USHA CHANDRESH SHAH, MUMBAI V. ITO 19(1)(2), MUMBAI

ITA 2970/MUM/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4632 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THARIAN OOMMEN
• Keywords: Unexplained cash credit; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH MUMBAI BEFORE : SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M.BALAGANESH, A CCOUNTANT MEMBER ITA NO. 2970 /MUM/ 20 15 ( ASSESSMENT YEAR : 2006 - 07 ) MS. USHA CHANDRESH SHAH 52, LAXMI NIWAS CHS FLAT NO.15, 3 RD FLOOR 9 TH ROAD, KHAR (W) MUMBAI 400 052 VS. ITO - 19(1)(2) MUMBAI PAN/GIR NO. AURPS1402K (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI THARIAN OOMMEN DATE OF HEARING 0 9 /0 8 /2021 DATE OF PRONOUNCEMENT 30 / 09 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 2970/MUM/2015 FOR A.Y. 2006 - 07 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 34, MUMBAI IN APPEAL NO. CIT(A) - 34/ITO - 19(1)(2)/IT - 34/13 - 14 DATED 11/03/2 015 (LD. CIT(A) IN SHORT) IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THE NOTICE SENT TO THE ASSESSEE HAD RETURNED UNSERVED. SINCE, IT IS AN OLD APPEAL, WE PROCEEDED ITA NO . 2970/MUM/2015 MS. USHA CHANDRESH SHAH 2 TO DISPOSE OF THIS APPEAL ON HEARING THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S.271( 1)(C) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 4. WE HAVE HEARD LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE RETURN OF INCOME FOR THE A.Y.2006 - 07 WAS FILED BY THE ASSESSEE ON 06/07/2006 DECLARING TOTAL INCOM E OF RS.1,50,049/ - . THE LD. AO OBSERVED THAT ASSESSEE IS DERIVING INCOME FROM OTHER SOURCES. THE ASSESSEE WAS ASKED TO FURNISH BANK SUMMARY AND CAPITAL ACCOUNT VIDE ORDER SHEET NOTING DATED 12/09/2008 DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AN D THE SAME WERE DULY FURNISHED BEFORE THE LD. AO ON 29/09/2008. FROM THE PERUSAL OF THE CAPITAL ACCOUNT, THE LD. AO OBSERVED THAT ON 10/09/2005, T HE ASSESSEE HAS RECEIVED SALE PROCEEDS OF SHARES AMOUNTING TO RS.7,53,061/ - RESULTING IN EARNING LONG TERM CAP ITAL GAIN ON SALE OF SHARES OF RS.7,39,103/ - . THE LD. AO COMPLETED THE ASSESSMENT U/S.14 3 ( 3 ) OF THE ACT ON 29/ 12 /2008 MAKING ADDITION OF RS.7,53,061/ - AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT REPRESENTING THE SALE PROCEEDS OF THE SHARES OF M/S ROBINSON WORLDWIDE TRADE LIMITED. THE LD. AO INITIATED PENALTY PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE ASSESSMENT PROCEEDINGS. THE LD. AO IN HIS PENALTY ORDER U/S.271(1)(C) OF THE ACT PASSED ON 19/03/2013 STATED THAT ASSESSEE HAD PURCHA SED 2700 SHARES ON 13/05/2004 AT RS.5.17 PER SHARE TOTALING TO RS.13,959/ - . THESE SHARES WERE SOLD THROUGH BROKER SHRI SANJ U KABRA ON 10 /09/2005 @279.50 AMOUNTING TO RS.7,53,894/ - . THE NET SALE PROCEED S AMOUNTING TO RS.7,53,061/ - WAS CREDITED BY THE ASSESS EE IN HER CAPITAL ACCOUNT. SINCE, THERE WAS AN ASTRONO MICAL APPRECIATION IN THE PRICE ITA NO . 2970/MUM/2015 MS. USHA CHANDRESH SHAH 3 OF THE SCRIP FROM RS.5.17 TO RS.279.50 WITHIN A SPAN OF 16 MONTHS, THE LD. AO , BASED ON THE ENQUIRIES CONDUCTED FROM KOLKATA STOCK EXCHANGE, BROKERS , DEPOSITORY PARTICIPA NT M/S. INDIA BULLS SECURITIES LTD., THE COMPANY I.E. M/S. PRIME CAPITAL MARKET LTD., AND M/S. BRIGHT SU N MERCHANTS PVT. LTD., OBSERVED THAT THE SCRIP TREATED BY THE ASSESSEE HAD BEEN CATEGORISED AS PENNY STOCK AND INVESTIGATIONS OF KOLKATA INVESTIGATION WING REVEALED THAT SHRI SANJ U KABRA (BROKER) HAD BEEN INVOLVED IN MANIPULATION OF SHARE PRICES. THE ADDITION MADE BY THE LD. AO IN THE QUANTUM PROCEEDINGS WAS UPHELD BY THE LD. CIT(A) VIDE ORDER DATED 28/03/2011. IT WAS POINTED OUT THAT ASSESSEE HAD FURNIS HED PURCHASE AND SALE BILLS / CONTRACT NOTES , BANK STATEMENTS, BROKERS CONFIRMATIONS, BOOKS OF ACCOUNTS ETC., TO ESTABLISH THAT THE SHARE TRANSACTION WAS GENUINE AND BONAFIDE, HENCE, THERE CANNOT BE ANY ALLEGATION OF CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. THE LD. AO HOWEVER, DID NOT HE E D TO THE CONTENTIONS OF THE ASSESSEE AND PROCEEDED TO LEVY PENALTY U/S.271(1)(C) OF THE ACT ON THE GROUND THAT ASSESSEE HAD FURNISHED INACCURATE PARTI CULARS OF INCOME AND ACCORDINGLY, LEVIED PENALTY OF RS.1,79,430/ - IN THE ORDER PASSED U/S.271(1)(C) OF THE ACT DATED 19/03/2013. THE LD. CIT(A) ON THE BASIS OF QUANTUM APPEAL BEING CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 26/09/2014 , UPHELD THE LEVY OF P ENALTY U/S.271(1)(C) OF THE ACT . 5. WE FIND THAT AGAINST THE DISMISSAL OF THE APPEAL BY THE TRIBUNAL VIDE ORDER DATED 26/09/2014 IN THE QUANTUM APPELLATE PROCEEDINGS, THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND TH E SAME HAS BEEN ADMITTED IN THE INCOME TAX APPEAL NO.13 OF 2016 DATED 18/06/2018. ONCE THE QUESTION OF LAW HAS BEEN ADMITTED BY THE HONBLE HIGH COURT, THERE CANNOT BE ANY ALLEGATION THAT COULD BE ITA NO . 2970/MUM/2015 MS. USHA CHANDRESH SHAH 4 LEVIED ON THE ASSESSEE FOR FURNISHING INACCURATE PARTICULAR S OF INCOME THEREON AS THE ISSUE BECAMES DEBATABLE . IN THE INSTANT CASE, THE ASSESSEE HAD INDEED FURNISHED ALL THE RELEVANT DOCUMENTS THAT ARE NECESSARY FOR FACTUAL ADJUDICATION OF THE ISSUE IN DISPUTE. IT IS ONLY QUESTION OF NON - ACCEPTANCE OF THE SAID EVI DENCE BY THE LD. AO DUE TO ASTRONOMICAL INCREASE IN SHARE PRICE OF THE SCRIP DEALT BY THE ASSESSEE WHICH HAD EVENTUALLY LED TO ADDITION. THE SUBSTANTIAL QUESTION OF LAW RAISED BY THE ASSESSEE ON SUCH ADDITION HAS BEEN ADMITTED BY THE HONBLE JURISDICTIONAL HIGH COURT WHICH ORDER IS ENCLOSED IN PAGE 39 OF THE PAPER BOOK FILED BY THE ASSESSEE. ONCE, THE SUBSTANTIAL QUESTION OF LAW ON THE QUANTUM PROCEEDINGS IS ADMITTED BY THE HONBLE HIGH COURT, THE ISSUE IN DISPUTE BECAME DEBATABLE. HENCE, THERE CANNOT BE AN Y CONCEALMENT PENALTY OF THE ASSESSEE FOR ALLEGED FURNISHING OF INACCUARATE PARTICULARS OF INCOME. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. HARSH INTERNATIONAL PVT. LTD., IN INCOME TAX APPEAL NO.620/2019 DATED 22/12/2020. HENCE, WE HAVE NO HESITATION IN DIRECTING THE LD. AO TO DELETE THE PENALTY IN THE SUM OF RS.1,79,430/ - IN THE INSTANT CASE. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 30 / 09 /202 1 BY WAY OF PROPER MENTIONING THE NOTICE BOARD. SD/ - ( VIKAS AWASTHY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 30 / 09 / 2021 KARUNA , SR.PS ITA NO . 2970/MUM/2015 MS. USHA CHANDRESH SHAH 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//