ACIT CIR 4(2), MUMBAI V. INDIA CAPITAL MARKETS P.LTD ( FORMELRY KNOWN AS NICHE BROKERAGE P. LTD), MUMBAI

ITA 4877/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8887 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 05-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINAY SETHY
• Keywords: Deemed dividend

Judgement Text

, IN THE INCOME TAX APPELLA TE TRIBUNAL I BENCH, MUMBAI , . . , . . BEFORE SHRI RAJENDRA SINGH, AM & SHRI VIJAYPAL RAO, JM ./ ITA NOS.4877/MUM/2011 ( / ASSESSMENT YEARS:2005-06 ) ACIT CIR. 4(2), MUMBAI-400 020 VS. INDIA CAPITAL MARKETS P. LTD. (FORMERLY KNOWN AS NICHE BROKERAGE P. LTD.) INDIA CAPITAL HOUSE, OFF DATTAPADA RD., BORIVALI (E), MUMBAI-400 066. ./ ./PAN NO. AABCN 0802 B ( /APPELLANT ) : ( / RESPONDENT ) REVENUE BY : MR. CHANDRAJIT SINGH / ASSESSEE BY : MR. VINAY SETHY / DATE OF HEARING : 5 TH SEPT., 2012 / DATE OF PRONOUNCEMENT : 12 TH SEPT, 2012 / O R D E R PER VIJAY PAL RAO (J.M.) : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 13-4-2011 OF CIT(A)-8, MUMBAI ARISING FROM PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE I.T. AC T FOR THE ASSESSMENT YEAR 2005- 06 ON THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DE LETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF ` .12,80,738/- ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(2)(E) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW TO BE SET ASIDE AND THAT OF THE ASSE SSING OFFICER BE RESTORED. ITA NO :4877/11 2 2. WE HAVE HEARD THE LEARNED DR AS WELL AS LEARNED AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. LEARNED AR OF THE ASSESSEE HAS POINTED OUT T HAT THE ADDITION AGAINST WHICH THE PENALTY WAS LEVIED UNDER SECTION 271(1)(C) HAS ALREADY BEEN DELETED BY THIS TRIBUNAL IN QUANTUM APPEAL. HE HAS REFERRED TO THE IMPUGNED ORDER OF CIT(A) AND SUBMITTED THAT THE CIT(A) HAS DELETED THE PENALTY ON THE GROUND THAT THE ADDITION HAS ALREADY BEEN DELETED BY THIS TRIBUNAL. LEARNED DR HAS NOT DISPUTED THE FACT OF DELETING THE ADDITION BY THIS TRIBUNAL, HOWEVER, HE HAS PLEADED THAT SINCE THE REVENUE HAS NOT ACCEPTED THE ORDER OF THIS TRIBUNAL, THEREFORE, THE APPEAL AGAINST DELETION OF PENALTY HAS BEEN PREFERRED. 3. HAVING CONSIDERED THE RIVAL SUBM ISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, AT THE OUTSET, WE NOTE THAT IN THE QUANTUM OF APPEAL I.E. ITA NOS.949 & 1496/M/2009, VIDE ORDER DATED 30-7-2010, THIS TRIBUNAL HAS DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND OF ` .35,00,000/-. THE CIT(A) HAS DELETED THE PENALTY ON THE BASIS OF OR DER OF THIS TRIBUNAL IN QUANTUM APPEAL IN PARA 1.1, WHICH IS AS UNDER :- 1.1 FROM THE ORDER OF THE HON BLE ITAT (SUPRA), COPY OF WHICH HAS BEEN FURNISHED BY THE APPELLANT UNDER COVER OF ITS LETTER DATED 5 TH APRIL, 2011, I FIND THAT THE ADDITION OF ` .35 LAKHS SUSTAINED BY THE CIT(A) HAD BEEN DELETED HOLDING THAT DEEMED DIVIDEND U/S 2(22)(E) CANNOT BE TAKEN IN THE HANDS OF THE ASSESSEE. THUS, THE ADDITION IN RESPECT OF WHICH THE PENALTY OF ` .12,80,738/- HAD BEEN LEVIED U/S 271(1)(C) HAD BEEN DELETED BY THE HONBLE ITAT. THE PENALTY LEVIED, THEREFORE, CANNOT SURVIVE. THE LEVY OF PENALTY U/S 271(1)(C) OF ` .12,80,738/- IS, THEREFORE, CANC ELLED. THE APPEAL IS ALLOWED. ITA NO :4877/11 3 4. SINCE THE ADDITION AGAINST WHICH THE PENALTY HAS BEEN LEVIED UNDER SECTION 271(1)(C) HAS ALREADY BEEN DELETED BY THIS TRIBUNAL, THEREFORE, THE PENALTY WOULD NOT SUSTA IN. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) IN DELETING THE PENALTY. 5 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPT., 2012 . 12 TH SEPT.,2012 SD/- SD/- ( ) ( ) ( RAJENDRA SINGH) ( VIJAY PAL RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED 12 TH / SEPT. /2012 . . / PKM. . ./PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI