ANGEL BROKING LIMITED (FORMERLY KNOWN AS ANGEL COMMODITIES BROKING PRIVATE LIMITED SINCE MERGED WITH ANGEL BROKING PRIVATE LIMITED), MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 8(3), MUMBAI

ITA 4803/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0854 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALDLD
• Assessee Lawyers: ADITYA MAHESHWARI LD
• Section: 271(1)(c); 143(3)

Judgement Text

1 ITA NO.4803/MUM/2018 ANGEL BROKING LIMITED ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.4803/MUM/2018 ( / ASSESSMENT YEAR: 2009-10) ANGEL BROKING LIMITED [FORMERLY KNOWN AS ANGEL COMMODITIES BROKING PRIVATE LIMITED SINCE MERGED WITH ANGEL BROKING PRIVATE LIMITED] G-1, AKRUTI TRADE CENTRE, ROAD NO.7 MIDC, ANDHERI(E), MUMBAI-400 093. / VS. D CIT - CENTRAL CIRCLE - 8(3) ROOM NO.659, 6 TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ./ ./PAN/GIR NO. AAACK-3472-D ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI ADITYA MAHESHWARI - LD.AR / RESPONDENT BY : SHRI S. MICHAEL JERALD - LD. DR / DATE OF HEARING : 19/12/2019 / DATE OF PRONOUNCEMENT : 19/12/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. IN THE AFORESAID APPEAL FOR ASSESSMENT YEAR (AY) 2009-10, THE ASSESSEE IS AGGRIEVED BY CONFIRMATION OF PENALTY OF RS.2.85 LACS U/S 271(1)(C) BY LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-50, MUMBAI [IN 2 ITA NO.4803/MUM/2018 ANGEL BROKING LIMITED ASSESSMENT YEAR-2009-10 SHORT REFERRED TO AS CIT(A)] VIDE APPEAL NO. CIT( A)-50/IT-10636/15-16 ORDER DATED 05/06/2018. 2. THE ERSTWHILE ASSESSEE NAMELY ANGEL COMMODITIES BROKING PRIVATE LTD. HAS BEEN MERGED WITH ANOTHER ENTITY I.E. ANGEL BROKING PRIVATE LIMITED. ACCORDINGLY, FORM NO. 36 HAS BEEN FILED IN THE NAME OF NEW ENTITY. FINDING THE SAME IN ORDER, WE PROCEED TO DISPOSE-OFF THE AP PEAL AS ARGUED BEFORE US. 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AS WELL AS MATERIAL ON RECORD AND DELIBERATED ON JUDICIAL PRONOUNCEMENT S AS CITED BEFORE US DURING THE HEARING OF THE APPEAL. OUR ADJUDICATION ON THE APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4.1 FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT THE ERSTWHILE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE STATED TO BE ENGA GED IN THE BUSINESS OF COMMODITIES BROKING WAS ASSESSED FOR YEAR UNDER CON SIDERATION U/S. 143(3) ON 13/12/2011 WHEREIN THE ASSESSEE WAS SADDLED WITH CERTAIN DISALLOWANCES / ADDITION. THE ASSESSEE CONTESTED TH E SAME UP-TO THE LEVEL OF THIS TRIBUNAL VIDE ITA NO. 3994/MUM/2013 ORDER D ATED 23/10/2013, WHEREIN THE MATTER OF CERTAIN DISALLOWANCES WAS RES TORED BACK TO THE FILE OF LD. AO FOR RECONSIDERATION. ONE OF SUCH DISALLOWANC ES, AS RESTORED BACK TO THE FILE OF LD. AO WAS ON ACCOUNT OF SUNDRY COLLECTIONS FROM CLIENTS ACCOUNT FOR RS.17.65 LACS. 4.2 PURSUANT TO THE SAID DIRECTIONS, LD. AO, IN THE SET-ASIDE PROCEEDINGS, VIDE ORDER U/S 254 R.W.S. 143(3) DATED 30/03/2015, RECONSIDERED ASSESSEES CLAIM. SINCE THE ASSESSEE COULD SUBMIT RECONCILIATI ON ONLY TO THE EXTENT OF 3 ITA NO.4803/MUM/2018 ANGEL BROKING LIMITED ASSESSMENT YEAR-2009-10 RS.9.25 LACS, THE BALANCE AMOUNT I.E. RS.8.40 LACS WAS RETAINED AS DISALLOWANCE. CONSEQUENTLY, PENALTY PROCEEDINGS WER E INITIATED AGAINST THE ASSESSEE, AGAINST THIS DISALLOWANCE, FOR FILING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. 4.3 DURING PENALTY PROCEEDINGS, THE ASSESSEE, INTER-ALIA, SUBMITTED THAT OUT OF DISALLOWANCE FINALLY SUSTAINED BY LD. AO, AN AMOUNT OF RS.5.32 LACS WAS ALREADY BEEN WRITTEN BACK IN AY 2010-11 & OFFER ED TO TAX AND THEREFORE, THE DISALLOWANCE TO THAT EXTENT COULD NO T BE SUSTAINED AND THE PENALTY WOULD NOT BE JUSTIFIED. HOWEVER, NOT CONVIN CED, LD. AO INVOKING EXPLANATION-1 TO SECTION 271(1)(C) CONCLUDED THAT T HE ASSESSEE CONCEALED THE PARTICULARS OF INCOME AND ACCORDINGLY, LEVIED I MPUGNED PENALTY OF RS.2.85 LACS VIDE PENALTY ORDER DATED 29/09/2015. 4.4 ALTHOUGH THE ASSESSEE CONTESTED THE IMPOSITION OF PENALTY BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 05/06/2018, HOWEVE R, NOT CONVINCED, LD. FIRST APPELLATE AUTHORITY CONFIRMED THE SAID PENALT Y. AGGRIEVED, THE ASSESSEE IS UNDER FURTHER APPEAL BEFORE US. 5. AFTER CAREFUL CONSIDERATION OF FACTUAL MATRIX, W E FIND THAT THE ASSESSEE HAD ALREADY WRITTEN BACK AN AMOUNT OF RS.5.23 LACS IN AY 2010-11 BY WAY OF REDUCTION OF MISCELLANEOUS EXPENSES. IN OTHER WO RDS, THE AMOUNT TO THAT EXTENT WAS ALREADY OFFERED TO TAX IN AY 2010-11, WH ICH EVENT TOOK PLACE MUCH BEFORE THE COMPLETION OF ASSESSMENT PROCEEDING S FOR YEAR UNDER CONSIDERATION. SECONDLY, THE MATERIAL ON RECORD WOU LD SHOW THAT THE ASSESSEE WAS DEALING WITH LARGE NUMBER OF CLIENTS A ND AT THE FIRST STAGE, CHEQUES RECEIVED FROM CUSTOMERS WERE CREDITED TO SUNDRY COLLECTIONS FROM 4 ITA NO.4803/MUM/2018 ANGEL BROKING LIMITED ASSESSMENT YEAR-2009-10 CLIENTS ACCOUNT AND SUBSEQUENTLY WHEN THE CUSTOMERS WERE IDENTIFIE D, THE NECESSARY RECTIFICATION ENTRIES WOULD BE PASSED. TH E ASSESSEE WAS ABLE TO RECONCILE THE AMOUNT TO THE EXTENT OF RS.9.25 LACS OUT OF TOTAL OUTSTANDING OF RS.17.65 LACS. BUT, NEVERTHELESS, THE ISSUE WOUL D BE MATTER OF RECONCILIATION ONLY AND BY ACCEPTING THE DISALLOWAN CE OF THE SAID AMOUNT, IT COULD NOT BE SAID THAT THE ASSESSEE FURNISHED INACC URATE PARTICULARS OF INCOME OR CONCEALED ITS INCOME SO AS TO ATTRACT PEN ALTY U/S 271(1)(C). FOR THE SAME, STRENGTH COULD BE DRAWN FROM THE DECISION OF HONBLE SUPREME COURT RENDERED IN CIT V/S RELIANCE PETROPRODUCTS LTD. (322 ITR 158) WHEREIN IT WAS HELD THAT MERELY BECAUSE ADDITIONS W ERE MADE, PENALTY COULD NOT BE IMPOSED. IN OUR CONSIDERED OPINION, TH E EXPLANATION FURNISHED BY THE ASSESSEE WAS PLAUSIBLE ONE AND KEEPING IN VI EW THE FACTUAL MATRIX, WE DO NOT FIND IT A FIT CASE FOR IMPOSITION OF PENA LTY. HENCE, BY DELETING THE SAME, WE ALLOW ASSESSEES APPEAL. 6. IN THE RESULT, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2019. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 19/12/2019 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT 5 ITA NO.4803/MUM/2018 ANGEL BROKING LIMITED ASSESSMENT YEAR-2009-10 3. $ ( ) / THE CIT(A) 4. $ / CIT CONCERNED 5. %& ''( , ( , / DR, ITAT, MUMBAI 6. &*+, / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.