DCIT RG 9(1), MUMBAI V. CHOUDHARI HOTELS & RESTAURANT PVT. LTD., MUMBAI

ITA 5502/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3182 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 19-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.5502/M/2013 ASSESSMENT YEAR: 2005-06 DCIT, RG.9(1), R.NO.223, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20 VS. M/S. CHOUDHARI HOTELS & RESTAURANTS PVT. LTD., 354, LINKING ROAD, KHAR (W), MUMBAI 400 101 PAN: AAACC0742L (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : DR. S. PANDIAN, D.R. DATE OF HEARING : 28.03.2016 DATE OF PRONOUNCEMENT : 31.03.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ACTION OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREIN AFTER REFERRED TO AS THE CIT(A)] IN DELETING THE PENALTY LEVIED BY THE ASSES SING OFFICER (HEREINAFTER REFERRED TO AS THE AO) UNDER SECTION 271(1)(C) OF T HE ACT. 2. THE NOTICE IN THIS CASE HAS BEEN SERVED ON THE A SSESSEE TIME AND AGAIN BUT TILL DATE NO ONE HAS EVER COME PRESENT ON BEHAL F OF THE ASSESSEE. HENCE, WE PROCEED TO DECIDE THE APPEAL OF THE REVENUE BY HEAR ING THE LD. D.R. 3. THE LD. D.R. HAS STATED THAT THE PENALTY IN THIS CASE HAS BEEN LEVIED BY THE AO ON ACCOUNT OF CHANGE OF HEAD OF THE INCOME. THE ASSESSEE HAD OFFERED THE INCOME AS BUSINESS INCOME EARNED AS COMMISSION ON THE SALES MADE BY RELIANCE WEB STORE LTD. OPERATING FROM A PORTION OF THE HOTEL OF THE ASSESSEE. ITA NO.5502/M/2013 M/S. CHOUDHARI HOTELS & RESTAURANTS PVT. LTD. 2 THE AO OBSERVED THAT THE SAID COMMISSION INCOME WAS THE RENTAL INCOME OF THE ASSESSEE. 4. HOWEVER, A PERUSAL OF THE ORDER OF THE LD. CIT(A ) REVEALS THAT THE LD. CIT(A) HAS NOTED THAT THE ASSESSEE HAD DISCLOSED AL L THE MATERIAL FACTS RELEVANT TO THE COMPUTATION OF INCOME IN THE RETURN OF INCOM E ITSELF. THE ASSESSEE HAD OFFERED AS BUSINESS INCOME UNDER BONAFIDE BELIEF. HOWEVER, THE AO HAS ASSESSED THE SAME UNDER A DIFFERENT HEAD. THE AO, HOWEVER, HAS NOT BROUGHT OUT THE ESSENTIAL REQUIREMENTS OF THE SECTION 271(1 )(C) FOR IMPOSITION OF PENALTY I.E. FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE LD. CIT(A), THUS, HAS HELD THAT THE PENALTY WAS NOT SUSTAINABLE IN THIS CASE. 5. WE HAVE GONE THROUGH THE ASSESSMENT ORDER, PENAL TY ORDER AND THE IMPUGNED ORDER OF THE LD. CIT(A). WE FIND THAT THE ASSESSEE HAD OFFERED THE COMMISSION INCOME AS BUSINESS INCOME BECAUSE THE AS SESSEE HAD OFFERED A PORTION OF ITS HOTEL PREMISES TO THE RELIANCE WEB S TORE LTD. ALONG WITH FACILITIES FOR RUNNING OF THE STORE AND THAT THE AS SESSEE WAS OFFERED COMMISSION INCOME ON THE BASIS OF THE SALES DONE BY THE RELIAN CE WEB STORES. THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THE COMMISS ION INCOME WAS THE BUSINESS INCOME. THOUGH THE AO HAD ASSESSED THE SA ME UNDER DIFFERENT HEAD BUT THERE IS NO ALLEGATION THAT THE ASSESSEE HAD FI LED ANY INACCURATE PARTICULARS OF INCOME OR HAD CONCEALED ITS INCOME. WE DO NOT F IND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE PENALTY LEV IED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. THERE IS NO MERIT IN THE APP EAL OF THE REVENUE AND THE SAME IS THEREFORE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.03.2016. SD/- SD/- (RAMIT KOCHAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.03.2016. * KISHORE, SR. P.S. ITA NO.5502/M/2013 M/S. CHOUDHARI HOTELS & RESTAURANTS PVT. 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.