M/s. Pinewood Commercial Ltd., Kolkata V. ITO, WD-3(1), KOLKATA, Kolkata

ITA 730/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1058 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: S SINGHI
• Keywords: Capital asset; Depreciation
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & DR.ARJUN LAL SAINI, AM] I.T.A NO. 730/KOL/201 6 ASSESSMENT YEAR : 2008-09 PINEWOOD COMMERCIAL LTD. -VS.- I.T.O., WAR D-3(1) KOLKATA KOLKATA. [PAN : AABCP 5822 H] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI S.SINGHI, FCA FOR THE RESPONDENT : SHRI ARINDAM BHATTACHAR JEE, ADDL. CIT DATE OF HEARING : 20.11.2017. DATE OF PRONOUNCEMENT : 22.11.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 29.02.2016 OF CIT-(A)- 1, KOLKATA RELATING TO A.Y.2008-09. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED TH E ORDER OF CIT(A) WHEREBY THE CIT(A) CONFIRMED THE ORDER OF AO IMPOSING PENALTY U/S 271( 1)(C) OF THE INCOME TAX ACT, 1961 (ACT). 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS :- THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS O F PROVIDING SECRETARIAL, CONSULTANCY AND ACCOUNTING SERVICES. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 WAS SUBMITTED ON 28/09/2008 SHOWING TOTAL I NCOME OF RS. 3,55,634/-. THE ASSESSEE HAD PURCHASED A COMMERCIAL PROPERTY SITUAT ED AT WESTMORE 11, SIR POCHKANWALE ROAD, WORLI, MUMBAI IN THE YEAR 1987. D EPRECIATION ON THE PROPERTY WAS CLAIMED AND ALLOWED IN EARLIER ASSESSMENT YEARS. DU RING THE YEAR THE ASSESSEE SOLD THE 2 ITA NO.730/KOL/2016 PINEWOOD COMMERCIAL LTD. A.Y.2008-09 2 PROPERTY AND ACQUIRED A NEW PROPERTY FOR RS. 1,00,7 9,310/-. THE ASSESSEE INADVERTENTLY OFFERED THE PROFITS UNDER THE HEAD CAPITAL GAIN INS TEAD OF UNDER THE HEAD PROFIT AND GAINS FROM BUSINESS OR PROFESSION. THE ASSESSEE RE CTIFIED THE MISTAKE IN THE COURSE OF HEARING BY SUBMITTING A REVISED COMPUTATION AND OFF ERING PROFIT OF RS 2,41,254/- UNDER SECTION 41(2) OF THE INCOME TAX ACT, 1961. THE PROF IT OF RS. 2,41,254/- WAS DULY DISCLOSED IN THE REVISED COMPUTATION. THE ASSESSING OFFICER DID NOT ACCEPT THE REVISED COMPUTATION AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 27/12/2010 ON THE BASIS OF ORIGINAL COMPUTATION FIL ED BY THE ASSESSEE. HE MADE AN ADDITION OF RS. 60,05,067/- TO THE INCOME OF THE AS SESSEE UNDER THE HEAD 'CAPITAL GAINS' ON ALLEGED GROUND THAT THE COMMERCIAL PREMIS ES SOLD BY THE ASSESSEE WAS A CAPITAL ASSET. THE ASSESSING OFFICER ALSO HELD THAT NO DEPRECIATION WAS CLAIMED BY THE ASSESSEE FOR THE COMMERCIAL PREMISES UNDER SECTION 32 OF THE INCOME TAX ACT 1961. THE ASSESSEE AGGRIEVED BY THE ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 OF THE ASSESSING OFFICER FILED AN APPEAL BEFORE THE CIT(A) ON 19/01/2011. HOWEVER, THE CIT(A) CONFIRMED THE DISALLOWANCE BY HIS ORDER DT.2 5.1.2011. 4. IN RESPECT OF THE ADDITION MADE UNDER THE HEAD CAP ITAL GAINS THE AO IMPOSED PENALTY ON THE ASSESSEE U/S 271(1)(C) OF THE ACT. ON APPEAL THE CIT(A) CONFIRMED THE ORDER OF THE AO. AGGRIEVED BY THE ORDER OF CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING OF THIS APPEAL IT WAS BR OUGHT TO OUR NOTICE BY THE LD. COUNSEL FOR THE ASSESSEE THAT AS AGAINST THE ADDITION OF R S.60,05,067/- MADE BY THE AO UNDER THE HEAD CAPITAL GAINS WHICH WAS CONFIRMED BY CIT (A), THE ASSESSEE PREFERRED AN APPEAL BEFORE THE HONBLE TRIBUNAL IN ITA NO.1028/ KOL/2014. THE TRIBUNAL VIDE ITS ORDER DATED 31.07.2017 WAS PLEASED TO DELETE THE AD DITION MADE UNDER THE HEAD CAPITAL GAINS. SINCE THE VERY ADDITION ON THE BASIS OF WHI CH PENALTY WAS IMPOSED ON THE ASSESSEE BY THE AO HAS BEEN DELETED BY THE TRIBUNAL , WE ARE OF THE VIEW THAT THE ORDER 3 ITA NO.730/KOL/2016 PINEWOOD COMMERCIAL LTD. A.Y.2008-09 3 IMPOSING PENALTY HAS NO LEGS TO STAND. THE PENALTY IMPOSED ON THE ASSESSEE IS THEREFORE CANCELLED AND THE APPEAL OF THE ASSESSEE IS ALLOWED . 6. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 22.11.2017. SD/- SD/- [DR.A.L.SAINI] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22.11.2017. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. PINEWOOD COMMERCIAL LTD., C/O V.SINGHI & ASS OCIATES, CHARTERED ACCOUNTANTS, FOUR MANGO LANE, SURENDRA MOHAN GHOSH SARANI, KOLKA TA-700001. 2. I.T.,O., WARD-3(1), KOLKATA. 3. C.I.T. (A)-1, KOLKATA. 4. C.I.T.-1, KOL KATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SR. PRIVA TE SECRETARY HEAD OF OFFICE/DDO,, ITAT, KOLKATA BENCHES 4 ITA NO.730/KOL/2016 PINEWOOD COMMERCIAL LTD. A.Y.2008-09 4