PRAKASH JEEWANRAM SANGHAI, MUMBAI V. ITO WD 14(2)(1, MUMBAI

ITA 6283/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8224 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. , ! , BEFORE S/SH.VIJAY PAL RAO, JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.6283/MUM/2012, ' ' ' ' # # # # / ASSESSMENT YEAR-2008-09 PRAKASH JEEWANRAM SANGHAI, 17, LAWYERS CHAMBERS, PICKET ROAD, RS.S.SAPRE MARG, MUMBAI-400002 PAN:AAGPS0692G VS IT O WARD 14(2)(1), 3RD FLOOR, EARNEST HOUSE, NARIMAN POINT,MUMBAI-400021 ( $% / APPELLANT) ( &'$% / RESPONDENT) '() '() '() '() * * * * / ASSESSEE BY : NONE + * / REVENUE BY : SHRI PREMANAND J. ' ' ' ' + ++ + ), ), ), ), / DATE OF HEARING : 30-09-2014 -.# + ), / DATE OF PRONOUNCEMENT : 31-10-2014 ' ' ' ' , 1961 + ++ + 254 )1( )/) )/) )/) )/) 0 0 0 0 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! ! ! ! ' ' ' ' : CHALLENGING THE ORDER DATED 28.06.2012 OF THE CIT(A )-25, MUMBAI,ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEALS: 1.THE COMMISSIONER OF INCOME TAX (APPEALS)-25, HAS ERRED IN LAW BY SUSTAINING THE PENALTY AT RS. 39784/-. 2.THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER BY DE LETION, SUBSTITUTION OR OTHERWISE THE ABOVE GROUNDS OF APPEAL BEFORE OR DURING THE HEARING OF T HIS APPEAL. THE EFFECTIVE GROUND OF APPEAL IS ABOUT PENALTY LEV IED BY THE ASSESSING OFFICER(AO) U/S. 271 (1) (C)OF THE ACT.ASSESSEE, AN INDIVIDUAL,ENGAGED IN TH E BUSINESS OF TRADING IN STEEL ON WHOLESALE BASIS IN THE NAME AND STYLE OF M/S J.J.STEEL,FILED HIS RETURN OF INCOME ON 24.09.2008 DECLARING NIL INCOME.THE AO FINALISED THE ASSESSMENT,U/S.143(3) O F THE ACT,ON 22.12.2010 DETERMINING HIS INCOME AT RS. 3.42 LAKHS. 2. ON VERIFICATION OF THE COMPUTATION OF TOTAL INCOME, THE AO FOUND THAT ASSESSEE HAD NOT SHOWN ANY LONG TERM CAPITAL GAIN (LTCG).AS PER THE AO DUR ING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISED STATEMENT OF COMPUTATION O F INCOME IN WHICH HE DECLARED LTCG OF RS. 2. 98 LAKHS FROM SALE PROCEEDS OF SHARES.THE AO HELD T HAT IF THE CASE WAS NOT SELECTED FOR SCRUTINY THE LTCG WOULD NOT HAVE BEEN BROUGHT TO TAX.HE INIT IATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME.ASSESSEE FILED HI S EXPLANATION BEFORE THE AO.AFTER CONSIDER - ING THE REPLY OF THE ASSESSEE,HE HELD THAT THE ASSE SSEE HAD FILED INACCURATE PARTICULARS OF INCOME ANT HAD THUS CONCEALED HIS INCOME.HE LEVIED A PENAL TY OF RS.39,784/- INVOKING THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE ASSESSMENT OR DER,PENALTY ORDER AND THE SUBMISSIONS OF THE ASSESSEE,HE HELD THAT EXPLANATION FURNISHED BY THE ASSESSEE DID NOT INSPIRE ANY CREDIBILITY, THAT THE ASSESSEE DID NOT OFFER IMPUGNED LTCG FOR TAXATION I N RETURN OF INCOME EVEN THOUGH IMPUGNED 2 ITA NO. 6283/M/2012 PRAKASH JEEWANRAM SANGHAI SALE PROCEEDS WERE RECEIVED BYHIM ,THAT THE ASSESSE E HAD NOT OFFERED THE SAID AMOUNT VOLUNTARILY /SUE MOTU,THAT IT WAS OFFERED FOR TAXATION ONLY AFT ER THE AO DETECTED THE SAME AND ASKED THE ASSESSEE TO EXPLAIN WHY IT SHOULD NOT BE TAXED,THAT ONLY AFTER DETECTION BY THE AO AND CONSEQUENTIAL QUERY FOR TAXATION OF THE SAID AMOUNT THE ASSESSEE HAD AGREED FOR TAXATION,THAT HAD THE CASE NOT BEING SELECTED FOR SCRUTINY,SUCH TYPE OF APPARENT CONCEALMENT OF INCOME COULD NOT HAVE BEEN UNEARTHED.THE FAA REFERRED TO THE CASES O F K.P. MADHUSUDHANAN (251 ITR 99), DHARMENDRA TEXTILE PROCESSORS (295 ITR 244), ZOOM C OMMUNICATION PVT. LTD.(233 CTR 465). 4. AS STATED EARLIER,NO BODY APPEARED PERSONALLY BEFOR E US.BUT,THE ASSESSEE HAS FILED HIS WRITTEN SUBMISSION AND HAS STATED THAT ISSUE SHOULD BE DECI DED AFTER CONSIDERING THE SAME.WE FIND THAT THE ASSESSEE HAD FILED THE REVISED STATEMENT OF HIS INC OME DURING THE ASSESSMENT PROCEEDINGS.THOUGH THE FAA MENTIONS THAT THE AO HAD DIRECTED THE ASSES SEE TO EXPLAIN THE TRANSACTION,YET FROM THE ORDER OF THE AO IT APPEARS THAT THE FILING OF REVIS ED STATEMENT WAS VOLUNTARY.IN OUR OPINION,IF AN ASSESSEE REVISES HIS RETURN ON ITS OWN WITHOUT BEIN G INVESTIGATED BY THE AO,HIS MATTER CANNOT BE EQUATED WITH THE CASE WHERE THE ASSESSEE IS CONFRON TED BY THE AO WITH INCRIMINATING MATERIAL.ADDITION TO THE INCOME OF THE ASSESSEE IN BOTH THE CASES WOULD BE JUSTIFIED.BUT,AS FAR AS PENAL PROVISIONS CANNOT BE INVOKED,IN OUR OPINION,I N THE FIRST TYPE OF CASES.WE FIND THAT THE MATTER BEFORE US DOES NOT FALL UNDER THE SECOND CATEGORY.T HEREFORE,CONSIDERING THE PECULIAR FACTS OF THE CASE,INCLUDING THE AMOUNT INVOLVED,WE ARE REVERSING THE ORDER OF THE FAA.EFFECTIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. AS A RESULT,APPEAL FIL ED BY THE ASSESSEE STANDS ALLOWED ( 1 '() + 2 + ) 34. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER,2014 . 0 + -.# 6 7' 31.10. 201 4 . + / 8 SD/- SD/- ( / VIJAY PAL RAO) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 7' /DATE: 31 .10 . 2014. SK 0 0 0 0 + ++ + &) &) &) &) 9 #) 9 #) 9 #) 9 #) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ : ; , 4. THE CONCERNED CIT / : ; 5. DR C BENCH, ITAT, MUMBAI / / 3 DY./ASST. REGISTRAR , /ITAT, MUMBAI