ITO 1(1)(4), MUMBAI V. THAKUR N MULANI, MUMBAI

ITA 6007/MUM/2010

• Counselvise Citation: 600719914 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 12-04-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 02-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Keywords: Unexplained cash credit; Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M.JAGTAP (A.M) & SHRI N.V.VASUDEVAN( J.M) ITA NO. 6007/MUM/2010(A.Y. 1998-99) THE ITO 1(1)(4), ROOM NO.579, AAYKAR BHAVAN, MUMBAI 400 020. (APPELLANT) VS. THAKUR N. MULANI, 83/84, ASHOKA SHOPPING CENTRE, NR. G.T.HOSPITAL, MUMBAI -01. PAN:AEPPM 8951P (RESPONDENT) APPELLANT BY : SHRI D.S.SUNDER SINGH RESPONDENT BY : SHRI NILESH PATEL DATE OF HEARING : 12/04/2012 DATE OF PRONOUNCEMENT : 18/04/2012 ORDER PER N.V.VASUDEVAN, J.M THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 9/4/2010 OF CIT(A)-1, MUMBAI RELATING TO THE ASSESSMENT YEAR 19 98-99. IN THIS APPEAL THE REVENUE HAS CHALLENGED THE ORDER OF THE CIT(A), WHEREBY THE CIT(A) HAS CANCELLED THE ORDER OF THE AO IMPOSING PENALTY ON T HE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE ASSESSEE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF TRADING IN TEXTILE GOODS. WHILE COMPLETING THE ASS ESSMENT UNDER SECTION 143(3) OF THE ACT, THE AO MADE THE FOLLOWING ADDITI ONS TO THE TOTAL INCOME DECLARED BY THE ASSESSEE. 1. ARTIFICIAL LOSS ON COTTON FABRICS RS. 6,06,392 2. UNEXPLAINED CASH CREDIT RS. 12,75,000 3. SHORT TERM CAPITAL GAIN RS. 2,48,000 4. CASH CREDIT RS. 48,500 ITA NO. 6007/MUM/2010(A.Y. 1998-99) 2 IN RESPECT OF THE AFORESAID ADDITION MADE IN THE CO URSE OF ASSESSMENT PROCEEDINGS THE AO IMPOSED PENALTY ON THE ASSESSEE HOLDING THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME . WHILE IMPOSING THE PENALTY THE AO ALSO MADE A REFERENCE TO THE FACT TH AT THE APPEAL OF THE ASSESSEE AGAINST THE ADDITION MADE BY THE AO BEFORE THE CIT(A) WAS ALSO DISMISSED. 3. AGGRIEVED BY THE ORDER OF THE AO IMPOSING PENALT Y THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) WAS OF THE VIEW THAT THERE WAS NO CONCEALMENT OR PARTICULARS OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS BY THE ASSESSEE AND THAT THE ADDITIONS WERE MADE PURELY BECAUSE OF TECHNICAL DIFFERENCES OF OPINION BETWEEN THE ASS ESSEE AND THE AO. HE WAS OF THE VIEW THAT THE EXPLANATION OFFERED BY THE ASS ESSEE WAS BONAFIDE AND, THEREFORE, PENALTY CANNOT BE LEVIED MERELY BECAUSE DISALLOWANCES OR ADDITION WERE MADE ON ACCOUNT OF DIFFERENCE OF OPINION. AGG RIEVED BY THE ORDER OF THE CIT(A) THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING OF THE APPEAL IT WAS BROU GHT TO OUR NOTICE THAT AS AGAINST THE ADDITIONS MADE BY THE AO WHICH WERE CONFIRMED BY THE CIT(A) IN THE QUANTUM PROCEEDINGS, THE ASSESSEE FIELD AN A PPEAL BEFORE THE ITAT IN ITA NO.6885/M/2002 AND THE TRIBUNAL BY ITS ORDER DA TED 18/6/2010 WAS PLEASED TO SET ASIDE THE ORDER OF THE CIT(A) AND R EMAND ALL THE ISSUES (ADDITIONS IN RESPECT OF WHICH PENALTY WAS IMPOSED) TO THE AO FOR FRESH CONSIDERATION IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNAL IN THE SAID ORDER. SINCE THE ADDITION MADE BY THE AO IN RESPEC T OF WHICH PENALTY HAS BEEN IMPOSED HAS BEEN SET ASIDE BY THE TRIBUNAL WE ARE OF THE VIEW THAT THE ORDER IMPOSING PENALTY CANNOT STAND. FOR THIS REAS ON WE CONFIRM THE ORDER OF THE CIT(A). WE HOWEVER, MAKE IT CLEAR THAT WHIL E COMPLETING THE SIDE ASIDE PROCEEDINGS THE AO WILL BE FREE TO INITIATE PENALTY PROCEEDINGS, IF ADDITIONS ITA NO. 6007/MUM/2010(A.Y. 1998-99) 3 ARE AGAIN MADE IN THE SET ASIDE PROCEEDINGS AND IF HE CONSIDERS APPROPRIATE TO INITIATE PENALTY PROCEEDINGS IN RESPECT OF ADDIT IONS IF MADE. WITH THESE OBSERVATIONS THE APPEAL OF THE REVENUE IS DISMISSED . 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 18 TH DAY OF APRIL 2012 SD/- SD/- (P.M.JAGTAP ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 18 TH APRIL 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RE BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.