MUKESH M. GUPTA, MUMBAI V. ACIT 19(3),

ITA 3989/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55613 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 17-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C MAURYA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.3989/ MUM/2010 ASSESSMENT YEAR: 2006-07 MR MUKESH M GUPTA, .. APPELLANT C-5, LAXMI TOWERS, C WING, 6 TH FLOOR, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-51. PA NO.AACPG 4594 K VS ACIT 19(3), .. RESPONDEN T MUMBAI. APPEARANCES: NARAYAN ATAL, FOR THE APPELLANT P.C.MAURYA , FOR THE RESPONDENT DATE OF HEARING : 28.9.2011 DATE OF PRONOUNCEMENT : 19-10-2011 O R D E R PER PRAMOD KUMAR: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.2.2010 OF THE CIT(A)-30, MUMBAI CONFIRMING THE P ENALTY OF RS.1,21,255 LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED THE MATERIAL FACTS ARE LIKE THIS. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT T HE ASSESSEE HAS CLAIMED I.T.A NO.3989/ MUM/2010 ASSESSMENT YEAR: 2006-07 2 PMS FEES AMOUNTING TO RS.55,100 AND RS.9,576 FOR S.T.T . TO KOTAK SECURITIES. THE ASSESSEE HAS ALSO CLAIMED PMS FEES AMOUNTING TO RS.77,678 AND RS.11,126 FOR S.T.T. TO ASK REYMONDS JAMES SECURITIES. THE AO ALSO NOTICED THAT THE ASSESSEE HAS CLAIMED SHARE TRADING EXPENSES AMOUNTING TO RS.4,204 A GAINST SHORT TERM CAPITAL GAINS OF RS.12,90,089. THE AO ALSO NOTICED THAT THE A SSESSEE HAS CLAIMED PROFESSIONAL TAX OF RS.2,500 AND INTEREST ON OVERDRAFT OF RS.3,22,650 OUT OF INTEREST INCOME. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW C AUSE AS TO WHY THE ABOVE AMOUNT SHOULD NOT BE DISALLOWED, TO WHICH, THE ASSESSEE AGREED FOR THE DISALLOWANCE. ACCORDINGLY, THE AO DISALLOWED THE ABO VE ADDITIONS TOTALING TO RS.4,82,924. THE ASSESSING OFFICER ALSO INITIATED PENA LTY PROCEEDINGS UNDER SECTION 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF IN COME AND FINALLY LEVIED MINIMUM PENALTY OF RS.1,21,255 BEING 100% OF TAX SOUG HT TO BE EVADED. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A) BUT WITHOUT ANY SUCCESS. 3. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL B EFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERU SED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLI CABLE LEGAL POSITION. 5. WE FIND THAT THE IMPUGNED PENALTY HAS BEEN LEVIED FOR ASSESSEES HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. WE HAVE ALSO NOTED THAT THERE ARE DECISIONS, IN FAVOUR OF THE ASSESSEE, ON THE QUESTION OF DEDUCTIBILITY OF PMS FEES, SUCH AS IN THE CASE OF KRA HOLDING & TRADING CO.LTD. ( ITA NO..5007/PUNE/2008). IT IS A FACT THAT THE ASSESSEE HAS AGREED FOR ALL THE ADDITIONS TO BE MADE BEFORE THE ASSESSING OFFICER. THAT DOES NOT, HOWEVER, MEAN THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IN THE CASE OF CIT VS. RELIAN CE PETROPRODUCTS (P) LTD., (322 ITR 158, THEIR LORDSHIPS NOTED THAT 'IN THIS CASE, THE RE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE' AND ADDED THAT 'SUCH BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271( 1)(C) OF THE ACT' AND THAT 'A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT I.T.A NO.3989/ MUM/2010 ASSESSMENT YEAR: 2006-07 3 AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG INCOME OF THE ASSESSEE'. IT IS ALSO REQUIRED TO BE NOTICED THAT IMPUGNED PENALTY IS LEVIED IN RESPECT OF SMALL DISALLOANCES AND, THEREFORE, REQUI RES LENIENT CONSIDERATION. KEEPING IN VIEW OF THE FACT THAT IN THE PRESENT CAS E THE PENALTY IS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS, AND THAT THER E IS NOTHING TO INDICATE INCORRECTNESS OF PARTICULARS OF CLAIM OF DEDUCTION ON THE FACTS OF THIS CASE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED PENALT Y, TO THE EXTENT OF RS 1,21,255, LEVIED BY THE AO AND SUSTAINED BY THE CIT (A) DESERVES TO BE DELETED. WE, ACCORDINGLY, DIRECT THE AO TO DELETE THE PENALT Y IMPOSED ON THE ASSESSEE. 6. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER, 2011 SD/- (D.MANMOHAN) VICE PRESIDENT SD/ (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 19 TH OCTOBER, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),,30 MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-19 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI