PANKAJ INVESTMENTS, MUMBAI V. DCIT 16(3), MUMBAI

ITA 4690/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0266 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT & SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 4690/MUM/2013 ASSESSMENT YEAR : 2005 2006 M/S PANKAJ INVESTMENTS 401 RAINBOW CHAMBERS, S V ROAD, NEAR MTNL, KANDIVALI (W) MUMBAI 400 067 PAN AAAFP2940G VS. DCIT 16(3) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI RAJAT MITTAL DATE OF HEARING : 08. 08 .2017 DATE OF PRONOUNCEMENT : 09. 0 8 .2017 O R D E R PER P K BANSAL, VICE-PRESIDENT: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE U/S. 253 OF THE INCOME TAX ACT AND IS DIRECTED AGAINST THE ORDER OF THE CIT(A) 28, MUMBAI DATED 18.03.2013 FOR A.Y. 2005-06. THOUGH THE ASSESSEE H AS RAISED AS MANY AS 10 GROUNDS OF APPEAL, IN OUR VIEW THE ONLY SUBSTANTIAL GROUND IS WHETHER THE CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME TAX ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI RM IS ENGAGED IN THE BUSINESS OF INVESTMENT IN SHARES AND SECURITIES. F OR THE RELEVANT YEAR UNDER ITA NO.4690/MUM/ 2013 M/S PANKAJ INVESTMENTS 2 CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INC OME ON 31.10.2005, DECLARING INCOME AT NIL. THE ASSESSMENT WAS COMP LETED U/S. 143(3) ON 31.12.2007. THE ASSESSING OFFICER WHILE PASSING AS SESSMENT ORDER, BESIDES OTHER ADDITIONS/DISALLOWANCES, DISALLOWED INTEREST EXPENSES OF ` 4,11,024/-; INTEREST PAID ON BORROWINGS UTILIZED FOR INVESTMENT IN GROUP COMPANIES ` 26,54,257/-; AND INTEREST ON DEBIT BALANCE IN PART NERS CAPITAL ACCOUNT ` 1,84,06,951/-. ON APPEAL, THE CIT(A) VIDE HIS ORD ER DATED 18.02.2009, CONFIRMED THE ADDITIONS ON ACCOUNT ON INTEREST EXPE NSES. AFTER DISMISSAL OF THE APPEAL, AND REJECTION OF THE REPLIES BY THE ASS ESSEE, THE ASSESSING OFFICER VIDE ORDER DATED 24.03.2010 IMPOSED PENALTY U/S. 271(1)(C) @100% OF TAX SOUGHT TO BE EVADED AMOUNTING TO ` 78,57,226/-. ON APPEAL, THE CIT(A) GAVE PARTIAL RELIEF TO THE ASSESSEE BY DELET ING THE PENALTY IN RESPECT OF ADDITION AMOUNTING TO ` .26,54,257/- BEING INTEREST ON DEBIT BALANCE IN PARTNERS CAPITAL ACCOUNT. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WHEN THE MATTER CAME UP FOR HEARING ON 08.08.201 7, NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPITE REPEATED CALL AN D PASS OVER. WE, THEREFORE, PROCEED TO DISPOSE OF THE APPEAL EX PART E, AFTER HEARING THE LEARNED DR AND ON THE BASIS OF THE MATERIAL AVAILAB LE ON RECORD. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE FURTHER ARGUED THAT THE ASSESSEES APPEAL IN QUANTUM ASSESSMENT WAS DISMISS ED BY THE CIT(A) AS ITA NO.4690/MUM/ 2013 M/S PANKAJ INVESTMENTS 3 WELL AS BY THE TRIBUNAL IN RESPECT OF THE ADDITIONS ON WHICH PENALTY WAS LEVIED. THE LEARNED DR FOR THE REVENUE PRAYED FOR DISMISSAL OF THE APPEAL. 4. WE FIND THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER INITIATED PENALTY FOR INACCURATE PARTICULARS OF INC OME (INTEREST). HOWEVER, WHILE LEVYING PENALTY, THE ASSESSING OFFICER HAS NO T SPECIFIED UNDER WHICH LIMB OF CLAUSE (C) TO SUBSECTION (1) OF SECTION 271 , THE PENALTY IS LEVIED. EVEN OTHERWISE, WE HAVE NOTED THAT THE VARIOUS CLAI M OF INTERST EXPENSES WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE ASSES SING OFFICER MADE THE DISALLOWANCES. IT IS WELL SETTLED LAW THAT MERE DI SALLOWANCE OF CLAIM UNDER ESTIMATION WOULD NOT ATTRACT PENALTY. HENCE, WE A RE OF THE VIEW THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRM ED BY THE CIT(A) IS NOT SUSTAINABLE AND, THEREFORE, THE SAME ARE DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH DAY OF AUGUST, 2017. SD/- SD/- (PAWAN SINGH) (P K BANSAL) JUDICIAL MEMBER VICE-PRESIDENT MUMBAI; DATED: 9 TH AUGUST, 2017 SA ITA NO.4690/MUM/ 2013 M/S PANKAJ INVESTMENTS 4 COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, C BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI