ACIT CIR 6(3)(1), MUMBAI V. IDEA INTERNATIONAL P. LTD, MUMBAI

ITA 4916/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2441 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 16-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER& SHRI AMARJIT SINGH, JUDICIAL MEMBER. ITA NO. 4916 /MUM/2015 (ASSESSMENT YEAR : 2006-07) THE ACIT, CIR.6(3)(1), ROOM NO.506, 5 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI - 400020 ... APPELLA NT VS. M/S. IDEA INTERNATIONAL PVT. LTD. 36/40, MAHALAXMI BRIDGE ARCADE, MAHALAXMI, MUMBAI 400 034. PAN:AABCI 1527J .... RESPONDENT APPELLANT BY : SHRI A.K.KARDAM RESPONDENT BY : SHRI HARIDAS BHATT DATE OF HEARING : 19/07/2016 DATE OF PRONOUNCEMENT : 22/07/2016 ORDER PER G.S.PANNU, A.M: THE CAPTIONED APPEAL FILED BY THE REVENUE PERTAININ G TO ASSESSMENT YEAR 2006-07 IS DIRECTED AGAINST AN ORD ER PASSED BY CIT(A)- 12, MUMBAI DATED 12/06/2015 WHICH IN TURN ARISES OU T OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30/03/201 4. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOL LOWING GROUND OF APPEAL:- 2 ITA NO. 4916 /MUM/2015 (ASSESSMENT YEAR : 2006-07) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE PENALTY ORDER UNDER SECTION 271(1)(C) ON DISALLOWANCE OF SHORT TERM CAPITAL GAIN ON SALE OF UNITS AND SHA RES TREATING AS BUSINESS INCOME WITHOUT APPRECIATING THE FACT THAT THE ORDER OF THE HONBLE ITAT QUASHING THE ASSESSMENT ORDER UNDER SECTION. 143(3 ) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. 3. THE BRIEF FACTS ARE THAT THE RESPONDENT ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, AND IS, INTER-ALIA, ENGAGED IN THE BUSINESS OF TRADING OF S OYA SEED, SOYA OIL AND SOYA DOC AND ALSO IN THE BUSINESS OF MANUFACTURING AND DISTRIBUTION OF VARIOUS COMMODITIES. IN THE ASSESSMENT FINALIZED U NDER SECTION 143(3) OF THE ACT DATED 8/12/2008. THE ASSESSING OFFICER TREATED THE GAIN DECLARED BY THE ASSESSEE ON SALE OF SHARES AS BUSIN ESS INCOME AS AGAINST SHORT TERM CAPITAL GAIN DECLARED BY THE ASSESSEE. SUBSEQUENTLY, THE ASSESSING OFFICER HELD THE ASSESSEE GUILTY OF FURNI SHING INACCURATE PARTICULARS OF SUCH INCOME WITHIN THE MEANING OF S ECTION 271(1)(C) OF THE ACT, THEREBY IMPOSING A PENALTY OF RS.17,44,338 /- . BY WAY OF THE IMPUGNED ORDER, THE CIT(A) HAS DELETED THE PENALTY ON THE GROUND THAT THE TRIBUNAL VIDE ITS ORDER IN ITA NO.2597/MUM/2011 DATED 26/6/2014 HAS QUASHED THE ASSESSMENT ORDER DATED 8/12/2008. AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 4. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT THE ORDER OF THE TRIBUNAL DATED 26/06/2014(SUPRA) CONT INUES TO HOLD THE FIELD AND, THEREFORE, NO ERROR CAN BE FOUND IN THE ORDER OF THE CIT(A) DELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C ) OF THE ACT AS THE ASSESSMENT ORDER GIVING RISE TO THE ADDITION ITSELF DOES NOT SURVIVE THUS, ON THIS ASPECT, THE ORDER OF THE CIT(A) IS A FFIRMED AND REVENUE FAIL IN ITS APPEAL. 3 ITA NO. 4916 /MUM/2015 (ASSESSMENT YEAR : 2006-07) 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/07/2016 SD/- SD/- (AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOU NTANT MEMBER MUMBAI, DATED 22/07/2016 VM , SR. 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. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI