ITO 9(1)(4), MUMBAI V. FOBEOZ INDIA P.LTD, MUMBAI

ITA 4378/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84279 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 27-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Section: 143(3); 260A

Judgement Text

K , , IN THE INCOME TAX APPELLATE TRIBUNALF BENCH, MUMB AI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARORA, AM ITA NOS.4378/MUM/2012 ASSESSMENT YEARS-2007-08 INCOME-TAX OFFICER,9(1)(4), ROOM NO.224, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI-400020 / VS. M/S FOBEOZ INDIA PVT. LTD. FOBEOZ TOWERS, SHEETAL APARTMENT, RAMCHANDRA LANE, KANCHPADA, MALADI(W), MUMBAI-400063 ./ PAN :AAACF9720B ( / REVENUE ) .. ( / RESPONDENT ) / REVENUE BY: SHRI PAWAN KUMAR BEERLA / RESPONDENT BY : NONE ! '# $% / DATE OF HEARING 27/11/2014 &'( $% / DATE OF PRONOUNCEMENT : 27/11/2014 * / O R D E R PER JOGINDER SINGH, JM: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 10/04/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MUM BAI. THE ONLY GROUND RAISED PERTAINS TO DELETING THE PENALTY OF R S.1,77,98,081/- LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT 1961( HEREINAFTER THE ACT ). 2 M/S FOBEOZ INDIA PVT. LTD. 2. DURING HEARING, THE LD. DR SHRI PAWAN KUMAR BEE RLA CONTENDED THAT THE PENALTY HAS BEEN DELETED WITHOUT ASSIGNING A VALID REASON OVERLOOKING THE FACT THAT APPEAL U/S 260A OF THE AC T HAS BEEN FILED AGAINST THE DECISION OF THE TRIBUNAL, DELETING QUAN TUM ADDITION, BEFORE THE HONBLE HIGH COURT. ON THE OTHER HAND, NONE APPEAR ON BEHALF OF THE ASSESSEE, THEREFORE, WE HAVE NO OPTIO N TO PROCEED EX- PARTE QUA THE ASSESSEE AND DISPOSED OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DERIVED ITS INCOME FROM LOCAL AND EXPORT SALE, INTE REST ON DEPOSIT ETC. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT WITH RESPECT TO NON DEDUCTION OF TDS ON THE CLAIMED EXPENSES IN ITS PROFIT AND LOSS ACCOUNT, CAPITALIZATION OF AMOUNT PAID TOWARD DEVEL OPMENT AGREEMENT, WORK IN PROGRESS, TAXABILITY OF INTEREST ON PROJECT ADVANCES UNDER THE HEAD INCOME FROM OTHER SOURCES ETC. ASSES SING THE TAXABLE INCOME AT RS.1,80,05,214/-. THE ASSESSING OFFICER T HEREAFTER IMPOSED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. HOWEV ER, THE APPEAL ON QUANTUM ADDITION WAS DECIDED IN FAVOUR OF THE ASSES SEE DELETING THE ALLEGED ADDITION. THE LD. COMMISSIONER OF INCOME T AX (APPEALS) DELETED THE PENALTY ON THE GROUND THAT SINCE THE TR IBUNAL HAS DELETED THE ADDITION, THEREFORE, THE PENALTY SO IMPOSED U/S 271(1)(C) OF THE ACT CANNOT SURVIVE AGAINST WHICH THE REVENUE IS AGGRIEV ED AND IS IN APPEAL BEFORE THIS TRIBUNAL. THE SUM AND SUBSTANCE OF THE ARGUMENTS ADVANCED BY THE LD. DR IS THAT THE DEPART MENT HAS FILED APPEAL U/S 260A OF THE ACT BEFORE THE HONBLE HIGH COURT. WE ARE REPRODUCING HEREUNDER THE RELEVANT CONCLUDING PORTI ON FROM THE IMPUGNED ORDER: 3 M/S FOBEOZ INDIA PVT. LTD. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS OF THE APPELLANT AND PENALTY ORDER. TH ERE ARE TWO ISSUES ON WHICH PENALTY IS LEVIED. THE FIRST I SSUE IS AN ADDITION MADE OF RS.1,77,98,081 ON ACCOUNT OF ACCRU AL OF INTEREST ON ADVANCE GIVEN TO M/S KUBER DEVELOPERS. THE HONBLE ITAT HAS DELETED THIS ADDITION IN PARA 12 O F THE ORDER AND HAS HELD INTERALIA THAT THE INCOME ON NOTIONAL BASIS CANNOT BE BROUGHT TO TAX. SINCE, THE QUANTUM ADDIT ION HAS BEEN DELETED BY HONBLE ITAT, MUMBAI, THE PENALTY L EVIED ON THIS GROUND ALSO IS DELETED. 2.2. THERE IS NO DISPUTE THAT QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL, THEREFORE, IN OUR HUMBLE OPINION, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED IN REACHING TO A PARTICULAR CONCLUSION. OUR VIEW FURTHER FINDS SUPPORT FROM TH E DECISION AND THE RATIO LAID DOWN IN CIT VS S.P VIZ CONSTRUCTION COMP ANY 176 ITR 47 (PATNA) AND K.C. BUILDERS VS ACIT 265 ITR 562 (SUPR EME COURT). WE ARE OF THE VIEW WHERE THE PENALTY FOR CONCEALMENT O R FURNISHING INACCURATE PARTICULARS WAS LEVIED AND AFTER DELETIN G THE QUANTUM ADDITION, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY. ORDINARILY, PENALTY CANNOT STAND IN ITSELF IF THE A DDITION MADE IN THE ASSESSMENT ITSELF IS SET ASIDE OR CANCELLED BY THE SUPERIOR AUTHORITY/COURT. THE PENALTY CANNOT STAND BY ITSEL F BECAUSE FALSE RESULT MAY BE PRODUCED BY THE FALSITY OF ONE OR MOR E OF THE CONSTITUENT ITEMS IN THE RETURN. THE WORD INACCURATE PARTICUL ARS WOULD COVER FALSITY IN THE FINAL FIGURE AND ALSO THE CONSTITUEN T ELEMENTS OR ITEMS. THEY SIMPLY WOULD MEAN INACCURATE IN SOME SPECIFIC OR DEFINITE RESPECT WHETHER IN THE CONSTITUENT OR SUBORDINATE I TEMS OF INCOME OR THE END RESULT. CONCEALMENT OR FURNISHING INACCURA TE PARTICULARS IMPLIES SOME DELIBERATE ACT ON THE PART OF THE ASSE SSEE IN WITHHOLDING 4 M/S FOBEOZ INDIA PVT. LTD. THE TRUE FACTS FROM THE AUTHORITIES. SINCE, THE BA SIS OF LEVYING PENALTY REMAINS NO MORE IN EXISTENCE, AFTER DELETION OF QUA NTUM ADDITION, THEREFORE, FROM THIS ANGLE THE STAND OF THE LD. COM MISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED. 2.3. SO FAR AS, THE CONTENTION OF THE LD. DR THAT A PPEAL U/S 260A OF THE ACT HAS BEEN FILED BEFORE THE HONBLE HIGH COUR T AGAINST THE DELETION OF QUANTUM ADDITION BY THE TRIBUNAL, IS CO NCERNED, NO ORDER HAS BEEN PRODUCED BEFORE US REVERSING/STAYING THE O RDER OF THE TRIBUNAL, THEREFORE, AS ON TODAY, THE ORDER OF THE TRIBUNAL STANDS, CONSEQUENTLY, MERE FILING OF APPEAL IS NOT ENOUGH. HOWEVER, IF AT ANY STAGE, THE ORDER OF THE TRIBUNAL IS REVERSED, THE C ONSEQUENCES MAY FOLLOW AND THE DEPARTMENT IS FREE TO TAKE THE LEGAL RECOURSE. THEREFORE, WE FIND NO FORCE IN THE ARGUMENT OF THE LD. DR FROM THIS ANGLE ALSO. 3. FINALLY, WE FIND NO INFIRMITY IN THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), CONSEQUENTLY, THE APPEAL O F THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED, IN THE OPEN COURT, IN TH E PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING, ON 27 TH NOVEMBER, 2014. SD/- SD/- (SANJAY ARORA) ( JOGINDER SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER ! +# MUMBAI; ,' DATED.- 28/11/2014 F{X~{T? P.S/. ' . . 5 M/S FOBEOZ INDIA PVT. LTD. !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. / THE RESPONDENT. 3. ! /$ ( -. ) / THE CIT(A)- CONCERNED, MUMBAI 4. ! /$ / CIT CONCERNED, MUMBAI 5. 01 $'2 , -.% -2( , ! +# / DR, ITAT, MUMBAI E BENCH 6. 34 5# / GUARD FILE. & / BY ORDER, 0.$ $ //TRUE COPY// ' / &( ) (DY./ASSTT. REGISTRAR) , ! +# / ITAT, MUMBAI.