN RELATION TO THE ASSESSMENT YEAR 2003-2004. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE SHOWED SPECULATIVE PROFIT AFTER CLAIMING DEDUCTION FOR CERTAIN EXPENSES. THESE EXPENSES INCLUDED A SUM OF RS.27,007 ON ACCOUNT OF TRANSACTION CHARGES OF STOCK EXCHANGE OF RS.2,42,769 INCURRED ON ACCOUNT OF INTEREST ON LOAN PAID TO BANK AND RS.72,000 ON ACCOUNT OF SALARY AND WAGES . THE ASSESSING OFFICER NOTED THAT TOTAL INTEREST CLAIMED IN THE RETURN OF INCOME OF RS .5,39,485 WAS CLAIMED AGAINST SPECULATIVE INCOME AND FURTHER SUM OF RS.2,96,716 WAS CLAIMED AGAINST SHOR T TERM CAPITAL GAIN REALIZED ON THE SALE OF SHAR ES. THE A.O. ALSO NOTICED THAT THE ASSESSEE HAD ALSO INCURRED RS.1,493 ON OVERDRAFT ACCOUNT WHICH WAS UTILIZED FOR THE PURPOSE OF SPECULATIVE TRANSACTION. ON FURTHER VERIFI CATION THE A.O. DISALLOWED THE ENTIRE SUM OF RS.2,42,769 CLAIMED BY THE ASSESSEE AGAINS T THE SPECULATIVE INCOME AND HALF OF THE SALARY AT RS.36,000. INTEREST OF RS .1,493 FOR FUNDING MARGIN MONEY USED WAS ALLOWED. INTEREST OF RS.2,9 6,716 CLAIMED AGAINST SHORT TE RM CAPITAL GAIN WAS ALSO NOT ALLOWED. THEREAFTER THE A.O. IM POSED PENALTY AMOUNTING TO RS.1,91,527 U/S.271(1)(C) WHICH CAME TO BE UPHELD IN THE FIRST APPEAL. ITA NO.2623/MUM/2010 MRS.SANIKA SHILOTRI. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS NOTICED THAT TH E ASSESSEE CHALLENGED BEFORE THE TRIBUNAL THE ADDITION OF RS.2,96,716 CLAIMED AS DEDUC TION ON ACCOUNT OF INTEREST WHILE COMPUTING THE SHORT TERM CAPITAL GAIN WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER. THE TRIBUNAL VIDE ITS ORDER DATED 13.04.2011 IN ITA NO.346/MUM/2009 HAS ACCEPTED THE ASSESSEES GROUND BY DIRECTIN G THE A.O. TO TREAT THE IN TEREST ON BORROWED CAPITAL AS PART OF COST OF ACQUISITION. WITH THE DELETI ON OF THIS ADDITION, WE ARE LEFT WITH THE ADDITION ON ACCOUNT OF INTEREST AND DISA LLOWANCE OF SALARY. THE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF SALARY AT RS.72,000 WHICH WAS RESTRICTED BY THE ASSESSING OFFICER TO RS.36,000. IT IS A CASE IN WHICH THE ASSESSEE MADE CLAIM FOR DEDUCTION TOWARDS INTEREST AND AS WELL AS SALARY BY DISCL OSING COMPLETE FACTS. SIMPLY FOR THE REASON THAT THE ASSESSING OFFICER DID NOT FIND THE CLAIM OF THE ASSESSEE TO BE SUSTAINABLE IN LAW UP TO A CERTAIN EXTENT, IT CA NNOT BE A CASE FOR PENALTY U/S.271(1)(C) MORE SO WHEN THE PARTICUL ARS FURNISHED BY THE ASSESSEE WERE NOT INACCURATE. THE HONBLE SU PREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. [(2010) 322 ITR 158 (SC)] HAS ORDERED FOR THE DELETION OF PENALTY IN SUCH CIRCUMSTANCES. WE ARE, THEREFORE, OF TH E CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN UPHO LDING THE PENALTY OF RS.1.91 LACS. THE SAME IS HEREBY ORDERE D TO BE DELETED. 4. IN THE RESULT, TH E APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 22 ND DAY OF JULY, 2011. SD/- SD/- ( V.DURGA RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 22 ND JULY, 2011. DEVDAS*` ITA NO.2623/MUM/2010 MRS.SANIKA SHILOTRI. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXXI, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.