JUNNAR FARMS P.LTD, MUMBAI V. ITO 5(2)(2), MUMBAI

ITA 6428/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1843 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 22-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 20-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TUSHAR SINGH
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 6428/MUM/2011 (ASSESSMENT YEAR: 2005-06) JUNNAR FARMS PVT. LTD., 108, L.T. MARKET, GRANT ROAD, MUMBAI -400 007 PAN: AAACJ- 0899 B VS ITO -5(2)(2), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT-ASSESSEE BY : NONE RESPONDENT-REVENUE BY : SHRI TUSHAR SINGH DATE OF HEARING :22-01-2013 DATE OF PRONOUNCEMENT :30-01-2013 O R D E R PER VIVEK VARMA, JM: THE APPEAL EMANATES FROM THE ORDER OF THE CIT(A)-9, MUMB AI DATED 13.06.2011, WHEREIN THE PENALTY U/S. 271(1)(C), LEVIED AT RS. 4,61,065/- HAS BEEN SUSTAINED. 2. NO ONE APPEARED ON BEHALF OF THE ASSESSEE, NOR ANY A DJOURNMENT LETTER HAS BEEN FILED, HENCE, WE PROCEED TO DECIDE THE APP EAL EX-PARTE QUA THE ASSESSEE, ON MERITS. 3. THE FACTS ARE THAT THE ASSESSEE WAS HAVING THE BUSIN ESS OF PRODUCING AND SELLING LIVE BROILER BIRDS TILL ASSESSMENT YEAR 1999-200 0. SUBSEQUENT TO ASSESSMENT YEAR, THE ASSESSEE RENTED T HE BUSINESS TO C&M FARMING LTD AND WAS GETTING A RENT OF RS. 1,50,000 PE R MONTH, WHICH HE WAS SHOWING AS BUSINESS INCOME. FOR ASSESSMENT YEAR 1999- 2000 TO 2004-05 AND 2006-07, THE AO TAXED THIS RENTAL INCOME AS INCOME FROM HOUSE PROPERTY, WHICH WAS SUSTAINED BY THE CIT(A). JUNNAR FARMS PVT. LTD. ITA 6428/M/2011 2 4. FROM THE IMPUGNED ORDER, WE FIND THAT THE ASSESSEE H AD ARGUED BEFORE THE CIT(A) THAT NEITHER ANY INFORMATION WAS WITHHELD , NOR ANY INACCURATE PARTICULARS WERE SUBMITTED TO THE AO, PERTAININ G TO ITS INCOME. IT WAS ALSO POINTED OUT THAT IN THE PROCEEDINGS U NDER SECTION 263, CIT-5, HAD TREATED THAT VERY INCOME AS BUSINESS IN COME IN ASSESSMENT YEAR 2001-02. IN THE SUBMISSIONS MADE BEFOR E THE CIT(A), THE ASSESSEE RELIED ON SEVERAL DECISIONS, AS CITED BY THE CIT(A). 5. THE CIT(A), WHILE SUSTAINING THE PENALTY, LEVIED BY THE AO, RELIED HIS OBSERVATION ON THE DECISION OF SHAMBHU INVESTMENTS (P ) LTD. VS CIT 263 ITR 143 (SC), WHEREIN THE HONBLE SUPREME COURT HELD THAT RENTAL INCOME SHOULD BE TAXED AS INCOME FROM HOUSE PROPERTY. 6. THE DR RELIED HEAVILY ON THE DECISIONS OF THE REVENUE AUTHORITIES AND REITERATED THAT THE INITIATION AND LEVY OF PENALTY WAS IN ORDER AND IN ACCORDANCE WITH LAW. 7. WE HAVE HEARD THE ARGUMENTS OF THE DR HAVE PERUSE D THE ORDERS OF THE REVENUE AUTHORITIES AND WE ARE OF THE OPINION THAT SINCE THE ISSUE HAS ALREADY BEEN DEALT WITH BY THE CONCERNED CIT IN PROCEEDINGS UNDER SECTION 263, WHEREIN, THE CIT HAS TREATED THE REN TAL INCOME AS BUSINESS INCOME, THIS ITSELF, IN OUR OPINION IS BEREFT THE REVEN UE AUTHORITIES ARGUMENTS ON THE ISSUE. ON THE CASE OF SHAM BHU INVESTMENTS (SUPRA), AS CITED BY THE CIT(A), THE FACTS ARE DISTINCT, BECAUSE IN THAT CASE, THE ASSESSEE WAS RENTING FURNISHED PREMISES ON MONTHLY RENT BASIS, BUT IN THE INSTANT CASE, THE ASSESS EE HAD LEASED OUT HIS BUSINESS. THEREFORE, THE FACTS ARE DISTINGUISHABLE AN D HENCE THE RATIO BROUGHT OUT IN THE CITED CASE CANNOT BE APPLIED HEREIN. 8. WE HAVE ALREADY TAKEN NOTE OF THE SUBMISSIONS OF THE ASSESSEE BEFORE THE CIT(A), THAT THE ASSESSEE HAD PROVIDED ALL FACTS AND THERE WAS NO INACCURATE PARTICULARS THAT WAS FURNISHED BY THE ASSESSEE. IN JUNNAR FARMS PVT. LTD. ITA 6428/M/2011 3 OUR OPINION, THE PENALTY EMANATES FROM INACCURATE PARTICULA RS FURNISHED IN THE RETURN, HOW IT ULTIMATELY GETS DEALT WITH SUBSEQUENTLY IS ANOTHER MATTER. WHAT HAD TO BE EXAMINED BY US, WAS W HETHER THE ASSESSEE HAD DISCLOSED ALL MATERIAL FACTS IN THE RETURN, THE ANSWER, ACCORDING TO US IS YES AND WHICH HAS NOT BEEN CONTROVERTED BY THE REVENUE AUTHORITIES OR THE DR. HENCE PLACING RELIANCE ON T HE RATIO LAID DOWN IN THE RECENT CASE OF CIT VS RELIANCE PETROPRODUC TS PVT. LTD. REPORTED IN 322 ITR 158, WE HOLD THAT IN THE INSTANT CAS E, PENALTY CANNOT BE SUSTAINED. 9. IN THESE CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN TH E LEVY AND SUSTAINING THE PENALTY U/S. 271(1)(C), WHICH WE CANCEL AND DELETE. 10. THE APPEAL FILED BY THE ASSESSEE IS THUS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2013. SD/- SD/- (B. RAMAKOTAIAH) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI : 30 TH JANUARY, 2013 COPY TO: 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT (A)-9, MUMBAI. 4) THE CIT -5, MUMBAI 5) THE DR, A BENCH MUMBAI. 6) COPY TO GUARD FILE. BY ORDER / / TRUE COPY / / ASST. REGISTRAR, ITAT, MUMBAI *CHAVAN