DCIT CC 38, MUMBAI V. SHANTI SARUP RENIWAL, MUMBAI

ITA 8245/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9416 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: REEPAL G TRALSHAWALA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT, AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. : 8245/MUM/2010 ASSESSMENT YEAR : 2007-08 D CIT CC - 38, ROOM NO. 32(1), GROUND FLOOR, AAYKAR BHAVAN, MAHARSHI KARVE MARG, MUMBAI-400 020 VS. SHRI SHANTI SARUP RENIWAL 302, SYLVERTON BUILDING, 102, WODEHOUSE ROAD, COLABA, MUMBAI-400 005 PAN NO: ADMPR 3332 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DINESH KUMAR RESPONDENT BY : SHRI REEPA L G. TRAL SHAWALA DATE OF HEARING : 14.11.2012 DATE OF PRONOUNCEMENT : 21.11.2012 ORDER PER B. RAMAKOTAIAH, A.M. : THIS IS REVENUES APPEAL AGAINST THE ORDER OF CIT( A)-41, MUMBAI DATED 14.09.2010 DELETING THE PENALTY LEVIED U/S.27 1(1)(C) AMOUNTING TO `. 6,36,598/-. 2. BRIEFLY STATED, THE ASSESSEE MADE A CLAIM OF INT EREST ON BORROWALS AGAINST THE SHORT TERM CAPITAL GAIN ARISING ON SALE OF SHARES. IT WAS THE CONTENTION THAT THE AMOUNTS WERE BORROWED AND WERE INVESTED IN PURCHASING THE SHARES. THEREFORE, THE INTEREST CLA IMED / DEBT CHARGES ARE ELIGIBLE FOR DEDUCTION UNDER THE PROVISIONS OF SECTION 48. THE A.O. DID ITA NO : 8245/MUM/2010 SHRI SHANTI SARUP RENIWAL 2 NOT AGREE WITH THE SAME AND DISALLOWED THE AMOUNT. HE ALSO LEVIED THE PENALTY ON THE ABOVE AMOUNT. THE LD. CIT(A) DELETE D THE PENALTY ON THE REASON THAT IT IS A MERE DISALLOWANCE OF THE CLAIM AND KEEPING THE PRINCIPLE LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. [230 CTR 320], HE D ELETED THE PENALTY. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE PLACED THE ORDER OF THE ITAT IN ITA NO.453/MUM/2010 DATED 28.04.2011 ON RECORD, WHEREIN THE MATTER IN QUANTUM APPEAL WAS RESTORED T O THE FILE OF THE A.O. TO CONSIDER THE PLEA OF ASSESSEE. HE SUBMITTED THA T THERE IS NO DISPUTE WITH REFERENCE TO THE ALLOWANCE OF THE INTEREST BUT ONLY QUANTUM WAS PENDING AND SUPPORTED THE ORDER OF THE LD. CIT(A) T HAT THE MERE DISALLOWANCE OF THE CLAIM DOES NOT ATTRACT LEVY OF PENALTY. THE LEARNED DR HOWEVER, SUBMITTED THAT SINCE THE QUANTUM IS RES TORED TO THE FILE OF THE A.O. THIS ALSO CAN BE RESTORED TO THE A.O. FOR EXAMINATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON PRI NCIPLE OF LAW, IT IS WELL SETTLED THAT PENALTY U/S 271(1)(C) IS NOT ATTR ACTED ON MERE DISALLOWANCE OF CLAIM MADE AND TO THAT EXTENT THE O RDER OF THE LD. CIT(A) CAN NOT BE FAULTED. HOWEVER, SINCE THE ISSUE OF IN TEREST DISALLOWANCE WAS RESTORED TO THE FILE OF THE A.O. IN QUANTUM APPEAL, WE ARE OF THE OPINION THAT THERE IS NO NEED TO ADJUDICATE THE MERITS OF L EVY OF PENALTY. IN VIEW OF THIS, WE SET ASIDE THE ORDERS OF THE A.O. PASSED U/S.271(1)(C) AS WELL AS THAT OF LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE A.O. TO CONSIDER IT AFRESH, IN CASE THE FACTS WARRANT LEVY OF PENALTY U/S.271(1)(C). THEREFORE, THE GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSE. ITA NO : 8245/MUM/2010 SHRI SHANTI SARUP RENIWAL 3 5. IN THE RESULT, THE APPEAL BY REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 21 ST DAY OF NOVEMBER, 2012. SD/- SD/- ( D. MANMOHAN ) ( B. RAMAKOTAIAH ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DT: COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI