SHREELEKHA NANDAN DAMANI, MUMBAI V. DCIT (OSD-I) CIR-7, MUMBAI

ITA 5005/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9859 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 08-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI R.C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5005 / MUM/ 20 15 ( / ASSESSMENT YEAR: 20 07 - 0 8 ) SHREELEKHA NANDAN DAMANI 11 DAMANI HOUSE, CUFFE PARADE, MUMBAI 400005 / VS. DCIT(OSD - 1) CIR - 7 AAYAKAR BHAVAN, M.K. MARG MUMBAI PIN:400020 ./ ./ PAN/GIR NO. : AECPD 7468 K ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 04 .0 7 .2017 / DATE OF PRONOUNCEMENT : 12.07 . 2017 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPE AL AGAINST THE ORDER DATED 07.07.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 52 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2007 - 08 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE HONBLE COMMISSIONER OF INCOME TAX - (APPEALS) - 52 MUMBAI ERRED IN UPHOLDING THE LEVY OF PENALTY U/S 271(1)(C). THE SUBSTANTIVE APPEAL ORDER U/S 143(3) HAS BEEN ANNULLED BY THE ITAT, MUMBAI VIDE ORDER DATED 19.08.2015 AND THE ASSESSEES APPEAL HAS BEEN ALLOWED. ASSESSEE BY : SHRI ANIL LOHIA REVENUE BY: SHRI RAM TIWARI, DR SHREELEKHA NANDAN DAMANI 2 2. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE. COMMIOSSIONER OF INCOME TAX - (APPEALS) - 52, MUMBAI ERRED IN UPHOLDING THE LEVY OF PENALTY U.S. 271(1) (C) WITH OUT CONSIDERING THE FACT THAT THE ADDITION WAS MADE ON A DEBATABLE ISSUE. NO PENALTY CAN BE LEVIED FOR ADDITIONS MADE ON SUCH DEBATABLE POINTS OF LAW. 3. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 4. YOUR APPELLANT CRAVES TO AD D, ALTER, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE A.Y. 2007.08. ASSESSING THE TOTAL INCOME TO THE TUNE OF RS.4,52,391/ - ON 28.07.2007. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 16.10.2010 AND ON SUBSEQUENT DATES ON SIMPLEX GROUP OF COMPANIES AND ITS ASSOCIATES. THE ASSESSMENT PROCEEDING WAS INITIATED BY ISSUANCE OF NOTICE U/S 153A OF THE I.T. ACT, 1961 . IN PURSUANCE OF NOTICE , THE ASS ESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF RS.1,04,26,373/ - . NOTICE U/S 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE . THE ASSESSEE HAS CLAIMED RENT PAID TO TOBACCOWALA AN AMOUNT OF RS. 60,23,2710/ - AND THE SAID RENT WAS CLAIMED AT BUSINESS EXPENDITURE. O N VERIFICATION , IT WAS FOUND THAT THE ASSESSEE WAS HAVING HER RESIDENTIAL PREMISES AT 11, DAMANI HOUSE CUF FE PARADE, MUMBAI . T HE SAID PLOT WAS SUBJECT TO THE REDEVELOPMENT. THEREFORE, ASSESSEE AND HER HUSBAND SHRI NANDAN DAMANI E NTERED INTO AN AGREEMENT DATED 31.08.2001 AND THE LAND WAS CONVERTED INTO STOCK - IN - TRADE THEREFORE THE OLD DAMANI HOUSE WAS DEMOLISHED F OR CONSTRUCTION OF NEW BUILDING. T HE ASSESSEE AND HER HUSBAND PAID SUM OF RS. 1,20,46,540/ - FOR ALTERNATE ACCOMMODATION. SINCE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEES SHARES TO THE TUNE OF RS. 60,23,270/ - WAS FOR HER OWN PERSONAL EXPENDITURE. THEREFORE, THE SHREELEKHA NANDAN DAMANI 3 EXPENSES WAS NOT LIABLE TO BE ALLOWED HENCE, THE AMOUNT TO THE TUNE OF RS.60.23.270/ - WAS ADDED TO T HE INCOME OF THE ASSESSEE . P ENALTY PROCEEDING WAS INITIATED AND PENALTY TO THE TUNE OF RS . 20 , 60 ,444 WAS LEVIED WHICH WAS CONFIRMED BY THE CIT(A) THEREFORE THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 & 2 : - 4 . WE HAVE HEARD THE ARGUMENT ADVAN CED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. TH E LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE HONBLE ITAT MUMBAI BENCHES HAS DELETED THE QUANTUM BY THE VIRTUE OF VIDE ORDER DATED 19.08.2015 IN ITA. NO. 4061/M/2012 THEREFOR E IN THE SAID CIRCUMSTANCES NO PENALTY IS LIABLE TO BE LEVIED. HOWEVER, ON THE OTHER HAND THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED SAID CONTENTION . O RDER DATED 19.08.2012 IN ITA. NO. 4061/M/2012 I N THE ASSESSEES OWN CASE FOR THE A.Y. 2007 - 08 PERUSED IN WHICH THE ASSESSMENT ORDER MADE U/S 143(3 ) OF THE REA D WITH S ECTION 153A HAS BEEN ANNULLED . SINCE, THE VERY BASE TO IMPOSE THE PENALTY HAS BEEN DELETED BY THE HONBLE ITAT MUMBAI BENCHES IN ITA.NO.4061/M/2012 DATED 19.08.2012 ASSESSEES OWN C ASE THEREFORE IN THE SAID CIRCUMSTANCES THE PENALTY IS NOT LIABLE TO BE SUSTAINABLE IN VIEW OF EYE OF LAW. HENCE, WE DELETE THE PENALTY AND ALLO WED THE APPEAL OF THE ASSESSEE . 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOW ED . SHREELEKHA NANDAN DAMANI 4 ORDER PRONOUNCED IN THE OPEN COURT ON 12.07. 2017 . SD/ - SD/ - ( R.C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 12.07. 2017 V.P. SINGH / 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, //T RUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI