GLOBAL FINTCH P.LTD, MUMBAI V. DCIT 9(1), MUMBAI

ITA 7743/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62615 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 21-06-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P ARTH SARATHI NAIK
• Assessee Lawyers: ARUN SATHE; KALPESH TURALKAR
• Section: 143(3); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , , . . BEFORE SHRI G.E. VEERABHADRAPPA, HON'BLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./ ITA NO.7743/MUM/2010 . ( / ASSESSMENT YEAR: 2004-2005 ) GLOBAL FINTCH P. LTD., FLAT NO.102 & 103, 1 ST FLOOR, ARIHANT BLDG. OPP. DARA HOUSE, 15 TH RD, BANDRA (W)., MUMBAI-400 050. VS. DCIT 9(1), MUMBAI ./ ./PAN NO. AAACG 1389 B ( /APPELLANT ) : ( / RESPONDENT ) / AND ./ ITA NO.7755/MUM/2010 ( / ASSESSMENT YEAR: 2004-2005) DCIT 9(1), MUMBAI VS. GLOBAL FINTCH P. LTD., FLAT NO.102 & 103, 1 ST FLOOR, ARIHANT BLDG. OPP. DARA HOUSE, 15 TH RD, BANDRA (W)., MUMBAI-400 050. ./ ./PAN NO. AAACG 1389 B ( /APPELLANT ) : ( / RESPONDENT ) / ASSESSEE BY : MR. ARUN SATHE & MR. KALPESH TURALKAR / REVENUE BY : MR. PARTHSARATHI NAIK / DATE OF HEARING : 21 ST JUNE 2012 / DATE OF PRONOUNCEMENT :6 TH JULY, 2012 / O R D E R PER AMIT SHUKLA (J.M.) : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE DEPARTMENT AGAINST THE ORDER DATED 19- 8-2010, PASSED BY THE CIT (A)- ITA NOS : 7743/10, &7755/10 2 19, MUMBAI IN RELATION TO PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEAR 2004-2005. SINCE THE COMMON ISSUES ARE INVOLVED IN BOTH THE APPEALS, THEREFOR E, FOR THE SAKE OF CONVENIENCE, BOTH THE APPEALS ARE BEING DISPOSED OF F BY THIS CONSOLIDATED ORDER. 2 . FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) VIDE ORDER DATED 20-10-2006, FOLLOWING ADDITIONS/DISALLOWANCES WERE MADE :- I) LOSS ON SALE OF FLATS AND EXPENSES ON SALE 61,65,800 II) DISALLOWANCE UNDER S.14A 27,77,355 III) OUT OF TRAVELLING A ND CONVEYANCE 19,63,982 IV) OUT OF MISC. EXPENSES 7,73,028 THE SAID DISALLOWANCE/ADDITIONS WERE ALSO CONFIRMED BY THE CIT(A) VIDE ORDER DATED 5-10-2007. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) FOR CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THE GROUND THAT THE ENTIRE DISALLOWANCE/ADDITI ONS HAVE BEEN CONFIRMED BY THE CIT(A). IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE THAT THE MATTER IS STILL PENDING BEF ORE THE ITAT AND, THEREFORE, REQUESTED THE ASSESSING OFFICER TO KEEP THE PENALTY PROCEEDINGS IN ABEYANCE TILL DISPOSAL OF THE APPEAL BY THE ITAT. THE ASSESSING OFFICER HELD THAT SINCE NO EXPLANATION OR INFORMATION HAVE BEEN FURNISHED, HE LEVIED THE PENALTY OF ` .41,78,420/- ON THE ENTIRE ADDITIONS. ITA NOS : 7743/10, &7755/10 3 3. IN THE FIRST APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY AND ADDITIONS OF ` .61,65,800/- ON ACCOUNT OF LOSS ON SALE OF FLATS AND EXPENSES ON SALE. HOWEVER, WITH R EGARD TO DISALLOWANCE MADE UNDER SECTION 14A, TRAVELLING AND CONVEYANCE AND MISCELLANEOUS EXPENSES, HE DELETED THE PENALTY. AGAINST THIS, BOTH THE ASSESSEE AND THE DEPARTMENT HAVE COME IN APPEAL BEFORE US. 4 . AT THE OUTSET, LEARNED COUNSEL ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN THE QUANTUM PROCEEDINGS, THE MATTER WAS SET ASIDE AND RESTORED BACK TO THE FILE OF TH E ASSESSING OFFICER VIDE ORDER DATED 24-11-2010 PASSED IN ITA NO.149/MU M/2008. HE FURTHER BROUGHT TO OUR NOTICE THAT IN PURSUANCE OF THE ITATS ORDER, THE ASSESSMENT ORDER HAS ALREADY BEEN PASSED VIDE ORDER DATED 30-5-2011, WHEREIN RELIEF ON ACCOUNT OF LOSS ON SALE OF FLATS AND EXPENSES ON SALE AND DISALLOWANCE UNDER SECTION 14A HAS BEEN GIVEN AND THE ENTIRE ADDITIONS STANDS DELETED BY THE ASSESSING OFFICER HIMSELF IN SET ASIDE PROCEEDINGS. THUS, THE IMPUGNED PEN ALTY PROCEEDINGS HAVE BECOME INFRUCTUOUS. ON THE OTHER HAND, LEAR NED DR DID NOT DISPUTE THIS FACT. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE ITATS ORDER IN THE QUANTUM PROCEEDINGS AND ALSO THE ASSESSMENT ORDER PASSED IN PURSUANCE OF ITATS ORDER. SO FAR AS THE ISSUE OF LOSS ON SALE OF FLATS AND EXPENSES ON SALE AND DISALLOWANCE UNDER SECTION 14A, THE SAME STANDS DEL ETED IN THE ASSESSMENT ORDER DATED 30-5-2011, PASSED UNDER SECTION 143(3) R.W.S.254. THEREFORE, ITA NOS : 7743/10, &7755/10 4 THE PENALTY ON THESE AMOUNTS DO NOT SURVIVE, HENCE, THE SAME IS DELETED. 6 . AS REGARDS THE EXPENSES ON ACCOUNT OF TRAVELLING AND CONVEYANCE AND OTHER MISCELLANEOUS EXPENSES, IT IS SEEN THAT THE SAME HAS BEEN MADE ON AD HOC BASIS BY ESTIMATION. THE CIT(A) IN THE IMPUGNED ORDER HAS HELD T HAT THESE EXPENSES HAVE BEEN DISALLOWED MERELY ON ESTIMATED/AD HOC BASIS, THEREFORE, PENALTY UNDER SECTION 271(1)(C) FOR CONCEALMENT OF INCOME IS NOT LEVIABLE. IN VIEW OF THESE FACTS, WE DO NOT FIND ANY INFIRM ITY IN SUCH A FINDING AS NO PENALTY CAN BE LEVIED ON ADDITIONS MADE ON AD HOC BASIS. ACCORDINGLY THE ENTIRE PENALTY STANDS DELETED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL THAT OF THE REV ENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JULY, 2012 . 6 TH JULY,2012 SD/- SD/- ( . . ) ( ) ( G.E. VEERABHADRAPPA) ( AMIT SHUKLA) / PRESIDENT /JUDICIAL MEMBER MUMBAI; DATED 06 / JULY /2012 . . / PKM. . ./PS ITA NOS : 7743/10, &7755/10 5 / 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. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI