ASST CIT 19(1), MUMBAI V. GHANSHAM SEWAK RAMANI, MUMBAI

ITA 7170/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2195 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7170/MUM/2014 FOR ASSESSMENT YEAR: 2005-06 ACIT-19(1), 2 ND FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI-400007. VS. SHRI GHANSHAM SEWAK RAMANI 11-A, SETT-MINAR APARTMENTS, PEDDAR ROAD, MUMBAI -400066 PAN: AALPS0237Q (APPELLANT) (RESPONDENT) REVENUE BY : MISS. MAHUA SAR KAR (DR) ASSESSEE BY : SHRI B.V. JHAV ERI (AR) DATE OF HEARING : 28.09.2016 DATE OF PRONOUNCEMENT : 28.10.2016 O R D E R PER PAWAN SINGH, JM: 1. THIS PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-27, MUMBAI [FOR SHORT CIT( A)] DATED 04.09.2014 FOR ASSESSMENT YEAR (AY)-2005-06, WHEREIN THE PENALTY L EVIED U/S. 271(1)(C) OF THE ACT WAS DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AN IN DIVIDUAL, FILED RETURN HIS RETURN OF INCOME ON 29.03.2006 FOR RELEVANT ASSESSMENT YEAR D ECLARING TOTAL INCOME OF RS. 10,67,957/-. THE ASSESSING OFFICER (AO) WHILE FRAMI NG THE ASSESSMENT NOTICED THAT ASSESSEE WAS A SHAREHOLDER OF MORE THAN 10% IN 10 C OMPANIES. AND AFTER VERIFYING THE LOAN ADVANCES RECEIVED BY ASSESSEE FROM THE CLO SELY HELD COMPANIES DISALLOWED RS. 48,18,241/- U/S. 2(22)(E) OF THE ACT. THE ASSE SSEE FILED APPEAL AGAINST THE QUANTUM ASSESSMENT BEFORE THE LD. CIT(A) WHICH WAS DISMISSED VIDE ORDER DATED 11.08.2009. THEREAFTER, THE AO ISSUED PENALTY NOTIC E ON 09.03.2012, IN THE REPLY OF THE SAID NOTICE, THE ASSESSEE ACCEPTED THAT HE WAS HOLDING MORE THAN 10% BENEFICIAL INTEREST IN FEW OF THE COMPANIES AND AVAILED LOAN F ROM SUCH COMPANIES FOR HIS ITA NO.7170/M/014, SHRI GHANSHAM SEWAK RAMANI 2 BUSINESS PURPOSE. IT WAS FURTHER CONTENDED THAT THE ASSESSEE WAS NOT CONVERGENT WITH THE PROVISION OF I.T. ACT. THUS, ON THE BASIS OF ADMISSION, THE AO LEVIED THE PENALTY U/S 271(1)(C) OF RS. 16,21,819/- @ 100% OF THE TAX SOUGHT TO BE EVADED. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED TH E APPEAL BEFORE THE LD. CIT(A), WHEREIN THE APPEAL OF THE ASSESSEE WAS ALLOWED, RES ULTANTLY PENALTY WAS DELETED. THUS, BEING AGGRIEVED OF THE ORDER OF LD. CIT(A), T HE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND LD. AUTHORISED REPRESENTATIVE (AR) FOR ASSESSEE AND GON E THROUGH THE ORDER OF AUTHORITIES BELOW. THE LD. DR FOR REVENUE ARGUED TH AT LD. CIT(A) DELETED THE PENALTY ON WRONG PREMISES AND PRAYED THAT THE ORDER OF LD. CIT(A) MAY BE SET-ASIDE AND THAT OF THE AO BE RESTORED. ON THE OTHER HAND, LD. AR FOR ASSESSEE ARGUED THAT THE CASE IS SQUARELY COVERED IN HIS FAVOUR IN ASSES SEES OWN CASE FOR AY 2007-08. IT WAS FURTHER ARGUED THAT A SIMILAR PENALTY WAS LEVIE D FOR AY 2007-08 AND THE MATTER TRAVELLED UP TO THIS TRIBUNAL AND THE TRIBUNAL DEL ETED THE PENALTY VIDE ORDER DATED 30.10.2015. 4. WE HAVE CONSIDERED THE CONTENTION OF THE PARTIES AN D SEEN THAT SIMILAR ISSUES AROSE FOR AY 2007-08 AND THE AO LEVIED THE PENALTY U/S. 2 71(1)(C) WHICH WAS DELETED BY THE TRIBUNAL HOLDING AS UNDER: 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL O F IMPUGNED ORDER AND MATERIAL ON RECORD, WE FIND THAT AT THE ASSESSMENT ST AGE, THE ADDITION ON ACCOUNT OF DEEMED DIVIDED WAS MADE AT RS. 491,27,257 /-. SUCH AN ADDITION WAS REDUCED TO RS. 71,54,961/- BY THE CIT(A) VIDE O RDER DATED 08.11.2010. SUBSEQUNTLY, THE ASSESSEE FILED A RECTIFICATION APP LICATION U/S 154 POINTING OUT CERTAIN MISTAKES, IN RESPONSE TO WHICH, THE LD. CIT( A) VIDE ORDER DATED 4TH AUGUST, 2004 PASSED U/S 154, RESTRICTED THE ADDITIO N ON ACCOUNT OF DEEMED DIVIDEND AT RS. 23,36,720/- SINCE BALANCE DIVIDEND INCOME HAS ALREADY BEEN TAXED IN THE HANDS OF THE ASSESSEE IN THE AY 2005-0 6. THE ASSESSEE'S EXPLANATION HAD BEEN THAT, IT HAS DISCLOSED ALL THE FACTS OF THE LOANS TAKEN FROM VARIOUS COMPANIES, HOWEVER MATERIAL FACT RELATING T O PERCENTAGE OF HOLDING IN CERTAIN COMPANIES, WHICH HAS CHANGED FREQUENTLY FRO M TIME TO TIME COULD NOT BE PROPERLY REPORTED. SINCE ASSESSEE HAD DISCLOSED ALL THE LOANS AND ADVANCES, THEN EVEN IF THE ADDITION HAS BEEN CONFIRMED BY INVO KING THE DEEMING PROVISION, THAT TOO WHICH HAS VERIFIED FROM ASSESSMEN T STAGE TO APPELLATE STAGE, WE ARE OF THE OPINION THAT IT DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS SO AS TO ATTRACT PENALTY U/S 271(1)(C). FURTHER, WHEN THE ADDITION ITSELF HAS BEEN MADE UNDER THE DEEMING PROVISIONS AND THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO FURNISH ALL THE PARTICU LARS OF INCOME, THEN IN OUR OPINION, PENALTY CANNOT BE LEVIED SHRI GHANSHAM J SH EWAKRAMANI ITA NO. 7507/MUM/2013 U/S 271(1)(C). ACCORDINGLY, PENALTY O N ACCOUNT OF DEEMED DIVIDEND STANDS DELETED. ITA NO.7170/M/014, SHRI GHANSHAM SEWAK RAMANI 3 5. THUS, RESPECTFULLY FOLLOWING THE DECISION OF COORDI NATE BENCH WHEN THE FACTS OF THE PRESENT CASE ARE NOT AT VARIANCE WE HOLD THAT THE G ROUND RAISED IN THE PRESENT APPEAL IS COVERED IN FAVOUR OF ASSESSEE. THUS, WE DO NOT F IND ANY REASON TO INTERFERE IN DELETING THE PENALTY BY LD. CIT(A). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH OCTOBER, 2016 SD/- SD/- (R.C. SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 28/10/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/