SAJJANRAJ SAYARCHAND KAWAR, MUMBAI V. ACIT WD 14(1), MUMBAI

ITA 6497/MUM/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0260 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 25-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 6497 / MUM/20 12 ASSESSMENT YEAR: 2005 - 06 SAJJANRAJ SAYARCHAND KAWAR 30/32 M.B. VELKAR STREET 4 TH FLOOR KALBADEVI ROAD MUMBAI - 400002. VS. ACIT - 14(1) EARNEST HOUSE, MUMBAI. PAN NO. AADPK9316J APPELLANT RESPONDENT ASSESSEE BY : SHRI GAURAV BANSAL, A R REVENUE BY : SHRI K. RAVI KIRAN, D R DATE OF HEARING: 15/05/2017 DATE OF PRONOUNCEMENT: 09/08/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE . THE RELEVANT ASSESSMENT YEAR IS 2005 - 06 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 25 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUND OF APPEAL FILED BY THE ASSESSEE READ S AS UNDER: - 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.15,01,380/ - U/S 271(1)(C) OF THE ACT WITHOUT APPRECIATING THE DETAILS SUBMITTED BY THE ASSESSEE AND WITHOUT ALLOWING PROPER OPPORTUNITY TO PRESENT ARGUMENTS ABOUT THE LAW AND FACTS OF ITA NO. 6497 /MUM/201 2 2 APPELLANT. THUS, THE IMPUGN ED PENALTY SO CONFIRMED MUST BE CANCELLED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY 2005 - 06 ON 02.01.2006 DECLARING TOTAL INCOME OF RS.73,63,320/ - . THE ASSESSEE HAD DISCLOSED LONG TERM CAPITAL GAI NS (LTCG) OF RS.66,95,035/ - ON SALE OF SHARES. THE ASSESSING OFFICER (AO) HELD THAT THE SHARES WERE ACTUALLY HELD BY THE ASSESSEE IN HIS DEMAT ACCOUNT FOR A PERIOD OF LESS THAN 2 MONTHS AND THUS TREATED THE CAPITAL GAINS ON SALE OF THE SAID SHARES AS SHORT TERM CAPITAL GAINS (STCG). AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) VIDE ORDER DATED 26.10.2009 UPHELD THE ASSESSMENT MADE BY THE AO. 3.1 THE ASSESSEE FILED AN APPEAL AGAINST THE SAID ORDER OF THE CIT(A) BEFORE THE TRIBUNAL. WE FIND THAT THE ITAT A BENCH, MUMBAI IN THE CASE OF THE ASSESSEE IN ITA NO. 165/MUM/2010 FOR THE IMPUGNED ASSESSMENT YEAR HAS SET ASIDE THE PROCEEDINGS AND RESTORED THE MATTER TO THE FILE OF THE AO TO ADJUDICATE THE ABOVE ISSUE IN THE LIGHT OF THE OBSERVATIONS MADE IN ITS ORDER DATED 24.01.2017. 4. THE AO HAS PASSED AN ORDER U/S 271(1)(C) ON 29.03.2011 IMPOSING A PENALTY OF RS.15,01,380/ - ON THE ABOVE ISSUE OF LTCG OF RS.66,95,035/ - CLAIMED BY THE ASSESSEE WHICH LATTER ON WAS BROUGHT TO TAX BY THE AO AS STCG. IN APPEAL, THE LD. CIT(A) CONFIRMED THE ABOVE PENALTY LEVIED BY THE AO. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE DREW OUT ATTENTION TO THE ORDER PASSED BY THE CO - ORDINATE BENCH IN THE CASE OF THE ASSESSEE FOR TH E IMPUGNED ASSESSMENT YEAR. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). ITA NO. 6497 /MUM/201 2 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE CO - ORDINATE BENCH IN THE QUANTUM APPEAL HAS SET ASIDE THE ORDER THE LD. CIT(A) AND RESTORED THE MATTER TO THE FILE OF THE AO TO ADJUDICATE THE ISSUE AFRESH. ORDINARILY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. WHERE AN ORDER OF ASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON THE ASSESSEE HAS ITSELF BEEN FINALLY SET ASIDE BY THE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND THE SAME IS LIABLE TO BE CANCELLED. WE MAY REFER TO THE DECISION IN THE CASE OF K.C. BUILDERS VS. ACIT (200 4) 265 ITR 562, 569 (SC) IN THIS REGARD . IN VIEW OF THE ABOVE, THE PENALTY ORDER DATED 29.03.2011 PASSED BY THE AO IMPOSING A MINIMUM PENALTY OF RS.15,01,380/ - IS CANCELLED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2017. SD/ - SD/ - ( MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 09/08/2017 RAHUL SHARMA , SR. P.S. 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