GALAXY ENTERTAINMENT CORPN. LTD, MUMBAI V. DCIT CC 47, MUMBAI

ITA 6735/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2113 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H M WANARE
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BE NCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER / I .T.A. NO.6735/MUM/2013 ( / ASSESSMENT YEAR:2009-10 M/S. GALAXY ENTERTAINMENT CORPN. LTD 4 TH FLOOR, SOBO CENTRAL MALL, NEAR HAJI ALI, NO. 28, PT. MADAN MOHAN MALVIYA ROAD, TARDEO, MUMBAI-400 034 / VS. THE DCIT, CC - 47, MUMBAI ./ ./ PAN/GIR NO. :AABCG 2464 ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: DR. K. SHIVARAM SHRI NEELAM JADHAV / RESPONDENT BY: SHRI H.M. WANARE / DATE OF HEARING :24.09.2015 / DATE OF PRONOUNCEMENT :07.10.2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-38, MUMBAI DATED 30.9.2013 PERTAINI NG TO ASSESSMENT YEAR 2009-10. ITA. NO.6735/M/2013 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO TH E LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT WHICH WAS CONFIRMED BY THE LD. CIT(A) IN RESPECT OF DISALLOWANCE OF CLAIM OF FOREIGN EXCHANG E LOSS. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASS ESSMENT ORDER DATED 23.12.2010 MADE U/S. 143(3) OF THE ACT WHEREI N WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OF FICER FOUND THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 1,22,89,316/- ON ACCOUNT OF LOSS ON FOREIGN EXCHANGE IN RESPECT OF FOREIGN CURR ENCY. THE CLAIM OF THE ASSESSEE WAS RUBBISHED BY THE AO WHO COMPLETED THE ASSESSMENT BY DISALLOWING RS. 93,22,699/- AND INITIATED PENAL PROCEEDINGS. 3.1. DURING THE COURSE OF THE PENAL PROCEEDINGS, TH E ASSESSEE CLAIMED THAT THE ONLY POINT ON WHICH THERE WAS DIFF ERENCE OF OPINION BETWEEN THE ASSESSEE AND THE AO WAS HEAD OF INCOME UNDER WHICH LOSS ON FOREIGN EXCHANGE WAS TO BE CLAIMED I.E. WHE THER IT WAS TO BE CLAIMED AS BUSINESS LOSS OR SHOULD BE CAPITALIZED T O FIXED ASSETS. IT WAS POINTED OUT TO THE AO THAT SIMPLY BECAUSE LEGAL VIEW TAKEN BY THE ASSESSEE IS NOT ACCEPTED, IT DOES NOT NECESSARI LY MEAN THAT THERE WAS CONCEALMENT OF INCOME ON THE PART OF THE ASSESS EE WITHIN THE MEANING OF SEC. 271(1)(C) OF THE ACT. THE SUBMISSI ONS MADE BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO WHO LEVIED PENALTY U/S. 271(1)(C)OF THE ACT AT RS. 33,56,688/-. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATT ER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE STATEMENT OF ACCOUNTS FOR THE YEAR ENDING 31 .3.2007, 31.3.2008 AND 31.3.2010. IT IS THE SAY OF THE LD. COUNSEL TH AT DURING ALL THESE ITA. NO.6735/M/2013 3 YEARS, THE ASSESSEE HAS EARNED GAINS IN RESPECT OF FOREIGN EXCHANGE FLUCTUATION AND THE GAINS WERE SHOWN AS INCOME AND THE SAME HAS BEEN ACCEPTED BY THE AO. SINCE DURING THE IMPUGNE D ASSESSMENT YEAR, THERE WAS A LOSS ON ACCOUNT OF FOREIGN EXCHAN GE FLUCTUATION, THE SAME WAS CHARGED TO THE PROFIT AND LOSS ACCOUNT. I T IS THE SAY OF THE COUNSEL THAT WHEN THE GAIN WAS ACCEPTED AS INCOME, THE LOSS SHOULD HAVE BEEN ACCEPTED AS EXPENDITURE AND THEREFORE IT IS NOT A FIT CASE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTHORITIES. 7. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW AND THE RELEVANT DOCUMENTARY EVIDENCES BROUGH T TO OUR NOTICE BY THE LD. COUNSEL. A PERUSAL OF THE REVENUE ACCOU NT FOR THE YEAR ENDED 31.3.2007 WHICH IS PLACED AT PAGE-137 OF THE PAPER BOOK SHOWS THAT THE ASSESSEE HAS SHOWN GAIN ON FOREIGN E XCHANGE FLUCTUATION IN RESPECT OF FOREIGN CURRENCY AT RS.83 ,68,775/-. SIMILARLY FOR THE YEAR ENDED 31.3.2008, GAIN ON FOREIGN EXCHA NGE CURRENCY LOAN HAS BEEN SHOWN AT RS. 1,04,75,920/-, THE SAME IS EX HIBITED AT PAGE- 164 OF THE PAPER BOOK. SIMILARLY FOR THE YEAR ENDED 31.3.2010, LOSS ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION HAS BEEN SH OWN AT RS. 47,48,723/-, THE SAME IS EXHIBITED AT PAGE-191 OF T HE PAPER BOOK. ALL THESE GAINS/LOSS HAVE BEEN ACCEPTED BY THE REVENUE. CONSIDERING THE ABOVE FACTUAL MATRIX, IN OUR CONSIDERED OPINION BY CLAIMING THE LOSS ON FOREIGN EXCHANGE FLUCTUATION DURING THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE HAS NOT FILED ANY INACCURATE PAR TICULARS OF INCOME NOR HAS CONCEALED THE PARTICULARS OF INCOME MERELY BECAUSE ASSESSEES VIEW WAS NOT ACCEPTED DOES NOT MAKE THE CASE FIT FOR LEVY ITA. NO.6735/M/2013 4 OF PENALTY U/S. 271(1)(C) OF THE ACT. WE, THEREFOR E SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DEL ETE THE PENALTY LEVIED U/S. 271(1)(C) AMOUNTING TO RS. 33,56,688/-. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER, 2015 SD/- SD/- (SANJAY GARG ) (N.K. BILLAIYA) $% /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; ( DATED : 7 TH OCTOBER, 2015 . % . ./ RJ , 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. ,/0 / GUARD FILE. / BY ORDER, * % //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI