PREMAL NIRVAN SANGHAVI, MUMBAI V. ACIT 16(2), MUMBAI

ITA 5650/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92325 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 05-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PERMANAND J
• Assessee Lawyers: INDIRA G ANAND

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 5650/MUM/2013 ASSESSMENT YEAR: 2005-06 SHRI PREMAL NIRVAN SANGHAVI, 62, CASA GRANDS, 22, K.S. TAYABI MARG, MUMBAI 400 001 PAN:AABPS 5226 P VS. ACIT - 16(2) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT . INDIRA G. ANAND REVENUE BY : SHRI PERMANAND J. DATE OF HEARING : 15.04 .2015 DATE OF PRONOUNCEMENT : 1 5 .04.2015 O R D E R PER AMIT SHUKLA, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST ORDER DATED 12.08.2013, PASSED BY THE LD.CIT(A)-28, MUMBA I IN RELATION TO PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE A.Y. 2005 -06. 2. THE ASSESSEE IS MAINLY AGGRIEVED BY LEVY OF PENA LTY OF RS.1,34,500/- ON ACCOUNT OF DISALLOWANCE OF CLAIM O F SHORT-TERM CAPITAL LOSS ON MUTUAL FUND ON WHICH ASSESSEE HAD RECEIVED DIVIDEND, U/S 94(7). 3. AT THE OUTSET, LEARNED COUNSEL SUBMITTED THAT IN THE CASE OF MS. MINAL NIRVAN SANGHAVI, WHO WAS OTHER PARTNER IN PR EMIN SECURITIES (PARTNERSHIP FIRM), THE TRIBUNAL HAS DELETED THE PE NALTY ON SIMILAR ITA NO. 5650/MUM/2013 ASSESSMENT YEAR: 2005-06 2 GROUND. LD. DR ALSO AGREED THAT THIS ISSUE IS COVER ED BY THE DECISION OF THE TRIBUNAL ORDER IN THE CASE OF THE OTHER PARTNER . 4. THE BRIEF FACTS ARE THAT, ASSESSEE IS AN INDIVID UAL AND A PARTNER IN PREMIN SECURITIES, DEALING IN SHARES AND SECURITI ES. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY TH E AO THAT ASSESSEE HAD CLAIMED SHORT-TERM CAPITAL LOSS ON MUTUAL FUNDS ON WHICH THE ASSESSEE HAS RECEIVED DIVIDEND. ACCORDINGLY, AS PER PROVISIONS OF SECTION 94(7), THE AO DISALLOWED SUCH LOSS TO THE EXTENT OF DIVIDEND RECEIVED AMOUNTING TO RS.3,99,699/-. THE ASSESSEES CASE DUR ING THE APPELLATE PROCEEDINGS WAS THAT IT HAD NOT RECEIVED DIVIDEND D URING THE RELEVANT FINANCIAL YEAR, THEREFORE, THE PROVISION OF SECTION 94(7) ARE NOT APPLICABLE. IN THE PENALTY PROCEEDINGS, ASSESSEE ST ATED THAT ALL THE DETAILS REGARDING SALE AND PURCHASE OF MUTUAL FUNDS , DIVIDEND RECEIVED ON MUTUAL FUNDS AND SHORT-TERM CAPITAL LOSS INCURRE D BY THE ASSESSEE IN SALE OF SUCH MUTUAL FUND WERE DULY DISCLOSED. IT HA D NOT RECEIVED ANY DIVIDEND DURING THE YEAR UNDER CONSIDERATION, THERE FORE, THE CLAIM OF SHORT-TERM CAPITAL LOSS WAS BASED ON BONA FIDE BELI EF. HOWEVER, THE AO DID NOT AGREED WITH THE ASSESSEES SUBMISSION AND H ELD THAT ASSESSEES EXPLANATION DO NOT PASS THE TEST OF BONA FIDE AND T HEREBY LEVIED THE PENALTY OF RS.1,34,500/- THE LD. CIT(A) TOO HAS CON FIRM THE PENALTY. 5. AFTER CONSIDERING THE FINDING GIVEN IN THE IMPUG NED ORDER, AND ALSO THE RELEVANT FINDING GIVEN BY THE TRIBUNAL IN THE C ASE OF MS. MINAL NIRVAN SANGHAVI, WE FIND THAT SIMILAR ISSUE HAD COME UP FO R CONSIDERATION BEFORE THE TRIBUNAL, WHEREIN THE TRIBUNAL HAS DELET ED THE PENALTY ON THE GROUND THAT IT WAS NOT A CASE OF FURNISHING OF INAC CURATE PARTICULARS. MOREOVER IT IS OBSERVED THAT THE AMENDMENT TO SECTI ON 94(7) HAD COME WITH EFFECT FROM 01.04.2005, THEREFORE IT CAN BE VE RY WELL PRESUME THAT ITA NO. 5650/MUM/2013 ASSESSMENT YEAR: 2005-06 3 THE ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT THE AMENDED PROVISIONS WOULD NOT BE APPLICABLE ON THE TRANSACTION CONCLUDE D PRIOR TO THE DATE OF AMENDMENT. THUS, ON THIS GROUND AND ALSO FOLLOWING THE ORDER OF THE TRIBUNAL WE DELETE THE PENALTY OF RS.1,34,500/-,. A CCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF APRIL, 2015. SD/- SD/- (G. S. PANNU) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED:15 .04.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH // TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.