PMT MACHINES LTD, MUMBAI V. DCIT 2(2), MUMBAI

ITA 7526/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2051 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Wrong claim
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C ,MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7526/MUM/2012 FOR (ASSESSMENT YEAR : 2008-09 ) M/S PMT MACHINES LIMITED 214, LINKWAY ESTATE, NEW LINK ROAD, MALAD (WEST), MUMBAI-400064. PAN: AAACP4680L VS. DCIT, 2(2)(1) AAYAKAR BHAVAN, MUMBAI-400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK PATIL (AR) REVENUE BY : MS. BHARTI SINGH ( DR) DATE OF HEARING : 27.10.2016 DATE OF PRONOUNCEMENT : 09.11.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL U/S 253 OF INCOME TAX ACT (ACT ) IS DIRECTED BY THE ASSESSEE- COMPANY AGAINST THE CONFIRMATION OF PENALTY ORDER BY COMMISSIONER OF INCOME-TAX (APPEALS) [CIT(A)]-5 MUMBAI DATED 03.10.2012 FOR ASSESSMENT YEAR (AY) 2008- 09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 30.09.2008 DECLARING TOTAL INCOME OF RS. 14,05,13,606/-. THE ASSESSMENT WAS COMPLETED ON 08.12.2010 U/S 143(3) O F THE ACT DETERMINING THE TOTAL INCOME OF ASSESSEE AT RS. 14,56,26,450/-. DURING TH E COURSE OF ASSESSMENT, THE AO NOTICED THAT TRANSACTION OF RS. 1,50,16,736/- WAS N OT REFLECTED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAM E. FROM THE EXPLANATION OF THE ASSESSEE, AO NOTED THAT THE PROFIT OF RS. 5016736/- BEING PROFIT OF SWITCHED OVER OF UNITS PURCHASED BY ASSESSEE ON 31.03.2007 TO THE UN ITS OF FUSION FUND SERIES 3 RETAIL GROWTH WAS NOT OFFERED FOR TAXATION. THUS, T HE ASSESSING OFFICER (AO) MADE 2 ITA NO. 7526/M/2012 M/S PMT MACHIN ES LIMITED THE DISALLOWANCE OF RS. 50,16,736/- IN THE ASSESSME NT ORDER DATED 08.12.2010. AFTER COMPLETION OF ASSESSMENT, NOTICE U/S 274 R.W.S. 271 DATED 08.12.2010 WAS SERVED FOR INITIATING PENALTY. WHEN NO REPLY WAS RECEIVED FURT HER NOTICE DATED 01.06.2011 WAS SERVED FOR SEEKING EXPLANATION OF ASSESSEE. AS NO R EPLY WAS FILED, THE AO LEVIED THE PENALTY @ 100% ON THE TAX SOUGHT TO BE EVADED VIDE ORDER DATED 29.06.2011. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED AP PEAL BEFORE THE LD. CIT(A) BUT THE SAME WAS DISMISSED VIDE ORDER IMPUGNED IN THE P RESENT APPEAL. THUS, THE PRESENT APPEAL IS FILED BEFORE US. 3. WE HAVE HEARD LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE ARGUED THAT D UE TO MISTAKE THE ASSESSEE HAS NOT CONCEALED ANY INCOME. THE ERROR COMMITTED BY THE AS SESSEE WAS WITHOUT ANY INTENTION TO CONCEAL ANY FACT OF THE MATTER REGARDI NG INCOME. IT WAS FURTHER ARGUED THAT AS SOON AS THE FACT CAME TO THE KNOWLEDGE OF T HE ASSESSEE, THE INCOME WAS VOLUNTARY OFFERED FOR TAXATION. THE LD. AR FOR ASSE SSEE FURTHER ARGUED THAT MERE DISALLOWANCE WOULD NOT ATTRACT THE PENALTY; MOREOVE R, THE ASSESSEE HAS ADMITTED THAT IT WAS ON ACCOUNT OF MISTAKE. THE LD. AR OF THE ASS ESSEE RELIED UPON THE DECISION OF KRISHNA SACHDEVA VS. DCIT IN ITA NO.4384/DEL/2009 D ATED 31.03.2010 REPORTED VIDE (2010) 29 CCH AND THE DECISION OF BOMBAY HIGH COURT IN CIT VS. SOMANY EVERGREE KNITS LTD. [2013] 352 ITR 592 (BOM). ON TH E OTHER HAND, THE LD. DR FOR REVENUE VEHEMENTLY ARGUED THAT THE ASSESSEE HAS ACT IVELY CONCEALED THE INCOME AND IT WAS THE WORK OF AO, WHO HAD DETECTED THE INCOME OF ASSESSEE. HAS THE CASE BEEN NOT SELECTED FOR SCRUTINY, THE REVENUE WOULD HAVE B EEN LOST. THE LD. DR FOR REVENUE FURTHER ARGUED THAT THE LD. CIT(A) HAS CATEGORICALL Y EXAMINED THE CONTENTION OF THE ASSESSEE AND THAT THE ASSESSEE IS NOT ENTITLED FOR ANY RELIEF. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND FURTHER GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE PENALTY PRO CEEDING, THE ASSESSEE HAS NOT FILED ANY REPLY TO THE SHOW-CAUSE NOTICE ISSUED TO HIM. W E HAVE FURTHER NOTICED THAT THERE IS NO EVIDENCE ON RECORD WHICH MAY SUGGEST THAT ASS ESSEE FILED ANY APPEAL AGAINST THE ADDITION OF QUANTUM ASSESSMENT. DURING THE APPE LLATE PROCEEDING, THE ASSESSEE CONTENDED THAT DUE TO NON-AVAILABILITY OF THE DOCUM ENTS OF GAIN OF SWITCHED OVER 3 ITA NO. 7526/M/2012 M/S PMT MACHIN ES LIMITED WHICH WAS TO BE ACCOUNTED AND SHOULD HAVE DEBITED T O INVESTMENT AND THE COST OF INVESTMENT SHOULD HAVE BEEN INCREASED BY THE GAIN O F RS. 50,16,736/-. AS THE GAIN WAS NOT ACCOUNTED FOR THE COST OF INVESTMENT REMAIN ED RS. 1 CRORE INSTEAD OF 1.5 CRORE (APPROX) AND IT WAS FURTHER CONTENDED THAT TH E ASSESSEE SOLD THE INVESTMENT IN AY 2011-12 AT RS. 2,03,41,745/- AND DISCLOSED THE P ROFIT IN THE RETURN FOR AY 2011- 12. THE LD. CIT(A) CONSIDERED THE CONTENTION OF ASS ESSEE AND CONCLUDED THAT QUERY REGARDING NOT DISCLOSING THE PROFIT OF RS. 50,16,73 6/- ON SWITCHED OVER ON UNITS WAS RAISED BY AO ON 10.11.2010. IT WAS ONLY THEREAFTER, THAT ASSESSEE DISCLOSED THE PROFIT IN THE RETURN FILED FOR AY 2011-12 AFTER 10.11.2010 AND AS SUCH THAT ASSESSEES CONTENTION THAT IT HAD NO MENS REA OR WILLFUL CONCEALMENT IS NOT CORRECT. LD. CIT(A) CONCLUDED THAT ASSESSEE IS WILLFULLY AND INTENTIONA LLY NOT DISCLOSED THE PROFIT OF RS. 50,16,736/- BEING PROFIT ON SWITCHED OVER OF THE UN IT. THE ASSESSEE HAS NOT COUNTER THIS FACT BEFORE US, RATHER IT WAS ARGUED THAT THER E WAS NO INTENTIONAL CONCEALMENT OF FACT OR MERE DISALLOWANCE WOULD NOT LEAD TO LEVY OF PENALTY, THE LD. AR OF ASSESSEE ALSO FAILED TO SUBSTANTIATE THAT MISTAKE WAS BONAFI DE MISTAKE ON THE PART OF ASSESSEE. THE FACTS OF THE DECISION CITED BY LD. AR OF THE AS SESSEE ARE AT VARIANCE. IN KRISHNA SACHDEVA VS. DCIT (SUPRA) THE ASSESSEE CLAIMED LOSS ON SALE OF ASSETS AS CAPITAL LOSS AND WAS NOT ALLOWED AS A SET OFF OF AGAINST THE BUS INESS INCOME. THUS, THERE WAS A MERELY A WRONG CLAIM WHICH WAS DISALLOWED. IN CIT V S. SOMANY EVERGREE KNITS LTD. (SUPRA) ASSESSEE WRONGLY CLAIMED LOSS A REVENU E EXPENDITURE AND THE MISTAKE WAS RECTIFIED DURING THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE REALIZED ITS MISTAKE AND POINTED IT OUT. HOWEVER, IN THE PRESENT CASE TH ERE WAS AN ACTIVE CONCEALMENT ON THE PART OF ASSESSEE. THE ASSESSEE HAS NOT INTENTIO NALLY EXPLAINED IT DURING THE PENALTY PROCEEDING BY NOT RESPONDING TO THE NOTICES ISSUED BY AO BEFORE LEVYING THE PENALTY. HENCE, WE DO NOT FIND ANY REASON TO INTERF ERE WITH THE ORDER OF LD. CIT(A), HENCE, THE GROUND NO. 1 TO 4 RAISED IN THE PRESENT APPEAL ARE DISMISSED. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH NOVEMBER, 2016. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 09/11/2016 4 ITA NO. 7526/M/2012 M/S PMT MACHIN ES LIMITED 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/