ITO 9(3)(4), MUMBAI V. WHISTLING WOODS INTERNAITONAL P.LTD, MUMBAI

ITA 5918/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3455 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 28-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SENT H IL KUMARAN
• Assessee Lawyers: K SHIVARAM
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , ! , ' , # BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I.T.A. 5919/MUM/2012 & I .T.A. NO.5918/MUM/2012 ( ' $ %$ / ASSESSMENT YEAR: 2003-04 & 2004-05) INCOME TAX OFFICER 9(3)(4) 2 ND FLOOR, ROOM NO.216B, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 / VS. M/S. WHISTLING WOODS INTERNATIONAL PVT. LTD. 6, BASHIRON, 28 TH ROAD, TPS- III, BANDRA WEST, MUMBAI - 400050 ./ ./ PAN/GIR NO. : AAACW4307R ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI K.SHIVARAM & RAHUL HAKANI DEPARTMENT BY: SHRI S. SENTHIL KUMARAN / DATE OF HEARING: 29.03.2016 /DATE OF PRONOUNCEMENT: 18.05.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 31.07.2012 & 30.07.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-20, MUMBAI [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 2003-04 & 2004-05 RESPECTIVE LY WHEREIN THE PENALTY IMPOSED BY THE ASSESSING OFFICER HAS BEEN O RDERED TO BE DELETED. ITA NO.5919&5918/MUM/2012 ASSESSMENT YEAR: 2003-04 & 2004-05 2 2. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARIN G TOTAL INCOME AT RS.NIL ON 21.11.2003 AND 21.10.2004. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT U/S. 143(3) OF THE INCOME T AX ACT, 1961 ( IN SHORT THE ACT) WAS COMPLETED ON 18.10.2005 AND 26 .09.2006 DETERMINING TOTAL INCOME AT RS.61,56,030/- AND 76,4 0,047/- FOR A.Y.2003-04 AND 2004-05 RESPECTIVELY . THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF ESTABLISHING RESEARCH AND TRAINI NG INSTITUTE CUM INTEGRATED STUDIO. DURING THE RELEVANT YEAR THE PR OJECT WAS UNDER CONSTRUCTION AND WORK WAS ALLOTTED TO M/S. LARSEN & TOUBRO LTD. ACCORDING TO THE AGREEMENT THE TOTAL CONTRACT WAS C ARRIED OUT FOR AN AMOUNT OF RS.6,93,81,720/- AND WORK WAS REQUIRED TO BE COMPLETED WITHIN THE PERIOD OF 12 MONTHS. THE TOTAL EXPENDIT URE AS ON 31.03.2003 WAS SHOWN TO THE TUNE OF RS.1,67,19,603/- AND RS.5, 45,21,709/- FOR A.Y.2003-04 AND 2004-05 RESPECTIVELY. ACCORDING TO THE BALANCE SHEET, THE ASSESSEE COMPANY DECLARED AUTHORIZED SHARE CAPI TAL TO THE TUNE OF RS.20.00 CRORES AND ISSUED SHARE CAPITAL TO THE TUN E OF RS.10.10 CRORES. NO UNSECURED LOANS WERE TAKEN BY THE ASSESSEE COMPA NY. DURING THE A.Y. 2003-04 ASSESSEE HAS RECEIVED INTEREST INCOME FROM FIXED DEPOSITS TO THE TUNE OF RS.2,51,537/- AND INTEREST ON LOANS OF RS.59,04,493/- AGGREGATING TO THE TUNE OF RS.61,56,030/- ON DEPLOY ING SURPLUS FUNDS OUT OF SHARE CAPITAL AND INTEREST ON FIXED DEPOSITS OF RS.1,23,411/- AND INTEREST ON LOANS OF RS.26,93,042/- AND INCOME FROM UNITS AND MUTUAL FUNDS OF RS.48,23,594/- AGGREGATING TO RS.76,40,047 /- ON DEPLOYING SURPLUS FUNDS OUT OF SHARE CAPITAL FOR A.Y.2004-05. THE ASSESSEE COMPANY REDUCED THE SAID INTEREST INCOME EARNED, FR OM THE CAPITAL WORK IN PROGRESS OF RS.1,67,19,603/- AND DECLARED CLOSIN G CAPITAL WORK IN ITA NO.5919&5918/MUM/2012 ASSESSMENT YEAR: 2003-04 & 2004-05 3 PROGRESS OF RS.1,05,63,573/- FOR A.Y.2003-04 AND RE DUCED THE SAID INTEREST INCOME EARNED, FROM THE CAPITAL WORK IN PR OGRESS OF RS.5,45,21,709/- AND DECLARED CLOSING WORK IN PROGR ESS OF RS.4,68,81,662/- FOR A.Y.2004-05. ASSESSING OFFICER WAS OF THE VIEW THAT INTEREST INCOME COMES UNDER THE INCOME FROM OT HER SOURCES WHICH HAS NOT BEEN SHOWN BY THE ASSESSEE IN HIS RETURN TH EREFORE THE ASSESSING OFFICER LEVY THE PENALTY IN QUESTION. IN APPEAL TH E LEARNED CIT(A) DELETED THE PENALTY THEREFORE THE REVENUE IS BEFORE US. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIV ES OF THE PARTIES AND PERUSED THE RECORD. THE BALANCE SHEET AND OTHER CO NVENIENT STATEMENT ATTACHED WITH THE RETURN OF INCOME SPEAKS THAT THE ASSESSEE HAS DISCLOSED EACH AND EVERYTHING IN HIS RETURN. THE ONLY QUESTI ON IS THAT THE CLAIM OF THE ASSESSEE IS IN CONNECTION WITH THE CLAIM OF INC OME AS CAPITAL WORK IN PROGRESS RESULTING TO LEVY THE PENALTY FOR FURNISH THE INACCURATE PARTICULARS OF INCOME. PENALTY U/S. 271(1)(C) SPEA KS ABOUT THE CONCEALMENT OF INCOME AND FURNISHING THE INACCURATE PARTICULARS BY THE ASSESSEE. IN THE INSTANT CASE THE APPELLANT HAD AC CURATELY AND TRULY DISCLOSED ALL PARTICULARS OF HIS INCOME OR DURING T HE PRE-COMMENCEMENT PERIOD. THERE IS NO CHANGE IN RESPECT OF FIGURE DE BITED FROM INTEREST ON FIXED DEPOSITS, LOANS AND ADVANCES AND MUTUAL FUNDS . IT WAS ONLY THE CASE OF DIFFERENCE OF OPINION WHEREIN THE CLAIM MAD E BY THE APPELLANT IS BASED UPON THE CIT VS BOKARO STEEL LTD.[1999] 236 I TR 315 (SC) WHERE THE DEPARTMENT DECIDED THE MATTER BY RELYING UPON THE DECISION OF TUTICORIN ALKALI CHEMICALS [1997] 227 ITR 172. NO DOUBT IN THE SAID CIRCUMSTANCES IT IS CLEARLY THE CHANGE OF OPINION W ITH REGARD TO THE CLAIM RAISED BY THE ASSESSEE AND IT CANNOT CONSIDERED TO FURNISH THE INACCURATE ITA NO.5919&5918/MUM/2012 ASSESSMENT YEAR: 2003-04 & 2004-05 4 PARTICULARS OF INCOME. IN THIS REGARD WE ALSO SUPP ORT OF LAW SETTLED IN CIT VS. RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158 SC. NO DOUBT IN THE SAID CIRCUMSTANCES THE LEARNED CIT(A) HAS PASSE D THE ORDER JUDICIOUSLY AND CORRECTLY WHICH IS NOT REQUIRED TO BE INTERFERE WITH AT THIS APPELLATE STAGE. 5. IN THE RESULT, THE APPEALS OF THE REVENUE ARE TR EATED AS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MAY, 2016 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 18 TH MAY, 2016 MP MP MP MP & ' (' ) *)% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. & / BY ORDER, ) $ //TRUE COPY// + / ! (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI