MEENA KOTHARI, MUMBAI V. ACIT CIRCLE-16 (1), MUMBAI

ITA 7505/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3578 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MOHANDOSS
• Keywords: Revised return
• Section: 143(3); 142(1); 139(5); 27; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.C.SHARMA (AM) AND SHRI RAM LAL NEGI (JM ) ITA NO. 7505/MUM/2013 ASSESSMENT YEAR: 2009-10 MRS. MEENA KOTHARI. GOLD CORNET, FLAT NO. 4, 1 ST FLOOR, 11 NAWROJEE GAMADIA ROAD, MUMBAI- 400026. PAN: AABPK6060D VS. THE ASSTT. CIT, CIRCLE - 16(1), MATRU MANDIR, TARDEO, MUMBAI- 400007. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. ANUJ KISNADWALA RESPONDENT BY : SHRI. K. MOHANDOSS DATE OF HEARING: 2 7/05/2016 DATE OF PRONOUNCEMENT: 25/08/20 16 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST ORDER DATED 30/10/2013 PASSED BY THE LD. CIT(APPEALS)-27, MUMBA I, FOR THE ASST. YEAR 2009-10, WHEREBY THE LD. CIT(A) UPHELD THE PENALTY ORDER PASSED BY THE A.O U/S 271(1)(C). 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT/ ASSESSEE HAVING INCOME FROM HOUSE PROPERTY, BUSINESS, CAPITAL GAINS AND OT HER SOURCES, FILED HER RETURN OF INCOME FOR A.Y. 2009-10 ON 28/07/2009 DECLARING THE TOTAL INCOME OF RS. 91,22,800/-. THE CASE WAS IDENTIFIED FOR SCRUTINY A ND NOTICE U/S 143(2) WAS SERVED ON THE ASSESSEE. IN RESPONSE THEREOF THE ASS ESSEE FILED HER REVISED RETURN ON 31.3.2011 DECLARING TOTAL INCOME OF RS. 1,05,42,842/-. ACCORDINGLY, 2 ITA NO. 7505/MUM/2013 ASSESSMENT YEAR: 2009-10 THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF RS. 1,06,31,340/- THE APPELLANT/ASSESSEE DID NOT CHALLENGE THE ASSESSMENT ORDER. THE AO ISSUED PENALTY NOTICE U/S 274 R/W SECTION 271(1)(C) OF THE ACT. IN RESPONSE TO THE NOTICE THE ASSESSEE SUBMITTED WRITTEN EXPLANATION STATING THEREIN THAT NOTICE U/S 143(2) WAS RECEIVED ON 3.9.2010 AND THE RETURN WAS REVISED AND MISTAKE IN CALCULATION OF SHORT TER M CAPITAL GAIN WAS RECTIFIED AND THE TAX DUE WAS PAID. THE ASSESSEE FURTHER CONT ENDED THAT SHE RECEIVED FIRST NOTICE U/S 142(1) AFTER REVISING HER RETURN. THE A.O LEVIED PENALTY OF RS. 5,66,570/-U/S 271(1)(C) OF THE ACT, HOLDING THAT TH E ASSESSEE FILED HER REVISED RETURN AFTER RECEIVING NOTICE U/S 143(2)/142(1) OF THE ACT. THE PENALTY ORDER WAS CHALLENGED BY THE ASSESSEE BEFORE THE FIRST APP ELLATE AUTHORITY. THE LD. CIT(A) AFTER HEARING THE ASSESSEE CONFIRMED THE ACT ION OF THE A.O. AND DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED, TH E ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE HONBLE CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE LEARNED ASSESSING OFFICER U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 5,66,570/-. THE APPELLANT PRAYS THAT THE SAME M AY PLEASE BE DELETED. 2.WITHOUT PREJUDICE TO GROUND NO.1, ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE C IT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY LEARNED ASSESSING OFFICER ON RS. 33,615/- I.E. ADDITION MADE ON ACCOUNT OF DEPOSITOR Y CHARGED IN THE ASSESSMENT ORDER, ON WHICH NO PENALTY WAS INITI ATED IN THE ASSESSMENT ORDER. THE APPELLANT PRAYS THAT PENALTY ON AN ADDITION OF RS. 33,615/- MAY BE DELETED. 3 ITA NO. 7505/MUM/2013 ASSESSMENT YEAR: 2009-10 3. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESS EE SOLD SHARES OF KIRLOSKAR OIL ON 29/09/2008 AND OFFERED THE GAIN AR ISING FROM THOSE SHARES AS LONG TERM CAPITAL GAIN. ALL THE SHARES EXCEPT THE B ONUS SHARES WERE ACQUIRED IN THE YEAR 2003. HOWEVER, THE ASSESSEE SOLD ALL THE S HARES OF KIRLOSKAR OIL TOGETHER AND INADVERTENTLY THE GAIN FROM BONUS SHAR ES WAS ALSO OFFERED AS LONG TERM CAPITAL GAIN INSTEAD ON SHORT TERM CAPITAL GAI N. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT MENTIONED ANY W RONG DATE AND DETAILS, HOWEVER, THE SHORT TERM CAPITAL GAIN WAS ALSO ERRON EOUSLY OFFERED AS LONG TERM CAPITAL GAIN DUE TO REASONS THAT ALL THE SHARES IN QUESTION WERE SOLD TOGETHER. THE SAID MISTAKE WAS RECTIFIED BY THE ASSESSEE BY F ILING A REVISED RETURN ON 31/03/2011 WHICH WAS ACCEPTED BY THE ASSESSING OFFI CER. SUBSEQUENTLY, NOTICE WAS ISSUED U/S 142(1) ON 28/07/2011 ASKING F OR DETAILS OF SHORT TERM AND LONG TERM CAPITAL GAINS. THE ASSESSEE REITERAT ED THAT THE REVISED RETURN RECTIFYING THE SAID MISTAKE WAS ACCEPTED BY THE A.O . THE LD. AR FURTHER SUBMITTED THAT THE MUMBAI TRIBUNAL IN THE CASE OF RAJESH C. GANDHI VS. ITO (38 SOT 537) HAS CONSIDERED THE IDENTICAL ISSUE AND HELD THAT S INCE THE ASSESSEE OFFERED THE ADDITIONAL INCOME BEFORE IT WA S DETECTED BY THE ASSESSING OFFICER AND THE ADDITIONAL INCOME WAS ACCEPTED IN T HE REVISED RETURN, NO PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE ACT. THE LD. AR FURTHER PLACED RELIANCE ON THE ORDER OF THE HONBLE TRIBUNAL IN TH E CASE OF ACIT VS. M/S. R.J. ELECTRICALS ( ITA NO. 5025/MUM/2012 DATED 29/10/201 4) , WHEREIN IT HAS BEEN HELD THAT IF THE A.O DOES NOT RAISE ANY QUERY U/S 1 43(2) OF THE ACT AND SUBSEQUENTLY THE ASSESSEE FILES A REVISED RETURN O F THE INCOME WHICH IS ACCEPTED BY THE A.O, NO PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE ACT. 4. AS REGARDS THE LD. AR SUBMITTED THAT THE ASSESS EE HAD CLAIMED DEPOSITORY CHARGES OF RS. 33,615/- IN THE PROFIT AN D LOSS ACCOUNT WHICH WERE INCURRED FOR INVESTMENT IN SHARES EARNING LONG TERM CAPITAL GAIN. THE SAID EXPENSES WERE DISALLOWED BY THE ASSESSING OFFICER. THE LD. AR RELYING ON THE 4 ITA NO. 7505/MUM/2013 ASSESSMENT YEAR: 2009-10 RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158 SUBMITTED THAT THE ASSESSEES CLAIM, WHICH IS NOT SUSTAINABLE IN THE LAW ITSELF DOES NOT ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. 5. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) RELYING ON THE CONCURRENT FINDING OF THE AUTHORITIES BELOW SUB MITTED THAT THERE IS NO LEGAL OR FACTUAL INFIRMITY IN THE IMPUGNED ORDER. THE LD. CIT(A) HAS CONFIRMED THE FINDING OF THE A.O AS PER THE PROVISIONS OF LAW AND THE EVIDENCE ON RECORD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PE RUSED THE MATERIAL PLACED BEFORE US INCLUDING THE CASES RELIED UPON BY THE PARTIES. WE NOTICE THAT THAT THE ASSESSEE SOLD 9,00,000 SHARES OF KIRLOSKAR OIL ON 29/09/2009 OUT OF WHICH 1,08,600 WERE BONUS SHARES RECEIVED ON 27/10/ 2007. THE RETURN WAS FILED BY THE APPELLANT ON 28/07/2009. SINCE 1,08,60 0 SHARES WERE RECEIVED ON 27/10/2007, THE GAIN ARISING OUT OF THE SALE OF THE SAID SHARES WAS REQUIRED TO BE COMPUTED AS SHORT TERM CAPITAL GAIN INSTEAD OF L ONG TERM CAPITAL GAIN. WHEN THE ASSESSEE NOTICED THE SAID MISTAKE, SHE SUO-MOTO RECTIFIED THE SAME BY FILING REVISED RETURN U/S 139(5) ON 31/03/2011 TREATING THE GAIN ON SALE OF BONUS SHARES OF KIRLOSKAR OIL AS SHORT TERM CAPITAL GAIN THEREBY OFFERING A HIGHER INCOME TO THE TUNE OF RS. 14,74,930/-. ACCORDINGLY THE DIFFERENTIAL TAX AS WELL AS THE INTEREST THEREON WAS PAID. 7. IN THE CASE OF ACIT VS. M/S. R.J. ELECTRICALS (ITA NO. 5025/MUM/20 12 DATED 29/10/2014) , THE CO-ORDINATE BENCH OF THE ITAT HAS HELD THAT I F NO QUERY HAS BEEN ISSUED BY THE A.O U/S 143(2) OF THE ACT AND SUBSEQUENTLY THE ASSESSEE FILES A REVISED RETURN DECLARING THE INCOM E WHICH HAS BEEN ACCEPTED BY THE A.O, NO PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE ACT. RESPECTFULLY FOLLOWING THE VIEWS TAKEN BY THE CO-ORDINATE BENCH IN THE SIMILAR 5 ITA NO. 7505/MUM/2013 ASSESSMENT YEAR: 2009-10 CIRCUMSTANCES, WE HOLD THAT IT IS NOT A FIT CASE WH ERE PENALTY CAN BE IMPOSED U/S 271(1)(C) OF THE ACT. HENCE THIS GROUND OF APPE AL OF THE ASSESSEE IS ALLOWED. 8. SO FAR AS THE SECOND GROUND IS CONCERNED, WE FI ND MERIT IN THE CONTENTION OF THE LD. AR THAT DISALLOWANCE OF ANY CLAIM WHICH IS NOT SUSTAINABLE IN LAW ITSELF IS NOT SUFFICIENT TO IMPOSED PENALTY U/S 27 1(1)(C) OF THE ACT. THE ASSESSEE HAD CLAIMED DEPOSITORY CHARGES OF RS. 33,615/- AND THE A.O. DISALLOWED THE SAID EXPENSES. IN OUR CONSIDERED VIEW THE SAID CLAI M OF THE ASSESSEE DOES NOT TANTAMOUNT TO CONCEALMENT OF PARTICULARS INCOME OR FURNISHING OF INCORRECT PARTICULARS OF INCOME. WE, THEREFORE, DECIDE THIS G ROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASST. YEAR 2009-10 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COUR T 25 TH AUG, 2016. SD/- SD/- ( R.C.SHARMA ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 25/08/2016 6 ITA NO. 7505/MUM/2013 ASSESSMENT YEAR: 2009-10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA