Y.P. PUNJ FAMILY TRUST, MUMBAI V. DCIT 15(2), MUMBAI

ITA 7614/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2605 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M

Judgement Text

Y P PUNJ FAMILY TRUST ITA NO. 7614 /MUM/201 3 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI . , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER ITA NO. : 7 6 14 /MUM/20 1 3 (ASSESSMENT YEAR :200 6 - 0 7 ) Y P PUNJ FAMILY TRUST , PSL TOWERS, 615, MAKWANA ROAD, MAROL, ANDHERI (EAST), MUMBAI - 400 0 59 .: PAN: AAATY 1077 D VS A SST . COMMISSIONER OF INCOME TAX - 15 ( 2 ), MATRU MANDIR, TARDEO ROAD, M UMBAI - 400 007 (APPELLANT (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI A K KARDAM /DATE OF HEARING : 30 - 0 7 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 10 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE A FORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST IMPUGNED ORDER DATED 3 1 . 1 0 . 201 3 PASSED BY CIT(A) - 26 , MUMBAI - 26, IN RELATION TO PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE ASSESSMENT YEAR 2006 - 07. THE ASSESSEE IS MAINLY AGGRIEVED BY LEVY OF PENALTY U/S 271(1)(C) FOR SUM OF RS. 24,353/ - . IN THIS CASE, THE PENALTY HAS BEEN LEVIED ON THE ASSESSEE ON THE ADDITION MADE ON PROTECTIVE BASIS. THE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHRI Y P PUNJ . 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE IS FAMILY TRUST WHICH HAS TAKEN THE PROPERTY ON LEASE FROM SHRI Y. P. PUNJ AT MONTHLY RENT OF RS. 5 ,45,250/ - FRO M 01.07.2003 TO 31.03.2006. THE PROPERTY SO TAKEN ON LEASE HAS BEEN SUB - LET TO HDFC. AS PER Y P PUNJ FAMILY TRUST ITA NO. 7614 /MUM/201 3 2 THE SUB - LICENSE AGREEMENT BETWEEN THE ASSESSEE TRUST AND HDFC BANK DATED 15.09.2004 , THE MONTHLY LEASE RENT OF RS. 2,24,640/ - PLUS RS. 1,49,768/ - FOR 33 MONTHS WITH AN ADVANCE DEPOSIT OF RS. 22,46,400/ - FOR A TOTAL AREA 2340 SQ. FT. AND OTHER PROPERTY WAS GIVEN ON RENT TO SONY MONY ELECTRONICS LTD. FOR A MONTHLY RENT OF RS. 3,52,800/ - AND ADVANCE DEPOSIT OF RS. 35,28,000/ - . THE AO HELD THAT, THIS TRUST IS NOTHING BU T A COLOURABLE DEVICE OF TRANSFERRING THE INCOME FROM THE HANDS OF Y P PUNJ TO THE FAMILY TRUST. HE THUS ADDED THE INCOME ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI Y P PUNJ AND IN THE CASE OF ASSESSEE, I.E. Y.P. PUNJ FAMILY TRUST ON THE PROTECTIVE BASIS. 3. BEFORE US, IT HAS BEEN SUBMITTED THAT IN THE CASE OF Y.P. PUNJ, THE TRUST INCOME HAS ALREADY BEEN CLUBBED U/S 64 AND RENTAL INCOME HAS BEEN OFFERED ON SUBSTANTIVE BASIS IN HIS HAND. ONCE THAT IS SO, WE ARE UNABLE TO UNDERSTAND WHY THE PENALTY ON PROTEC TIVE ASSESSMENT HAS BEEN LEVIED. THERE CAN BE PROTECTIVE ASSESSMENT BUT THERE CANNOT BE PROTECTIVE PENALTY, BECAUSE THERE IS NO ASSESSED INCOME WHICH C A N BE TREATED AS CONCEALED INCOME OR FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME. BEFORE US, THE LD. COUNSEL HAS CITED FOLLOWING DECISION IN SUPPORT OF THE CONTENTION NO PENALTY CAN BE LEVIED ON PROTECTIVE BASIS : - CIT V SUPER STEEL (SALES) CO. 178 ITR 451(CAL) METAL STORES VS CIT 186 ITR 612(GAU) ITO VS MISS VASUDHA BAJORIA 40 ITD 414(ITAT - KOL) CIT V SMT. DURGAWATI SINGH 234 ITR 249(ALL) WHEREAS, THE LD. DR HAS STRONGLY RELIED UPON THE ORDER OF THE CIT(A). 4. ON THE PERUSAL OF THE IMPUGNED ORDER AND FACTS AND MATERIALS ON RECORD, WE FIND THAT BOTH THE AUTHORITIES HAVE DISCUSSED IN DETA IL, THE COLOURABLE DEVICE BUT FAILED TO UNDERSTAND THAT , ONCE AN INCOME HAS ALREADY BEEN OFFERED AND ASSESSED ON Y P PUNJ FAMILY TRUST ITA NO. 7614 /MUM/201 3 3 SUBSTANTIVE BASIS IN THE CASE OF THE INDIVIDUAL ASSESSEE , THEN HOW IT BECOMES CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN THE CASE OF A PERSON WHERE INCOME HAS BEEN ASSESSED ON A PROTECTIVE BASIS. THUS, PENALTY LEVIED ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE STANDS DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER , 2015. SD/ - SD/ - ( . ) ( ) ( D. KARUNAKARA RAO ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30 TH OCTOBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 26 , MUMBAI. 4 ) THE CIT - 15 , MUMBAI. 5 ) , , / THE D.R. G BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS