ITO 6(1)(2), MUMBAI V. AMRIT PETROLEUMS P.LTD, MUMBAI

ITA 5745/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8675 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJNIKANT CHANIYARIAR
• Keywords: Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5745/MUM/2015 ASSESSMENT YEAR: 2011-12 ITO 6(1)(2) VS. M/S. AMRIT PETROLEUMS PVT. LTD. R. NO. 508 5 TH FLOOR, 601 SYMPHONY NEHRU ROAD, AAYAKAR BHAVAN, M.K. ROAD, VILE PARLE (EAST) MUMBAI 400020 MUMBAI 400057 PAN NO. AAACA4348L (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PURUSHOTTAM KUMAR,DR ASSESSEE BY: SHRI RAJNIKANT CHANIYARI,AR DATE OF HEARING : 25/0 1/2017 DATE OF PRONOUNCEMENT: 27/01/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) 12, MUMBAI AND ARISES OUT OF ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY LEVIED U/ S 271(1)(C) OF RS. 10,66,504/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT OFFERED ANY TAXABLE INCOME UNDER THE HEAD INCOME FROM HOUSE P ROPERTY FOR ANY OF THE IMMOVABLE PROPERTY OUT OF TOTAL FOURTEEN IMMOVA BLE PROPERTIES. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE TCVHE FACT THAT ASSES SING OFFICER HAS PROVED ITA NO. 5745/MUM/2015 2 THAT ASSESSEE HAS NOT SHOWN INCOME FROM HOUSE PROPE RTY IN RESPECT OF ANY OF THE IMMOVABLE PROPERTY OUT OF 14 IMMOVABLE PROPE RTIES AND THERE WAS NOTHING ON RECORD TO PROVE THAT OMISSION ON THE PART OF ASSESSEE COMPANY NOT TO OFFER FOR TAX IS CORRECT AND INCOME FROM H OUSE PROPERTY WAS ON ACCOUNT OF BONAFIDE MISTAKE ON THE PART OF ASSE SSEE COMPANY, WHICH IS AN ENTITY DULY ASSISTED BY C.A / C.S FOR ALL COMPLIANCES UNDER THE COMPANY ACT AND INCOME TAX ACT. 3. IT IS FURTHER SUBMITTED THAT SIMILAR PENALTY ORDER U/S 271(1)(C) HAS BEEN PASSED BY THE A.O. FOR THE A.Y. 2009-10 ON IDENTICAL ISSUE AS THAT OF THE ASSESSEE COMPANY FOR THE A.Y,. IN QUESTION AND THE S AID PENALTY WAS ALSO DELETED BY THE CIT(A)-14 IN ORDER DATED 20.08.2014. THE DELETION OF PENALTY BY THE LD. CIT(A)-14 FOR THE A.Y. 2009-10 HAS ALSO B EEN CHALLENGED BY THE DEPARTMENT BEFORE HON'BLE ITAT. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS. 5,86,0 7,966/- TOWARDS INVESTMENT IN IMMOVABLE PROPERTIES. HOWEVER, NO I NCOME FROM HOUSE PROPERTY HAS BEEN OFFERED AGAINST THESE PRO PERTIES. THE AO DETERMINED THE ANNUAL VALUE AT 8.5% OF THE COST OF ABOVE PROPERTIES. THUS HE DETERMINED THE INCOME FROM HOUSE PROPERTY A T RS. 32,31,831/-. THEREAFTER, THE AO LEVIED A MINIMUM P ENALTY OF RS. 10,.66,504/- ON THE ABOVE AMOUNT U/S 271(1)(C) OF T HE ACT. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEAR NED CIT(A) AGAINST THE PENALTY OF RS. 10,66,504/- LEVIED BY TH E AO. THE LEARNED CIT(A) FOLLOWED THE APPELLATE ORDER OF HER PREDECES SOR-IN-OFFICE FOR THE A.Y. 2009-10 AND DELETED THE SAID PENALTY LEVIE D BY THE AO. 5. THE LEARNED DR SUPPORTS THE ORDER PASSED BY THE AO. IT IS SUBMITTED BY HIM THAT THE ASSESSEE HAS NOT PREFERRE D AN APPEAL BEFORE THE LEARNED CIT(A) AGAINST THE INCOME FROM H OUSE PROPERTY DETERMINED BY THE AO. AT RS. 32,31,831/-. IT IS ALS O SUBMITTED BY THE LEARNED DR THAT THE ASSESSEE HAS NOT OFFERED INCO ME FROM HOUSE ITA NO. 5745/MUM/2015 3 PROPERTY FROM THE INVESTMENT OF RS. 5,86,07,966/- . THUS IT WAS SUBMITTED THAT THE ASSESSEE HAD FURNISHED INACCURAT E PARTICULARS OF INCOME AND ALSO CONCEALED THE INCOME. 6. THE LEARNED COUNSEL OF THE ASSESSEE SUPPORTED TH E ORDER PASSED BY THE LEARNED CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE AO HAS DETERMI NED THE ANNUAL VALUE AT 8.5% OF THE COST OF PROPERTIES. THIS IS NO T THE WAY TO DO SO. THERE IS NO PRECEDENT FOR DOING SO. IN CIT VS METAL PRODUCTS OF INDIA [(1984) 150 ITR 714 (PUNJ)], IT HAS BEEN HELD THAT MERELY BECAUSE THE ADDITION HAS BEEN MADE ON ESTIMATE UNDER THE FIRST PROVISO TO SECTION 145(1) CANNOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT THERE WAS FAILURE TO RETURN THE CORRECT INCOME BY MEANS OF FR AUD OR GROSS OR WILFUL NEGLECT. 7.1 WE HOLD THAT THE DETERMINATION OF ANNUAL VALUE AT 8.5% OF THE COST OF PROPERTIES BY THE A.O. IS DEVOID OF REASONS . 7.2 REGARDING THE CONTENTION OF THE LEARNED DR THAT THE ASSESSEE HAS NOT FILED AN APPEAL AGAINST THE ORDER OF THE AO BEFORE THE LEARNED CIT(A), WE MAY SAY THAT FINDINGS GIVEN IN ASSESSMEN T PROCEEDINGS ARE CERTAINLY RELEVANT AND HAVE PROBATIVE VALUE, BUT SU CH FINDINGS ARE MATERIAL ALONE AND MAY NOT JUSTIFY THE IMPOSITION O F PENALTY IN A GIVEN CASE, BECAUSE THE CONSIDERATION THAT ARISE IN PENAL TY PROCEEDINGS ARE DIFFERENT FROM THOSE THAT ARISE IN ASSESSMENT PROCE EDINGS . WE RELY ON THE DECISION IN BANARAS TEXTORIUM VS CIT , (1988) 169 ITR 782, 790, 791 (ALL); CIT VS GOVINDANKUTTY MENON , (1989) 178 ITR 509, 515 (KER); HOTEL & ALLIED TRADES (P) LTD. VS CIT , (1996) 221 ITR 619, 646 (KER). ITA NO. 5745/MUM/2015 4 8. IN VIEW OF THE REASONS DELINEATED AT PARA 7, 7.1 & 7.2 HERE-IN- ABOVE, WE UPHOLD THE ORDER OF THE LEARNED CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/01/2017 SD/- SD/- (SAKTIJIT DEY) N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 27/01/2017 BISWAJIT, SR. P.S. 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