ACIT CIR - 31(1), MUMBAI V. M/s. AMARDEO PLASTIC INDUSTRIES, MUMBAI

ITA 3806/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2214 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 30-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR LD
• Assessee Lawyers: ANUJ KISNADWALALD
• Keywords: Capital Gains
• Section: 271(1)(c); 143(3)

Judgement Text

ITA NO.3806/MUM/2019 ASSESSMENT YEAR: 2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.3806/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) ACIT - 31(1) ROOM NO.602, 6 TH FLOOR KAUTILYA BHAWAN BKC, BANDRA (E) MUMBAI 400 051 / VS. M/S AMARDEO PLAS TIC INDUSTRIES GALA NO.1, VIRWANI INDL. ESTATE WESTERN EXPRESS HIGHWAY GOREGAON (E) MUMBAI 400 063 PAN/GIR NO. AA AFA - 3965 - E ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) ASSESSEE BY : SHRI ANUJ KISNADWALA-LD. AR REVENUE BY : SHRI BRAJENDRA KUMAR-LD.-DR / DATE OF HEARING : 02/12/2020 / DATE OF PRONOUNCEMENT : 02/12/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF THIS APPEAL, THE REVENUE CONTESTS THE ORDER OF LD. FIRST APPELLATE AUTHORITY DATED 26/02/2019 WHICH HAS DELE TED THE PENALTY OF RS.342 LACS AS LEVIED BY LD. AO U/S 271(1)(C) VIDE ORDER DATED 28/03/2018. THE ASSESSMENT FOR THE YEAR UNDER CONSI DERATION WAS FRAMED U/S 143(3) ON 15/03/2013 WHEREIN THE ASSESSE E WAS SADDLED WITH CERTAIN ADDITIONS UNDER THE HEAD CAPITAL GAINS AS WELL AS UNDER THE HEAD INCOME FROM HOUSE PROPERTY. CONSEQUENTLY PENAL TY PROCEEDINGS ITA NO.3806/MUM/2019 ASSESSMENT YEAR: 2010-11 2 WERE INITIATED ON ACCOUNT OF QUANTUM ADDITION WHICH RESULTED INTO LEVY OF IMPUGNED PENALTY OF RS.342 LACS BY LD. AO VIDE ORDE R DATED 28/03/2018. HOWEVER, LD. CIT(A) DELETED THE PENALTY , INTER-ALIA, BY OBSERVING THAT THE ISSUES WERE DEBATABLE ONE AND TH E ASSESSEE HAD DISCLOSED ALL MATERIAL PARTICULARS OF HIS INCOME AN D THERE WAS NO CONCEALMENT OF FACTS. AGGRIEVED BY DELETION OF PENA LTY, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 2. IT IS ADMITTED POSITION THAT BESIDES THE FAVORAB LE ORDER OF LD. CIT(A) ON MERITS, THE QUANTUM ADDITIONS AGAINST WHICH THE PENALTY WAS LEVIED, CAME UP FOR CHALLENGE BY THE ASSESSEE BEFORE THIS T RIBUNAL VIDE ITA NOS.1874-75/MUM/2017 ORDER DATED 31/05/2019. A COPY OF THE ORDER IS ON RECORD. UPON PERUSAL OF THE SAME, IT IS QUITE EV IDENT THAT SUBSTANTIAL ADDITIONS OF RS.11.12 CRORES WERE DELETED BY THE TR IBUNAL. THERE IS NOTHING ON RECORD THAT THE SAID ORDER HAS BEEN REVE RSED SUBSEQUENTLY, IN ANY MANNER. THEREFORE, SINCE THE QUANTUM ADDITION S TANDS DELETED BY THE TRIBUNAL, THE PENALTY LEVIED AGAINST THOSE ADDI TIONS WOULD NOT SURVIVE. FOR THE SAID REASON ALONE, THE IMPUGNED OR DER WOULD NOT REQUIRE ANY INTERFERENCE ON OUR PART, TO THAT EXTENT. 3. THE ONLY SURVIVING ADDITION AGAINST WHICH PENALT Y HAS BEEN LEVIED IS ADDITION OF RS.3.02 LACS UNDER THE HEAD INCOME F ROM HOUSE PROPERTY. THE ASSESSEE RENTED OUT GALA NO.B-316 TO AN ENTITY ON MONTHLY RENT OF RS.5000/-. HOWEVER, GALA NO. B-317 WAS ALSO GIVEN O N RENT BY THE ASSESSEE AT MONTHLY RENT OF RS.36,000/-. THE ASSESS EE EXPLAINED THAT GALA NO.B-316 WAS GIVEN ON RENT SINCE 1984 WHEREAS THE OTHER GALA WAS RENTED OUT IN THE YEAR 2009-10 AT HIGHER RENT. HOWEVER, REJECTING THE SAME, LD. AO ADOPTING THE NEW RATES, COMPUTED ADDIT IONAL INCOME OF RS.3.02 LACS AND ADDED THE SAME TO THE INCOME OF TH E ASSESSEE AND ITA NO.3806/MUM/2019 ASSESSMENT YEAR: 2010-11 3 LEVIED PENALTY AGAINST THE SAME. THE LD. CIT(A) DEL ETED THE PENALTY BY OBSERVING THAT PENALTY COULD NOT BE LEVIED FOR ADDI TION OF NOTIONAL INCOME. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. UPON DUE CONSIDERATION, GOING BY THE FACTUAL MA TRIX OF THE ADDITIONS, WE CONCUR WITH THE STAND OF LD. CIT(A) I N DELETING THE PENALTY. IT IS QUITE EVIDENT THAT THE ADDITION HAS BEEN MADE MERELY ON NOTIONAL BASIS. HOWEVER, THERE WAS FULL DISCLOSURE OF INCOME EARNED BY THE ASSESSEE. THEREFORE, THE PENALTY AGAINST THE NOTION AL ADDITIONS SO MADE COULD NOT BE SUSTAINED. 5. IN NUTSHELL, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 02 ND DECEMBER, 2020. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 02/12/2020 SR.PS:-JAISY VARGHESE '# $# / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$- , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.