ASIAN POWER CONTROLS LTD, MUMBAI V. DCIT CIR 3(1), MUMBAI

ITA 7431/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3932 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 29-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Wrong claim
• Section: 142(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI .. , , , BEFORE, SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.7431/MUM/2010 ASSESSMENT YEAR: 2004-05 M/S ASIAN POWER CONTROLS LTD. 96, ARCADIA NARIMAN POINT, MUMBAI-400021 / VS. DCIT, CENTRAL CIRCLE-3(1), ROOM NO.603-607, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-40020 ( !'#$ /ASSESSEE) ( % / REVENUE) PAN. NO. AACCA6535B !'#$ / ASSESSEE BY NONE % / REVENUE BY SHRI YOGESH KAMAT & %'($) / DATE OF HEARING : 11/02/2016 ($) / DATE OF ORDER: 22/02/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER D ATED 22/06/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, ITA NO.7431/MUM/2010 M/S ASIAN POWER CONTROLS LTD. 2 CONFIRMING PENALTY IMPOSED U/S 271(1)(C) OF THE INC OME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, NONE WAS PRESENT FOR THE ASSESS EE IN SPITE OF ISSUANCE OF REGISTERED AD NOTICE TO THE ASSESSEE, WHICH WAS DULY RECEIVED BY THE ASSESSEE AS IS EVIDE NT FROM ACKNOWLEDGMENT AVAILABLE ON RECORD. IT SEEMS THAT T HE ASSESSEE IS NOT INTERESTED TO PURSUE ITS APPEAL, TH EREFORE, WE HAVE NO OPTION BUT TO PROCEED EX-PARTE, QUA THE ASS ESSEE, AND TEND TO DISPOSE OF THE APPEAL ON THE BASIS OF M ATERIAL AVAILABLE ON RECORD. ON THE OTHER HAND, THE LD. DR, SHRI YOGESH KAMAT DEFENDED THE IMPOSITION AS WELL AS CONFIRMATION OF PENALTY BY CONTENDING THAT DISALLOW ANCE WAS RIGHTLY MADE ON THE CLAIMED EXPENSES UNDER THE HEAD SHORT TERM CAPITAL GAIN. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A LIMITED COMPANY, DECLARE D TAXABLE INCOME OF RS.50,61,430/- IN ITS RETURN FILED ON 29/ 10/2004. THE CASE OF THE ASSESSEE COMPANY WAS SELECTED FOR S CRUTINY, THEREFORE, REQUIRED NOTICES U/S 143(2) AND 142(1) W ERE ISSUED ITA NO.7431/MUM/2010 M/S ASIAN POWER CONTROLS LTD. 3 AND SERVED UPON THE ASSESSEE. WHILE COMPLETING THE ASSESSMENT, IT WAS NOTICED THAT THE ASSESSEE CLAIME D FOLLOWING EXPENSES UNDER THE HEAD SHORT TERM CAPITA L GAIN:- SL. NO. EXPENSES AMOUNT (IN RS.) 1 PORTFOLIO MANAGEMENT FEES 2,96,182/- 2 OTHER EXPENSE AS PER TB OF ASK RAYMOND 1,34,167/- 3. OTHER EXPENSES (DIFFERENCE BETWEEN THE ESTIMATED EXPENSES AND ACTUAL BILL OF THE PORT MANAGEMENT FEES) ON ESTIMATION BASIS 62,275/- THE LD. ASSESSING OFFICER DISALLOWED THESE EXPENSES ON THE PLEA THAT NEITHER THESE EXPENSES ARE FOR THE IMPROV EMENT OF THE CAPITAL ASSET NOR IN CONNECTION WITH TRANSFER O F CAPITAL ASSET. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED AGAINST THE ASSESSEE. ON APPEAL, THE STAN D OF THE LD. ASSESSING OFFICER WAS AFFIRMED, THEREFORE, THE ASSE SSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 2.2. UNDER THE AFOREMENTIONED FACTS, NOW QUESTION ARISES, WHETHER THE PENALTY WAS RIGHTLY IMPOSED/CON FIRMED. UNDISPUTED FACT IS COMING OUT THAT THE IMPUGNED EXP ENSES WERE CLAIMED BY THE ASSESSEE UNDER THE PROFESSIONAL ADVICE OF ITA NO.7431/MUM/2010 M/S ASIAN POWER CONTROLS LTD. 4 THE CHARTERED ACCOUNTANT. EVEN IF IT IS PRESUMED T HAT THE PROFESSIONAL ADVICE WAS WRONG, STILL IT CANNOT BE C ONSTRUED THAT EITHER THE ASSESSEE FURNISHED WRONG PARTICULAR S OF CONCEALED ITS INCOME BECAUSE MERE MAKING A FALSE CL AIM IN ITSELF DOES NOT LEAD TO THE CONCLUSION THAT ANYTHIN G WAS HIDDEN BY THE ASSESSEE. OUR VIEW FIND SUPPORT FROM THE DECISION FROM HONBLE APEX COURT IN RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158) (SC), WHEREIN, IT WAS HELD THAT MERE MAKING A WRONG CLAIM ITSELF DOES NOT TANTAMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. EVEN OTHERWISE, THE LD. ASSESSING OFFICER IS EMPOWERED TO ALLOW, IF LEGALLY CLAIMED, OR DISALLOW, IF NOT PERMITTED BY THE PROVISION OF THE ACT, BUT CERT AINLY, IT CANNOT BE CONCLUDED THAT THE ASSESSEE MADE A WRONG CLAIM. IT IS ALSO NOTED THAT THE ASSESSEE IS ASSISTED BY P ROFESSIONAL CHARTERED ACCOUNTANTS AND ON THE BASIS OF THEIR ADV ICE, SUCH CLAIM WAS MADE BY THE ASSESSEE, THEREFORE, FROM THI S ANGLE ALSO, WE ARE IN AGREEMENT WITH THE VIEW THAT FOR TH E MISTAKE OF THE CHARTERED ACCOUNTANT, THE ASSESSEE SHOULD NO T SUFFER AS WAS HELD IN VARIOUS DECISIONS. LIKE MANJOJ AHUJA VS ACIT 150 ITR 696 (P & H), RATIO LAID DOWN IN SMT. SHEFAL I GODHA VS ITO (ITA NO.550/IND/2009) ORDER DATED 15/02/2010, V IPUL CHATTAR (ITA NO.146/IND)2013) ORDER DATED 03/06/201 3 AND SHANTILAL JAIN (ITA NO.2123/MUM/2015) ORDER DATED 11/01/2016. IN VIEW OF THE AFOREMENTIONED FACTS AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE, WE A RE OF THE VIEW THAT IT MAY BE A GOOD CASE FOR QUANTUM ADD ITION BUT ITA NO.7431/MUM/2010 M/S ASIAN POWER CONTROLS LTD. 5 NOT FOR IMPOSING PENALTY, THEREFORE, WE DIRECT THE LD. ASSESSING OFFICER TO DELETE THE PENALTY OF RS.1,25, 460/- IMPOSED BY HIM AND CONFIRMED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESEN CE OF LD. DR AT THE CONCLUSION OF HEARING ON 11/02/201 6. SD/- SD/- ( G.S. PANNU ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & ' MUMBAI; + DATED : 22/02/2016 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. , -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 11 & 2$ ( , ) / THE CIT, MUMBAI. 4. 11 & 2$ / CIT(A)- , MUMBAI 5. 4%5/$! , 1, ),!6 , & ' / DR, ITAT, MUMBAI 6. 7'8' / GUARD FILE. / BY ORDER, 04$/$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI