RUIA ALLOY TRADE P.LTD, MUMBAI V. ITO 5(3)(1), MUMBAI

ITA 6312/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3510 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 13-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NEELIMA NADKARNI
• Assessee Lawyers: MIHIR A TANNA
• Keywords: Unexplained cash credit; Bogus Share capital; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, ITA. NO. 6312/MUM/2014 (ASSESSMENT YEAR:2006-07) M/S. RUIA ALLOY TRADE PVT. LTD. 17, KIKA MANSHION, 3 RD FLOOR, 7 KIKA STREET, MUMBAI - 400004 APPELLA NT VS. INCOME TAX OFFICER 5(3)(1), MUMBAI RESPONDENT PAN: AADCR1678K /BY APPELLANT : MR. MIHIR A TANNA, A.R. /BY RESPONDENT : MRS. NEELIMA NADKARNI, D.R. /DATE OF HEARING : 20.06.2016 /DATE OF PRONOUNCEMENT : 27.06.2016 ORDER ITA NO.6312/MUM/14 A.Y. 06-07[RUIA ALLOY TRADE P. LTD. VS. ITO] PAGE 2 PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-9, MU MBAI, DATED 08.08.2014 FOR A.Y. 2006-07 ON FOLLOWING GROU ND: THE COMMISSIONER OF INCOME TAX (APPEALS)-9, MUMBAI HAS ERRED IN: CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER OF LEVYING THE PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT 1961, AMOUNTING TO RS.11,27,600/-. WHEREAS AS PER THE FACTS & CIRCUMSTANCES THE SAME SHOULD NOT BE LEVIED. 2. ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRAD ING IN ALLOY STEEL. IT FURNISHED ITS RETURN OF INCOME FOR A.Y. 2006-07 DECLARING TOTAL INCOME AT RS.61,200/-. ASS ESSING OFFICER COMPLETED ASSESSMENT U/S.143(3) R.W.S 148 O F THE ACT AND DETERMINING TAXABLE INCOME OF RS.34,11,200/ - WHERE AN ADDITION OF RS.33,50,000/- WAS MADE ON ACC OUNT OF UNEXPLAINED CASH CREDITS RELATED TO BOGUS SHARE APPLICATION MONEY AND PENALTY PROCEEDINGS U/S.271(1 )(C) OF THE ACT WERE ALSO INITIATED ON THIS ADDITION. ASSE SSEE COMPANY HAD NOT FILED ANY APPEAL AGAINST THE ASSESS MENT ORDER U/S.143(3) R.W.S. 148 OF THE ACT. THE STAND OF ASSESSEE HAS BEEN THAT ADDITION IN QUESTION WAS ACC EPTED TO BUY PEACE OF MIND AND THERE WAS NEITHER FURNISHI NG OF INACCURATE PARTICULARS NOR CONCEALMENT OF INCOME. HOWEVER, ASSESSING OFFICER CONCLUDED THAT COMPANY H AD COMMITTED DEFAULT BY CONCEALMENT OF PARTICULARS OF INCOME ITA NO.6312/MUM/14 A.Y. 06-07[RUIA ALLOY TRADE P. LTD. VS. ITO] PAGE 3 AS THE ACT OF ASSESSEE COMPANY CLEARLY GIVES OUT TO SHOW ARTIFICIAL SHARE APPLICATION MONEY MERELY TO BUILD THE CAPITAL OUT OF UNACCOUNTED INCOME ROUTED THROUGH EN TRY PROVIDER. ASSESSING OFFICER THEREFORE LEVIED MINIM UM PENALTY OF RS.11,27,600/- EQUIVALENT OF 100% TAX SO UGHT TO BE EVADED AND THE SAID PENALTY WAS CONFIRMED BY CIT (A). 2.1 SAME HAS BEEN OPPOSED BEFORE ME INTER ALIA SUBMITTING THAT ASSESSING OFFICER HAS LEVIED PENALT Y U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.11,27,600/ - ON ADDITION MADE IN ASSESSMENT ORDER U/S.143(3) R.W.S. 148 OF THE ACT. ACCORDING TO ASSESSEE, ALL FACTS HAD BEEN DISCLOSED AND AT THE TIME OF ASSESSMENT PROCEEDINGS, NECESSAR Y DETAILS/INFORMATION HAVE BEEN SUBMITTED AT THE RELE VANT POINT OF TIME. MERELY BECAUSE DEPARTMENT HAS NOT ACCEPTED THE CONTENTION OF ASSESSEE DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. ASSESSEE HAD FURNISHED ALL THE DETAILS TO THE ASSESSING OFFICER. ASSESSING OFFICER ON THE BASIS OF DOUBTS RAISED BY THE INVESTIGATION WING MADE AN ADDITION O F RS.33.50LAC, EVEN THROUGH THE SHARE APPLICATION MON EY WAS RECEIVED THROUGH PROPER BANKING CHANNEL AND ALL RELATED DOCUMENTS I.E. SHARE APPLICATION FORM, ITR COPY, BANK STATEMENT & FINANCIAL DOCUMENTS WERE SUBMITTED . FROM THIS, I FIND THAT ASSESSEE HAS DECLARED ALL TH E FACTS AND DETAILS ON RECORDED AT RELEVANT POINT OF TIME. QUANTUM ADDITION AND PENALTY PROCEEDING ARE TWO DIF FERENT THINGS. ASSESSEE HAS GIVEN COMPLETE DETAILS AT REL EVANT ITA NO.6312/MUM/14 A.Y. 06-07[RUIA ALLOY TRADE P. LTD. VS. ITO] PAGE 4 POINT OF TIME, SO ON THE BASIS OF ADDITION IN QUANT UM, PENALTY IS NOT AUTOMATIC. THUS, TAKING ALL FACTS AN D CIRCUMSTANCES INTO CONSIDERATION, PENALTY IN QUESTI ON IS NOT JUSTIFIED AND SAME IS DIRECTED TO BE DELETED. 3. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF JUNE, 2016. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER MUMBAI: DATED 27/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&