CONCRETE ERECTORS P.LTD, MUMBAI V. ITO 5(1)(3), MUMBAI

ITA 3094/MUM/2012

• Counselvise Citation: 309419914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRA BHAT JHA
• Assessee Lawyers: N M PORWAL
• Keywords: Business income; Difference of opinion
• Section: 28; 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . . , , BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RA JENDRA, ACCOUNTANT MEMBER ./ ITA NO. 3094/MUM/2012, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2006-07 CONCRETE ERECTORS PVT. LTD. C-2/C-3 FARIYAS, CUMBALLA HILL KEMPS CORNER, MUMBAI- 400036 VS. ITO 5(1)(3) MUMBAI. PAN: AAACC6150 ( #$ / APPELLANT ) ( %&#$ / RESPONDENT ) #$ #$ #$ #$ ' ' ' ' / APPELLANT BY : SHRI N.M. PORWAL %&#$ ( ' / RESPONDENT BY : SHRI PRABHAT JHA ! ! ! ! ( (( ( )* )* )* )* / DATE OF HEARING : 19-08-2013 +,' ( )* / DATE OF PRONOUNCEMENT : 28-08-2013 ! ! ! ! , 1961 ( (( ( 254(1) )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER DT.16-03-2011 OF THE CIT(A)-9 ,MUMBAI, ASSESSEE-COMPANY HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING PENALTY OF RS. 2,21,0 00/- LEVIED UNDER SECTION 271(1)(C) OF THE ACT. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY C ONSTRUED AND REGARFD BEING HAD TO FACTS OF THE CASE SAID PENALTY SHOULD NOT HAVE BEEN CONFIRMED. REASON S ASSIGNED BY HIM ARE WRONG AND INSUFFICIENT TO JUSTIFY PENALTY OF RS. 2,21,000/- UNDER SECTION 271 (1)(C) OF THE ACT. 2.THE APPELLANT CRAVE LEAVE TO ADD, AMEND, ALTER AN D /OR VARY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF LEASING OF ASSETS FURNISHED ITS RETURN OF INCOME ON 29.11.2006 DECLARING LOSS OF RS.6.50 LACS.AO COMPLE TED THE ASSESSMENT ON 19.11.2008 U/S. 143(3) OF THE ACT DETERMINING THE TOTAL INCOME AT RS.4,855/- DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAD RECEIVED RENTAL INCOME AND OFFERED THE SAME UNDER T HE HEAD BUSINESS INCOME. INITIALLY,ASSESSING OFFICER(AO)WAS OF THE OPINION THAT THE RENTAL INCOM E SHOULD BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY.AO DID NOT ACCEPT THE ASSESSEES CO NTENTION ON THE GROUND THAT THIS ISSUE OF TAXING THE RENT RECEIPT UNDER THE HEAD INCOME FROM HOUSE P ROPERTY HAD BEEN SETTLED VIDE HONBLE SUPREME COURTS DECISION IN THE CASE OF SHAMBHU INVESTMENTS PVT. LTD.(263ITR 149).HE FURTHER HELD THAT THE PROPERTY WHICH IT HAD PURCHASED WAS IN POSSESSION O F DENA BANK TO WHOM IT WAS RENTED ON MONTHLY BASIS,THAT THE EXPLANATION OFFERED BY THE ASSESSEE REGARDING BUSINESS INCOME WAS NOT BONA FIDE.FINALLY,HE ASSESSED THE SAID INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES.HE ISSUED A 2 ITA NO. 3094/MUM/2012 (AY- 2006-07) CONCRETE ERECTO RS PVT. LTD. NOTICE U/S.274 R.W.S.271(1)(C) OF THE ACT FOR IMPOS ING PENALTY FOR FURNISHING INACCURATE PARTICULARS O F INCOME. AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE,HE LEVIED PENALTY OF RS. AS HE WAS OF THE OPINION THAT CASE OF THE ASSESSEE WAS COVERED BY TH E PROVISIONS OF EXPLANATION 1 TO SECTION 271 (1)(C) OF THE ACT. 2.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA) AND MADE SUBMISSIONS BEFORE HIM.AFTER DELIBERATING UPON THE REPLY OF THE ASSESSEE HE HELD THAT WILLFUL CONCEALMENT WAS NOT PRE-REQUIREMENT FOR IMPOSING PENALTY.HE HELD THAT A O WAS JUSTIFIED IN LEVYING PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 2.2. BEFORE US,AUTHORISED REPRESENTATIVE(AR) SUBMITTED T HAT PENALTY WAS LEVIED ONLY BECAUSE ASSESSEE HAD SHOWN THE INCOME UNDER THE HEAD INCOM E FROM HOUSE PROPERTY WHEREAS AO HAD ASSESSED IT UNDER A DIFFERENT HEAD, THAT INITIALLY AO PROPOSED TO ASSESS THE INCOME U/S. 22 OF THE ACT,THAT FINALLY HE ASSESSED THE INCOME UNDER THE H EAD INCOME FROM OTHER SOURCES, THAT PENALTY FOR FURNISHING INACCURATE PARTICULARS COULD NOT BE LEVI ED WHERE THERE WAS DIFFERENCE OF OPINION BETWEEN THE A.O AND THE ASSESSEE,THAT FAA HAD CONFIRMED THE PENALTY ON A DEBATABLE ISSUE, THAT ASSESSEE HAD NOT FILED ANY INACCURATE PARTICULAR OF INCOME.HE RE LIED UPON THE ORDER OF THE PUNJAB & HARYANA HIGH COURT DELIVERED IN THE CASE OF INDERSONS LEATHER PV T. LTD. (328 ITR 167).HE ALSO REFERRED TO THE JUDGMENT DELIVERED BY HONBLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF PARVEEN B. GADA (HUF)-15 TAXMANN.COM.129. DEPARTMENTAL REPRESENTATI VE (DR) RELIED UPON THE ORDER OF THE FAA. 2.3 .WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US.ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF LEASING OF ASSETS. ASSES SEE HAD FURNISHED ALL THE PARTICULARS OF INCOME DURING THE ASSESSMENT PROCEEDINGS.AO WAS OF THE OPI NION THAT RENT RECEIVED BY THE ASSESSEE- COMPANY SHOULD BE ASSESSED AS INCOME FROM BUSINESS, WHEREAS ASSESSEE HAD SHOWN THE INCOME UNDER THE HEAD HOUSE PROPERTY.THE DIFFERENCE OF OPINION B ETWEEN THE AO AND THE ASSESSEE CANNOT BE CONSTRUED AS CONCEALMENT OF PARTICULARS OF INCOME A ND IN SUCH CASES PENALTY SHOULD NOT BE LEVIED U/S. 271(1)(C) OF THE ACT.WE FIND THAT WHILE FINALISING THE ASSESSMENT, AO HAS HELD THAT RENTAL INCOME WAS TO BE ASSESSED UNDER HEAD INCOME FROM OTHER SOURCES . IT APPEARS THAT AO HIMSELF WAS IN DOUBT ABOUT THE HEAD UNDER WHICH THE RENTAL INCOME COULD BE ASS ESSED.INITIALLY HE WANTED TO ASSESS THE SAID INCOME UNDER THE PROVISIONS OF SECTION 28 OF THE AC T,BUT LATER ON HE DECIDE TO TAX THE SAME U/S.56 OF THE ACT.WE ARE OF THE OPINION THAT IN SUCH SITUATIO N THE ISSUE COULD BE HELD A DEBATABLE ISSUE OR ISSU ES WERE TWO VIEWS ARE POSSIBLY.COURTS ARE OF THE OPINI ON THAT PENAL PROVISIONS AS ENVISAGED IN SECTION 271(1)(C) OF THE ACT SHOULD NOT BE INVOKED WHERE TH ERE IS DIFFERENCE OF OPINION OR WHERE DEBATABLE ISSUES ARE INVOLVED.IN THE CASE UNDER CONSIDERATION , AS HELD EARLIER, PENALTY HAS BEEN LEVIED ONLY BECAUSE THERE WAS DIFFERENCE OF OPINION ABOUT THE H EAD OF INCOME UNDER WHICH RENT RECEIVED BY THE ASSESSEE COMPANY WAS TO BE ASSESSED. WE FIND THAT IN THE CASE OF INDERSONS LEATHER PVT. LTD.(SUPRA) SIMILAR ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE.IN THAT CASE THE ASSESSEE HA D MADE A CLAIM THAT ITS INCOME FROM LETTING OUT OF PREMISES SHOULD BE TAXED AS BUSINESS INCOME,WHILE T HE AO HELD THE SAME TO BE TAXED UNDER THE HEAD HOUSE PROPERTY.IN THE APPELLATE PROCEEDINGS,TRIBUNA L UPHELD THE ORDER OF THE AO. MEANWHILE, AO LEVIED THE PENALTY U/S. 271(1) (C) OF THE ACT THAT WAS UPHELD BY THE FAA.ASSESEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND ALLOWING ITS APPEAL TRIBUNA L HELD THAT THE ASSESSEE WAS NOT GUILTY OF CONCEALMENT/FILING INACCURATE PARTICULARS OF INCOME ,TRIBUNAL WAS OF THE OPINION THAT IT WAS A DEBATABLE ISSUE AND HENCE PENALTY COULD NOT BE LEVI ED.HONBLE HIGH COURT OF PUNJAB & HARYANA UPHELD THE ORDER OF THE TRIBUNAL.WE FIND THAT A.O/F AA HAS NOT POINTED OUT THE PARTICULARS WHICH WERE INACCURATE. IT IS NOT THE CASE THAT THE ASSESS EE HAD NOT SHOWN THE INCOME FROM LET OUT PROPERTIES , THEREFORE IT CANNOT BE HELD GUILTY OF FURNISHING IN ACCURATE PARTICULARS OF INCOME. 3 ITA NO. 3094/MUM/2012 (AY- 2006-07) CONCRETE ERECTO RS PVT. LTD. 2.4. RESPECTFULLY FOLLOWING THE ABOVE MENTIONED JUDGMENT OF THE HONBLE HIGH COURT OF PUNJAB & HARYANA,WE REVERSE THE ORDER OF THE FAA. AS A RESULT,APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. / )0 !/) 2 3 ( - 4) ( ) 56 . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST,2013 . . ( +,' 7 8! 28 -) , 2013 , ( - 9 SD/- SD/- ( . : : : : . . B.R.MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 8! /DATE: 28 TH AUGUST,2013 SK . . . . ( (( ( % %% %); ); ); ); <;') <;') <;') <;') / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT (A) / = > , 4. THE CONCERNED CIT / = > 5. DR C BENCH, ITAT, MUMBAI / ;?- %)! , . . . 6. GUARD FILE/ - @ &;) &;) &;) &;) %) %)%) %) //TRUE COPY// .! / BY ORDER, A / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI