ACIT 10(1), MUMBAI V. RECLAMATION PROPERTIES (I) P. TLD, MUMBAI

ITA 6836/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9234 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-12-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: RUSHNA DARUWALLA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 6836/MUM/2011 (ASSESSMENT YEAR: 2002-03) A C I T - 10(11) M/S. RECLAMATION PROPERTIES (I) P. LTD. ROOM NO. 455, 4TH FLOOR ICICI TOWER, BANDRA KURLA C OMPLEX AAYAKAR BHAVAN, M.K. ROAD VS. MUMBAI 400051 MUMBAI 400020 PAN - AAACI 1564 K APPELLANT RESPONDENT APPELLANT BY: SHRI O.P. MEENA RESPONDENT BY: MS. RUSHNA DARUWALLA DATE OF HEARING: 19.12.2012 DATE OF PRONOUNCEMENT: 19.12.2012 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL IS FILED AT THE INSTANCE OF THE REVENUE AND IT PERTAINS TO A.Y. 2002-03. 2. PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT WAS SET ASIDE BY THE LEARNED CIT(A) AND HENCE THE REVENUE I S IN APPEAL BEFORE US. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D ECLARED TOTAL INCOME OF ` 78,85,080/- REFERABLE TO HOUSE PROPERTY INCOME FOR THE PREVIOUS YEAR RELEVANT TO A.Y. 2002-03. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE AO NOTICED THAT AN ASSOCIATE COMPANY OF THE ASSESSE E HAS RECEIVED A MUCH HIGHER RENT AND HENCE THE ASSESSEE OUGHT TO HAVE RE CEIVED A HIGHER RENT IN RESPECT OF THE PROPERTY LET OUT BY IT. IN THE OPINI ON OF THE AO THE FAIR RENT OF THE PROPERTY SHOULD HAVE BEEN TAKEN AT ` 2,62,25,960/- INSTEAD OF THE ACTUAL RECEIPT AMOUNTING TO ` 1,12,64,400/- AND ACCORDINGLY HE PROCEEDED TO COMPLETE THE ASSESSMENT. THEREAFTER PENALTY PROCEED INGS WERE INITIATED WHEREIN THE STAND OF THE AO WAS THAT THE ASSESSEE A DOPTED LESSER VALUE ITA NO. 6836/MUM/2011 M/S. RECLAMATION PROPERTIES (I) P. LTD. 2 WHICH AMOUNTED TO CONCEALMENT OF INCOME. DESPITE EX PLANATION, PENALTY OF ` 37,38,894/- WAS LEVIED. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFE RRED AN APPEAL BEFORE CIT(A) WHEREIN IT WAS CONTENDED THAT RE-DETE RMINATION OF FAIR RENT OF THE PREMISES LET OUT BY THE ASSESSEE WAS NOT IN ACC ORDANCE WITH LAW AND PENALTY OUGHT NOT HAVE BEEN LEVIED ON THAT BASIS. I T WAS ALSO SUBMITTED THAT ON IDENTICAL CIRCUMSTANCES FOR A.Y. 2004-05 THE APP ELLATE TRIBUNAL DELETED THE ENHANCEMENT MADE BY THE AO IN THE RENTAL INCOME AND THE FACTS BEING SAME IN THIS YEAR ALSO, THERE IS NO CASE FOR LEVY O F PENALTY. THE LEARNED CIT(A) CANCELLED THE PENALTY IN THE LIGHT OF THE DE CISION OF THE ITAT FOR A.Y. 2004-05. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE FILED A COPY OF THE ORDER OF THE ITAT D BENCH MUMBAI IN ASSESS EES OWN CASE FOR ASSESSMENT YEARS 2001-02 TO 2003-04 (ITA NO. 2189 T O 2192/MUM/2010 DATED 30.06.2011) TO SUBMIT THAT THE IMPUGNED ADDIT ION MADE BY THE AO WAS SET ASIDE BY THE TRIBUNAL IN WHICH EVENT THERE IS NO CASE FOR LEVY OF PENALTY. 6. ON THE OTHER HAND, THE LEARNED D.R. RELIED UPON THE ORDER PASSED BY THE AO. 7. SINCE THE VERY BASIS FOR LEVY OF PENALTY NO LONGER STANDS, IN THE LIGHT OF THE DECISION OF THE ITAT (SUPRA), IT IS NOT A FIT C ASE FOR LEVY OF PENALTY. THEREFORE WE UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2012. SD/- SD/- (SANJAY ARORA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 19 TH DECEMBER, 2012 ITA NO. 6836/MUM/2011 M/S. RECLAMATION PROPERTIES (I) P. LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 21, MUMBAI 4. THE CIT X, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.