NEELKANTH TOWNSHIP & CONSTRUCTION P.LTD, MUMBAI V. ITO 3(2)(3), MUMBAI

ITA 6062/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84318 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEKANAND PERMPURNA
• Assessee Lawyers: V C SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUM BAI . , , BEFORE SHRI D. KARUNAKARA RAO, AM & SHRI AMIT SHUKL A, JM ./ ITA NO. 6062/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) M/S. NEELKANTH TOWNSHIP & / VS. INCOME TAX OFFICER-3(2)(3) CONSTRUCTION PVT. LTD. 508, DALAMAL HOUSE NARIMAN POINT, MUMBAI 400021 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 ./ PAN AACCN5345C / APPELLANT !' / RESPONDENT # $ / APPELLANT BY: SHRI V.C. SHAH !' # $ / RESPONDENT BY: SHRI VIVEKANAND PERMPURNA %& # ' / DATE OF HEARING: 02.12.2014 ()* # ' / DATE OF PRONOUNCEMENT: 02.12.2014 / O R D E R PER D. KARUNAKARA RAO, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 02.07.2012 PASSED BY THE CIT(A)-4, MUMBAI AND IT PE RTAINS TO AY 2008-09 IN CONNECTION WITH PENALTY LEVIED UNDER SECTION 271 (1)(C) OF THE ACT. 2. THE RELEVANT FACTS LEADING TO THE LEVY OF PENALTY A RE THAT THE ASSESSEE RECEIVED INTEREST INCOME OF ` 5,99,644/-. THE SAME WAS ADJUSTED AGAINST THE EXPENSES WHILE FILING THE RETURN OF INCOME. OTHERWI SE, IT IS A CASE THAT THE ASSESSEE DISCLOSED THE FACT OF RECEIPT OF INTEREST INCOME IN THE RETURN. THE AO DID NOT ALLOW THE SET OFF OF THE SAID INCOME AGA INST THE EXPENSES AND THE SAME WAS TREATED AS INCOME OF THE ASSESSEE. THE ASS ESSEE ACCEPTED THE SAME. HOWEVER, THE AO LEVIED PENALTY ON THE SAID AM OUNT UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO ` 1,82,289/-. THE CIT(A) CONFIRMED THE ITA NO. 6062/MUM/2012 NEELKANTH TOWNSHIP & CONSTRUCTION P. LTD. 2 SAME IGNORING ASSESSEES ARGUMENT THAT THERE IS NO FAILURE IN DISCLOSING THE RELEVANT INFORMATION IN THE RETURN AND THE INCOME I S NOT CONCEALED IN THE REAL SENSE. 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE MEN TIONED THE ABOVE FACTS AND THE REASONS FOR OFFER OF THE SAID INTERES T INCOME TO TAX ARE TO SET OFF OF THE SAID INTEREST INCOME AGAINST THE WORK-IN-PRO GRESS THEREBY REDUCING THE CLAIM OF WORK-IN-PROGRESS IS A MATTER OF DEBATE AND THE SAME SHOULD NOT BE CONSTRUED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. 4. ON A PERUSAL OF THE RECORDS MADE AVAILABLE BEFORE U S WE FIND THAT THE ASSESSEE HAS DISCLOSED THE RELEVANT FACTS IN THE RE TURN OF INCOME. THE FACT OF NOT FILING FURTHER APPEAL ON QUANTUM ADDITION SHOUL D NOT COME IN THE WAY OF DECIDING THE PENALTY PROCEEDINGS. IN OUR OPINION IT IS A MATTER OF DEBATE IF THE SAID INTEREST INCOME IS RIGHTLY SET OFF AGAINST THE DEVELOPMENTAL EXPENSES OR OFFERED THE SAME AS INCOME OF THE ASSESSEE. THE ISSUE IS SO DEBATABLE, IT IS A SETTLED PROPOSITION IN LAW THAT PENALTY UNDER SEC TION 271(1)(C) OF THE ACT IS NOT SUSTAINABLE. ACCORDINGLY GROUNDS NO. 1 TO 5 ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS ALLO WED. +, %-.+ # / 0 # 1 23 ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND DECEMBER, 2014. # ()* / 5%, 02.12.2014 ) # 6& SD/- SD/- ( AMIT SHUKLA ) ( D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 7& MUMBAI, 5% DATED: 2 ND DECEMBER, 2014 ITA NO. 6062/MUM/2012 NEELKANTH TOWNSHIP & CONSTRUCTION P. LTD. 3 COPY TO: 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ( )/ THE CIT(A) 4, MUMBAI 4. / THE CIT 3, MUMBAI CITY 5. 896 !%:- , ' :- , 7& THE DR, B BENCH, ITAT, MUMBAI 6. 6. ;& / GUARD FILE. % / BY ORDER '8 ! //TRUE COPY// ASSISTANT REGISTRAR , 7& ITAT, MUMBAI BENCHES, MUMBAI N.P.