SHRI MADHU MEHTA, MUMBAI V. THE ACIT CEN CIR-13, MUMBAI

ITA 2737/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1484 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM GAUR
• Assessee Lawyers: AJAY NAGPAL
• Keywords: Initiation of penalty proceedings
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI. BEFORE SHRI R.V. EASWAR, HONBLE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER I.T.A. NO. 2737/MUM/2008. ASSESSMENT YEAR : 2006-07. SMT. MADHU MEHTA, ASSTT. COMMISSIONER OF B-88, KALPATARU HABITAR, VS. INCOME TAX, DR. S.S. RAO ROAD, PAREL, CENTRAL CIRCLE-13, MUMBAI 400 020. MUMBAI 400 020. PAN AAGPM0688J APPELLANT RESPONDENT APPELLANT BY : SHRI AJAY NAGPAL. RESPONDENT BY : S HRI VIKRAM GAUR. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS), CENTRAL VII, MUMBAI DATE D 13-02-2008 FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS : 1.A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,18, 242/- MADE BY THE AO TO THE TOTAL INCOME OF THE APPELLANT ON ACCO UNT OF ALLEGED BROKERAGE OR FACILITATION CHARGES PAID BY THE APPEL LANT IN CONNECTION WITH CAPITAL GAINS. B) THE LD. CIT(A) FAILED TO APPRECIATE THAT NO SUCH BR OKERAGE OR FACILITATION CHARGES WAS PAID BY THE APPELLANT. C) IN REACHING TO THE CONCLUSION AND CONFIRMING SUCH A DDITION THE LD. CIT() OMITTED TO CONSIDER RELEVANT FACTORS, CONSIDE RATIONS, 2 PRINCIPLES AND EVIDENCES WHILE HE WAS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVANT CONSIDERATIONS AND FAC TORS. 2. THE LD. CIT(A) ERRED IN HOLDING THAT NO INTERFERENC E WAS CALLED FOR IN RESPECT OF GROUND NO. 3 RAISED DISPUTING INTERES T U/S 234A, 234B, 234C AND 234D OF THE INCOME TAX ACT, 1961. THE APPE LLANT DENIES HER LIABILITY FOR SUCH INTEREST. 3. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE GROUND RAISED DISPUTING INITIATION OF PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE INCOME TAX ACT, 1961 IS PREMATURE. THE APPELLANT DE NIES HER LIABILITY FOR SUCH PENALTY. 2. THE ASSESSEE IS A MEMBER OF RAHUL KANTILAL MEHT A AND FAMILY ON WHOM SEARCH ACTION U/S 132 OF THE ACT WAS TAKEN. THE ISSUE THAT ARISES IN THIS APPEAL IS WHETHER THE CIT(APPEA LS) WAS RIGHT IN CONFIRMING THE ADDITION OF RS.1,18,242/- MADE BY TH E AO TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF ALLEGED BROKER AGE OR FACILITATION CHARGES PAID BY THE ASSESSEE IN CONNECTION WITH CAP ITAL GAINS. 3. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT T HE ISSUE IS COVERED BY THE DECISION OF THE D-BENCH OF THE MUMBA I TRIBUNAL IN ITA NO. 2736/MUM/2008 IN THE CASE OF SHRI RAHUL MEHTA F OR ASSESSMENT YEAR 2006-07, ORDER DATED 18 TH MARCH, 2010 WHEREIN AT PARA 7 PAGE 2 IT IS HELD AS FOLLOWS : AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT T HE ASSESSEE DESERVES TO SUCCEED ON THIS ISSUE. IT IS SEEN THAT NO EVIDENCE WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH ON THE FAMILY MEMBERS OF MEHTA GROUP. IT IS A SETTLED POSITION IN LAW THAT ANY ADDITION CAN BE MADE IN CASE OF SEARCH ONLY ON THE BASIS OF EVIDENCE FOUND. AS STATED ABOVE, NOTHING WAS FOUND TO SHOW THAT THE ASSESSEE HAS PAID 5% BROKERAGE FOR THE BROKERS FOR ARRANGING THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES. TH EREFORE, IN OUR CONSIDERED VIEW, THE ADDITION MADE BY THE AO AND SU STAINED BY THE CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, WE DELETE TH E ADDITION OF RS.2,28,356/-. 3 4. ON SIMILAR FACTS, IN THE CASE OF SHRI KANTILAL MEHTA IN ITA NO. 2735/MUM/2008, THE H-BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 20-04-2010 AT PARA 3 PAGE 3, FOLLOWED THE DECISION IN THE CASE OF RAHUL MEHTA AND DELETED THE ADDITION. 5. RESPECTFULLY FOLLOWING THE SAME, AS THE FACTS A RE IDENTICAL, WE ALLOW GROUND NO. 1 OF THE ASSESSEE. 6. COMING TO GROUND NO.2, THE SAME IS CONSEQUENTIA L AND MANDATORY. 7. COMING TO GROUND NO. 3, THE SAME DOES NOT ARISE IN THIS APPEAL AND NEED NOT BE ADJUDICATED UPON. HENCE THE SAME IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ORDER PRONOUNCED ON THIS 18 TH DAY OF JUNE, 2010. SD/- SD/- (R.V. EASWAR) (J. SUDHAKAR REDDY) PRESIDENT. ACCOUNTANT MEMBER. MUMBAI, DATED : 18 TH JUNE, 2010. WAKODE 4 COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, B-BENCH (TRUE COPY) BY ORDER AS STT.REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.