ASST CIT 8(1)(2), MUMBAI V. QUEST INVESTMENT ADVISORS P.LTD, MUMBAI

ITA 535/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1724 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY R SINGH
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.535/M/2015 ASSESSMENT YEAR: 2008-09 ASST. COMMISSIONER OF INCOME TAX-8(1)(2), ROOM NO.624, M.K. ROAD, MUMBAI - 400020 VS. M/S. QUEST INVESTMENT ADVISORS P. LTD., 188/3, GURUKRIPA BUILDING, NEXT TO JAIN TEMPLE, JAIN SOCIETY, SION (W), MUMBAI - 22 PAN: AAACQ 0371R (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI AJAY R. SINGH, A.R. REVENUE BY : SHRI VACHASPATI TRIPATHI, D.R. DATE OF HEARING : 06.10.2016 DATE OF PRONOUNCEMENT : 09.12.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 13.11.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2008-09. 2. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE LD . CIT(A) IN DELETING THE PENALTY OF RS.29,92,860/- IMPOSED BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) UNDER SECTION 271(1)(C) OF T HE INCOME TAX ACT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT ASSESSEES INCOME UNDER THE HEAD CAPITAL GAINS WAS SUBSTANTIALLY HIGHER THAN THE INCOME FRO M PROFESSIONAL RECEIPTS. THE AO OBSERVED THAT CERTAIN EXPENDITURE WHICH THE ASSESSEE HAD CLAIMED AS ITA NO.535/M/2015 M/S. QUEST INVESTMENT ADVISORS P. LTD. 2 BUSINESS EXPENDITURE WAS IN FACT ATTRIBUTABLE TO TH E EARNING OF CAPITAL GAINS. HE, THEREFORE, PROPORTIONATELY DISALLOWED A SUM OF RS.88,05,120/- BEING THE EXPENSES ATTRIBUTABLE TO THE EARNING OF SHORT TERM CAPITAL GAINS. HE ALSO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN RESPE CT OF THE ABOVE DISALLOWANCE WHICH WAS COMPUTED AT RS.29,92,860/- BEING 100% OF THE TAX AMOUNT SOUGHT TO BE EVADED. 4. IN APPEAL, THE LD. CIT(A) DELETED THE PENALTY SO LEVIED BY THE AO OBSERVING THAT THE CASE OF THE ASSESSEE WAS NOT A C ASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. 5. BEFORE US, THE LD. A.R. AT THE OUTSET, HAS INVIT ED OUR ATTENTION TO THE COMMON ORDER OF THE TRIBUNAL DATED 20.05.15 PASSED IN ITA NO.5685/M/2010 AND ITA NO.866/M/2010 PERTAINING TO ASSESSMENT YEAR S 2007-08 AND 2008-09 RESPECTIVELY. THE LD. A.R. HAS FURTHER STATED THAT THE IMPUGNED DISALLOWANCE MADE BY THE AO IN RELATION TO THE NOTIONALLY ALLOCA TED EXPENSES TO THE CAPITAL GAINS HAS BEEN DELETED BY THE TRIBUNAL. WE HAVE PE RUSED THE PARA 13 OF THE SAID ORDER OF THE TRIBUNAL DATED 20.05.15 (SUPRA). THE ADDITION/DISALLOWANCE MADE BY THE AO WHICH WAS THE BASIS FOR THE LEVY OF THE IMPUGNED PENALTY UNDER SECTION 271(1)(C) OF THE ACT HAS ALREADY BEEN DELETED BY THE TRIBUNAL. SINCE THE VERY BASIS UPON WHICH THE PENALTY HAS BEE N LEVIED HAS CEASED TO EXIST, HENCE THERE ARE NO LEGS FOR THE IMPUGNED PEN ALTY TO STAND. THE IMPUGNED PENALTY IS THEREFORE ORDERED TO BE DELETED . 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS HERE BY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.12.2016. SD/- SD/- (ASHWANI TANEJA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 09.12.2016. * KISHORE, SR. P.S. ITA NO.535/M/2015 M/S. QUEST INVESTMENT ADVISORS P. LTD. 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.