ITO 8(3)(1), MUMBAI V. SHIRAZ DEVELOPERS P.LTD, MUMBAI

ITA 6884/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75314 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M P MEHWALA IZRFKHZ DH LS
• Keywords: Business income
• Section: 115JB

Judgement Text

- 1 - VK;DJ VIHYH; VF/KDJ.K BZ U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI JH VKJ JH VKJ JH VKJ JH VKJ- -- - LH LHLH LH- -- - 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA 'KEKZ] YS[KK LNL; ,OA MK0 ,L MK0 ,L MK0 ,L MK0 ,L- -- - VH VHVH VH- -- - ,E ,E,E ,E- -- - IOYU IOYU IOYU IOYU] U;KF;D ] U;KF;D ] U;KF;D ] U;KF;D LNL; DS LE{K LNL; DS LE{K LNL; DS LE{K LNL; DS LE{K BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND DR. S.T. M PAVALAN, JUDICIAL MEMBER VK;DJ VIHY LA[;K /ITA NO.6884/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR 2007-08 INCOME TAX OFFICER 8(3)-1 ROOM NO. 201, 2 ND FLOOR AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. CUKE@ VS. M/S SHIRAZ DEVELOPERS PVT. LTD. SHOP NO. 1&2, UNIQUE APARTMENTS, S.V. ROAD, IRLA VILE PARLE, (WEST) MUMBAI 400 056. PAN:- AAACS5310G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VIHYKFKHZ DH VKSJ LS @ ASSESSEE BY SHRI M.P. MEHWALA IZR;FKHZ DH VKSJ LS @ REVENUE BY MS. SONIA KUMAR VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER R.C. SHARMA, AM. THIS IS AN APPEAL, FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 16.08.2012 FOR A.Y. 2007-08, IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT IN THE RETURN OF INCOME FILED, THE A SSESSEE HAD COMPUTED THE INCOME U/S 115JB AT RS 16,76,160/- AND PAID THE TAXES ACCORDINLGY. THE ASSESSED INCOME WAS RS. 16,75,564/- WHICH WAS L ESS THAN THE INCOME LQUOKBZ DH RKJH[K@ DATE OF HEARING 15 - 01 - 2014 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT 22-01-2014 - 2 - DECLARED U/S 115JB. WHILE PASSING THE ORDER THE LD. AO HAS NOT ACCEPTED INTEREST INCOME OFFERED AS BUSINESS INCOME. THE AO TREATED THE INTEREST INCOME AS INCOME FROM OTHER SOURCES, FOR SUCH CHANG E IN THE HEAD OF INCOME THE AO LEVIED PENALTY U/S 271(1)(C) BY DECLA RING ASSESSEES CLAIM OF INCOME FROM BUSINESS. 3. BY IMPUGNED ORDER CIT(A) DELETED THE PENALTY AFT ER HAVING FOLLOWING OBSRVATIONS:- I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. COUNS EL AND IN THIS CASE IT IS SEEN THAT THE PENALTY HAS BEEN IMPOSED ON THE ISSUE WHETHER INTEREST INCOME IS TO BE TAXED AS BUSINESS INCOME AS SHOWN BY THE APPELLANT OR AS INCOME FROM OTHER SOURCES AS HELD BY THE AO. AS P OINTED OUT BY THE LD. COUNSEL IN DETAILED SUBMISSIONS HEREINBEFORE THIS I SSUE ITSELF IS DEBATABLE AND WHICH THERE COULD BE TWO POSSIBLE VIEWS THEREFO RE IT IS SETTLED LAW THAT WHEN THERE ARE TWO CONCEIVABLE OPINIONS ON AN ISSUE , IT IS DEBATABLE NO PENALTY U/S 271(1)(C) CAN BE IMPOSED BECAUSE THERE IS NEITHER ANY CONCEALMENT IN PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR. HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIA NCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) HAS HELD THAT MERE FAILURE T O SUBSTANTIATE LEGAL CLAIM CANNOT IMPOSE A LEGAL PENALTY. HENCE, THE PENALTY I MPOSED OF RS. 5,63,995/- IS HEREBY DELTED AND THIS GROUND OF APPEAL IS ALLOW ED. 4. AGAINST THE ORDER OF CIT(A) THE REVENUE IS IN AP PEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E CAREFULLY PERUSED THE ORDERS OF AUTHORITIES BELOW. WE FIND FR OM RECORD THAT AO HAS LEVIED PENALTY ONLY FOR CHANGE OF HEAD OF INCOME, F ROM BUSINESS INCOME - 3 - TO INTEREST INCOME. HOWEVER, THERE WAS FULL DISCLOS URE BY THE ASSESSEE WITH REGARD TO THE INTEREST INCOME EARNED BY ASSES SEE. THERE WAS NO VARIATION IN THE TOTAL INCOME OFFERED BY ASSESSEE. THE ISSUE IS COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158), AS DISCUSSED BY CIT(A) IN HIS ORDER . ACCORDINLGY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) IN DELETING THE PENALTY AND THE SAME IS UPHELD. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED ON 22 /01/2014 SD/- SD/- (DR. S.T.M. PAVALAN) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 22 /01/2014 SKS SR. P.S COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI