ITO 1(1)(4), MUMBAI V. BOMBAY MERCANTILE CO-OP BAK LTD, MUMBAI

ITA 5542/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5048 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-03-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 27-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: W HASAN
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SRI H.L. KARWA, PRESIDENT, AND SHRI N.K.BILL AIYA, AM ./ I.T.A. NO. 5542/MUM/2011 ( / ASSESSMENT YEAR : 2001-02) THE INCOME - TAX OFFICER, CIRCLE-1(1)(4), ROOM NO.531A/579, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S. BOMBAY MERCANTILE CO-OP BANK LTD., 78, MOHAMMED ALI ROAD, MUMBAI-400003 !' $ ./ PAN :AAAAB2359J ( '% / APPELLANT ) .. ( & ''% / RESPONDENT ) '% ( ) / APPELLANT BY : SHRI SURENDRA KUMAR &''% ( ) / RESPONDENT BY : SHRI W.HASAN ( *$ / DATE OF HEARING : 19-09-2013 +, ( *$ / DATE OF PRONOUNCEMENT : 19 -09-2013 -. / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-1, MUMBAI, DATED 09.03.2011, PERTAINING TO A.Y.2001-02. 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE CI T(A) ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 3. THE ASSESSEE IS IN THE BUSINESS OF BANKING . ASS ESSMENT U/S 143(3) WAS COMPLETED ON 28.11.2003. THE RETURN OF INCOME AS PER COMPUTATION OF 2 ITA NO.5542/MUM/2011 M/S BOMBAY MERCANTILE COOP BANK LTD. INCOME WAS LOSS OF RS.15,91,46,222/-. THIS RETURNE D LOSS WAS REDUCED BY THE FOLLOWING ADDITIONS:- I. INTEREST DEBITED AS ACCRUED INTEREST RS.4,89,98,12 4/- II. BROKEN PERIOD INTEREST RS.2,03,62,058/- III. DISALLOWANCE U/S 40A(9) RS. 26,00,000/- THE RETURNED LOSS WAS ASSESSED AT A LOSS OF RS.8,74 ,59,341/-. 4. ASSESSEE CARRIED THE MATTER IN QUANTUM APPEAL UP TO THE TRIBUNAL. THE TRIBUNAL HAS CONSIDERED THE APPEAL OF THE ASSES SEE IN ITA NO.4661/MUM/2005 DATED 22.04.2008. THE TRIBUNAL CO NFIRMED THE ACTION OF THE AO IN SO FAR AS ADDITIONS AT POINT NO. 1 AND 3 ARE CONCERNED, HOWEVER ALLOWED THE APPEAL ON ADDITION AT POINT NO. 2 HEREI NABOVE. HOWEVER, AT PARA 14 ON PAGE 10 OF ITS ORDER, THE TRIBUNAL HAS GRANTE D DEDUCTION U/S 80P TO THE ASSESSEE . WITH THESE FACTUAL GROUNDS , THE AO HAS LEVIED PENALTY ON THE AMOUNT OF ADDITIONS SUSTAINED BY THE TRIBUNAL. THE CIT(A) DELETED THE PENALTY HOLDING THAT EXPLANATION [4A] TO SECTION 27 1(1)(C) APPLIES TO CASES WHERE THE INCOME IS TAXABLE UNDER THE PROVISIONS OF THE ACT. THE CIT(A) OBSERVED THAT EXPLANATION [4A] WILL NOT BE APPLICAB LE WHERE THE INCOME IS NOT TAXABLE UNDER THE ACT. EITHER BECAUSE OF THE EXEMP TION U/S 10 OR IT IS ELIGIBLE FOR DEDUCTION FROM THE TAXABLE INCOME UNDE R ANY OTHER PROVISIONS OF THE ACT. THE CIT(A) FURTHER OBSERVED THAT THE TRIB UNAL HAS ALREADY HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P. TH EREFORE, THE PROVISIONS OF SECTION 271(1)(C) WILL NOT APPLY ON FACTS OF THE CA SE. 5. AGGRIEVED BY THIS REVENUE IS BEFORE US. 6. THE LD. DR STRONGLY SUPPORTED THE PENALTY ORDER. PER CONTRA COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 3 ITA NO.5542/MUM/2011 M/S BOMBAY MERCANTILE COOP BANK LTD. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE DECISION OF THE TRIBUNAL IN QUANTUM APPEAL DISCUSSE D HEREINABOVE. IT IS NOT IN DISPUTE THAT THE TRIBUNAL HAS ALLOWED THE ASSESS EE DEDUCTION U/S 80P OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT THE PENALT Y HAS BEEN LEVIED MERELY ON CERTAIN DISALLOWANCES MADE BY THE AO WHICH HAVE BEE N CONFIRMED BY THE TRIBUNAL IN QUANTUM APPEAL. IN OUR CONSIDERATE VIE W, ONCE THE ASSESSEE IS HELD TO BE ELIGIBLE FOR DEDUCTION U/S 80P OF THE AC T, NO PENALTY IS LEVIABLE U/S 271(1)(C) OF THE ACT. WE, THEREFORE, DO NOT FIND A NY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A). APPEAL FILED BY THE RE VENUE IS DISMISSED. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/09/2013 -. ( +, $ /- 19/09/2013 , , ( 0 SD/- (H.L.KARWA) SD/- (N.K.BILLAIYA) HONBLE PRESIDENT ACCOUNTANT MEMBER MUMBAI; /- /DATED : 19 TH SEPTEMBER, 2013. SHEKHAR. P.S. -. -. -. -. ( (( ( &*12 &*12 &*12 &*12 32 * 32 * 32 * 32 * / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 4 ( ) / THE CIT- , MUMBAI. 4. 4 / CIT(A)- , MUMBAI 5. 250 &* , , / DR, ITAT, MUMBAI 6. 06 7 / GUARD FILE. -. -. -. -. / BY ORDER, '2* &* //TRUE COPY// 8 88 8 / 9 9 9 9 : : : : (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI