ITO 14(3)2, MUMBAI V. VITHALDAS JAMNADAS, MUMBAI

ITA 5591/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55672 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 09-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T T JACOB
• Assessee Lawyers: AMIT KATIWALA
• Keywords: Wrong claim; Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER. I.T.A. NO. 5591/MUM/2010. ASSESS MENT YEAR : 2005-06. THE INCOME-TAX OFFICER, M/S VITHALDAS JAMNADAS, 14(3)(2), MUMBAI. VS. 91, CHIKHAL GALLY, M.J. MARKET, MUMBAI 400 002 PAN : AAFV 0869L APPELLANT. RESPONDENT. APPELLANT BY : SHR I T.T. JACOB RESPONDENT BY : SHRI AMIT KATIWALA. DATE OF HEA RING : 18-10-2011. DATE OF PRONO UNCEMENT : 21-10-2011. O R D E R PER P.M. JAGTAP, A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-25, MUMBAI DATED 16-04-2010 AND THE G ROUNDS RAISED BY THE REVENUE READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.2,39,378 /- LEVIED U/S 271(1)(C) OF THE I.T. ACT, 1961 BY THE AO WITHOUT A PPRECIATING THE FACT THAT THE ASSESSEE HAD FURNISHED INACCURATE PAR TICULARS OF ITS INCOME BY MAKING WRONG CLAIM AGAINST TAX FREE INCOM E. 2 ITA NO. 5591/MUM/2010 ASSESSMENT YEAR : 2005-06 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE AO HA D RIGHTLY APPLIED THE PROVISIONS OF SECTION 14A OF THE I.T. ACT IN DI SALLOWING THE EXPENSES OF RS.6,54,170/- AS THE ASSESSEE HAD NOT C ARRIED ON ANY BUSINESS FOR THE PAST THREE YEARS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS IGNORED THE FACT THAT THE ASSESSEE HAD N OT DISPUTED THE ADDITION OF RS.6,54,170/- MADE IN THE ASSESSMENT IN FIRST APPEAL WHICH GOES TO PROVE THAT THE ASSESSEE HAD ACCEPTED THAT I T HAD MADE A WRONG CLAIM BY FURNISHING INACCURATE PARTICULARS OF ITS I NCOME. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY BY HOLDING THA T THE DISALLOWANCE MADE BY THE AO IS BY WAY OF INVOKING THE PROVISIONS OF SECTION 14A OF THE I.T. ACT WHICH IS A DEEMING PROVISION AND TH AT MERELY BECAUSE THE DISALLOWANCE IS MADE, THE CONCEALMENT PENALTY C ANNOT BE AUTOMATICALLY LEVIED AND THUS HAS FAILED TO APPRECI ATE THE FACT THAT THIS WAS NOT A CASE WHEREIN AN ADHOC DISALLOWANCE WAS MA DE BY THE AO BUT THE DISALLOWANCE WAS MADE FOR FURNISHING INACCU RATE PARTICULARS OF ITS INCOME BY MAKING WRONG CLAIM OF EXPENDITURE AGA INST TAX FREE INCOME. 2. WE HAVE HEARD THE ARGUMENTS OF THE BOTH THE SIDE S AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS NOTED AT THE OUTSET FROM THE GROUNDS RAISED BY THE REVENUE, THE TAX EFFECT INVOLVED IN THIS APPEAL FIL ED BY THE REVENUE IS LESS THAN RS.3 LAKHS AND THIS POSITION HAS NOT BEEN DISPUTED EVEN BY THE LEARNED DR. AS PER THE CBDT INSTRUCTION NO. 3 OF 2011 ISSUED ON 09-02- 2011, THE MONETARY LIMIT FOR FILING OF AN APPEAL BY THE DEPARTMENT BEFORE THE TR IBUNAL HAS BEEN REVISED TO RS.3 LAKHS. AS DECIDED BY THE CBDT, APPEALS SHALL NOT BE FILED BY THE DEPARTMENT IN CASES WHERE TAX EFFECT DOES NOT EXCEED RS.3 LAKHS. IN THE CASE OF CIT VS. MADHUKAR INAMDAR (HUF) 318 ITR 149, THE HONBLE BOMBAY HIGH COURT HAS HELD THAT CBDT INSTRUCTION FIXING ANY MONETARY LIMIT FOR FILI NG THE APPEAL WOULD APPLY EVEN FOR THE PENDING CASES. KEEPING IN VIEW THE SAID DEC ISION OF HONBLE JURISDICTIONAL HIGH COURT AND THE BOARD INSTRUCTION NO. 3 OF 2011 DATED 09-02-2011, WE HOLD 3 ITA NO. 5591/MUM/2010 ASSESSMENT YEAR : 2005-06 THAT THE PRESENT APPEAL FILED BY THE DEPARTMENT INV OLVING TAX EFFECT OF LESS THAN RS.3 LAKHS IS NOT MAINTAINABLE. THE SAME IS, THEREF ORE, DISMISSED AT THE THRESHOLD. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF OCT., 2011. SD/- SD/- (V. DURGA RAO) ( P.M. JAGTAP) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI, DATED: 21 ST OCT., 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, F-BENCH. (TRUE COPY) BY ORDE R ASSTT. REGI STRAR, ITAT, MUMBAI BEN CHES, MUMBAI ,