RAMNIKLAL RATILAL MEHTA, MUMBAI V. ACIT 13(1), MUMBAI

ITA 6729/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2336 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 20-11-2013
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Keywords: Corroborative evidences; Tax effect; Revised return
• Section: 143(3)

Judgement Text

, , D, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.6729/MUM/2013 ASSESSMENT YEAR: 2008-09 RAMNIKLAL RATILAL MEHTA, 13 CHAMPA GALLI MUMBAI-400002 / VS. ACIT 1 3(1) , ROOM NO.428. 4 TH FLOOR AAYKAR BHAVAN, M.K.RD. MUMBAI ( APPELLANT ) ( REVENUE ) P.A. NO . AABPM783P APP ELLANT BY SHRI H IRO RAI , (AR) REVENUE BY SHRI B.S. BIST (SR. DR) ! ' # $% / DATE OF HEARING : 05/10/2016 # $% / DATE OF ORDER: 26/10/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI- 24,{(IN SHORT CIT(A)}, DATED 04.09.2013 PASSED AG AINST PENALTY ORDER OF THE AO DATED 17.06.2011 U/S 271(1)(C) FOR THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS: RAMNIKLAL RATILAL MEHTA 2 1.UNDER THE FACTS AND IN LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING THE LEVY OF PENALTY ON THE AMOUNT OF DISALLOWANCE OF SET OFF OF LOSS OF RS 33,19,672/- U NDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961. 1.1. THE LEARNED CIT(A) HAS ERRED IN STATING THAT ' THE NON-PRODUCTION OF EVIDENCE IN THE FORM OF RETURN OF INCOME FOR THE A.Y 2001-02 WILL LEAD TO THE PRESUMP TION GIVEN IN THE EXPLANATION 1 TO SEC 271(1)(C) THAT TH E ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM AND, THER EFORE, ATTRACTS THE PROVISIONS OF SEC.271(1)(C) AS THE ASS ESSEE HAS CONCEALED THE PARTICULARS OF INCOME AND FILED INACC URATE PARTICULARS TO EVADE TAXES. 1.2. THE LEARNED CIT (A) FAILED TO APPRECIATE THE F ACT THAT THE EXPLANATION OFFERED AND DOCUMENTS FILED WAS NOT FOUND FALSE BY THE ASSESSING OFFICER. 1.3. THE LEARNED CIT (A) FAILED TO APPRECIATE THE F ACT THAT THE LOSS IS THE REAL LOSS AND NOT NOTIONAL LOSS, WH ICH IS NOT DOUBTED BY THE ASSESSING OFFICER. 1.4. THE LEARNED CIT (A) FAILED TO CONSIDER THE WRI TTEN SUBMISSION MADE BEFORE HIM. 2. UNDER THE FACTS AND IN THE LAW, THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING INACCURATE PARTICULARS AS CONTEMPLATED U/S 271(1)(C) OF THE IN COME TAX ACT,1961 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI HIRO RAI, , AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI B.S. BIST, DEPARTMENTAL REPRES ENTATIVE (SR. DR) ON BEHALF OF THE REVENUE. 3. THE SOLITARY ISSUE IN THIS APPEAL IS WITH REGARD TO EXAMINING THE VALIDITY OF LEVY OF PENALTY OF RS. 7,92,000/- L EVIED BY THE AO ON ACCOUNT OF DENIAL BY HIM OF SET OFF OF BROUGH T FORWARD LONG TERM CAPITAL LOSS FOR ASSESSMENT YEAR 2001-02 AMOUNTING TO RS.33,19,672/-. 3.1. DURING THE COURSE OF HEARING LD. COUNSEL OF THE AS SESSEE SUBMITTED THAT THE LONG TERM CAPITAL LOSS OF A.Y. 2 001-02 FOR THE AFORESAID AMOUNT AND OF ASSESSMENT YEAR 2002-03 FOR RAMNIKLAL RATILAL MEHTA 3 RS.1,92,35,939/- WERE CLAIMED BY THE ASSESSEE IN TH E RETURN OF INCOME FILED BY HIM. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE ASSESSEE HAD SUBMITTED COPIES OF P REVIOUS YEARS COMPUTATION SHEET AND RETURNS TO JUSTIFY THE CLAIM OF THESE LOSSES. BUT, COPY OF ACKNOWLEDGMENT OF RETURN OF A.Y. 2001-02 COULD NOT BE FILED TO SUBSTANTIATE THE CLAI M THEREFORE, THOUGH THE SET OFF OF LOSS OF A.Y. 2002-03 WAS ALLO WED, BUT, THE CLAIM OF LOSS OF ASSESSMENT YEAR 2001-02 WAS DENIED ON THIS GROUND ITSELF. 3.2. IT WAS FURTHER SUBMITTED THAT ACKNOWLEDGMENT OF RE TURN FOR AY 2001-02 WAS PART OF VERY OLD RECORDS AND THE REFORE IT COULD NOT BE TRACED. BUT, ACKNOWLEDGEMENT OF RETURN AND COMPUTATION SHEET OF A.Y. 2002-03 AS WELL AS ASSESS MENT ORDER FOR A.Y. 2007-08 WERE MADE AVAILABLE TO AO FR OM WHERE LOSS BROUGHT FORWARD OF AY 2001-02 WAS CROSS VERIFI ABLE. IT WAS THUS EVIDENT THAT LOSS OF A.Y. 2001-02 WAS GENU INE LOSS. DENIAL OF CLAIM BY THE AO WAS NOT CONTESTED IN THE QUANTUM APPEAL BECAUSE OF NIL TAX EFFECT. BUT, THAT ITSELF DOES NOT PROVE ANY CONCEALMENT OR FILING OF INACCURATE PARTICULARS OF INCOME. ALL THESE RECORD WERE AVAILABLE BEFORE THE DEPARTME NT. THUS, EVEN IF ASSESSEE COULD NOT SUBMIT ACKNOWLEDGMENT OF RETURN OF A.Y. 2001-02, BUT, COMPUTATION SHEET OF 2001-02 AS WELL AS RETURNS AND ASSESSMENT ORDER PASSED BY THE AO OF SU BSEQUENT YEARS WERE SUBMITTED BEFORE THE AO FROM WHICH REQUI SITE INFORMATION WAS DULY VERIFIABLE. IT WAS ALSO SUBMIT TED WITHOUT PREJUDICE THAT IN ANY CASE DENIAL OF SET OFF OF BRO UGHT FORWARD LOSS DOES NOT AMOUNT TO CONCEALMENT OR FURNISHING O F INACCURATE PARTICULARS OF INCOME. RELIANCE WAS PLAC ED IN THIS RAMNIKLAL RATILAL MEHTA 4 REGARD UPON THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. MAKINO ASIA(P) LTD. 264 CTR 172 (KAR) AND OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. U DAIPUR HOTELS LTD. 35 TAXMANN.COM 207 (DELHI). 3.3. PER CONTRA, LD. DR RELIED UPON THE ORDERS OF THE L OWER AUTHORITIES. 3.4. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWE R AUTHORITIES, DETAILS AND EVIDENCES FURNISHED AND SU BMISSIONS MADE BY BOTH THE SIDES AS WELL AS COPIES OF JUDGMEN TS PLACED BEFORE US. THE BRIEF BACKGROUND OF THE ISSUE IS THA T IN THE RETURN OF INCOME FILED BY HIM, THE ASSESSEE MADE CL AIM OF SET OFF OF BROUGHT FORWARD LONG TERM CAPITAL LOSS FOR A .YS. 2001-02 AND 2002-03 FOR THE AMOUNTS AS MENTIONED ABOVE. THE AO ALLOWED THE LOSS OF A.Y. 2002-03 BUT DENIED SET OFF OF BROUGHT FORWARD LOSS OF A.Y. 2001-02 ON THE GROUND THAT ASS ESSEE COULD NOT SUBMIT COPY OF RETURN FOR A.Y. 2001-02. T HE ASSESSEE DID NOT CONTEST THE MATTER IN QUANTUM PROC EEDINGS TO AVOID ANY LITIGATION. SUBSEQUENTLY, PENALTY PROCEED INGS WERE INITIATED DURING WHICH THE ASSESSEE REITERATED THAT REVISED RETURN WAS FILED IN A.Y. 2001-02 WHEREIN CARRY FORW ARD OF THE IMPUGNED LONG TERM LOSS WAS CLAIMED AND THOUGH THE ACKNOWLEDGMENT OF REVISED RETURN OF A.Y. 2001-02 WA S NOT AVAILABLE BUT OTHER SUPPORTING EVIDENCES WERE MADE AVAILABLE. THE AO WAS NOT SATISFIED WITH SUBMISSIONS OF ASSESS EE AND THEREFORE HE LEVIED THE PENALTY. 3.5. BEING AGGRIEVED, THE ASSESSEE CONTESTED THE MATTER BEFORE THE LD. CIT(A) BUT HE DID NOT FIND FAVOUR WITH THE EXPLANATION RAMNIKLAL RATILAL MEHTA 5 OF THE ASSESSEE AND CONFIRMED THE PENALTY AND CONSE QUENTLY THE ASSESSEE IS IN APPEAL BEFORE US. 3.6. WITH THE ASSISTANCE OF BOTH THE REPRESENTATIVES, I T WAS NOTED BY US THAT IN THE COMPUTATION SHEET OF ASSESS MENT YEAR 2002-03, IT WAS MENTIONED THAT THE ASSESSEE HAD CLA IMED CARRY FORWARD OF BROUGHT FORWARD CAPITAL LOSS FOR A .Y. 2001-02 AMOUNTING TO RS.33,19,672/-. IN ADDITION TO THAT IT WAS SHOWN THAT IN THE ASSESSMENT ORDER PASSED U/S 143(3) DATE D 28.10.2009 FOR A.Y. 2007-08 BY THE AO, FACTS REGARD ING CREDIT AVAILABLE WITH THE ASSESSEE FOR CARRY FORWARD OF BR OUGHT FORWARD LOSS OF A.Y. 2001-02 FOR RS.33,19,672/- ALO NG WITH LOSS OF OTHER YEARS HAVE BEEN DULY NARRATED BY WAY OF A SPECIFIC MENTION. UNDER THESE CIRCUMSTANCES, WE FIND THE EXP LANATION TENDERED BY ASSESSEE THAT THE CLAIM OF LOSS WAS NOT FALSE OR BOGUS SEEMS TO BE BELIEVABLE, AND IN ANY CASE IT IS NOT WHOLLY UNFOUNDED. UNDER THESE CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE CANNOT BE SAID TO BE FALSE OR BOGUS. RATHE R, EVIDENCES PLACED BY THE ASSESSEE SUPPORT ITS CLAIM. THUS, JUD GMENTS RELIED UPON BY THE ASSESSEE AS MENTIONED ABOVE BECO ME APPLICABLE ON THE FACTS OF THIS CASE WHEREIN IT WAS HELD THAT MERE DENIAL OF CLAIM OF SET OFF OF BROUGHT FORWARD LOSS SHALL NOT LEAD TO CONCEALMENT OR FURNISHING OF INACCURATE PAR TICULARS OF INCOME, SO LONG AS THE CLAIM IS NOT HELD TO BE MALAFIDE OR BOGUS. THUS, IN OUR OPINION, AFTER TAKING INTO ACCO UNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, LEVY OF IMPUGN ED PENALTY OF RS.9,92,009/ IS NOT LEGAL AND JUSTIFIED AND THER EFORE SAME IS DIRECTED TO BE DELETED. RAMNIKLAL RATILAL MEHTA 6 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER, 2016 SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER ! ' MUMBAI; ' DATED : 26 /10/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. ) *+ / THE APPELLANT 2. ,-*+ / THE RESPONDENT. 3. .$ . ! / ( ) ) / THE CIT, MUMBAI. 4. .$ . ! / / CIT(A)- , MUMBAI 5. 23 , 45 , .$ )% 45$6 , ! ' / DR, ITAT, MUMBAI 6. 7 8 ' / GUARD FILE. / BY ORDER, - 2) , //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! ' / ITAT, MUMBAI