SHRI PRABHA TRADE & FINANCE CO., MUMBAI V. ITO 14(2)(3), MUMBAI

ITA 3611/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88125 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 02-02-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 21-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Business income; Difference of opinion; Change of opinion

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , , ! BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.3611 TO 3614/MUM/2012 ASSESSMENT YEARS: 2001-02 TO 2002-03 AND 2005-06 TO 2006-07 M/ S. SHREE PRABHA TRADE & FINANCE CO. LAXMI BHAVAN, 4 TH FLOOR, 158/164, KALBADEVI ROAD, MUMBAI-400002 ' ' ' ' / VS. CIT(A) - 25, MUMBAI ( ' % &' /ASSESSEE) ( / REVENUE) P.A. NO.AAAFS6533L ' %&' ( ) ( ) ( ) ( ) / // / ASSESSEE BY): SHRI VIMAL PUNMIYA ( ) ( ) ( ) ( ) / REVENUE BY SMT. NEIL PHILIP - DR ' ( '* / / / / DATE OF HEARING : 02/02/2015 +,- ( '* / DATE OF PRONOUNCEMENT : 02/02/2015 . . . . / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THIS BUNCH OF FOUR APPEALS IS BY THE ASSESSEE, ON I DENTICAL GROUNDS, THAT THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) ERRED IN CONFIRMING PENALTY OF RS.72,213 (ASSESSMEN T YEAR M/S. SHREE PRABHA TRADE & FINANCE CO. 2 2001-02), RS.41,635/- (ASSESSMENT YEAR 2002-03), RS.1,62,300/- (ASSESSMENT YEAR 2005-06) AND RS.1,33 ,383/- (ASSESSMENT YEAR 2006-07), RESPECTIVELY, IMPOSED U/ S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSEL FOR THE ASSESSEE, SHREE VIMAL PUNMIYA, CONTENDED THAT PENALT Y WAS IMPOSED MERELY ON THE BASIS OF CHANGE OF HEAD OF IN COME BUT THERE IS NEITHER CONCEALMENT NOR FURNISHING INACCUR ATE PARTICULARS OF INCOME BY THE ASSESSEE AS TRUE DECLA RATION OF RECEIPTS/FACTS WAS DULY MADE. ON THE OTHER HAND, TH E LD. DR, SHRI NEIL PHILIP ASSERTED THAT LEVY AS WELL AS CONF IRMATION OF PENALTY IS JUSTIFIED BECAUSE THE ASSESSEE SHOWED IT S INCOME UNDER DIFFERENT HEAD OF INCOME, THEREFORE, IT IS FU RNISHING OF INACCURATE PARTICULARS WITH THE INTENTION TO CONCEA L INCOME. IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED T HAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL DATED 15 TH OCTOBER, 2010 (ITA NO.6291 TO 6295/MUM/2009) AND DIT VS DOSSAL ESTATE DEVELOPM ENT PVT. LTD. (ITA NO.7379/MUM/2010) ORDER DATED 16/05/ 2012. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE, THE FACTS AND THE ISSUE ARE IDENTICAL AND PERTAINS TO THE SAME ASSESSEE FOR DIFFERENT ASSESSMENT YEARS, THEREFORE, THESE APPEALS CAN BE D ISPOSED OF BY A COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE, A PARTN ERSHIP FIRM, IS ENGAGED IN TRADING IN TEXTILES AND MONEY LENDING. THE ASSESSEE SHOWED RENT/LICENSE FEE AND COMPENSATION FROM SUB-L ETTING PROPERTIES AS WELL AS INTEREST INCOME UNDER THE HEA D INCOME M/S. SHREE PRABHA TRADE & FINANCE CO. 3 FROM BUSINESS. HOWEVER, THE LD. ASSESSING OFFICER TREATED THE RENT/LICENSE FEE AND COMPENSATION FROM SUB-LETTING OF THE LEASE PROPERTY AS WELL AS INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. UP TO THE TRIBUNAL LEVEL, THE QUANTUM ADDITION WAS DECIDED AGAINST THE ASSESSEE, AGAINST WHICH NO CONTRARY DECISION FROM ANY HONBLE HIGHER FORUM WAS PRODUCED BEFORE US, MEANING THEREBY, THE DECISION OF THE TRI BUNAL ON QUANTUM ADDITION STANDS AS ON DATE. THE LD. ASSESS ING OFFICER INITIATED/LEVIED PENALTY PROCEEDINGS U/S 271(1)(C) READ WITH EXPLANATION, THERETO OF THE ACT FOR FILING INACCURA TE PARTICULARS OF INCOME. ON APPEAL, THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) CONFIRMED THE PENALTY ON THE GROUND THAT THERE WAS A CHANGE OF OPINION AND THE ASSESSEE CONCEALED ITS INCOME BY FILING INACCURATE PARTICULARS. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 2.2. UNDER THE FACTS, NARRATED HEREINABOVE, NOW QUE STION ARISES, WHETHER THERE IS CONCEALMENT OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF INCOME. FACT REMAINS THA T THE ASSESSEE MADE FULL DISCLOSURE OF INCOME/FACTS AND A S SUCH THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. IT SEEMS THAT THERE WAS ME RELY DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE DEPARTMENT WITH RESPECT TO UNDER WHICH HEAD THE INCOME IS TAXA BLE. IN SUCH A SITUATION, IT IS NOT PROVED THAT THE ASSESSE E FURNISHED INACCURATE PARTICULARS OR CONCEALED ITS INCOME RESU LTING INTO TAX EVASION. IN OUR VIEW, MERELY CHANGING THE HEAD BY THE DEPARTMENT AUTOMATICALLY DOES NOT LEAD TO THE CONCL USION THAT EITHER THE ASSESSEE FURNISHED INACCURATE PARTICULAR S OR M/S. SHREE PRABHA TRADE & FINANCE CO. 4 CONCEALED ITS INCOME. IT MAY BE A GOOD CASE FOR QU ANTUM ADDITION BUT CERTAINLY NOT A CASE FOR IMPOSING OF P ENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT APPEALS, THE ASSESSMENT OF INCOME UNDER DIFFERENT HEAD IS DUE TO DIFFERENCE OF OPINION, THUS, IT DOES NOT IPSO-FACTO WARRANT LEVY OF PENALT Y, BECAUSE FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT EITHER TH ERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF ITS INCOME. IDENTICALLY, THE TRIBUNAL, VIDE ORD ER DATED 16/05/2012, IN THE CASE OF DCIT VS DOSSAL ESTATE DE VELOPMENT PVT. LTD., DECIDED IN FAVOUR OF THE ASSESSEE. THE RATIO LAID DOWN IN CIT VS BENNETT COLEMAN & CO LTD. (2013) 33 TAXMA N.COM 227 (BOMBAY), THE HONBLE JURISDICTIONAL HIGH COURT , WHEREIN, THE ASSESSEE CLAIMED DEDUCTION OF INTEREST ON TAX F REE BONDS, THERE WAS A RECORDING OF FACTS BY THE TRIBUNAL THAT THERE WAS AN INADVERTENT MISTAKE OF THE ASSESSEE FOR CLAIMING IN TEREST RECEIVED ON GOVERNMENT OF INDIA CAPITAL INDEX BONDS AS INTEREST RECEIVED ON TAX FREE BONDS, IT WAS HELD TH AT PENALTY IS NOT LEVIABLE U/S 271(1)(C) OF THE ACT. 2.3. WE NOTE THAT FOR ASSESSMENT YEAR 2001-02, THE ASSESSEE SHOWED RECEIPT OF INTEREST AS BUSINESS RECEIPT AND CLAIMED VARIOUS EXPENSES AGAINST INTEREST INCOME UNDER BUSI NESS HEAD. LIKEWISE, FOR ASSESSMENT YEAR 2002-03, THE ASSESSEE SHOWED RECEIPT OF COMMISSION AND INTEREST AS BUSINESS RECE IPT AND THEREFORE CLAIMED VARIOUS EXPENSES. LIKEWISE, ASSE SSMENT YEAR 2005-06, THE PENALTY WAS LEVIED BY THE ASSESSI NG OFFICER BY STATING THAT THE ASSESSEE WRONGLY CLAIMED EXPENS ES BY WRONGLY OFFERING INCOME UNDER BUSINESS HEAD AGAINST OTHER SOURCES. IDENTICAL IS THE SITUATION FOR ASSESSMENT YEAR 2006- M/S. SHREE PRABHA TRADE & FINANCE CO. 5 07. IT IS NOT THE CASE THAT NO DISCLOSURE WAS MADE BY THE ASSESSEE AND IF THE ASSESSING OFFICER FINDS THAT IT COMES UNDER DIFFERENT HEAD, IT CANNOT BE A GOOD GROUND FOR IMPO SING PENALTY U/S 271(1)(C) MERELY ON THE BASIS OF CHANGE OF OPIN ION. THE ASSESSING OFFICER IS HOWEVER, WITHIN HIS RIGHT TO M AKE ADDITION UNDER THE CORRECT HEAD, BUT AT THE SAME TIME, IT IS NOT A GOOD GROUND FOR IMPOSING THE PENALTY UNLESS AND UNTIL TH E INGREDIENTS I.E. (A) FURNISHING INACCURATE PARTICUL ARS (B) CONCEALMENT OF INCOME, ENSHRINED IN SECTION ARE P ROVED BY THE REVENUE, MORE SPECIFICALLY, WHEN THE NECESSARY DETAILS WERE DULY FURNISHED BY THE ASSESSEE. FOR IMPOSING PENALT Y U/S 271(1)(C) OF THE ACT, A DEFINITE FINDING BY THE ASS ESSING OFFICER FOR CONCEALMENT IS NECESSARY AS WAS HELD BY HONBLE MADRAS HIGH COURT IN CIT VS K. R. CHINNI KRISHNA CHETTY (2 000) 246 ITR 121 (MAD.). EVEN IT IS PRESUMED THAT A WRONG CL AIM WAS MADE BY THE ASSESSEE BY CLAIMING UNDER DIFFERENT HE AD STILL IT DOES NOT TANTAMOUNT TO FURNISHING INACCURATE PARTIC ULARS. THE RATIO LAID DOWN IN CIT VS RELIANCE PETRO PRODUCTS P VT. LTD. 322 ITR 158 (SC) FROM HONBLE APEX COURT COMES TO THE R ESCUE OF THE ASSESSEE. EVEN IF, WE FIND THAT IT IS A BONAFI DE MISTAKE OF THE ASSESSEE THEN ALSO THE DECISION IN NORTH LAND D EVELOPMENT AND HOTEL CORPORATION VS CIT 210 TAXMAN 249 (SC) AN D PRICE WATERHOUSE COOPERS (P.) LTD. VS CIT (2012) 25 TAXMA N.COM 400/211 TAXMAN 40 (SC) AND CIT VS. SKYLINE AUTO PRO DUCTS PVT. LTD. (2004) 271 ITR 335 (MP) COMES TO THE RESC UE OF THE ASSESSEE. IN VIEW OF THESE FACTS/JUDICIAL PRONOUN CEMENTS, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY SO IMPOSED. FINALLY, THESE APPEALS OF THE ASSESSEE ARE ALLOWED. M/S. SHREE PRABHA TRADE & FINANCE CO. 6 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 02/02/2015. SD/- (RAJENDRA) SD/- (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; /' DATED : 02/02/201 5 F{X~{T? P.S/. '.. . ( 1'2 32-' . ( 1'2 32-' . ( 1'2 32-' . ( 1'2 32-'/ COPY OF THE ORDER FORWARDED TO : 1. 45 / THE APPELLANT 2. 1645 / THE RESPONDENT. 3. 7 ( ) / THE CIT, MUMBAI. 4. 7 / CIT(A)- , MUMBAI 5. 29: 1'' , , / DR, ITAT, MUMBAI 6. :;% < / GUARD FILE. .' .' .' .' / BY ORDER, 62' 1' //TRUE COPY// = == =/ // /> > > > (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI