GOPIKISHAN BIYANI, MUMBAI V. ACIT CEN CIR-47, MUMBAI

ITA 3986/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1516 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 05-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P N DEVDASAN
• Keywords: Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, G, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 3986/MUM/2008 (ASSESSMENT YEARS: 2005-06) GOPIKISHAN BIYANI 86, MIRA STREET, VENKATESH BHAVAN, 4 TH FL, MUMBAI-400003 PAN: AACPB0198A .APPELLANT V/S ACIT CEN CIR-47 AAYAKAR BHAVAN M K ROAD MUMBAI-400020 RESPONDENT APPELLANT BY : SHRI MADHUR AGARWAL RESPONDENT BY : SHRI P N DEVDASAN O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 31.03.2008 OF CIT(A)-CENTRAL-III, MUMB AI ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 271(1)( C) OF THE ACT FOR THE ASSESSMENT YEAR 2005-06. 2 THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS A PPEAL. HOWEVER, THE ONLY ISSUE ARISES FOR OUR CONSIDERATIO N AND ADJUDICATION WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE ITA NO. 3986/MUM/2008 (ASSESSMENT YEARS: 2005-06) 2 CASE, THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PEN ALTY OF RS.4,14,350/- LEVIED U/S 271(1)( C ) OF THE ACT. 3. THE RELEVANT FACTS LEADING TO PENALTY ARE THAT THE ASSESSEE PURCHASED 1000 SHARES OF M/S INFOSYS TECHN OLOGIES LTD FOR RS.56,02,498. THE ASSESSEE HAS ALSO RE CEIVED 3000 BONUS SHARES. THE ASSESSEE RETAINED 1000 SHARES PU RCHASED BY HIM AND TRANSFERRED 3000 BONUS SHARES TO HIS R ELATIVE SMT.SANGEETA BIYANI AS LOAN. SUBSEQUENTLY, THE A SSESSEE SOLD 1000 SHARES AT RS.14,27,689/- AND CLAIMED SHOR T TERM CAPITAL LOSS OF RS.41,74,809/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE AO FOUND FROM THE BANK STATEMENT THAT 3000 SHARES WERE NOT ONLY SOLD BY SMT.BIYANI BUT THE SALE PROCEEDS OF RS.41,43,502/- THEREFROM HAD BEEN TRANSFERRED TO THE ASSESSEES BANK ACCOUNT WHICH HA D NOT BEEN TAKEN INTO CONSIDERATION IN THE COMPUTATION OF SHORT TERM CAPITAL LOSS. SINCE THE ASSESSEE DID NOT DISCLOSE THE SAID SALE OF 3000 SHARES AND RECEIPTS OF SALE PROCEEDS, THE A O COMPUTED THE SHORT TERM CAPITAL LOSS ON THE TRANSAC TION RELATING TO 4000 SHARES OF M/S INFOSYS TECHNOLOGIE S LTD AT RS.31,307. SUBSEQUENTLY, PENALTY PROCEEDINGS WERE I NITIATED AND THE PENALTY OF RS.4,41,350/- WAS IMPOSED VIDE PENALTY ORDER DATED 28.11.2007. ITA NO. 3986/MUM/2008 (ASSESSMENT YEARS: 2005-06) 3 4. ON APPEAL, THE CIT(A) HAS CONFIRMED THE PENALT Y LEVIED BY THE AO. 5. AGGRIEVED BY THE SAID ORDER OF THE CIT(A), THE A SSESSEE HAS FILED THIS APPEAL BEFORE US. 6. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE HAS FULLY DISCLOSED ALL THE FACTS AND DETA ILS RELEVANT TO THE SALE OF 4000 SHARES. HE HAS REFERRED LETTER DATED 23.5.2007 TO THE AO AND SUBMITTED THAT ONLY FROM THE DETAILS FILED BY THE ASSESSEE, THE AO CAME TO KNOW ABOUT T HE SALE OF 3000 BONUS SHARES BY THE RELATIVE OF THE ASSESSEE AND TRANSFER OF SALES PROCEEDS TO THE ACCOUNT OF THE AS SESSEE. HE HAS FURTHER CONTENDED THAT IMMEDIATELY AFTER, IT WA S POINTED OUT BY THE AO, THE ASSESSEE HIMSELF HAS INCLUDED THE SALE PROCEEDS ON THE SALE OF 3000 BONUS SHARES BY THE RE LATIVE OF THE ASSESSEE WHILE COMPUTING THE CAPITAL LOSS OR CA PITAL GAIN AND THEREFORE, THERE IS NO QUESTION OF CONCEALING T HE INCOME AND FURNISHING THE INACCURATE PARTICULARS OF INCOME . HE HAS URGED THAT THERE WAS MERELY AN OMISSION AND NEGLI GENCE ON THE PART OF THE ASSESSEE FOR NOT INCLUDING THE SALE PROCEEDS OF 3000 BONUS SHARES WHILE COMPUTING THE SHORT CAPITA L GAIN OR LOSS. THE LEARNED AR OF THE ASSESSEE HAS POINTED OU T THAT IN THE SIMILAR CASE OF THE FAMILY MEMBER OF THE ASSESS EE, THIS TRIBUNAL IN THE CASE OF SHRI RAKESH G. BIYANI ( ITA NO. ITA NO. 3986/MUM/2008 (ASSESSMENT YEARS: 2005-06) 4 3987/M/2008 AY 2005-06) VIDE ORDER DATED 26.02.2010 HAS DELETED THE PENALTY. HE HAS FILED A COPY OF THE OR DER OF THIS TRIBUNAL AND SUBMITTED THAT WHEN THE FACTS ARE IDEN TICAL IN BOTH THE CASES AND THIS TRIBUNAL DELETED THE PENALT Y IN THE SIMILAR SET OF FACTS AND CIRCUMSTANCES THEN THE CAS E OF THE ASSESSEE IS COVERED BY THE ORDER OF THIS TRIBUNAL.. 7. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THIS IS NOT AN OMISSION OR INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE, IT WAS A CALCULATED AND DELIBERATE AC T OF CONCEALMENT OF INCOME TO EVADE TAX LIABILITY. HE HAS FURTHER CONTENDED THAT ALL THE THREE MEMBERS OF THE FAMILY ADOPTED THE SAME PRACTICE AND METHOD OF GIVING BONUS SHARES TO THE RELATIVE AS A LOAN AND THE SALE PROCEEDS WAS NOT I NCLUDED WHILE COMPUTING THE CAPITAL LOSS/GAIN. THEREFORE, FROM THE FACTS, IT IS CLEAR THAT THE ASSESSEE ALONG WITH THE OTHER PERSONS IN THE FAMILY DELIBERATELY AND INTENTIONALLY CONCEA LED THE INCOME AND FURNISHED THE INACCURATE PARTICULARS OF INCOME. HE HAS RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD. WE FIND THAT THE FACTS OF THE CASE IN H AND AND IN THE CASE OF SHRI RAKESH G. BIYANI (SUPRA) ARE IDENTICA L AND THIS TRIBUNAL IN THE CASE OF SHRI RAKESH G BIYANI HAS D ELETED THE PENALTY. THE RELEVANT PORTION OF THE SAID ORDERS F OR THE SAKE OF CONVENIENCE IS REPRODUCED BELOW: ITA NO. 3986/MUM/2008 (ASSESSMENT YEARS: 2005-06) 5 6.7 IN THE LIGHT OF ABOVE DISCUSSION IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATION. THE ASSESSEE TRANSFERRED 3000 SHARES TO RELATIVE, I.E. SMT. BIYANI ON LOAN. THE ASSESSEE FILED HIS RETURN OF INCOME ON THE BASIS OF ONLY HIS DEMAT ACCOUNT WHEREIN ONLY 1000 SHARES WERE SOLD. SMT. BIYANI HAD SOLD THESE 3000 SHARES THROUGH HER DEMAT ACCOUNT, WHICH SHOWS THE BONAFIDE OF THE ASSESSEE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON PRESUMPTION THAT THE 3000 SHARES GIVEN TO SMT BIYANI WAS ON LOAN. THIS EXPLANATION OF THE ASSESSEE HAS NOT FOUND FALSE BY THE AO. SMT BIYANI SOLD SHARES THROUGH HER DEMAT ACCOUNT AND SALE PROCEEDS WERE GIVEN TO THE ASSESSEE, WHICH ADJUSTED AGAINST THE LOAN. THE ASSESSEE ON HIS OWN AND VOLUNTARILY POINTED OUT AND ACCEPTED THIS LAPSE DURING THE ASSESSMENT PROCEEDINGS. WE THEREFORE FIND THAT THE ASSESSEE HAS SURRENDERED THE AMOUNT OF INCOME BEFORE RECORDING SATISFACTION WHICH REQUIRED UNDER SECTION 271 OF THE ACT. THE AO HIMSELF ACCEPTED THE SURRENDER OF INCOME AND NO FURTHER INVESTIGATION/EXAMINATION WERE MADE. WE THEREFORE OF THE CONSIDERED VIEW THAT PENAL PROVISIONS UNDER THE CIRCUMSTANCES OF THE CASE ARE NOT APPLICABLE, WE ACCORDINGLY CANCEL PENALTY LEVIE D UNDER SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, IN VIEW OF THE ABOVE SAID ORDER OF THI S TRIBUNAL AND FOLLOWING THE PRINCIPLE OF CONSISTENCY, WE DELE TE THE PENALTY LEVIED U/S 271(1)( C ) OF THE ACT AND ALLO W THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 18.06.2010 SD SD (P.M.JAGTAP) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI, DATED 18TH JUNE 2010 SRL:10610 ITA NO. 3986/MUM/2008 (ASSESSMENT YEARS: 2005-06) 6 COPY TO: 1. GOPIKISHAN BIYANI 86, MIRA STREET, VENKATESH BHAVAN, 4 TH FL, MUMBAI-400003 PAN: AACPB0198A 2.ACIT CEN CIR-47 AAYAKAR BHAVAN M K ROAD MUMBAI-400020 3. CCIT CITY-CENTRAL-I, MUMBAI. 4.CIT CENTRAL-IV, MUMBAI 5 CIT(A)-III, MUMBAI. 6. DR G BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI