EQUIPOISE INVESTMENTS P. LTD, MUMBAI V. ITO 2(1(3), MUMBAI

ITA 5831/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2370 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 13-10-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 27-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BANSALDR
• Assessee Lawyers: VIRAG M SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H ,MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5831/MUM/2013 (ASSESSMENT YEAR : 2004-05) M/S EQUIPOISE INVESTMENTS PVT. LTD. 301A, POONAM CHAMBERS, OPP. ATTRIA MALL, WORLI, MUMBAI-400018. PAN: AAACE7621E VS. ITO- 2(1)(3), AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIRAG M. SHA H (AR) REVENUE BY : MS. KUSUM BANSAL(D R) DATE OF HEARING : 13.10.2016 DATE OF PRONOUNCEMENT : 19.10.2016 O R D E R PER PAWAN SINGH, JM: 1. THIS APPEAL U/S 253 OF THE INCOME-TAX ACT IS DIRECT ED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-4, MUMBAI DATED 14.08.2 013, WHEREIN PENALTY LEVIED BY ASSESSING OFFICER (AO) U/S 271(1)(C) OF T HE ACT WAS CONFIRMED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY CARRYING ON THE BUSINESS OF LETTING OUT OF IMMOVABL E PROPERTIES. ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 16.11.2005 D ETERMINING THE TOTAL INCOME OF RS. 12,67,810/-. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED RENTAL INCOME AS INCOME FROM BUSINESS AND PROFESSIO N. THE AO WHILE FRAMING THE ASSESSMENT TREATED THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY INSTEAD OF INCOME FROM BUSINESS AND PROF ESSION AND INITIATED PENALTY. THE ASSESSEE FILED APPEAL AGAINST THE QUAN TUM ASSESSMENT BEFORE 2 ITA NO. 5831/M/2013- M/S EQUIPOISE INVESTMENTS PVT. LTD THE LD. CIT(A), WHEREIN ACTION OF THE AO WAS CONFIR MED. THE ASSESSEE FURTHER FILED APPEAL BEFORE THE ITAT AND THE MATTER WAS RESTORED TO THE FILE OF AO. THE AO AGAIN TREATED THE RENTAL INCOME AS IN COME FROM HOUSE PROPERTY IN THE ORDER PASSED U/S 143(3) R.W.S. 254 OF THE ACT. THEREAFTER, THE AO INITIATED PENALTY PROCEEDINGS AND ISSUED SHOW-CA USE NOTICE U/S 271(1)(C) R.W.S. 271(4) OF THE ACT. THE ASSESSEE FI LED ITS REPLY CONTENDED THEREIN THAT THEY HAVE LET OUT THE PROPERTY ALONG W ITH FIXED FIXTURES, AIR CONDITIONERS, FURNITURE & PLANT & MACHINERY FOR A L UMP-SUM COMPENSATION. AND IT WAS FURTHER CONTENDED THAT SAID COMPENSATION CANNOT BE TREATED AS INCOME FROM HOUSE PROPERTY. THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY AO HOLDING THAT ASSESSEE FAILED TO FURNISH THE COPY OF LEASE AGREEMENT IN RESPECT OF LEASED OUT PROPERTY. CONSIDERING THE INC OME RECEIVED BY WAY OF RENT FROM LETTING OUT OF PROPERTY AMOUNTING TO RS. 18,00,000/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ALLOWING THE STATUTORY DEDUCTION U/S 24, THE AO LEVIED THE MINIMUM PENALTY OF RS. 4, 78,703/- BEING 100% OF THE TAX SOUGHT TO BE EVADED. THE ASSESSEE FURTHER F ILED APPEAL BEFORE THE CIT(A) BUT THE SAME WAS DISMISSED VIDE ORDER IMPUGN ED IN THE PRESENT APPEAL. HENCE, THE PRESENT APPEAL IS FILED BEFORE U S. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENU E AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. AR OF THE ASSESSE E ARGUED THAT SIMILAR DISALLOWANCE WAS MADE IN THE AY 2008-09 AND AO LEVI ED THE PENALTY. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) WHEREIN THE PENALTY WAS DELETED VIDE ORDER DATED 13.07.2015 AND THE REVENUE HAS NOT FILED ANY FURTHER APPEAL. THE LD. AR OF THE ASSESSEE FURTHER ARGUED T HAT MERE DISALLOWANCE OF INCOME UNDER ONE HEAD AND TREATING THE SAME IN OTHE R HEAD OF INCOME WILL NOT TANTAMOUNT TO CONCEALMENT OF INCOME. IT WAS FUR THER ARGUED THAT MERE DISALLOWANCE WOULD NOT LEAD TO DRAW A CONCLUSION FO R CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULAR. ON THE OTHER HAND, LD. DR FOR 3 ITA NO. 5831/M/2013- M/S EQUIPOISE INVESTMENTS PVT. LTD REVENUE ARGUED THAT THE APPEAL OF THE ASSESSEE ON Q UANTUM ASSESSMENT WAS DISMISSED BY THE CIT(A) AND THE FURTHER APPEAL FILE D BEFORE THE ITAT WHEREIN THE DISALLOWANCE WAS RESTORED TO THE FILE O F AO AND THE AO FURTHER CONFIRMED THE DISALLOWANCE. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND FURTHER GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT ASSESSEE OFFERED RENTAL INCOME UNDER THE HEAD INCOME FROM B USINESS AND PROFESSION. THE AO TREATED THE SAME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. FURTHER, IT IS NOT IN DISPUTE THAT THE A PPEAL FILED BY ASSESSEE AGAINST THE QUANTUM ASSESSMENT WAS REMANDED BACK TO THE AO WHEREIN DISALLOWANCE WAS AGAIN CONFIRMED. THE ASSESSEE HAS NOT FILED ANY FURTHER APPEAL AGAINST THE SAID QUANTUM ASSESSMENT. WE ARE CONSCIOUS THAT THE PENALTY PROCEEDING ARE SEPARATE AND INDEPENDENT. IT IS SETTLED LAW THAT MERE DISALLOWANCE OF INCOME FROM ONE HEAD AND TREATING U NDER THE SAME IN OTHER HEAD WOULD NOT TANTAMOUNT TO CONCEALMENT OF INCOME. 5. IN OUR CONSIDERED OPINION, NO INACCURATE PARTICULAR WAS FURNISHED BY THE ASSESSEE NOR INCOME WAS CONCEALED, THUS THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE CIT(A) IS LIABLE TO BE DELETED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS19 TH OCTOBER, 2016. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 19/10/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/