ITO 9(2)(4), MUMBAI V. PATEL ALUMINIUM P. LTD, MUMBAI

ITA 3954/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48943 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K SOMANI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL,(JM) AND SHRI RAJENDRA SI NGH,(AM) ITA NO. 3954/MUM/2010 ASSESSMENT YEAR : 2003-04 INCOME TAX OFFICER-9(2)(4) ROOM NO.255, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ..( APPELLANT ) VS. M/S. PATEL ALUMINIUM PVT. LTD. PATEL VANIKA, WESTERN EXPRESS HIGHWAY GOREGAON MUMBAI-400 068. ..( RESPONDENT ) P.A. NO. (AAACP 2738 F) APPELLANT BY : SHRI R.K. GUPTA RESPONDENT BY : SHRI S .K. SOMANI O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 15.3.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2003-04 . THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING LEVY OF PENALTY UNDER SECTION 271(1)(C). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE FOR THE RELEVANT YEAR HAD DECLARED BUSINESS LOSS OF RS. 2,21,161/-. THE ASSESSEE HAD RECEIVED INTEREST INCOME, COMPENSATION FOR USE OF MACHINERY AND COMPENSATION FOR HIRING FACTORY PREMISES /PLANT TOTALING TO RS.22,51 ,572/- WHICH HAD BEEN DECLARED AS BUSINESS INCOME AND AFTER DEDUCTING EXP ENSES, NET LOSS OF RS.2,21,161/- HAD BEEN DECLARED. THE ASSESSING OF FICER IN THE ASSESSMENT ORDER TREATED THE INTEREST AND OTHER INCOME OF RS.2 2,51,572/- DECLARED BY ASSESSEE AS INCOME FROM OTHER SOURCES. HE ALSO DISA LLOWED CLAIM OF EXPENSES AMOUNTING TO RS.38,39,317/-. THE BUSINESS INCOME WAS COMPUTED ITA NO.3954/MUM/10 A.Y:03-04 2 AT RS.13,66,584/- WHICH WAS SET OFF AGAINST BROUGH T FORWARD BUSINESS LOSS FROM ASSESSMENT YEAR 1996-97 AND NET BUSINESS INCOM E COMPUTED AS NIL. THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF R S.22,51,572/- BEING INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER H AD ALSO INITIATED PENALTY PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS O F INCOME ABOUT THE INCOME FROM OTHER SOURCES AND LEVIED MINIMUM PENALTY OF RS .8,24,453/- IN RESPECT OF INCOME OF RS. 22,51,570/-/. IN APPEAL AGAINST THE PENALTY, CIT(A ) NOTED THAT IN THE QUANTUM APPEAL DISALLOWANCE OF EXPENSES OF RS.38,39,317/- HAD BEEN DELETED BY CIT(A). CIT(A) ALSO OBSERVED THAT THE CIT(A) HAD UPHELD THE ASSESSMENT OF INCOME OF RS. 22,51,570/-/ AS INCOME FROM OTHER SOURCES. HOWEVER AFTER DELETION OF ADDITION ON ACCOUNT OF DIS ALLOWANCE OF EXPENSES THE NET INCOME AFTER GIVING EFFECT TO ORDER OF CIT( A) WAS THE SAME AS LOSS OF RS.2,21,161/- RETURNED BY THE ASSESSEE. CIT(A) OBS ERVED THAT THOUGH THE INCOME FROM INTEREST AND OTHER INCOME WAS ASSESSED AS INCOME FROM OTHER SOURCES, THE TOTAL INCOME AND TAX LIABILITY OF THE ASSESSEE REMAINED THE SAME. ONLY THE HEAD OF INCOME WAS CHANGED. NO PEN ALTY WAS THEREFORE, TO BE LEVIED. HE ACCORDINGLY DELETED THE PENALTY AGGRI EVED BY WHICH REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US THE LD.AR SUBMITTED THAT DELETION OF A DDITION BY CIT(A) HAS BECOME FINAL AS NO FURTHER APPEAL HAS BEEN FILED BY THE REVENUE. THEREFORE, THERE BEING NO ADDITION TO TOTAL INCOME NOR ANY ADD ITIONAL TAX LIABILITY NO PENALTY COULD BE LEVIED. LD. DEPARTMENTAL REPRESEN TATIVE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING LEVY OF PENALT Y UNDER SECTION 271(1)(C). THE ASSESSEE HAD RETURNED BUSINESS LOSS OF RS.2,21, 161/-. THE ASSESSING OFFICER IN THE ASSESSMENT, DISALLOWED EXPENSES OF R S.38,39,317/- AND ALSO ASSESSED THE INCOME FROM INTEREST ETC. AS INCOME FR OM OTHER SOURCES IN PLACE OF BUSINESS INCOME DECLARED BY ASSESSEE. HE ASSESSED THE BUSINESS INCOME AT NIL AFTER SETTING OFF BROUGHT FORWARD LOSS OF AS SESSMENT YEAR 1996-97 AND OTHER SOURCES INCOME WAS ASSESSED AT RS .22,51,572/- LEADING TO ITA NO.3954/MUM/10 A.Y:03-04 3 DETERMINATION OF TOTAL INCOME AT RS.22,51,570/-. I N APPEAL CIT DELETED THE ADDITION MADE OF RS.38,39,317/- THOUGH HE CONFIRMED THE ASSESSMENT OF INTEREST AND OTHER INCOME AS INCOME FROM OTHER SOUR CES. AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A), THE TOTAL INCOME IS SAM E AS LOSS OF RS.2,21,161/-. IT HAS BEEN SUBMITTED THAT THE SAID ORDER OF CIT(A) IN THE QUANTUM APPEAL HAS BECOME FINAL. THEREFORE, THOUGH THE NATURE OF I NCOME FROM INTEREST AND COMPENSATION HAS BEEN CHANGED TO INCOME FROM OTHER SOURCES, THE TOTAL INCOME REMAINED THE SAME AS RETURNED BY THE ASSESSE E I.E. LOSS OF RS.2,21,161/-. THERE IS THUS, NEITHER ANY ADDITION TO TOTAL INCOME NOR ANY ADDITIONAL TAX LIABILITY ON THE ASSESSEE. THEREFORE , WE AGREE WITH CIT(A) THAT NO PENALTY CAN BE IMPOSED IN SUCH CASE. THE ORDER OF CIT(A) IS ACCORDINGLY UPHELD. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 27.5.2011. SD/- SD/- (D.K. AGARWAL) (RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 27.5.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.