ARYL PHARMACEUTICALS, MUMBAI V. ACIT RG 20(1), MUMBAI

ITA 6144/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0990 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-01-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 24-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: N O N E
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D,MUMBAI BEFORE SHRI D. MANMONAN (VICE PRESIDENT) & SHRI R.K. PANDA (ACCOUNTANT MEMBER) I.T.A.NO.6144 & 6145/MUM/2009 (A.YS. 2001-02 & 2002-03) M/S. ARYL PHARMACEUTICALS, 7/8, MAROL CO-OP.INDL.ESTATE, ANDHERI-KURLA RD., OPP.VIDEOCON SERVICE CENTRE, ANDHERI (E), MUMBAI-400 059. PAN: AAAFA1551G VS. ASST.COMMR. OF INCOME-TAX, RANGE 20(1), PIRAMAL CHAMBERS, 6 TH FLOOR, LOWER PAREL,MUMBAI-12. APPELLANT RESPONDENT APPELLANT BY NO NE. RESPONDENT BY SHRI JITENDRA YADAV. O R D E R PER R.K. PANDA, AM : THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DIR ECTED AGAINST THE COMMON ORDER DATED 3-8-2009 OF CIT(A)-XX, MUMBAI, RELATING TO ASSTT. YEARS 2001-02 AND 2002-03 RESPECTIVELY. IN BOTH THE APPE ALS, THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) SUSTAINING PENALTIES OF RS.5,31,914/- FOR ASSTT. YEAR 2001-02 AND RS.6,06,519/- FOR THE ASSTT. YEAR 2002-02 LEVIED BY THE AO U/S.271(1)(C) OF THE I.T. ACT. SINCE FACTS ARE IDEN TICAL, THEREFORE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER. 2. THE APPEALS WERE FIXED FOR HEARING ON 13-7-2010. ON 13-7-2010, AT THE REQUEST OF THE ASSESSEE, THE APPEALS WERE ADJOURNED TO 28-7-2010 FOR CONSOLIDATION AND FINAL HEARING. HOWEVER, WHEN THE NAME OF THE ASSESSEE WAS CALLED ON 28-7-2010, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT PETITION SEEKING ADJOURNMENT OF THE CAS E WAS FILED. UNDER THESE ITA NOS.6144-6145/M/09 ARYL PHARMACEUTICALS 2 CIRCUMSTANCES, BOTH THE APPEALS WERE TAKEN UP FOR H EARING ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. D.R. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM HAVING INCOME FROM HOUSE PROPERTY AND OTHER INCOME FOR THE RELEVANT ASSESSMENT YEAR. THE AO, DURING THE COURSE OF ASSES SMENT PROCEEDINGS, OBSERVED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY DURING BOTH THE ASSTT. YEARS. HOWEVER, THE ASSESSEE HAS SHOWN INTEREST INCOME, RENTAL INCOME AND DIVIDEND INCOME AS ITS BUSINESS INCOME A ND CLAIMED VARIOUS DEDUCTIONS AGAINST THE SAME AS SHOWN IN THE P & L A CCOUNT. NOT BEING SATISFIED WITH THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE , THE AO CAME TO THE CONCLUSION THAT RENTAL INCOME HAS TO BE ASSESSED A S INCOME FROM HOUSE PROPERTY AND DIVIDEND AND INTEREST INCOME HAS TO B E ASSESSED UNDER INCOME FROM OTHER SOURCES. ACCORDING TO THE AO, THE ASSE SSEE BY CLAIMING THE RENTAL INCOME AND INTEREST AND DIVIDEND INCOME AS BUSINES S INCOME AND THEREAFTER CLAIMING VARIOUS EXPENSES FROM SUCH BUSINESS INCOME HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN ORDER TO EVADE A PORTION OF TAX. HE ACCORDINGLY INVOKED THE PROVISIONS OF SEC. 271(1)(C) OF THE ACT AND LEV IED PENALTIES OF RS.5,31,914/- AND RS.6,06,519/- FOR THE ASSTT. YEARS 2001-02 AND 2002-03 RESPECTIVELY. 4. IN APPEAL, THE CIT(A), AFTER CONSIDERING THE VAR IOUS ARGUMENTS ADVANCED BY THE ASSESSEE AND DISTINGUISHING THE DECISIONS CI TED BEFORE HIM AND FOLLOWING VARIOUS OTHER DECISIONS, HELD THAT THE ASSESSEE ON FACTS AS WELL AS ON LEGAL POSITION HAS FURNISHED INACCURATE PARTICULARS OF IT S INCOME BY CLAIMING THE HOUSE PROPERTY AND OTHER INCOME AS BUSINESS INCOME. HE NO TED THAT SINCE THE BUSINESS WAS CLOSED FOR EVER WITH NO INTENTION TO RESTART, T HEREFORE, THE EXPENSES CLAIMED IN ITS P & L ACCOUNT AND ITS SET OFF AGAINST HOUSE PROPERTY INCOME AND INCOME FROM OTHER SOURCES, IS WRONG AND THEREFORE THE CLAI M OF THE ASSESSEE TO THIS ITA NOS.6144-6145/M/09 ARYL PHARMACEUTICALS 3 EXTENT AMOUNTS TO FURNISHING OF INACCURATE PARTICUL ARS OF INCOME WITHIN THE MEANING OF SEC. 271(1)(C) OF THE ACT. SINCE THE ASS ESSEE FAILED TO SUBSTANTIATE ITS EXPLANATION AND ALSO FAILED TO PROVE THAT THE SAID EXPLANATION IS BONA FIDE, AND ALL MATERIAL FACTS RELEVANT TO THE SAME HAVE BEEN DISCL OSED IN ITS RETURN OF INCOME, THE LD. CIT(A) HELD THAT THE ASSESSEES CASE IS HIT BY THE DEEMING PROVISIONS OF SEC. 271(1)(C) OF THE ACT. HE ACCORDINGLY UPHELD TH E ACTION OF AO FOR BOTH THE ASST. YEARS UNDER CONSIDERATION. AGGRIEVED WITH SUC H ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE ORDERS OF THE REVENUE AUT HORITIES AND HEARD THE LD. D.R. WE FIND THE LD. CIT(A) IN A VERY DETAILED AND SPEAKING ORDER HAS GIVEN SOUND REASONING WHILE UPHOLDING THE ACTION OF AO LE VYING PENALTY U/S.271(1)(C) OF THE I.T. ACT FOR BOTH THE YEARS. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN HIS ORDER AND ACCORDINGLY UPHOLD THE SAME. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ITSELF I.E. ON 28 TH JULY, 2010. SD/- SD/- (D. MANMOHAN) (R.K. PANDA) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 28 TH JULY , 2010. NG: ITA NOS.6144-6145/M/09 ARYL PHARMACEUTICALS 4 COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-XX,,MUMBAI. 4 CIT-XI,MUMBAI. 5.DR,D BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA NOS.6144-6145/M/09 ARYL PHARMACEUTICALS 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28-7-10 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 28-7-10 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER