ITO 8(1)-2, MUMBAI V. BRIGHT WAREHOUSE & LEASING P. LTD, MUMBAI

ITA 583/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2299 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 29-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G C LALKA
• Keywords: Business income; Tax effect; Set aside
• Section: 271(1)(c); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 583/M/2009 ASSESSMENT YEAR: 2002-03 INCOME-TAX OFFICER 8(1)2, APPELLANT ROOM NO. 205, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 20. VS. M/S BRIGHT WAREHOUSING & LEASING PVT. LTD., RESPON DENT D-35, JYOTI APARTMENTS, SEVEN BUNGLOWS, J.P. ROAD, ANDHERI(W), MUMBAI 58. (PAN AABCB4454F) APPELLANT BY : MR. AARSI PRASAD RESPONDENT BY : MR. G.C. LALKA ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT (A)- VIII, MUMBAI, PASSED ON 26.11. 2008 FOR T HE ASSESSMENT YEAR 2002-03, WHEREIN THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT (A) ERRED IN DISALLOWING THE PENALTY U/S 27 1(1)(C) WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS ES. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) O N THE ABOVE GROUND TO BE SET ASIDE AND THAT OF THE ITO/AC/DCIT BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ITA NO.583/M/09 M/S BRIGHT WAREHOUSING & LEASING PVT. LTD. 2 2. THE ASSESSEE COMPANY ACQUIRED A LAND SITUATED AT TALOJA ON TENANCY VIDE AGREEMENT DATED 03.04.96 FROM MR. K.M. PATEL AND MRS. K.K. PATEL AND THE SAME WAS LEASED OUT TO M/S HYUND AI MOTORS INDIA LTD. IN THE YEAR 1998 FOR STORING ITS MOTOR CARS. T HE ASSESSEE RECEIVED THE LEASE RENT AMOUNTING TO RS. 25, 50,735/- AND CL AIMED IT AS BUSINESS INCOME. THE AO TREATED THE SAID RENT AS IN COME FROM HOUSE PROPERTY, WHICH WAS CONFIRMED BY THE CIT (A). THER EAFTER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1) (C) AND LE VIED PENALTY OF RS. 4, 99,200/-. AGAINST THIS PENALTY, THE ASSESSEE CAR RIED THE MATTER BEFORE THE CIT (A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THIS SIMILAR ISSUE WAS INVOLVED IN AY 2001-02 IN HIS OWN CASE AND THE LEARNED CIT(A) DELETED THE PENALTY BY RELYING UPON THE DECISION OF HONBLE MUMBAI TRIBUNAL IN THE CASE OF ITO VS. ROBO RANT INVESTMENT P. LTD. IN ITA NO. 3937/MUM/2002, WHICH WAS REPORTE D IN 7 SOT 181. IN THE CASE UNDER CONSIDERATION, THE CIT(A) FOLLOWI NG THE DECISION OF HIS PREDECESSOR IN AY 2001-02, DELETED THE PENALTY LEVIED BY THE AO BY HOLDING THAT THERE IS NO CHANGE IN THE FACTS OF THE FOR THE YEAR UNDER CONSIDERATION AND MOREOVER, THE HONBLE TRIBU NAL HAS ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LE ARNED DR SUBMITTED THAT IN AY 2001-2002 THE REVENUE DID NOT FILE THE A PPEAL AGAINST THE ORDER OF CIT (A) WHERE PENALTY UNDER SECTION 271(1) (C) WAS CANCELLED, BECAUSE OF THE TAX EFFECT. 3. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE CIT (A) AFTER CONSIDERING ORDER OF THE ITAT IN THE CASE OF ITO VS. ROBORANT INVESTMENT P. LTD. IN ITA NO. 3937/MUM/2002, WHICH WAS REPORTED IN 7 SOT 181 HAS CANCELLED THE PENALTY. WE FURTHER FIND THAT THE VIEW TAKEN BY THE ITAT IN THE CASE OF ITO VS. ROBORANT INVESTMENT P. LTD. IN ITA NO. 3937 /MUM/2002, WHICH WAS REPORTED IN 7 SOT 181 HAS BEEN CONFIRMED BY THE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., [2010] 322 ITR 158(SC).THE APEX COURT HELD THAT MAKING INC ORRECT CLAIM ITA NO.583/M/09 M/S BRIGHT WAREHOUSING & LEASING PVT. LTD. 3 DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF IN COME U/S 271(1)(C) OF THE ACT. THE FINDINGS OF THE HONBLE SUPREME COU RT ARE EXTRACTED BELOW:- A GLANCE OF THE PROVISIONS OF SECTION 271(1) OF TH E INCOME TAX ACT, 1961,, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAIL S OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRE TCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NO T BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT S USTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS. 4. THE LAW LAID DOWN BY THE APEX COURT IN THE SAID CASE IS VERY CLEAR THAT MAKING INCORRECT CLAIM DOES NOT AMOUNT T O CONCEALMENT OF PARTICULARS. IN THE CASE UNDER CONSIDERATION THE AS SESSEE CLAIMED THE LEASE RENT AS BUSINESS INCOME BUT THE REVENUE AUTHO RITIES TREATED THE SAME AS INCOME FROM HOUSE PROPERTY. MERELY THE FACT THAT THE ASSESSEE CLAIMED AN INCOME UNDER A PARTICULAR HEAD AND THE AO ASSESSED UNDER SOME DIFFERENT HEAD THAT DOES NOT AU TOMATICALLY AMOUNTS TO CONCEALMENT OF PARTICULAR OF INCOME OR F URNISHING INACCURATE PARTICULAR OF THE INCOME LEADING TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT WE ITA NO.583/M/09 M/S BRIGHT WAREHOUSING & LEASING PVT. LTD. 4 ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY CANCELL ED THE PENALTY OF RS. 4,99,200/-LEVIED BY THE AO U/S 271(1)(C). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED ON THIS 22 ND DAY OF APRIL, 2010 SD/- SD/- (D. MANMOHAN) (A.L. GEHLOT) VICE PRESIDENT ACCOUNTAN T MEMBER DATED: 22 ND APRIL, 2010 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, B BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV