MARKET PLACE, MUMBAI V. ITO WD 19(2)(4), MUMBAI

ITA 3013/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3774 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 19-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: P N SHAH
• Keywords: Revised return
• Section: 143(3); 80HHC; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 3013 /MUM/2015 : (A.Y : 200 0 - 0 1 ) M/S. MARKET PLACE 16 - A, ST. FRANCIS AVENUE, SANTA CRUZ (W), MUMBAI 400 054. PAN : AAAAM1652R (APPELLANT) VS. ITO, WARD - 19(2)(4), MUMBAI (RESPONDENT) ASSESSEE BY : SHRI P.N. SHAH REVENUE BY : SHRI NEIL PHILIP DATE OF HEARING : 20 /07/2016 DATE OF PRONOUNCEMENT : 12 /0 8 /2016 O R D E R PER SANDEEP GOSAIN , JM : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF I NCOME T AX (A PPEALS ) - 34, MUMBAI (IN SHORT CIT(A)) DATED 11.03.2015 FOR A.Y 2000 - 01 ON THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) 34 , MUMBAI (HEREINAFTER REFERRED AS 'THE LEARNED CIT(A)') HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ORDER OF ASSESSING OFFICER IN LEVYING PENALTY U/S 271( 1 )(C) OF RS .3,00,000/ - . 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN NOT APPRECIATING THE FACT THAT THE DEDUCTION U/S 80HHC WILL 2 M/S. MARKET PLACE ITA NO. 3013/MUM/2015 CORRESPONDINGLY INCREASE BY THE SAME AMOUNT FROM THE ALLEGED ADDITION/ DISALLOWANCE OF CONSULTANCY CHARGES OF RS. 7,80,00 0/ - . AND THUS THE TOTAL TAXABLE INCOME OF THE APPELLANT WILL REMAIN THE SAME. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE STAND TAKEN BY THE A O THAT THE PAYMENT OF CONSULTANCY CHARGES OF RS. 7,8 0 , 000 / - WAS NOT INCURRED FOR THE PURPOSE OF BUSINESS . 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ORDER OF A O IN NOT WAITING TILL THE DISPOSAL OF MISCELLANEOUS APPLICATION FILED BY THE APPELLANT ON 13TH FEBRUARY 2013 . 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOME DECLARING TOTAL INCOME AT NIL WAS FILED ON 31.10.2000. THE RETURN OF INCOME WAS PROCESSE D U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ACCEPTING THE INCOME DECLARED BY THE ASSESSEE. SUBSEQUENTLY, THE CASE WAS REOPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT AND ASSESSEE FILED REVISED RETURN DECLARING TOTAL INCOME AT RS.1,64,445/ - AND ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 ON 24.3.2005 ASSESSING THE TOTAL INCOME AT RS.13,98,420/ - . IN THE ASSESSMENT ORDER, AN ADDITION WAS MADE ON ACCOUNT OF CONSULTANCY CHARGES OF RS.7,80,000/ - AND DISALLOWANCE OF DEDUCTION U/S 80HHC OF RS. 4,53,971 / - . PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS ALSO INITIATED ON THESE ISSUES. INITIALLY N OTICE U/S 271 R.W.S 274 OF THE ACT WAS ISSUED ON 24.3.2005, WHICH HAS BEEN DULY SERVED ON THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE FILED AN APPEAL BE FORE THE LD. CIT(A) ON 25.4.2005 AND THE PROCEEDINGS WERE KEPT IN ABEYANCE TILL DISPOSAL OF THE APPEAL BEFORE LD. CIT(A). VIDE ORDER DATED 28.11.2011 THE LD. CIT(A) DECIDED THE MATTER AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. CONSEQUENTLY, THE 3 M/S. MARKET PLACE ITA NO. 3013/MUM/2015 PENA LTY PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE AND AFTER CONSIDERING THE REPLY FILED BY THE ASSESSEE, PENALTY OF RS.3,00,000/ - U/S 271(1)(C) OF THE ACT READ WITH EXPL. (1) WAS LEVIED UPON THE ASSESSEE VIDE ORDER DATED 28.3.2013. AGGRIEVED BY THE ORDE R OF LEVY OF PENALTY, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH PARTIES DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE PREFERRED THE PRESENT APPEAL BEFO RE US ON THE GROUNDS MENTIONED HEREINABOVE. 3. AT THE VERY OUTSET, LD. AR REPRESENTING THE ASSESSEE SUBMITTED THAT THE MUMBAI BENCH OF THE TRIBUNAL IN ITA NO. 580/MUM/2012 FOR A.Y 2000 - 01 IN ASSESSEES OWN CASE HAD RESTORED THE ISSUE TO THE FILE OF ASSE SSING OFFICER WITH A DIRECTION TO RECOMPUTE THE DEDUCTION U/S 80HHC OF THE ACT AS PER LAW AFTER TAKING INTO CONSIDERATION THE DISALLOWANCE OF RS.7,80,000/ - AND AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. THE OPERATIVE PARAGRAPH OF THE T RIBUNALS ORDER IS REPRODUCED BELOW : - 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIREC TION TO RECOMPUTED THE DEDUCTION UNDER SECTION 80HHC AS PER LAW AFTER TAKING INTO CONSIDERATION THE DISALLOWANCE OF RS.7,80,000/ - AND AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. WE DIRECT ACCORDINGLY. 4. WE HAVE PERUSED THE ORDER OF T HE TRIBUNAL WHEREIN THE TRIBUNAL IN THE QUANTUM APPEAL HAS RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RECOMPUTE THE DEDUCTION U/S 80HHC OF THE 4 M/S. MARKET PLACE ITA NO. 3013/MUM/2015 ACT AS PER LAW AFTER TAKING INTO CONSIDERATION THE DISALLOWANCE OF RS.7,80,000 / - . SINCE THE BASIS FOR LEVY OF PENALTY IN THE QUANTUM APPEAL HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER, THEREFORE, THE ORDER OF PENALTY LEVIED ON THE BASIS OF THE ORDER IN QUANTUM APPEAL IS NOT SUSTAINABLE AT THIS STAGE AND, THEREFORE, WE AL SO RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE OF PENALTY AFRESH AFTER THE DECISION ON QUANTUM APPEAL ON THE SAME ISSUE AND AFTER RECOMPUTING THE DEDUCTION U/S 80HHC OF THE ACT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 2 T H AUGUST , 2016. SD/ - SD/ - (R.C. SHARMA) ACCOUNTANT MEMBER (SANDEEP GOSAIN) JUDICIAL MEMBER MUMBAI, DATE : 1 2 T H AUGUST , 2016 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, B BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI