ITO 21(3)(1), MUMBAI V. BALKISHEN R MEHRA, MUMBAI

ITA 3862/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8255 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-12-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Assessee Lawyers: DI LIP J THAKKAR
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUM BAI . , , BEFORE SHRI D. KARUNAKARA RAO, AM & SHRI AMIT SHUKL A, JM ./ ITA NO. 3862, 3863 & 3864/MUM/2012 ( / ASSESSMENT YEAR: 2004-05, 2005-06 & 2006-07) INCOME TAX OFFICER 21(3)(1) / VS. SHRI BALKISHEN R. MEHRA ROOM NO. 503, 5 TH FLOOR PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400051 C/O N I ANAND & CO. CAS 13, SILK HOUSE, 630 J. SHANKAR SETH ROAD, MUMBAI 400002 ./ PAN AAAPM8368E / APPELLANT !' / RESPONDENT # $ / APPELLANT BY: SHRI AKHILENDRA YADAV !' # $ / RESPONDENT BY: S/SHRI DILIP J. THAKKAR & RAJESH P. SHAH %& # ' / DATE OF HEARING: 04.12.2014 ()* # ' / DATE OF PRONOUNCEMENT: 04.12.2014 / O R D E R PER D. KARUNAKARA RAO, AM THESE ARE THREE APPEALS BY THE REVENUE FILED AGAINS T THE ORDER OF THE CIT(A)-32, MUMBAI AND THEY PERTAIN TO ASSESSMENT YE ARS 2004-05, 2005-06 AND 2006-07 IN CONNECTION WITH PENALTY LEVIED UNDER SECTION 271(1)(C). 2. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE RECEIVED CERTAIN RECEIPTS FROM LETTING OUT OF PROPERTY AND THE SAME WAS OFFERED TO TAX AS BUSINESS INCOME IN THE PAST Y EARS. THE CLAIM OF THE ASSESSEE WAS ACCEPTED IN THE ASSESSMENTS PRIOR TO A Y 2004-05. HOWEVER, SIMILAR CLAIM OF THE ASSESSEE WAS NOT ALLOWED IN TH REE ASSESSMENT YEARS UNDER CONSIDERATION IN VIEW OF THE HON'BLE SUPREME COURT JUDGEMENT IN THE CASE OF SHAMBHU INVESTMENT (P) LTD. (263 ITR 143) A ND THE AO TAXED THE SAME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. T HUS IT IS A CASE OF MERELY CHANGE OF HEAD OF INCOME. THE IMPUGNED PENAL TY FOR ALL THE THREE ITA NO. 3862, 3863 & 3864/MUM/2012 SHRI BALKISHEN R. MEHRA 2 YEARS UNDER CONSIDERATION RELATES TO THE ABOVE DECI SION OF THE AO TO TAX THE RECEIPTS UNDER THE HEAD INCOME FROM HOUSE PROPERTY . 3. THE CIT(A) DELETED THE ADDITION IN ALL THE THREE YE ARS RELYING ON VARIOUS DECISION. THE CONTENTS OF PARA 3.3 OF THE IMPUGNED ORDER IS RELEVANT HERE. FURTHER THE LEARNED COUNSEL FOR THE ASSESSEE MENTIO NED THAT MERE CHANGE OF HEAD OF INCOME DO NOT ATTRACT CONCEALMENT PENALTY A ND FOR THIS PROPOSITION THE COUNSEL RELIED UPON THE JURISDICTIONAL HIGH COU RT JUDGEMENT IN THE CASE OF CIT VS. BENNETT COLEMAN & CO. LTD. 87 DTR 0368. 4. THE LEARNED D.R. RELIED UPON THE PENALTY ORDER PASS ED BY THE AO. 5. AFTER HEARING BOTH THE PARTIES AND GOING THROUGH TH E FACTS WE FIND THAT THERE IS NO DISPUTE ABOUT DISCLOSURE OF RELEVANT IN FORMATION IN THE RETURN OF INCOME RELATING TO THE IMPUGNED RECEIPTS, WHICH WER E BROUGHT TO TAX UNDER THE HEAD HOUSE PROPERTY BY THE AO. THUS IT IS A C ASE OF CHANGE OF HEAD OF INCOME AND THERE IS NO DEFAULT SO FAR AS DISCLOSURE OF RELEVANT INFORMATION IN THE RETURN OF INCOME IS CONCERNED. WE PERUSED THE J UDGEMENT CITED BEFORE US AND FIND THE SAME RELEVANT FOR THE PROPOSITION T HAT WHEN THERE IS A CHANGE OF HEAD OF INCOME BY THE AO AND IN THE ABSEN CE OF ANY FACTS THAT THE CLAIM OF THE ASSESSEE IS NOT BOANFIDE, PENALTY UNDE R SECTION 271(1)(C) IS NOT ATTRACTED. IN THE INSTANT CASE WE FIND THAT THE ASS ESSEE IS CONSISTENTLY FURNISHING RELEVANT RECEIPTS UNDER THE HEAD PROFIT S AND GAINS OF BUSINESS AND THE CLAIM OF THE ASSESSEE WAS CONSISTENTLY ACCE PTED BY THE REVENUE. ASSESSEE OFFERED THE SAME FOR THESE YEARS ALSO BUT THE AO CHANGED THE HEAD OF INCOME ONLY IN VIEW OF THE SUBSEQUENT JUDGEMENT IN THE CASE OF SHAMBHU INVESTMENT (P) LTD. (SUPRA). THEREFORE, THERE IS NO THING MALAFIDE FROM ASSESSEES SIDE. THE AO HAS NOT INFORMATION TO DEMO NSTRATION THAT THE CLAIM OF THE ASSESSEE IN THE RETURN OF INCOME IS NOT BOAN AFIDE. THE RELEVANT CONCLUSION OF THE SAID JUDGEMENT IN THE CASE OF BEN NET COLEMAN & CO. READS AS UNDER: - WHEN INCOME RECEIVED HAS BEEN DISCLOSED IN COMPUTA TION OF INCOME AND THERE IS ONLY A CHANGE OF HEAD OF INCOME; IN TH E ABSENCE OF ANY FACTS THAT THE CLAIM OF THE ASSESSEE WAS NOT BONAFI DE, THE PENALTY CANNOT BE IMPOSED U/S 271(1)(C). ITA NO. 3862, 3863 & 3864/MUM/2012 SHRI BALKISHEN R. MEHRA 3 CONSIDERING THE ABOVE FACTS OF THE PRESENT CASE AND THE BINDING LEGAL PROPOSITION ON THE SUBJECT WE ARE OF THE OPINION TH AT IT IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) FOR ALL THE THREE YEARS. ACCORDINGLY THE GROUND RAISED BY THE REVENUE IN ALL THE THREE A PPEALS IS REJECTED. 6. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMI SSED. +, - # . +- # - /0 ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER, 2014. # ()* . 2%, 04.12.2014 ) # 3& SD/- SD/- (AMIT SHUKLA) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 4& MUMBAI, 2% DATED: 4 TH DECEMBER, 2014 COPY TO: 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ( )/ THE CIT(A) 32, MUMBAI 4. / THE CIT 21, MUMBAI CITY 5. 563 !%78 , ' 78 , 4& THE DR, B BENCH, ITAT, MUMBAI 6. 39 :& / GUARD FILE. % / BY ORDER '5 ! //TRUE COPY// ASSISTANT REGISTRAR , 4& ITAT, MUMBAI BENCHES, MUMBAI N.P.