PUKHRAJ H MEHTA, MUMBAI V. ACIT 21(1), MUMBAI

ITA 6219/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3332 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST TH E DATED PASSED
• Keywords: Revised return
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.6219/M/13 ( / ASSESSMENT YEAR: 2009-10) PUKHRAJ H. MEHTA 106-A, SHYAM KAMAL, TEJPAL ROAD, VILE PARLE (EAST), MUMBAI - 400057 / VS. ASST. COMM. OF INCOME TAX 21(1) MUMBAI ./ ./PAN/GIR NO. : AAOPM0512F ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 10.12.2015 /DATE OF PRONOUNCEMENT: 16.03.2016 ! / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 30.09.2013 PASSED BY THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) 32, MUMBAI [HEREINAFTER REFERR ED TO AS THE LEARNED CIT(A)] RELEVANT TO THE A.Y.2009-10 WHER EIN LEVY OF PENALTY BY THE ASSESSING OFFICER HAS BEEN CONFIRMED . 2. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN T HE BUSINESS OF CIVIL CONTRACT AND MANUFACTURING OF RMC IN THE N AME AND STYLE ASSESSEE BY: SHRI RAHUL H. HAKANI DEPARTMENT BY: SHRI SHIDDARAMAPPA K. NAVAR ITA NO.6219/MUM/2013 ASSESSMENT YEAR: 2009-10 2 OF M/S. MEHTA ENTERPRISES. DURING THE YEAR, ASSESS EE HAS SHOWN GROSS TURNOVER OF RS.19.02 CRORES AND OTHER INCOME ON ACCOUNT OF INTEREST AND DECLARED NET INCOME OF RS.88,21,559/-. AFTER THE SELECTION OF THE CASE OF THE ASSESSEE IN SCRUTINY, NOTICE U/S. 143(2) OF THE OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WAS ISSUED AND SUBSEQUENTLY, NOTICE U/S. 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED AND SERVED UPON THE ASSESS EE. AFTER THE RECEIPT OF THE NOTICES, THE REPRESENTATIVE OF THE A SSESSEE FURNISHED THE FOLLOWING DETAILS:- DIFFERENCES IN ITS DETAILS:- AS PER THE ITS DETAILS AVAILABLE ON RECORD, ASSESS EE RECEIVED CONTRACT INCOME FROM VARIOUS PARTIES. THE ASSESSEE WAS ASKED TO RECONCILE THE ITS DETAILS AND EXPLAIN HOW THE SAME HAS BEEN REFLECTED IN COMPUTATION OF TOTAL INCOME. ON VERIFICATION OF THE DETAILS, IT WAS NOTICED THAT TH E ASSESSEE HAS SHORT DECLARED CONTRACT INCOME IN RESPECT OF M/S. C OWTOWN LAND DEVELOPMENT TO THE TUNE OF RS.3880 AND M/S. AZ URE TREE TOWNSHIP RS.3600/-. IN VIEW OF THE ABOVE, AN AMOUNT OF RS.7480(3880+3600), IS ADDED TO ASSESSEES TOTAL INCOME. REVISED COMPUTATION OF TOTAL INCOME :- ON VERIFICATION OF THE ITS DETAILS, IT WAS NOTICED THAT THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY FOR AN AMOUNT OF RS.43,00,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE REPRESENTATIVE OF THE ASSESSEE FUR NISHED ITA NO.6219/MUM/2013 ASSESSMENT YEAR: 2009-10 3 REVISED COMPUTATION OF TOTAL INCOME COMPUTING TOTAL INCOME AT RS.1,02,59,826/- AS AGAINST DECLARED INCOME OF RS.94,67,826/- IN THE ORIGINAL RETURN OF INCOME. A SSESSEE ALSO ENCLOSED FORM NO.ITR-4 FOR REVISED INCOME. IN THE REVISED COMPUTATION, ASSESSEE OFFERED SHORT TERM CA PITAL GAIN ON SALE OF PROPERTY AMOUNTING TO RS.7,92,000/- ON S ALE OF FLAT REFLECTED IN ITS DETAILS. SINCE THE ASSESSEE DECLARED SHORT TERM CAPITAL GAIN ONLY AFTER ISSUANCE OF NOTICE U/S.143(2) OF THE ACT AND THE TR ANSACTION REPORTED IN ITS DETAILS, PENALTY PROCEEDINGS U/S.27 1(1)(C) ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE REVISED COMPUTATION FILED BY THE ASSESSEE IS CONSID ERED FOR COMPUTATION. CLAIM OF EXPENSES:- DURING THE YEAR, ASSESSEE HAS DEBITED CONVEYANCE EX PENSES OF RS.1,12,575/-, SITE EXPENSES OF RS.2,48,695/-. O N VERIFICATION OF THE DETAILS OF SITE EXPENSES AND CO NVEYANCE EXPENSES, IT WAS NOTICED THAT SOME OF THE EXPENSES WERE INCURRED IN CASH. FURTHER, THE ELEMENT OF PERSONAL USAGE OF TELEPHONES AND MOTOR CAR CANNOT BE RULED OUT. THE ASSESSEE WAS ASKED TO FURNISH THE SUPPORTING BI LLS / VOUCHERS IN RESPECT CONVEYANCE AND SITE EXPENSES. THE VOUCHERS PRODUCED IN RESPECT OF CASH EXPENSES REVEA LED THAT THE SAME ARE INCURRED IN PETTY CASH, FOR WHICH PROP ER THIRD ITA NO.6219/MUM/2013 ASSESSMENT YEAR: 2009-10 4 PARTY BILLS WERE NOT ATTACHED TO IT. HOWEVER, THE REPRESENTATIVE OF THE ASSESSEE EXPLAINED THAT THE N ATURE OF BUSINESS IS LIKE THAT IT IS DIFFICULT TO MAINTAIN T HIRD PARTY BILL IN RESPECT OF ALL ABOVE EXPENSES. THE EXPLANATION OF THE ASSESSEE HAS BEEN CONSIDERED, HOWEVER, THE SAME CAN NOT BE ACCEPTED IN TOTO IN THE ABSENCE OF COMPLETE CORROBO RATIVE EVIDENCE. IN VIEW OF THE ABOVE AND ALSO TO COVER U P THE DISCREPANCIES, AN AMOUNT OF RS.40,000/- IS DISALLOW ED AND ADDED TO ASSESSEES TOTAL INCOME. TELEPHONE AND MOTOR CAR EXPENSES:- DURING THE YEAR, ASSESSEE HAS DEBITED VEHICLE EXPEN SES OF RS.1,04,740/-, TELEPHONE EXPENSES OF RS.2,36,295/-. THE ASSESSEE WAS ASKED TO FURNISH THE ITEM WISE BILLS A ND LOG BOOK IN RESPECT OF USAGE OF MOTOR CAR, HOWEVER, HE HAS SUBMITTED THAT HE HAS NOT MAINTAINED THE LOG BOOK A ND NOR HE MAINTAINED THE ITEM WISE BILLS. IN THE ABSENCE OF ABOVE, THE USAGE OF ABOVE ITEMS FOR PERSONAL PURPOSES CANNOT B E RULED OUT. IN VIEW OF THE ABOVE, AN AMOUNT OF RS.35,000/ - IS TREATED AS PERSONAL IN NATURE AND ADDED TO ASSESSEE S TOTAL INCOME. 3. AFTER EXPLANATION SUBMITTED BY THE ASSESSEE THE TAXABLE INCOME TO THE TUNE OF RS.1,03,42,306/- WAS FOUND. SUBSEQUENTLY, THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT W AS INITIATED ON ACCOUNT OF THIS FACT THAT THE ASSESSEE HAS SOLD IMM OVABLE PROPERTY OF RS.43,00,000/- BUT DID NOT FIGURE THE DETAIL IN THE RETURN HOWEVER ITA NO.6219/MUM/2013 ASSESSMENT YEAR: 2009-10 5 AFTER THE ISSUANCE OF NOTICE THE ASSESSEE SUBMITTED THE REVISED RETURN AND DISCLOSED THE SAID TRANSACTION BY SHOWIN G THE INCOME TO THE TUNE OF RS.1,02,59,826/- AS AGAINST RETURNED IN COME OF RS.94,67,826/-. ASSESSEE ALSO ENCLOSED FORM NO.ITR -4 FOR REVISED INCOME. IN THE REVISED COMPUTATION, ASSESSEE OFFER ED SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY AMOUNTING TO RS.7, 92,000/- ON SALE OF FLAT REFLECTED IN ITS DETAILS. SINCE THE ASSESS ING OFFICER IS OF THE VIEW THAT SHORT TERM CAPITAL GAIN WAS DISCLOSED BY THE ASSESSEE AFTER ISSUANCE OF NOTICE U/S.143(2), THEREFORE, THE ASSESSING OFFICER LEVIED THE PENALTY IN QUESTION. THE REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE REVENUE NOWHERE IN HIS NOTICE D ISCLOSED ABOUT THE SALE OF FLAT HOWEVER ASSESSEE HAS VOLUNTARILY DISCLOSED THE TRANSACTION THEREFORE NO PENALTY IS LEVIABLE IN ACC ORDANCE WITH LAW. IT IS ALSO ARGUED THAT THE TRANSACTION HAS BEEN DIS CLOSED BUT PROFIT WAS NOT DISCLOSED INADVERTENTLY, THEREFORE THE PRES ENT CASE IS NOT THE CASE OF FURNISHING THE INACCURATE PARTICULARS O F INCOME AND CONCEALMENT THE PARTICULARS OF INCOME TO EVADE THE TAX, HENCE THE PENALTY IS LIABLE TO BE SET ASIDE. ON THE OTHER HA ND THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS STRONGLY RELIED UPO N THE ORDER PASSED BY THE LEARNED CIT(A). AFTER THE SELECTION OF THE CASE FOR SCRUTINY THE ABOVE SAID FOUR ADDITIONS WERE MADE AN D ON THE APPEAL THE ONLY ADDITION WITH REGARD TO THE SHORT TERM CAP ITAL GAIN WAS SUSTAIN. SUBSEQUENTLY, AFTER THE ISSUANCE OF NOTIC E, THE ASSESSING OFFICER LEVIED THE PENALTY TO THE TUNE OF RS.2,75,0 00/- WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A) ORDER IN QUES TION. IT IS NOT DISPUTED THAT THE ASSESSEE HAS REFLECTED IN HIS RET URN ABOUT THE SALE ITA NO.6219/MUM/2013 ASSESSMENT YEAR: 2009-10 6 OF FLAT OF RS.43,00,000/- HOWEVER, SHORT TERM CAPIT AL GAIN WHICH THE ASSESSEE HAS BEEN RECEIVED HAS NOT BEEN REFLECTED. SUBSEQUENTLY THE ASSESSEE FILED THE REVISED RETURN VOLUNTARILY OFFERING THE TAX TO THE TUNE OF RS.7,92,000/-. THE AUTHORITY DID NOT H IGHLIGHT THE FACT ABOUT NON FURNISHING OF THE DETAILS OF PROFIT ON SH ORT TERM CAPITAL GAIN IF ANY RECEIVED BY THE ASSESSEE. THE NOTICE D ATED 20.08.2010 ISSUED U/S. 143(2) OF THE ACT NOWHERE SPEAKS ABOUT THE NON- FURNISHING OF TAX ON SHORT TERM CAPITAL GAIN UPON T HE SALE OF FLAT RECEIVED TO THE TUNE OF RS.43,00,000/-. MOREOVER, THE NOTICES WHICH HAVE BEEN RECEIVED BY THE ASSESSEE BEFORE LE VYING THE PENALTY DATED 22.12.2011 AND 06.06.2012 WHICH HAS B EEN ATTACHED AT PAGE 48 OF THE PAPER BOOK NO.2 NOWHERE SPEAKS AB OUT ANY PARTICULARS TO LEVY THE PENALTY ON ACCOUNT OF NON F URNISHING THE PARTICULARS IN CONNECTION WITH SHORT TERM CAPITAL G AIN. THE NOTICE IS BLANK AND IN A SPECIFIC FORMAT WHICH NOWHERE CONTAI NED THE PARTICULARS OF THE PRESENT CASE. NO DOUBT, THERE S HOULD BE AN INTENTION ON THE PART OF THE ASSESSEE TO CONCEALMEN T OF PARTICULARS OF INCOME TO EVADE THE TAX WHICH DOES NOT SEEM ON R ECORD. IN VIEW OF THE LAW SETTLED IN CIT VS. MANJUNATH COTTON AND GINNING FACTORY (2013) 359 ITR 565 (KARATAKA) AND IN VIEW O F THE ORDER DATED 06.11.2015 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, KOLKATA IN ITA NO.1303/KOL/2010. WE ARE OF THE VIEW THAT THE LEARNED CIT(A) DID NOT PASSED THE ORDER JUDICIO USLY AND CORRECTLY THEREFORE, WE SET ASIDE THE SAME. WE ARE OF THE VIEW THAT THE PRESENT CASE IS NOT THE FIT CASE TO LEVY THE PE NALTY HENCE WE ORDER TO DELETE THE PENALTY. ITA NO.6219/MUM/2013 ASSESSMENT YEAR: 2009-10 7 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2016. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) / ACCOUNTANT MEMBER # $ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 16 TH MARCH, 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