ITO Wd. 2(1), Kolhapur V. Shri Khot Sunil Sudhakar, Kolhapur

ITA 795/PUN/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7386 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 03-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: NEETA DADLANI; C G DOSHI
• Keywords: Proportionate interest; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 795/ PN /2009 ( ASSTT. YEAR S : 2005 - 06 ) THE INCOME TAX OFFICER, WARD 2 ( 1 ), KOLHAPUR .. APP ELLANT V. SHRI KHOT SUNIL SUDHAKAR , PROP. MAHARAJA TRAVELS, OPP. S.T. STAND, E. WARD, KOLHAPUR PAN : NOT AVAILABLE . RESPONDENT C.O. NO. 37/ PN /2010 (ARISING OUT OF ITA NO. 795/PN/2009) (ASSTT. YEAR S : 2005 - 06 ) SHRI KHOT SUNIL SUDHAKAR, PROP. MAHARAJA TRAVELS, OPP. S.T. STA ND, E. WARD, KOLHAPUR PAN : NOT AVAILABLE . CROSS OBJECTOR V. THE INCOME TAX OFFICER, WARD 2(1), KOLHAPUR .. RESPONDENT APP ELLANT BY : SHRI HARESHWAR SHARMA RESPONDENT BY : SHRI C.G.DOSHI & SMT.NEETA DADLANI ORDER PER I.C. SUDHIR J M I TA NO. 795/PN/2009 IN T HIS APPEAL , THE REVENUE HAS QUESTIONNED THE ACTION OF LD CIT(A) IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 2. AFTER HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE A.O HAD LEVIED PENALTY U/ S. 271(1)(C ) OF THE ACT ON THE ADDITION MADE BY WAY OF DISALLOWANCE OF PROPORTIONATE INTEREST AT ITA . NO .795 /PN/2009AND C.O.NO.37/PN/2010 SH.KHOT SUNIL SUDHAKAR, A.Y 2005 - 06 . - 2 THE RATE OF 18% ON THE ADVNCE MADE TO M/S. HOTEL MAHARAJA DELUXE AND SHRI ASHOK KHOT. THE ASSESSEE OBJECTED THE PENALTY WITH THIS CONTENTION THAT THE ADDITIO N WAS ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE A.O AND ASSESSEE. THE ASSESSEE WAS A PARTNER IN HOTEL MAHARAJA DELUXE WITH 50% SHARE. THE FUNDS WERE UTILIZED BY THE ASSESSEE FOR BUSINESS PURPOSES OF THE FIRM WHERE HE WAS A PARTNER. THUS, IN SPIT E OF THE DISALLOWANCE MADE, IT CANNOT BE SAID THAT THE ASSESSEE HAD DISCLOSED INACCURATE PARTICULARS OF INCOME. IT WAS CONTENDED FURTHER THAT ROUTINE ADDITION MADE, THAT TOO ON ESTIMATE, CANNOT BE A SUBJECT MATTER OF PENALTY. ACCEPTING THIS SUBMISSION, IN OUR VIEW, THE LD CIT(A) HAS RIGHTLY DELETED THE PENALTY AS THE ISSUE OF DISALLOWANCE OF INTEREST IS A DEBATABLE ONE. THE ASSESSEE HAD GIVEN ALL THE DETAILS AND DISCLOSED ALL THE MATERIAL INFORMATION BEFORE THE A.O. WE ARE, THUS, OF THE VIEW THAT UNDE R SUCH CIRCUMSTANCES, IT CANNOT BE ALLEGED BEYOND DOUBT THAT THERE WAS FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE ABOUT THE DISALLOWANCE IN QUESTION. THE FIRST APPELLATE ORDER DELETING THE PENALTY IS THUS UPHELD. THE GROU ND IS ACCORDINGLY REJECTED. 3. IN THE RESULT , APPEAL IS DISMISSED. C.O. NO. 37/PN/2010 4. THE ASSESSEE HAS PREFERRED THE PRESENT CROSS OBJECTION ONLY IN SUPPORT OF THE FIRST APPELLATE ORDER DELETING THE PENALTY. IN VIEW OF OUR DECISION HEREINABOVE IN THE APPEAL PREFERRED BY THE REVENUE, WHEREBY WE HAVE UPHELD THE ACTION OF THE LD CIT(A) IN DELETING THE PENALTY, THE PRESENT CROSS OBJECTION IS DISMISSED AS HAVING BECOME INFRUCTUOUS. 5 . IN THE RESULT, BOTH THE APPEAL AND CROSS OBJECTION ARE DISMISSED. ITA . NO .795 /PN/2009AND C.O.NO.37/PN/2010 SH.KHOT SUNIL SUDHAKAR, A.Y 2005 - 06 . - 3 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31ST MARCH 2011. SD/ - SD/ - ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE , DATED THE 31ST MARCH , 20 1 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLA NT 2. THE RESPONDENT 3. THE CIT(A) - CONCERNED 4. THE CIT - CONCERNED 4 . THE D.R. A BENCH, PUNE 5 . GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE