ITO 17(3)(2), MUMBAI V. GRAND WOOD WORKS & SAW MILLS, MUMBAI

ITA 781/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87871 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2015
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 26-03-2015
• Assessment Year: 1990-1991
• Appeal Filed On: 06-02-2012
• Court: TRIBUNAL
• Department Lawyers: R N DSOUZA
• Assessee Lawyers: AARATI VISSANJI

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 781/M/2012 ( / ASSESSMENT YEAR : 1990 - 1991 ) ITO 17(3)(2), R.NO.611, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI - 12. / VS. GRAND WOOD WORKS & SAW MILLS, E S PATANWALA CROSS ROAD, GHORUPDEO, MUMBAI - 33. ./ PAN : AAAFQ1160F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R.N . DSOUZA, DR / RESPONDENT BY : MS. AARATI VISSANJI / DATE OF HEARING : 09.12.2014 / DATE OF PRONOUNCEMENT : 2. 01.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 6.2.2012 IS AGAINST THE ORDER OF THE CIT (A) - 19, MUMBAI DATED 18.11.2011 FOR THE ASSESSMENT YEAR 1990 - 1991. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DEALING THE PENALTY LEVIED U/S 271(1)(C) FOR RS. 9,64,250/ - . 2. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) FAILED TO APPRECIATE THE FACT THAT THE A SSESSEE FURNISHED INACCURATE PARTICULARS OF RENT EXPENDITURE FOR WHICH THE LIABILITY WAS NOT CRYSTALLIZED DURING THE PREVIOUS YEAR RELEVANT TO AY 1990 - 1991 AND EVEN THE ASSESSEE HAS NOT DEBITED IT INTO P&L ACCOUNT. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM AND ITS RETURN OF INCOME DECLARING THE TOTAL LOSS OF RS. 15,37,018/ - FROM THE TWO CONCERNS NAMELY M/S. GRAND WOOD WORK & SAW MILLS AND M/S. SANKAL CHAND AMRITLAL PAREKH. THE APPELLANT IS A TENANT OF BOMBAY PORT TRUST FO R SEVERAL YEARS AND THE PORT TRUST HAS INCREASED THE RENT IN RESPECT OF GODOWNS AND THE ENAHANCEMENT WAS DISPUTED BY THE ASSESSEE IN THE BOMBAY HIGH COURT. THE ASSESSEE CLAIMED INCREASED RENT LIABILITY OF RS. 5,92,682/ - IN RESPECT OF M/S. GRAND WOOD WORK & SAW MILLS AND RS. 2 13,15,235/ - IN RESPECT OF SANKAL CHAND AMRITLAL PAREKH. HONBLE MUMBAI HIGH COURT ALLOWED THE LIABILITY TO THE EXTENT OF RS. 80,070/ - AND THUS, ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICU LARS IN RESPECT OF IMPUGNED EXPEN DITURE OF RS. 18,27,847/ - (RS. 19,07,917 RS. 80,070/ - ). ACCORDINGLY, ASSESSING OFFICER IMPOSED THE PENALTY OF RS. 9,64,250/ - AND THE ORDER U/S 271(1)(C) WAS PASSED ON 31.7.2009. AGGRIEVED WITH THE SAID DECISION OF THE A SSESSING OFFICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, CIT (A) DELETED THE PENALTY VIDE PARA 4.3 OF HIS ORDER. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, LD DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PL ACED BEFORE US. ON PERUSAL OF THE CIT (A)S ORDER IN GENERAL AND PARA 4.3 IN PARTICULAR, WE FIND THE SAME IS RELEVANT IN THIS REGARD AND THEREFORE, FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA 4.3 OF THE IMPUGNED ORDER IS EXTRACTED WHICH READ S AS UNDER: 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS OF THE APPE LLANT, ASSESSMENT ORDER AND THE PENALTY ORDER. OWING TO THE DISPUTE WITH BOMBAY PORT TRUST, THE APPELLANT HAS CLAIMED INCREASED RENT LIABILITY IN THE RETURN & ALSO PROVIDED THE NECESSARY CLARIFICATION IN REGARD TO THE CLAIM AND THE SAID CLAIM WAS ALSO SUSTAINED TILL ITAT. BECAUSE, THE FINAL LIABILITY WAS REDUCED BY HIGH COURT, IT CANNOT BE INFERRED THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS THEREBY CONCEALING INCOME. THIS IS NOT A FIT CASE FOR LEVY OF PENALTY WHICH IS DIRECTED TO BE DELETED. 7. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE BY TAKING INTO ACCOUNT THE JUDGMENT OF THE HIGH COURT IN RE DUCING THE FINAL LIABILITY OF THE RENT. AS SUCH, THE ASSESSEE PROVIDED ALL THE REQUISITE INFORMATION AND THE NECESSARY CLARIFICATION WITH REGARD TO THE CLAIM AND THEREFORE, 3 THE DECISION TAKEN BY THE CIT (A) IN DELETING THE PENALTY IS FAIR AND REASONABLE AN D IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNC ED IN THE OP EN COURT ON 2 N D JANUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 2 .1.2015 . . ./ OKK , SR. PS / 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