M/s. RANJIT HOLDING P. LTD., MUMBAI V. ITO 9(3)(4), MUMBAI

ITA 5471/MUM/2005

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92952 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-01-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 17-08-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: DEEPAK PADACHH
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' D ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA , ACCOUNTANT MEMBER ITA NO. 5471/MUM/2005 (ASSESSMENT YEAR: 1998 - 99 ) M/S. RANJIT HOLDINGS P. LTD. VS. INCOME TAX OFFICER 9(3)(4) ( NOW PELICAN SYNTEX P. LTD.) 445, MANDHAN MANOR, C. WING MOUGHAL LANE, MATUNGA (W) MUMBAI 400016 2ND FLOOR, ROOM NO. 221 AYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN - AAACR2731C APPELLANT RESPONDENT APPELLANT BY: SHRI DEEPAK PADACHH RESPONDENT BY: SHRI LOVE KUMAR DATE OF HEARING: 17.06. 2015 DATE OF PRONOUNCEMENT: 17.06.2015 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - IX, MUMBAI AND IT PERTAINS TO A.Y. 1998 - 99. 2. PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT , HAVING BEEN CONFIRMED BY THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS THE AO NOTICED THAT AN AMOUNT OF ` 53,40,600/ - HAS BEEN DEBITED REFERABLE TO COMPENSATION PAID BY THE ASSESSEE. THE AO WAS OF THE OPINION THAT IT WAS A SHAM TRANSACTION IN THE NATURE OF SPECULATION TRANSACTION. THEREFORE THE ENTIRE COMPENSATION PAID BY THE ASSESSEE WAS DISALLO WED BY HOLDING THAT IT IS NOT A BUSINESS EXPENDITURE. CONSEQUENTLY PENALTY WAS LEVIED UNDER SECTION 271(1)(C) OF THE ACT REFERABLE TO THE ADDITION OF ` 53,40,600/ - . 4. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION, WHICH WAS THE BASIS F OR THE LEVY OF PENALTY, NO LONGER ITA NO. 5471/MUM/2005 M/S. RANJIT HOLDINGS P. LTD. 2 SUBSISTS IN VIEW OF THE FACT THAT THE ITAT D BENCH, MUMBAI , IN THE QUANTUM PROCEEDINGS , DIRECTED THE AO TO ALLOW THE CLAIM OF DEDUCTION REFERABLE TO THE COMPENSATION PAID (ITA NO. 3805/MUM/2004 DATED 30.04.2015). HE FURT HER SUBMITTED THAT THE LEARNED CIT(A) CONFIRMED THE PENALTY ORDER PASSED BY THE AO, SINCE HE DID NOT HAVE THE BENEFIT OF THE ORDER PASSED BY THE ITAT. 5. THE LEARNED D.R. FAIRLY ADMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE ITAT (SUPRA). 6. HAVING R EGARD TO THE CIRCUMSTANCES OF THE CASE, WE HOLD THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY, SINCE THE ADDITION, WHICH IS THE BASIS FOR LEVY OF PENALTY, STOOD DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE - COMPANY IS ALLOWED. ORDER PRONOUNCED I N THE OPEN COURT ON 17 TH JUNE, 2015. SD/ - SD/ - ( SANJAY ARORA ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 17 TH JUNE, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) IX , MUMBAI 4. THE CIT IX , MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P .