PIRAMAL ENTERPRISES LTD, MUMBAI V. DCIT 10(3), MUMBAI

ITA 3300/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0483 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 10-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL LD
• Assessee Lawyers: RONAK G DOSHILD
• Keywords: Question of law
• Section: 143(3); 68

Judgement Text

ITA NO. 3300/MUM/2016 PIRAMAL ENTERPRISES LIMITED ASSESSMENT YEAR 2003-04 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 3300/MUM/2016 ( / ASSESSMENT YEAR: 2003-04) PIRAMAL ENTERPRISES LIMITED [AS SUCCESSORS TO BMK LABORATORIES PRIVATE LIMITED] PIRAMAL TOWER GANPATRAO KADAM MARG LOWER PAREL MUMBAI 400 013 / VS. DEPUTY COMMISSIONER OF INCOME-TAX 10(3) MUMBAI ./ ./PAN/GIR NO. AAACB-1747-N ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : RONAK G DOSHI, LD. AR REVENUE BY : RAJAT MITTAL, LD. DR / DATE OF HEARING : 25/01/2018 / DATE OF PRONOUNCEMENT : 31 /01/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2003-04 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-24 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-22/DCIT 10(3)/IT- 179/14-15 DATED 12/02/2016 QUA CONFIRMATION OF PENALTY U/S 271(1)(C) FOR RS.20 LACS. THE QUANTUM ASSESSMENT FOR IMPUGNED AY WAS FRAMED ON ITA NO. 3300/MUM/2016 PIRAMAL ENTERPRISES LIMITED ASSESSMENT YEAR 2003-04 2 30/12/2005 BY LD. DEPUTY COMMISSIONER OF INCOME TAX-10(3), MUMBAI [AO] U/S 143(3) WHEREAS PENALTY HAS BEEN LEVIED VIDE ORDER DATED 31/07/2014. 2. FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT THE ERSTWHILE ASSESSEE NAMELY BMK LABORATORIES PVT. LTD. WAS SADDLED WITH QUANTUM ADDITIONS AGGREGATING TO RS.53.11 LACS ON ACCOUNT O F EXCESS INTEREST, STAMP DUTY & STAFF COST IN AN ASSESSMENT U/S 143(3) AGAINST WHICH THE PENALTY PROCEEDINGS WERE INITIATED IN THE QUANTUM O RDER. CONSEQUENTLY, THE ASSESSEE HAS BEEN SADDLED WITH PENALTY OF RS.20 LACS AGAINST THE SAME U/S 271(1)(C). UPON CONFIRMATION BY LD. FIRST APPELLATE AUTHORITY, THE SAME IS BEING CONTESTED BEFORE US BY WAY OF THI S APPEAL. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE [AR], AT THE OUTSET, DREW OUR ATTENTION TO THE FACT THAT QUANTUM ADDITIONS HAVE SINCE BEEN CONFIRMED BY THIS TRIBUNAL VIDE ITA NO.4443/MU M/2011 DATED 31/12/2013. HOWEVER, THE ASSESSEE PREFERRED FURTHER APPEAL AGAINST THE SAME BEFORE HONBLE BOMBAY HIGH COURT VIDE ITA NO. 1038 OF 2014 DATED 09/12/2016 WHERE THE SUBSTANTIAL QUESTION OF LAW HAS BEEN ADMITTED BY THE HONBLE COURT. IN VIEW OF THE STATE D FACT ALONE, LD. AR PLACING RELIANCE ON JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS. ADVAITA ESTATE DEVELOPMENT PVT. LTD. [ITA N O. 1498 OF 2014 17/02/2017] & CIT VS. NAYAN BUILDERS & DEVELOPERS P VT. LTD. [ITA NO. 415 OF 2012 08/07/2014] CONTENDED THAT THE IMPUGNED PENALTY DOES NOT SURVIVE. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] C OULD NOT CONTROVERT THE SAME OR BRING ON RECORD ANY CONTRARY JUDGMENT. 4. WE HAVE CAREFULLY PERUSED THE RIVAL CONTENTIONS AND PERUSED CITED JUDICIAL PRONOUNCEMENTS. UNDISPUTEDLY, THE SUBSTANT IAL QUESTION OF LAW ITA NO. 3300/MUM/2016 PIRAMAL ENTERPRISES LIMITED ASSESSMENT YEAR 2003-04 3 WITH RESPECT TO QUANTUM ADDITIONS, AGAINST WHICH TH E PENALTY HAS BEEN LEVIED, HAS BEEN ADMITTED BY THE HONBLE BOMBAY HIG H COURT. IN SUCH A SITUATION, WE FIND THAT THE IMPUGNED PENALTY DOES N OT SURVIVE IN VIEW OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS. ADVAITA ESTATE DEVELOPMENT PVT. LTD. [SUPRA] WHERE THE HONBLE COURT, AFTER CONSIDERING THE DECISIONS RENDERED IN CIT VS. NAYAN BUILDERS & DEVELOPERS PVT. LTD. [SUPRA] & CIT-8 VS. ADITYA BIR LA POWER CO. LTD. [ITA NO. 851 OF 2014 02/12/2015] HELD AS UNDER:- 2. THE REVENUE URGES THE FOLLOWING QUESTION OF LAW FOR OUR CONSIDERATION:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN DELETING THE PENALTY IMPO SED UNDER SECTION 271(1)(C)? 3. THE IMPUGNED ORDER OF THE TRIBUNAL ALLOWED THE R ESPONDENT-ASSESSEE'S APPEAL AND DELETED THE PENALTY IMPOSED. THIS ON THE GROUND THAT THE ORDER OF THE TRIBUNAL IN THE QUANTUM PROCEEDING WHICH WAS AGAINST RESPONDENT -ASSESSEE HAD BEEN CHALLENGED IN APPEAL BEFORE THIS COURT AND THE APPE AL HAS BEEN ADMITTED ON 12TH MARCH, 2013 BEING INCOME TAX APPEAL NO. 2582 OF 201 1 ON THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW : (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AND IN LAW, IS THE ORDER OF THE TRIBUNAL PERVERSE INASMUCH AS IT IGNOR ED THE BASIC DOCUMENTS LIKE STATEMENT OF CONFIRMATION OF ACCOUNT, BANK STA TEMENT SHOWING RECEIPT OF MONEY FROM AND PAYMENT OF MONEY TO M/S.KUBER DEV ELOPERS CORPORATION AND CONFIRMATION FROM THE SAID PARTY OF HAVING GIVE N AND RECEIPT OF THE ADVANCE WHICH WERE PRODUCED BEFORE THE CIT(A) AND T HE TRIBUNAL WHILE CONFIRMING THE ADDITION OF RS.2.73 CRORES UNDER SEC TION 68 OF THE ACT IN THE HANDS OF THE APPELLANT ? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, WAS THE TRIBUNAL JUSTIFIED IN NOT ADMITTING THE ADDITIO NAL EVIDENCE OF LOAN CREDITOR. MR. MAHENDRA MANSINGH ARORA IN THE FORM OF RETURN O F INCOME, BALANCE SHEET AND PROFIT & LOSS ACCOUNT FOR ASSESSMENT YEAR 2006-07 FILED BEFORE THE I.T. DEPARTMENT ON THE GROUND THAT THE SAME WER E NOT FILED BEFORE THE RESPONDENT NO.2 EARLIER WITHOUT APPRECIATING THAT T HE APPELLANT CANNOT BE PENALIZED FOR THE DEFAULT OF LOAN CREDITOR ? 4. IN THE ABOVE VIEW, THE IMPUGNED ORDER FOLLOWED I TS DECISION IN NAYAN BUILDERS AND DEVELOPERS PVT.LTD. VS. THE INCOME TAX OFFICER IN I NCOME TAX APPEAL NO. 2379/MUM/2009 RENDERED ON 18TH MARCH, 2011 AND THE DECISION OF THE DELHI HIGH COURT IN CIT VS LIQUID INVESTMENT AND TRADING CO (I TA NO.240/2009) RENDERED ON 5TH OCTOBER, 2010 TO HOLD THAT WHEN AN APPEAL HAS B EEN ADMITTED IN QUANTUM PROCEEDINGS BY THE HIGH COURT, THEN THAT ITSELF IS AN EVIDENCE OF THE ISSUE BEING DEBATABLE, NOT WARRANTING ANY PENALTY. ITA NO. 3300/MUM/2016 PIRAMAL ENTERPRISES LIMITED ASSESSMENT YEAR 2003-04 4 5. THE REVENUE HAD FILED AN APPEAL FROM THE ORDER O F THE TRIBUNAL IN NAYAN BUILDERS AND DEVELOPERS PVT. LTD. (SUPRA) DELETING THE PENAL TY. THIS APPEAL BEING CIT VS. NAYAN BUILDERS AND DEVELOPERS [(2014) 368 ITR 722] WAS NOT ENTERTAINED BY THIS COURT. IT UPHELD THE VIEW OF THE TRIBUNAL THAT THE IMPOSITION OF PENALTY WAS NOT JUSTIFIED AS ADMISSION OF APPEAL IN QUANTUM PROCEED ING ON THIS ISSUE AS SUBSTANTIAL QUESTION OF LAW WAS PROOF ENOUGH OF THE ISSUE BEING DEBATABLE. THE AFORESAID DECISION IN NAYAN BUILDERS AND DEVELOPERS PVT.LTD ( SUPRA) WAS ALSO FOLLOWED BY THIS COURT IN CIT-8 VS. ADITYA BIRLA POWER CO. LTD. IN I NCOME TAX APPEAL NO. 851 OF 2014 RENDERED ON 2ND DECEMBER, 2015. 6. HOWEVER, MR. TEJVEER SINGH, LEARNED COUNSEL APPE ARING FOR THE APPELLANT REVENUE SEEKS TO DISTINGUISH THE DECISION OF THIS C OURT IN NAYAN BUILDERS AND DEVELOPERS PVT. LTD. (SUPRA) ON THE GROUND THAT THI S COURT HAD AFTER RECORDING THE FACT THAT WHERE APPEALS FROM ORDERS IN QUANTUM PROC EEDINGS OF THIS COURT HAVE BEEN ADMITTED AS GIVING RISE TO SUBSTANTIAL QUESTION OF LAW THEN THAT ITSELF DISCLOSES THAT THE ISSUE IS DEBATABLE. HOWEVER, MR. SINGH POINTS O UT THAT IT ALSO FURTHER RECORDS IN OUR VIEW THERE WAS NO CASE MADE OUT FOR IMPOSITION OF PENALTY AND THE SAME WAS RIGHTLY SET ASIDE.. ON THE BASIS OF THE ABOVE OBSE RVATION, IT IS CONTENTION OF MR. TEJVEER SINGH THAT THE APPEAL FROM PENALTY PROCEEDI NG WAS NOT ADMITTED BY THIS COURT AS ON MERITS NO CASE FOR IMPOSITION OF PENALT Y WAS MADE OUT. 7. MR. DALAL, THE LEARNED COUNSEL FOR THE RESPONDEN T-ASSESSEE INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL DATED 18TH MARCH, 2011 IN THE CASE OF NAYAN BUILDERS AND DEVELOPERS PVT. LTD (SUPRA). ON PERUSAL OF THE TRIBUNAL ORDER DATED 18TH MARCH, 2011 WE NOTE THAT THE TRIBUNAL IN NAYAN BUILDERS AN D DEVELOPERS PVT. LTD (SUPRA) HAD DELETED THE PENALTY ONLY ON THE GROUND THAT AS SUBSTANTIAL QUESTION OF LAW HAD BEEN ADMITTED BY THIS COURT IN QUANTUM PROCEEDINGS THE ISSUE IS DEBATABLE. IT WAS ON THE BASIS OF THE AFORESAID REASONING OF THE TRIB UNAL IN NAYAN BUILDERS AND DEVELOPERS PVT.LTD. (SUPRA), THAT THIS COURT HELD T HAT NO PENALTY IS IMPOSABLE. THUS THE DISTINCTION SOUGHT TO BE MADE BY MR. TEJVEER SI NGH DOES NOT ASSIST THE REVENUE, AS IT DOES NOT EXIST. 8. IN VIEW OF THE DECISION TAKEN BY THIS COURT IN N AYAN BUILDERS AND DEVELOPERS PVT. LTD (SUPRA) AS WELL AS IN ADITYA BIRLA POWER CO. LT D. (SUPRA) THE PROPOSED QUESTION DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF L AW. THUS NOT ENTERTAINED. 9. THEREFORE, THE APPEAL IS DISMISSED. NO ORDER AS TO COSTS. RESPECTFULLY, FOLLOWING THE RATIO OF ABOVE DECISION , WE DELETE THE IMPUGNED PENALTY. NEEDLESS TO ADD THAT THE REVENUE IS FREE TO RE-INITIATE THE SAME AS PER LAW ON THE BASIS OF OUTCOME OF THE QUANTUM APPEAL. SINCE, THE APPEAL HAS BEEN ALLOWED ONLY ON THIS POI NT ALONE, FURTHER DISCUSSION ON OTHER GROUNDS RAISED BY ASSESSEE BECO MES MERELY ACADEMIC IN NATURE AND WE SEE NO REASON TO DELVE IN TO THE SAME. 5. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D. ITA NO. 3300/MUM/2016 PIRAMAL ENTERPRISES LIMITED ASSESSMENT YEAR 2003-04 5 ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2018 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :31.01.2018 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. * ( ) / THE CIT(A) 4. * / CIT CONCERNED 5. !$- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI