MUKUL HOLDING & TRADING CO. P.LTD, MUMBAI V. DCIT CEN CIR 33, MUMBAI

ITA 4012/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1135 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 25-04-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 20-05-2013
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Unexplained cash credit
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4012/MUM./2013 (ASSESSMENT YEAR: 2002 - 03) MUKUL HOLDING & TRADING CO. P. LTD. 19 JAI BHARAT SOCIETY, 3 RD FLOOR, KHAR (W), MUMBAI 400052. PAN AABCM6207F . APPELLANT V/S DCIT CEN CIR 33, AAYAKAR BHAVAN, MUMBAI 400020 . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI. SUMAN KUMAR DATE OF HEARING 25.04.2017 DATE OF ORDER - 25.04.2017 O R D E R PER: SHAMIM YAHYA THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LD. CIT - A DATED 25.02.2013 AND PERTAINS TO ASSESSMENT YEAR 2002 - 03. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE AND IN LAW, THE L D. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S.271(1)(C) FOR RS.2, 10,630/ - . 2. THE L D. CIT(A) FAILED TO APPRECIATED THAT: MUKUL HOLDING & TRADING CO. P. LTD. ITA NO.4012/MUM./2013 2 A) T HE APPELLANT HAS NEITHER CONCEALED THE PARTICULARS OF ITS INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF SUCH INCOME; B) T HE APPELLANT HAS EXPLAINED SATISFACTORILY THE NATURE AND SOURCE OF SHARE APPLICATION MONEY RECEIVED BY IT; AND C) M ERE REJECTION OF BONAFIDE EXPLANATION PER SE WILL NOT BE SUFFICIENT TO ATTRACT PENALTY U/S.271(1)(C). 3. IN REACHING TO THE CONCLUSION AND CONFIRMING THE PENALTY LEVIED BY THE AO, CIT(A) OMITTED TO CONSIDER RELEVANT FACTORS, CONSIDERATIONS, PRINCIPLES AND EVIDENCES WH ILE HE WAS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVANT CONSIDERATIONS AND FACTORS. 4. IN ANY CASE THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE CIT(A) IS EXCESSIVE AND UNREASONABLE. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/ OR DELE TE THE ABOVE GROUND OR GROUNDS OF APPEAL. 3. BRIEF FACTS OF THE CASE L EADING TO LEVY OF PENALTY ARE AS UNDER: - 3.1 THE APPELLANT IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING IS NON - FERROUS METALS AND CHEMICALS. SEARCH ACTION U/S.132 WAS CARRIED OUT ON 10.11.2006 AT THE PREMISES OF BALAJI YARN GROUP. THE APPELLANT BEING MEMBER OF THE SAID GROUP WAS ALSO COVERED IN THE SEARCH. THE ASSESSMENT WAS MADE ON 16.12.2008 DETERMINING TOTAL INCOME OF RS.8,49,610/ - BY MAKING AN ADDITION OF RS.8,00,0 00/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 3.2 LD. CIT(A) VIDE ORDER NO. CIT(A) - 41/ACCC - 33/IT - 3/08 - 09 DATED 25.09.2009 CONFIRMED THE ADDITION OF RS.8,00,000/ - MUKUL HOLDING & TRADING CO. P. LTD. ITA NO.4012/MUM./2013 3 MADE BY THE AO AND FURTHER ENHANCED THE TOTAL INCOME BY RS.5,90,000/ - AND DIRECTED THE LD. A.O TO INITIATE PENALTY PROCEEDINGS U/S. 271 (1)(C) FOR THE ENHANCED INCOME. 4. ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS OBSERVED THAT ASSESSEE IS GUILTY OF BOTH CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF I NCOME. IN THE PENALTY ORDER THE ASSESSING OFFICER HAS MENTIONED THAT ASSESSEE HAS NOT REPLIED TO THE SHOW CAUSE NOTICE. THEREFORE, HE HELD THAT ASSESSEE WAS GUILTY OF BOTH CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. UPON ASSES SEES APPEAL LD. CIT - A OBSERVED THAT ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME AS WELL AS FILING OF INACCURATE PARTICULARS OF INCOME. HOWEVER LD. CIT - A ALSO NOTED THAT ASSESSING OFFICER HAS PASSED AN ORDER IN THE U/S. 154 TO CORRECT A MISTAKE. ANOTHER O RDER FOR PENALTY WAS PASSED ON 31.03.2011. ON THIS ASPECT TH E LD. CIT - A HAS SAID THAT HE WILL NOT MAKE ANY COMMENT IN THIS REGARD. 5. WE HAVE HEARD THE LD. D.R . N ONE APPEARED ON BEHALF OF THE ASSESSEE . U PON CAREFUL CONSIDERATION WE FIND THAT IT IS APPARENT THAT THE A.O HAS PASSED AN ORDER U/S. 154 TO CORRECT MISTAKE IN THE PRESENT ASSESSMENT ORDER . A NOTHER PENALTY ORDER HAS ALSO BEEN PASSED ON 31.03.2011. FURTHER WE NOTE THAT THE ASSESSING OFFICER IN MUKUL HOLDING & TRADING CO. P. LTD. ITA NO.4012/MUM./2013 4 THE PENALTY PROCEEDINGS HAS NOT PROPERLY ESTABLISH ED AS T O WHETHER THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HE HAS HELD THAT SINCE THE ASSESSEE HAS NOT RESPONDED TO THE SHOW CAUSE NOTICE HE IS GUILTY OF CONCEALMENT AND FURNISHING OF INACCURATE PARTICULAR S. IN OUR CONSIDERED OPINION SUCH A REASONING FOR LEVY OF PENALTY IS NOT SUSTAINABLE IN LAW. ACCORDINGLY WE SET ASIDE ORDER OF AUTHORITIES BELOW DELETE OF THE LEVY OF PENALTY. IN THE RESULT THIS APPEAL BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 .04.2017 SD/ - SD/ - PAWAN SINGH SHAMIM YAHYA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 25 .04.2017 MUKUL HOLDING & TRADING CO. P. LTD. ITA NO.4012/MUM./2013 5 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE. OPY BY ORDER NISHANT VERMA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI MUKUL HOLDING & TRADING CO. P. LTD. ITA NO.4012/MUM./2013 6 DATE INITIAL 1. DRAFT DICTATED ON 25 .04.2017 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 25 .04.2017 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .04.2017 SR.PS 6. DATE OF PRONOUNCEMENT .04.2017 SR.PS 7. FILE SENT TO THE BENCH CLERK . 04.2017 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER