NAEEM EBRAHIM KHAN, MUMBAI V. ITO 19(3)(3), MUMBAI

ITA 6388/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3471 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 16-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PREMAND J
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 6388/MUM/2014 (ASSESSMENT YEAR : 2006-07) NAEEM EBRAHIM KHAN, PROP. E.A.KHAN&SONS, FLAT -102, E-WING, SINCLAIR APARTMENT, BEHIND GERMON LAUNDRY, 95, HILL ROAD, BANDRA (W), MUMBAI 400050 PAN: AABPK 8828M ... APPELLANT VS. THE ITO 19(3)(3), ROOM NO.303, PIRAMAL CHAMBERS, PAREL, LALBAUG, MUMBAI 400 012 .... RESPONDENT APPELLANT BY : SHRI MANISH J. SHAH RESPONDENT BY : SHRI PREMAND J. DATE OF HEARING : 10/05/2016 DATE OF PRONOUNCEMENT : 18/05/2016 ORDER PER MAHAVIR SINGH, J.M: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-30 MUMBAI IN APPEAL NO.CIT(A)-30/ITO-19(3)(3)/IT-31/12 -13 ORDER DATED 02/09/2014. ASSESSMENT WAS FRAMED BY ITO-19(3)(3), MUMBAI FOR THE ASSESSMENT YEAR 2006-07 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREAFTER REFERRED AS THE ACT) VIDE HIS ORD ER DATED 26/12/2008. 2 ITA NO. 6388/MUM/2014 (ASSESSMENT YEAR : 2006-07) THE PENALTY UNDER DISPUTE WAS LEVIED BY ITO 19(3)(3 ) UNDER SECTION 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 20/03/20 12. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(APPEALS) CONFIRMING THE LEVYING OF PENALTY BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT . 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THERE IS DIFFERENCE IN PURCHASE ACCOUNT I.E. PURCHASES MADE FROM M/S. ATLA S ENTERPRISES AND M/S.KEMP TRADING CORPORATION AS PER BOOKS OF ACCOUN TS OF THE ASSESSEE AND AS PER INFORMATION RECEIVED UNDER SECTION 133(6 ) OF THE ACT. ACCORDING TO ASSESSING OFFICER, THERE IS A DIFFEREN CE OF RS.1,48,338/-. THIS DIFFERENCE WAS ADDED AND PENALTY PROCEEDINGS F OR FURNISHING OF INACCURATE PARTICULARS OF INCOME UNDER SECTION 271( 1)(C) OF THE ACT WAS INITIATED. SIMILARLY, THE ASSESSEE HAS RECEIVED IN TEREST FROM UCO BANK AMOUNTING TO RS.35,691/-, WHICH WAS NOT OFFERED FOR TAX. THE ASSESSING OFFICER TAXED THE SAME AND INITIATED PENALTY PROCEE DINGS UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PART ICULARS OF INCOME. DURING THE PENALTY PROCEEDINGS, ASSESSEE REQUESTED THE ASSESSING OFFICER TO KEEP THE PENALTY PROCEEDINGS IN ABEYANC E TILL THE DECISION OF APPELLATE AUTHORITIES AND DID NOT REPLY TO THE NOTI CE ON MERITS. HOWEVER, ASSESSING OFFICER LEVIED PENALTY ON THE FO LLOWING TWO COUNTS:- (I) DIFFERENCE OF PURCHASE OF RS. 1,48,338/- (II) UNDISCLOSED INTEREST INCOME FROM UCO BANK OF R S.35,691/- FINALLY, THE ASSESSING OFFICER LEVIED PENALTY @100% ON THE TAX SOUGHT TO BE EVADED AT RS.1,09,315/-. AGGRIEVED, THE ASSESSE E PREFERRED AN 3 ITA NO. 6388/MUM/2014 (ASSESSMENT YEAR : 2006-07) APPEAL BEFORE CIT(APPEALS), WHO ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED, ASSESSEE IS IN SECON D APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT NOW B EFORE US, LD. COUNSEL FOR THE ASSESSEE FILED RECONCILIATION OF PU RCHASES FROM M/S. ATLAS ENTERPRISE AND ALSO M/S. KEMP TRADING CORPORA TION IN ITS PAPER BOOK AT PAGES 8 -9 AND10-11. LD. COUNSEL FOR THE A SSESSEE DEMONSTRATED BEFORE US THAT THERE IS NO DIFFERENCE IN PURCHASES FROM THESE TWO PARTIES. WHEN THESE WERE CONFRONTED TO L D. DR, HE FAIRLY AGREED THAT THERE IS NO DIFFERENCE IN PURCHASES BUT THESE DOCUMENTS WERE NOT PLACED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE PENALTY PROCEEDINGS. WE FIND THAT DUE TO SMALLNESS OF THE AMOUNT OF DIFFERENCE IN PURCHASES I.E. TO THE EXTENT OF RS.1,48,338/-, PARTICULARLY WHEN THE ASSESSEE HAS N OW EXPLAINED BEFORE US THERE IS NO NEED FOR SENDING BACK THE ISSUE TO F ILE OF ASSESSING OFFICER BECAUSE IT WILL NOT SERVE ANY PURPOSE. IN VIEW OF A BOVE RECONCILIATION, WE FELT THAT PENALTY ON THIS COUNT CANNOT SURVIVE A ND THEREFORE, THE SAME IS DELETED. 5. HOWEVER, THE PENALTY QUA THE INTEREST FROM UCO B ANK AMOUNTING TO RS.35,691/-, LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THIS AMOUNT WAS NOT DISCLOSED AND TO THAT EXTENT PENALTY CAN BE SUSTAINED. IN VIEW OF THE ABOVE CONCESSION GIVEN BY THE LD. CO UNSEL FOR THE ASSESSEE, WE SUSTAIN THE PENALTY ON THE ADDITION OF UNDISCLOSED INTEREST FROM UCO BANK. WE ORDER ACCORDINGLY. 4 ITA NO. 6388/MUM/2014 (ASSESSMENT YEAR : 2006-07) 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 18/05/ 2016 . SD/- SD/- (RAJESH KUMAR) (MAHAVIR SINGH) ACCOUNTNAT MEMBER JUDICIAL M EMBER MUMBAI, DATED 18/05/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI