VIVIDHMARGI INVESTMENT P. LTD, MUMBAI V. ASST CIT 9(3), MUMBAI

ITA 3305/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8011 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PURSHOTAM KUMAR
• Keywords: Business income
• Section: 143(3); 147; 144

Judgement Text

VIVIDHMARGI INVESTMENT PVT. LTD. VS. ACIT ITA NO. 3305/MUM/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, M UMBAI BEFORE SHRI RAJENDRA , AM AND SHRI RAVISH SOOD, JM ITA NO. 3305/MUM/2016 ( / ASSESSMENT YEAR:2006 - 07) VIVIDHMARGI INVESTMENT PVT. LTD., 11/12, UDYOG NAGAR, S.V ROAD, GOREGAON (W), MUMBAI - 400 104. / VS. ASST. COMMR. OF INCOME - TAX 9(3); AAYAKAR BHAVAN, MUMBAI - 400 020. ./ ./ PAN NO. AAACV0141N ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SMT. NEELAM JADHAV, A.R / RESPONDENT BY : SHRI PURSHOTAM KUMAR, D.R / DATE OF HEARING : 20.12.2017 / DATE OF PRONOUNCEMENT : 20 .12.2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 21, MUMBAI, DATED 29.03.2016, WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(C) OF THE INCOME - TAX ACT, 1961(FOR SHORT ACT), DATED 30.09.2014. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - VIVIDHMARGI INVESTMENT PVT. LTD. VS. ACIT ITA NO. 3305/MUM/2016 2 1. THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) ERRED IN LEVYING PENALTY U/S 271(10(C) OF THE ACT OF RS. 12,49,761/ - INSPITE OF THE FACT THAT THE APPELLANT HAD NEITHER CONCEALED THE PARTICULARS OF ITS INCOME NOT HAD IT FURNISHED INACCURATE PARTICULARS OF INCOME AND WHI LE DOING SO HE AMONGST OTHER FAILED TO APPRECIATE: A. THE APPELLANT HAD MADE A TRUE AND FULL DISCLOSURE OF ITS INCOME ARISING FROM TRANSFER OF SHARES UNDER THE HEAD SHORT TERM CAPITAL GAINS AND THEREFORE IT CANNOT BE FAULTED ON THE GROUND OF FURNISHING INA CCURATE PARTICULARS OF INCOME. B. AS PER THE SETTLED POSITION, CONCEALMENT PENALTY IS NOT EXIGIBLE WHERE THE INCOME OFFERED IN THE RETURN OF INCOME IS ASSESSED UNDER A DIFFERENT HEAD OF INCOME. C. THE ISSUE OF ASSESSABILITY OF INCOME UNDER THE HEAD SHORT TERM CAPITAL GAINS OR BUSINESS INCOME WAS DEBATABLE AND MERELY BECAUSE THE APPELLANT HAS REFLECTED THE INCOME ON A BONA FIDE INTERPRETATION OF LAW UNDER THE HEAD SHORT TERM CAPITAL GAINS, IT COULD NOT BE SAID THAT THE APPELLANT HAD FURNISHED INACCURATE PA RTICULARS OF INCOME. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN WRONGLY COMPUTING THE PENALTY U/S 271(1)(C). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR A.Y. 20 06 - 07 ON 28.11.2006, DECLARING TOTAL INCOME OF RS. 49,30,580/ - . THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND ITS INCOME WAS ASSESSED ON 17.11.2008 UNDER SEC. 143(3) AT RS. 50,43, 980/ - . THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC. 1 47. THE A.O DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAD OFFERED AN INCOME OF RS. 40,84,185/ - FROM SALE OF SHARES UNDER THE HEAD SHORT TERM CAPITAL GAINS (FOR SHORT STCG) AS PER THE PROVISIONS OF SEC. 111A OF THE ACT. THE A.O KEEPING IN VIEW THE FREQUENCY OF THE TRANSACTIONS, THEREIN BEING OF THE VIEW THAT THE INCOME FROM THE SALE OF SHARES WAS LIABLE TO BE BROUGHT TO TAX AS BUSINESS INCOME , THUS, IN THE ABSENCE OF ANY REPLY OF THE ASSESSEE BROUGHT THE SAME TO TAX AS TH E BUSINESS INCOME OF THE ASSESSEE INSTEAD OF STCG , VIDE HIS ORDER PASSED UND ER SEC.144 R.W.S 147 OF THE ACT . THE A.O WHILE FRAMING THE ASSESSMENT INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(C). 3. THAT AFTER THE CULMINATION OF THE ASSESSMENT PROCEEDING S THE A.O CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY UNDER VIVIDHMARGI INVESTMENT PVT. LTD. VS. ACIT ITA NO. 3305/MUM/2016 3 SEC. 271(1)(C) MAY NOT BE IMPOSED . THE ASSESSEE FURNISHED AN EXPLANATION AND SUBMITTED THAT NO PENALTY UNDER SEC. 271(1)(C) WAS CALLED FOR IN ITS HANDS. HOWEVER, THE A.O NOT FINDING F AVOUR WITH THE EXPLANATION OF THE ASSESSEE, THEREIN BEING OF THE VIEW THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SEC. 271(1)(C) R.W EXPLANATION 1, IMPOSED PENALTY OF RS. 12,49,761/ - . 4. THE ASSESSEE ASSAILED THE PENALTY IMPOSED U/S 271(1)(C) BEFORE THE CIT(A), WHO VIDE HIS ORDER DATED 29.03.2016 UPHELD THE ORDER OF THE A.O IMPOSING PENALTY UNDER SEC. 271(1)(C) AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED, THE ASSESSEE HAD ASSAILED THE ORDER OF THE CIT(A ) BEFORE US. THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT FRAMED BY THE A.O UNDER SEC. 144 R.W.S 147, HAD CARRIED THE MATTER IN APPEAL, WHICH HOWEVER WAS DISMISSED IN LIMINE BY THE CIT(A) , VIDE HIS ORDER DATED 21.10.2014, FOR THE REASON THAT THE APPEAL FILED BY THE ASSESSEE INVOLVED A DELAY OF 144 DAYS. THE A.R SUBMITTED THAT ON APPEAL THE TRIBUNAL, VIZ. ITAT F BENCH, MUMBAI, VID E ITS ORDER DATED 21. 09.2016, (C OPY PLACED ON RECORD) BEING OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE FACTS OF THE CASE THE CIT(A) SHOULD HAVE CONDONED THE DELAY, THEREFORE, HAD RESTORED THE MATTER TO THE FILE OF THE CIT(A) FOR ADJUDICATING THE SAME ON MERITS. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) DID NOT CONTROVERT THE CONTENTIONS SO RAISED BEFORE US. 6. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE HAVE PERUSED THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL, VIZ. ITAT F BENCH, MUMBAI, WHICH HAD VIDE ITS ORDER DATED 21.09.2016 AFTER CONDONING THE DELAY INVOLVED IN FILING VIVIDHMARGI INVESTMENT PVT. LTD. VS. ACIT ITA NO. 3305/MUM/2016 4 OF APPEAL BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY, HAD REST ORED THE QUANTUM APPEAL TO THE FILE OF THE CIT(A). WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE APPEAL AGAINST THE QUANTUM ASSESSMENT THAT WAS FRAMED UNDER SEC. 144 R.W.S 147 BY THE A.O HAD BEEN RESTORED TO THE FILE OF THE CIT(A) FOR ADJUDICATING AFTER DISPOSING OF THE SAME ON MERITS, THEREFORE, KEEPING IN VIEW THE FACT THAT THE ORDER OF THE CIT(A), DATED. 29.03.2016, UPHOLDING THE PENALTY IMPOSED UNDER SEC. 271(1)(C) WAS PASSED AFTER TAKING COGNIZANCE OF THE FACT THAT THE QUANTUM APPEAL WAS DISMISSED BY THE CIT(A) VIDE HIS ORDER DATED 21.10.2014, THUS , IN A LL FAIRNESS RESTORE THE MATTER TO THE FILE OF THE CIT(A) FOR ADJUDICATING THE SAME AFRESH AFTER THE DISPOSAL OF THE QUANTUM APPEAL BY THE CIT(A). 7. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONO UNCED IN THE OPEN COURT ON 20. 12.2017 SD/ - SD/ - ( RAJENDRA ) ( RAVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 20 .12 .2017 PS. ROHIT KUMAR VIVIDHMARGI INVESTMENT PVT. LTD. VS. ACIT ITA NO. 3305/MUM/2016 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI