DCIT 14(3)(2), MUMBAI V. SONU REALTORS P.LTD, MUMBAI

ITA 4556/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2548 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 115JB; 263

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4556/MUM/2015 ASSESSMENT YEAR: 2008-09 D C I T - 14(3)(1) ROOM NO., 455, 4 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 40002 / VS. M/S. SONU REALTORS P. LTD. NO.219, LAALASIS, 11 TH ROAD CHEMBUR, MUMBAI 400071 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AAACS7073C / REVENUE BY SHRI KAILASH KANOJIYA !'# $ / ASSESSEE BY SHRI J.P. BAIRAGRA % & $ ' / DATE OF HEARING : 18/07/2016 & $ ' / DATE OF ORDER: 20/07/2016 ITA NO. 4556/MUM/2015 M/S. SONU REALTORS P. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 27/05/2015 OF LD. COMMISSIONER OF INCOME TAX, MUMBAI DELETING PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AMOUNTIN G TO RS.1,63,71,320/- WITHOUT APPRECIATING THAT THE ASSE SSEE HAS TAX LIABILITY UNDER SECTION 115JB, HOWEVER, IT HAS OFFERED TAX UNDER NORMAL PROVISIONS OF THE ACT AND, THEREFORE, HAD FURNISHED INACCURATE PARTICULARS TO EVADE TAX RELYING UPON THE DECISION IN CIT VS. NALWA SONS INVESTMENT LTD. 327 ITR 543 (DEL). 2. DURING HEARING THE LEARNED D.R. SHRI KAILASH KANOJYIA ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI J.P. BAIRAGR A, LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE CONCL USION ARRIVED AT IN THE IMPUGNED ORDER. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE REL EVANT PORTION FROM THE CONCLUSION DRAWN IN THE IMPUGNED O RDER BY THE LEARNED FIRST APPELLATE AUTHORITY FOR READY REFERENCE AND ANALYSIS: - 23. I HAVE CONSIDERED APPELLANTS SUBMISSIONS. IN THIS CASE THOUGH TAX IS LEVIED U/S. 115JB WHILE FILING T HE RETURN OF INCOME APPELLANT HAD FAILED TO COMPUTE TAX U/S.115J B. LATER CIT REVISED THE ASSESSMENT U/S.263 AND A.O. HAD LEV IED TAX U/S. 115J3 WHICH APPELLANT HAD PAID. HOWEVER, A.O. HAD LEVIED PENALTY U/S.271(1)(C) FOR NOT PAYING THE TAX U/S. 115JB ITA NO. 4556/MUM/2015 M/S. SONU REALTORS P. LTD. 3 ON THE GROUND THAT APPELLANT HAD FILED INACCURATE P ARTICULARS OF INCOME. HERE THE ISSUE TO BE CONSIDERED IS WHETH ER THE PENALTY CAN BE LEVIED U/S. 271(1)(C) IF THE INCOME IS CALCULATED ON THE DEEMED INCOME U/S. 115JB. THIS IS SUE WAS CONSIDERED BY DELHI HIGH COURT IN THE CASE OF CIT V S NALWA SONS INVESTMENTS LTD. 327 ITR 543 WHEREIN IT IS HEL D AS UNDER: 'NO DOUBT THERE WAS CONCEALMENT BUT THAT HAD ITS REPERCUSSIONS ONLY WHEN THE ASSESSMENT WAS DONE UND ER THE NORMAL PROCEDURE. THE ASSESSMENT AS PER THE NOR MAL PROCEDURE WAS, HOWEVER, NOT ACTED UPON. ON THE CONT RARY, IT IS DEEMED INCOME ASSESSED UNDER SECTION 115JB OF THE ACT WHICH HAS BECOME THE BASIS OF ASSESSMENT AS IT WAS HIGHER OF THE TWO. TAX IS THUS PAID ON THE INCOME A SSESSED UNDER SECTION 115JB OF THE ACT. HENCE WHEN THE COMPUTATION WAS MADE UNDER SECTION 115JB OF THE ACT , THE AFORESAID CONCEALMENT HAD NO ROLE TO PLAY AND WAS T OTALLY IRRELEVANT. THEREFORE, THE CONCEALMENT DID NOT LEAD TO TAX EVASION AT ALL.' THE SLP FILED AGAINST THE ORDER WAS REJECTED BY HON 'BLE SUPREME COURT AS REPORTED IN 194 TAXMAN 387. ON PER USAL OF THE HON'BLE HIGH COURT AND SUPREME COURT ORDERS IT IS CLEAR THAT PENALTY CANNOT BE LEVIED U/S. 271(1)(C) IF THE INCOME IS COMPUTED U/S. 115JB. FOLLOWING THE ABOVE DECISIONS OF HON'BLE HIGH COURT AND SUPREME COURT O RDERS, PENALTY LEVIED U/S. 271(1)(C) IS CANCELLED. THESE G ROUNDS OF APPEAL ARE ALLOWED. 2.2 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER , LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN CONSTRUCTION BUSINESS DECLAR ED INCOME OF RS.51,34,740/-, AFTER CLAIMING ADDITION O F RS.13,72,33,540/- UNDER SECTION 80IB(10) OF THE ACT . THEREAFTER THE LEARNED CIT INVOKED REVISIONAL JURIS DICTION UNDER SECTION 263 OF THE ACT HOLDING THAT ASSESSEE IS TAXABLE UNDER SECTION 115JB OF THE ACT. THE LEARNED ASSESSING OFFICER FRAMED ASSESSMENT UNDER SECTION 1 43(3) ITA NO. 4556/MUM/2015 M/S. SONU REALTORS P. LTD. 4 R.W.S. 263 AND ASSESSED THE INCOME UNDER SECTION 11 5JB AND ACCORDINGLY THE ASSESSEE PAID TAX. LATER ON THE LEARNED ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271( 1)(C) OF THE ACT ON THE BASIS THAT THE ASSESSEE FURNISHED IN ACCURATE PARTICULARS OF INCOME. 2.3 ON APPEAL BEFORE THE LEARNED CIT(A) THE WRITTEN SUBMISSION OF THE ASSESSEE WERE CONSIDERED IN WHICH BROADLY THE DECISION IN NALWA SONS INVESTMENTS LTD. (SUPRA) WAS CONSIDERED. THE PENALTY WAS DELETED. THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. 2.4 IN VIEW OF THE ABOVE, CONSIDERING THE DECISION IN CIT VS. NALWA SONS INVESTMENTS LTD. AT THE SLP AGAINST THE DECISION WAS REJECTED BY HON'BLE APEX COURT IN 194 TAXMAN 38 7 (SC) AND THE FACTS AVAILABLE ON RECORD THERE IS NO DISPU TE TO THE FACT THAT THE ASSESSMENT AS PER NORMAL PROCEDURE WAS NOT ACTED UPON AND ONLY THE DEEMED INCOME ASSESSED UNDER SECT ION 115JB BECAME THE BASIS OF ASSESSMENT AS IT WAS HIGH ER OF THE TWO. IN THE CASE OF NALWA SONS INVESTMENT LTD. IT W AS HELD THAT WHEN THE TAX WAS CALCULATED ON THE DEEMED INCO ME UNDER SECTION 115JB. THE REVENUE IS NOT TO IMPOSE PENALTY . SINCE THE TAX HAS BEEN PAID BY THE ASSESSEE UNDER SECTION 115JB, THEREFORE, NOT PENALTY COULD BE LEVIED IN RESPECT O F ADDITIONS/DISALLOWANCES MADE BY THE ASSESSING OFFIC ER. RESPECTFULLY FOLLOWING THE DECISION FROM THE HON'BL E HIGH COURT WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LEARNED CIT(A). RESULTANTLY THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO. 4556/MUM/2015 M/S. SONU REALTORS P. LTD. 5 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 18/07/2016. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ) DATED : 20/07/2016 AA P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1 1 2$ ( +, ) / THE CIT-14, MUMBAI. 4. 1 1 2$ / CIT(A)-22, MUMBAI 5. 45 /$ ! , 1 +,' +! 6 , % / DR, ITAT, MUMBAI 6. 7' 8% / GUARD FILE. / BY ORDER, 04,$ /$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI