DCIT CC 3(2) CEN RG 3, MUMBAI V. MAJOR METALS LTD, NAVI MUMBAI

ITA 5661/MUM/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9757 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 17-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Keywords: Gift; Accommodation entries
• Section: 143(3); 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO.5661/MUM/2015, (A.Y. 2003-04) ITA NO.5662/MUM/2015, (A.Y. 2005-06) ITA NO.5663/MUM/2015, (A.Y. 2006-07) DY. COMMISSIONER OF INCOME TAX, CC.3(2), CENTRAL RANGE-3, ROOM NO.402, 4 TH FLOOR, AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020 ...... APPELLANT VS. M/S. MAJOR METAL LTD. 607, J.K.CHAMBERS, SECTOR -17, VASHI, NAVI MUMBAI ..... RESPONDENT APPELLANTS BY : SHRI T.A.KHAN RESPONDENT BY : SHRI PRATEEK JAIN DATE OF HEARING : 07/03/2018 DATE OF PRONOUNCEMENT : 21/03/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED THREE APPEALS BY THE REVENUE PERTA IN TO ASSESSMENT YEARS 2003-04, 2005-06 AND 2006-07, AND SINCE T HEY INVOLVE A COMMON ISSUE, THEY HAVE BEEN CLUBBED, HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVIT Y. 2. SINCE THE ISSUE RAISED IN THESE APPEALS ARE IDEN TICAL, ITA NO. 5661/MUM/2015 IS TAKEN AS THE LEAD CASE, WHICH IS D IRECTED AGAINST 2 ITA NO.5661/MUM/2015, (A.Y. 2003-04) ITA NO.5662/MUM/2015, (A.Y. 2005-06) ITA NO.5663/MUM/2015, (A.Y. 2006-07) ORDER PASSED BY THE CIT(A)-51, MUMBAI DATED 09/09 /2015, DELETING THE PENALTY IMPOSED UNDER SECTION UNDER SECTION 271(1)( C) OF THE ACT DATED 26/03/2014. THE GROUNDS OF APPEAL RAISED BY THE ASS ESSEE IN THIS APPEAL READ AS UNDER:- I. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) IGNORING THE FACT THAT SHRI GIRIRAJ VIJAYVARGIYA HAS ADMITTED TO GIVING ACCOMMO DATION ENTRIES AND THEREFORE FILED IN ACCURATE PARTICULARS INCOME. II. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CIRCU MSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN RELYING ON HIS OWN ORDER FOR A.Y.2004-05 WITHOUT APPRECIATING THAT THE ASSESSEE HAS ADMITTED GIVING ACCOMMODATION ENTRIES IN THE CURRENT YEAR AND THEREFORE DISTINCT FROM THAT O F 2004-05.' III. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD.CIT(A) ERRED IN IGNORING THE FINDING OF THE SETTLEMENT COM MISSION WHICH WAS IN TURN CONCURRED BY THE HON'BLE HIGH COURT THAT THE TRANSA CTIONS, ARE NOT GENUINE AND THEREFORE IS LIABLE FOR PENALTY U/S 271(1)(C) OF TH E ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE C OMPANY IS ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON-FERROUS METALS. THE ASSESSEE FILED ITS ORIGINAL RETURNS OF INCOME ON 17/10/2003 SHOWIN G AN INCOME OF RS.8,87,134/-. THE ASSESSMENT WAS REOPENED BY ISSU ING A NOTICE UNDER SECTION 148 OF THE ACT ON 30/03/2010. THE REASONS FOR REOPENING THE ASSESSMENT WAS THAT DURING THE COURSE OF SEARCH ACT ION UNDER SECTION 132 OF THE ACT IN THE CASE OF SHRI GIRIRAJ VIJAYVARGIYA TH E ASSESSING OFFICER FOUND THAT SHRI GIRIRAJ VIJAYVARGIYA HAD GIVEN ACCOMMODAT ION ENTRIES IN THE FORM OF GIFTS, LOANS AND SHARE APPLICATION MONEY. SHRI GIR IRAJ VIJAYVARGIYA ADMITTED IN A STATEMENT UNDER SECTION 132(4) OF THE ACT THAT HE IS NOT HAVING ANY SOURCE OF GIFTS, LOANS OR SHARE APPLICATION MONEY AND THE BENEFICIARIES PAID HIM CASH FOR THE EQUIVALENT AMOUNT IN CHEQUE AND A COMMISSIO N OF 2-3 TO5%. THE 3 ITA NO.5661/MUM/2015, (A.Y. 2003-04) ITA NO.5662/MUM/2015, (A.Y. 2005-06) ITA NO.5663/MUM/2015, (A.Y. 2006-07) ASSESSING OFFICER WHILE PASSING ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DATED 31/12/2010 HAS ALSO INITIATED PENALTY PRO CEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME, WHI CH WAS ULTIMATELY LEVIED AT RS.71,69,925/- VIDE ORDER DATED 26/03/2014(SUPRA ). AGAINST THE ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT, THE ASSE SSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A), FOLLOWING HIS EARL IER ORDERS FOR ASSESSMENT YEARS 2003-04 TO 2006-07, ON IDENTICAL ISSUE HAS AL LOWED THE APPEAL OF THE ASSESSEE AND DELETED THE PENALTY. 4. AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBU NAL. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE THAT THE ASSESSEE HAS CHALLENGED THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, WHICH WAS FURTHER CONFIRMED BY THE CIT(A), BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER IN ITA NO. 6742/ MUM/2012 DATED 13/05/2016 HAS QUASHED THE ASSESSMENT ORDER. A COP Y OF THE ABOVE ORDER OF THE TRIBUNAL HAS BEEN PLACED ON RECORD BY THE LD. REPRESENTATIVE FOR THE ASSESSEE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT CONT ROVERT THE FACTUAL POSITION ASSERTED BY THE ASSESSEE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN VIEW OF THE AFORESAID DECISION OF THE TRIBUNAL DATED 13/05/2016 (SUPRA) IN THE QUANTUM PROCEEDINGS, THE ORDER PASSED BY THE ASSESS ING OFFICER UNDER SECTION 271(1)(C) HAS BECOME INFRUCTUOUS AND, THERE FORE, THE ACTION OF THE CIT(A) DELETING THE PENALTY IS AFFIRMED, ALBEI T ON A DIFFERENT GROUND. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS DIS MISSED. 4 ITA NO.5661/MUM/2015, (A.Y. 2003-04) ITA NO.5662/MUM/2015, (A.Y. 2005-06) ITA NO.5663/MUM/2015, (A.Y. 2006-07) ITA NO.5662/MUM/2015, (A.Y. 2005-06) & ITA NO.5663/MUM/2015, (A.Y. 2006-07) 6. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT F ACTS AND CIRCUMSTANCES IN THESE APPEALS ARE PARI-MATERIA TO THOSE CONSIDERED BY US IN ITA NO.5661/MUM/2015, FOR ASSESSMENT YEAR 2003-0 4, IN THE EARLIER PARAGRAPHS, INASMUCH AS, FOR ASSESSMENT YEARS 2005- 06 AND 2006-07, THE ASSESSMENT ORDERS PASSED U/S. 143(3) R.W.S. 147 OF THE ACT HAVE BEEN QUASHED BY THE TRIBUNAL VIDE ORDER DATED 17/05/2016 IN ITA NO.6744&6745/MUM/2012; THUS, OUR DECISION FOR ASSE SSMENT YEAR 2003- 04 SHALL APPLY MUTATIS MUTANDIS IN THESE APPEALS ALSO. 6. IN THE RESULT, THE CAPTIONED APPEALS OF THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/03/201 8. SD/- SD/- (SANDEEP GOSAIN) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 21/03/2018 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI