ITO 25(3)(2), MUMBAI V. JAIN ASSOCIATES, MUMBAI

ITA 2625/MUM/2011

• Counselvise Citation: 262519914 RSA 2011
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 30-05-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 06-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: JIGNESH R SHAH AR Q
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI J BENCH BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO.2625/M/2011 ASSESSMENT YEAR 2007-08 ITO 25(3)(2), C-11, R.NO. 306, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. .......... APPELLANT VS. M/S. JAIN ASSOCIATES, 7B VICEROY PARK, TOWER-D, THAKUR VILLAGE, KANDIVLI (E), MUMBAI 400 101. PAN: AAFFJ 2914F ......... RESPONDENT APPELLANT BY: SHRI D.S. SUNDER SINGH, DR RESPONDENT BY: SHRI JIGNESH R. SHAH, AR Q DATE OF HEARING: 30.5.2012 DATE OF ORDER: 8.6.2012 ORDER PER S.S. GODARA, JM: THIS REVENUES APPEAL CHALLENGES DELETION OF PENALT Y BY LD CIT (A) VIDE ORDER DATED 19.1.2011 IMPOSED U/S 271(1)(C) BY ASSESSING OFFICER, PERTAINING TO ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WH O IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF COPY RIGHTS OF MOTION PI CTURES FILED ITS RETURN OF AY 2006- 07. IN THE SAID ASSESSMENT YEAR IT HAD RECEIVED AN AMOUNT OF RS. 37,50,000/- REGARDING TRANSFER OF OWNERSHIP RIGHTS OF THE MOVIE AMAR AKBAR ANTHONY TO M/S. TIPS INDUSTRIES LTD. THE SAID CONSIDERATION WAS NO T ADMITTED AS SALES IN PROFIT & LOSS A/C. THEREFORE, THE AO ADDED THE AMOUNT IN AS SESSMENT OF AY 2006-07. 2 ITA NO.2625/M/2011 3. THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) . IN THE SAID APPEAL, THE LD. CIT (A) HELD BY ORDER DATED 13.11.2009 THAT THE CON SIDERATION HAD TO BE TAXED IN ASSESSMENT YEAR 2007-08 I.E. ASSESSMENT YEAR IN HAN D IN PRESENT APPEAL BEFORE US INSTEAD OF ASSESSMENT YEAR 2006-07. 4. IN THE MEANTIME, REGARDING ASSESSMENT YEAR 2007- 08 I.E. AY IN HAND, THE ASSESSEE HAD ALREADY FILED RETURN ON 26.10.2007. B EFORE THE FINALIZATION OF ASSESSMENT, IN PURSUANCE TO ORDER DATED 13.11.2009 (SUPRA), IT FILED REVISED COMPUTATION OF TOTAL INCOME AS WELL AS PROFIT & LOS S A/C DULY MENTIONING THE CONSIDERATION AMOUNT. THE AO DID NOT ACCEPT THE RE VISED COMPUTATION. HELD THAT SINCE THE ASSESSEE HAD NOT INCLUDED THE AMOUNT IN Q UESTION IN THE SALES, THEREFORE, THE SAME WAS ADDED BY ASSESSMENT ORDER DATED 22.12. 2009. NOTICE OF PENALTY U/S 271(1)(C) OF THE ACT WAS ALSO ISSUED. 5. IN PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED T HAT THE REASON AS TO WHY SALE CONSIDERATION HAD NOT BEEN STATED IN THE ORIGI NAL RETURN WAS THAT SOME DISPUTE HAD ARISEN. THEREFORE, WHEN IN APPEAL, LD. CIT (A) VIDE ORDER DATED 13.11.2009 HELD THAT THE CONSIDERATION HAD TO BE OFFERED FOR TAXATI ON IN AY 2007-08 (SUPRA), IT FILED REVISED RETURN AND P & L ACCOUNT. 6. THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION . HELD VIDE PENALTY ORDER DATED 28.6.2010 THAT CONDUCT TO BE AS A CASE OF FAL SE EXPLANATION CALLING IT AS ITS FAILURE TO DISCLOSE ALL THE MATERIAL FACTS AND PART ICULARS IN ASSESSMENT. HENCE, IMPOSED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVAD ED I.E. 7,44,763/-. 7. IN APPEAL, LD. CIT (A) HAS DELETED THE PENALTY O N THE GROUND THAT THE ASSESSEE HAD ALREADY DISCLOSED THE FACT IN THE EARL IER YEAR ASSESSMENT I.E. AY 2006- 07. PER LD. CIT (A), IT SHOWED THAT THE ASSESSEE H AD NEVER INTENDED TO CONCEAL THE 3 ITA NO.2625/M/2011 AMOUNT FROM THE KNOWLEDGE OF AO. THEREFORE, THE PE NALTY HAS BEEN ORDERED TO BE STRUCK DOWN. HENCE, THE REVENUE IS AGGRIEVED. 8. LD DR APPEARING FOR REVENUE HAS VEHEMENTLY CONTE NDED THAT THE ASSESSEES CONDUCT IN NOT DISCLOSING THE CONSIDERATION AMOUNT IN PURSUANCE TO THE SALE OF RIGHTS IN HAND IS A CASE OF CONCEALMENT. IN THIS REGARD, HE HAS PLACED RELIANCE ON THE PENALTY ORDER AS WELL AS JUDGMENT OF HONBLE SUPREM E COURT IN THE CASE OF DHARMEDRA TEXTILE PROCESSORS 306 ITR 277 (SC) AND P RAYED FOR UPHOLDING THE PENALTY ORDER. 9. LD AR OPPOSING THE REVENUES ARGUMENTS HAS SUBMI TTED THAT THE ASSESSEE IS NOT AT ALL GUILTY OF EITHER FURNISHING INACCURATE P ARTICULARS OR CONCEALMENT OF INCOME. BY REITERATING THE ABOVE FACTUAL POSITION, HE HAS S UBMITTED THAT IN THE EARLIER ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2006-07, THE A SSESSEE HAD DULY DISCLOSED THE AMOUNT. THE LD. CIT (A) VIDE ORDER DATED 13.11.200 9 HELD THAT THE SAID AMOUNT HAD TO BE TAXED IN NEXT ASSESSMENT YEAR IN 2007-08. AF TER THE SAID ORDER, THE ASSESSEE FILED REVISED COMPUTATION AS WELL AS PROFIT & LOSS ACCOUNT IN THE ASSESSMENT PROCEEDINGS OF ASSESSMENT YEAR 2007-08. HOWEVER, T HE AO DID NOT ACCEPT IT. THEREFORE, THE ASSESSEE IS NOT GUILTY OF EITHER FUR NISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME IN HAND. 10. BESIDES THIS, THE LD AR HAS ALSO RELIED ON CASE LAW OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) AS WELL AS 339 ITR 373 (BOM) METAL ROLLING WORKS LTD. VS. CIT WHEREIN IT HAD BEEN HELD THAT WHEN THE ASSESSEE HAD DISCLOSED THE INCOME IN THE EARLIER AS SESSMENT YEAR I.E. ORIGINAL RETURN OF INCOME AS ADVANCE RECEIVED, THE SAME CANNOT BE C ALLED AS AN ACT OF CONCEALMENT. 4 ITA NO.2625/M/2011 11. IN REBUTTAL, THE LD DR HAS SUBMITTED THAT FACTS OF THE CASE IN METAL ROLLING WORKS LTD. AND PRESENT APPEAL ARE DIFFERENT. 12. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES IN DETAIL. NECESSARY FINDINGS IN THE ORDERS PASSED BY LOWER AUTHORITIES AS WELL A S THE RELEVANT CASE LAW REFERRED HAVE BEEN PERUSED. UNDOUBTEDLY, THE CONSIDERATION WAS RECEIVED IN 2006-07. AGREEMENT WAS SIGNED IN 2007-08. THE ASSESSEE HAD DISCLOSED THE CONSIDERATION AMOUNT IN ASSESSMENT YEAR 2006-07. THE LD. CIT (A) VIDE ORDER DATED 13.11.2009 HELD THAT THE SAID AMOUNT COULD ONLY BE TAXED IN NE XT ASSESSMENT YEAR I.E. 2007-08. 13. THEREAFTER, SINCE ASSESSMENT PROCEEDINGS IN ASS ESSMENT YEAR 2007-08 WERE YET TO BE FINALIZED, THE ASSESSEE FILED REVISED COM PUTATION OF INCOME AS WELL AS PROFIT & LOSS ACCOUNT. THAT WAS NOT ACCEPTED IN ASSESSMEN T ORDER DATED 23.12.2009. THE AO OBSERVED THAT IT WAS AN ACT OF CONCEALMENT. SUB SEQUENTLY, IMPOSED PENALTY IN HAND. 13.1. THE ABOVE FACTUAL MATRIX OF THE CASE NOWHERE PROVES THAT THE ASSESSEE HAD EITHER CONCEALED THE INCOME OR FURNISHED ANY INACCU RATE PARTICULARS. THE VERY FACT THAT IT HAD DULY MENTIONED THE CONSIDERATION IN YEA R OF RECEIPT ITSELF PROVES ITS BONAFIDES. IN THIS REGARD, WE FORTIFY OUR OPINION FROM THE HONBLE BOMBAY HIGH COURT JUDGMENT IN CASE OF METAL ROLLING WORKS LTD ( SUPRA). 14. EVEN OTHERWISE ALSO, EVERY INSTANCE OF ADDITION IN THE ASSESSMENT PROCEEDINGS DOES NOT IPSO FACTO LED TO CONCLUSION THAT AN ASSESSEE IS GUILTY OF CONCEALMENT ETC. AS THE PENALTY PROCEEDINGS ARE ALT OGETHER DIFFERENT IN NATURE. WE RELY ON THE HONBLE SUPREME COURT JUDGMENT IN CASE OF RELIANCE PETRO PRODUCTS LTD. (SUPRA). 5 ITA NO.2625/M/2011 15. HENCE, WE HOLD THAT THE LD. CIT (A) HAS NOT ERR ED IN DELETING THE PENALTY IN QUESTION. SO, THE REVENUES APPEAL IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 8.6.2012. SD/- SD/- (B. RAMAKOTAIAH) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:8.6.2012 OKK COPY TO 1. ITO-25(3)(2), MUMBAI. 2. M/S. JAIN ASSOCIATES, MUMBAI. 3. THE CIT (A)-35, MUMBAI. 4. THE CIT CONCERNED. 5. THE DR J, BENCH, ITAT MUMBAI. 6. GUARD FILE. // TRUE COPY // BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.