LATE DAULAT LALWANI L/H SMT. MADHU D. LALWALI, MUMBAI V. ITO (IT) WD WD 4(1), MUMBAI

ITA 6330/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8882 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 14-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K MEHTA
• Assessee Lawyers: V P KOTHARI

Judgement Text

PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI G. E. VEERABHADRAPPA, PRESIDENT & SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 6330/MUM/2011 ASSESSMENT YEAR : 2001-02 LATE SHRI DAULAT LALWANI (T/R ITS L/H SMT. MADHU DAULAT LALWANI) C/O. MEHTA KOTHARI & CO. CHARTERED ACCOUNTANTS A/2, HIRA ANAND, 17, SWASTIK SOCIETY, ROAD NO.2, JVPD SCHEME, VILE PARLE (W), MUMBAI-400 056 PAN NO: ACFPL 2467 D VS. INCOME TAX OFFICER (I.T.) WARD 4(1), SINDIA HOUSE, BALLARD PIER, MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.P. KOTHARI RESPONDENT BY : SHRI N. K. MEHTA DATE OF HEARING: 08.08.2012 DATE OF PRONOUNCEMENT: 05.09.2012 O R D E R PER VIVEK VARMA, J.M. : THE APPEAL ARISES FROM ORDER OF CIT(A)-II, MUMBAI , DATED 10.06.2011 WHEREIN THE REVENUE AUTHORITIES HAVE LEVIED PENALTY U/S 271(1)(C) FOR RS . 1,06,000/-. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N NRI STAYING IN DUBAI. IN HIS RETURN FILED FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE DECLARED INCOME FROM INTEREST AT RS . 7,872 AND LTCL AT RS . 5,20,391 ON SALE OF A PROPERTY. LATE SHRI DAULAT LALWANI ITA NO.6330/MUM/2011 PAGE 2 OF 5 INITIALLY, THE CASE OF THE ASSESSEE WAS ASSURED U/S 144, WHICH WENT UPTO THE ITAT, FROM WHERE IT WAS REVERTED BACK FOR RECONSIDE RATION. IN THE PRESENT SECOND INNINGS, THE AO, WHILE FRAMING THE ASSESSMEN T ORDER, COMPUTED THE LTCG AT RS . 29,248 AGAINST THE LTCL CLAIMED BY THE ASSESSEE. 3. THE AO, THEREAFTER, PROCEEDED TO INITIATE PENALT Y PROCEEDINGS AND VIDE ORDER DATED 02.06.2010, LEVIED THE PENALTY OF RS. 1 ,06,000, SLIGHTLY MORE THE THEN RS . 1,05,216 BEING THE AMOUNT EQUAL TO TAX ON INCOME OF RS . 4,49,639. 4. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMI TTED THAT BECAUSE OF MIS-APPRECIATION OF FACTS, THE COMPUTATION OF CAPIT AL GAINS HAD TO BE ALTERED. THE ASSESSEE FURTHER STATED THAT SO FAR AS SUBMISSI ONS OF FACTUAL DETAILS WERE CONCERNED, THESE WERE SUBMITTED BEFORE THE REVENUE AUTHORITY AS AND WHEN ASKED FOR. IT WAS ONLY THE COMPUTATION PART THAT A N INADVERTENT MISTAKE GOT CREPT IN. 5. THIS ARGUMENT DID NOT IMPRESS THE CIT(A), WHO, RELYING ON VARIOUS CASE LAWS, FINALLY CITED THE CASE OF UOI U/S DHARMENDRA TEXTILES PROCESSORS & OTHERS, REPORTED IN 306 ITR 277 (SC), DISMISSED THE CONTENT IONS OF THE ASSESSEE AND DISMISSED THE APPEAL. 6. AGGRIEVED, THE ASSESSEE IS NOW BEFORE THE ITAT. 7. BEFORE US, THE AR REITERATED THE FACTS AND CONCE DED THAT THE ENTIRE DISCREPANCY IS DUE TO WRONG CALCULATION/COMPUTATION OF LTCG/LTCL ON ACCOUNT OF INDEXATION. HOWEVER, THE AR POINTED OUT THAT THI S WAS NOT THE CASE OF LATE SHRI DAULAT LALWANI ITA NO.6330/MUM/2011 PAGE 3 OF 5 SUBMISSION OF WRONGFUL FACTS AND THE ASSESSEE AT NO POINT OF TIME HAD TRIED TO WITHHOLD ANY PRIMARY MATERIAL. THE AR, THEREFORE, P LEADED THAT, THIS WAS NOT THE CASE OF ANY WILLFUL MISCARRIAGE OF FACTS BUT AN INC ORRECT COMPUTATION OF THE FACTS ALREADY AVAILABLE ON RECORD. THE AR, RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD. REPORTED IN 322 ITR 158 WHEREIN IT WAS HELD THAT EVEN WRONGFUL CLAIM OF ALLOWANCE WOULD NOT BE GOOD ENOUGH FOR ELIGIBILITY OF PENALTY. 8. THE DR RELIED ON THE ORDER OF THE REVENUE AUTHOR ITY. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND HAVE PERUSED THE ORDERS OF THE REVENUE AUTHORITIES ON THE IMPUGNED I SSUE. IT IS APPARENT, THAT THERE HAS BEEN A CALCULATION MISTAKE OF THE LTCG / LTCL, BUT THERE HAD NOT BE ANY WILLFUL MISCARRIAGE OF FACTS, WHICH ARE THE PRI MARY REQUISITE OF THE ELIGIBILITY AND EXIGIBILITY OF A PENAL PROCEEDINGS. IN THE CAS E AT HAND, AT NO STAGE, THERE HAD BEEN AN OBJECTION BY ANY REVENUE AUTHORITY THAT ANY PRIMARY FACT HAD BEEN CONCEALED OR WITHHELD. 10. UNDER THESE CIRCUMSTANCES, THE DECISION OF HON' BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) COMES TO THE RESCUE OF THE ASSESSEE, WHEREIN THE HON'BLE SUPREME COURT HAS HEL D THAT EVEN A WRONGFUL CLAIM OF AN ALLOWANCE SHALL NOT BE GOOD ENOUGH FOR THE LEVY OF PENALTY. 11. RESPECTFULLY FOLLOWING THE DECISION OF THE HON' BLE SUPREME COURT, WE HOLD THAT THE PENALTY IN SUCH CIRCUMSTANCE, COULD N OT BE LEVIED. LATE SHRI DAULAT LALWANI ITA NO.6330/MUM/2011 PAGE 4 OF 5 12. IN THESE CIRCUMSTANCE WE SET ASIDE THE ORDER OF THE CIT(A) SUSTAINING THE LEVY OF PENALTY AND CANCEL THE PENALTY LEVIED BY TH E AO. 13. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 05/09/2012. SD/- (G.E. VEERABHADRAPPA) PRESIDENT SD/- (VIVEK VARMA) JUDICIAL MEMBER MUMBAI, DATE: 05/09/2012 ROSHANI COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY/ ASST.REGISTRAR,ITAT MUMBAI.