I.T.O. 8(2)(1), MUMBAI V. RISHI R OSWAL, MUMBAI

ITA 8854/MUM/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9163 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 30-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: BEHARILAL
• Keywords: Revised return
• Section: 133A; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 8854/MUM/2011 ASSESSMENT YEAR: 2005-06 ITO 8(2)(1) R. NO. 216, AAYAKAR BHAVAN MK MARG MUMBAI VS. RISHI R. OSWAL 81-82, SOLITAIRE, CENTRAL AVENUE, M.K. MARG MUMBAI 400 020 PAN:- AABCM 6419 P (APPELLANT) (RESPON DENT) ASSESSEE BY : SHRI BEHARILAL REVENUE BY : SHRI LOVE KUMAR DATE OF HEA RING : 1 8 .03.2015 DATE OF ORDER : 25 . 03.2015 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE , AGAINST THE ORDER DATED 18.10.2011 PASSED BY LD. CIT(A)-19 MUMB AI IN RELATION TO THE PENALTY PROCEEDING U/S 271(1)(C) FOR THE A.Y. 2 005-06. THE REVENUE IS MAINLY AGGRIEVED BY THE DELETION OF PENALTY OF R S.29,47,020/-, LEVIED ON ACCOUNT OF OFFERING OF LONG TERM CAPITAL GAIN ON SALE OF SHARES, WHICH WAS TREATED AS INCOME FROM OTHER SOURCES BY THE A O. 2. AT THE OUTSET, LEARNED COUNSEL SUBMITTED THAT ON SIMILAR ISSUE, THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.YS. 2002- 03, 2003-04 AND 2004-05 HAS DELETED THE PENALTY, VIDE ORDER DATED 1 2.12.2014. HE FURTHER SUBMITTED THAT IN THE CASE OF SHRI RISHI R. OSWAL (HUF), AND OTHER FAMILY MEMBERS, FOR THE A.Y. 2004-05, THE TRI BUNAL HAS DELETED ITA NO. 8854/MUM/2011 ASSESSMENT YEAR: 2005-06 2 THE PENALTY AND SUCH AN ORDER OF TRIBUNAL HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT. THEREFORE, ON SIMILAR FACTS, PENALTY SHOULD BE DELETED. 3. LD. DR ACCEPTED THAT THE ISSUE INVOLVED IS COVER ED BY THE DECISIONS OF THE TRIBUNAL. 4. AFTER CONSIDERING THE CONTENTION OF THE PARTIES AND ON PERUSAL OF MATERIAL PLACED ON RECORD, WE FIND THAT, A SURVEY U /S 133A WAS CONDUCTED ON 28.06.2006 AT THE BUSINESS PREMISES OW NED BY OSWAL FAMILY CONCERN. THEREAFTER, THE ASSESSEE HAS FILED A REVISED STATEMENT OF INCOME ON 18.01.2007, OFFERING LONG TERM CAPITAL GA IN ON SALE OF SHARES OF RS.47,55,256/- AS INCOME FROM OTHER SOURCES. I N THE PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE LONG T ERM CAPITAL GAIN WAS OFFERED AS INCOME FROM OTHER SOURCES, SUO MOTU WIT HOUT THERE BEING ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SURVEY QUA THE SUGGESTING TRANSACTION OF SHARES ANY CONCEALMENT OF PARTICULARS. THE AO HAS ALSO NOT BROUGHT OUT ANYTHING ON THE RECORD THA T THE TRANSACTION OF SALE OF SHARES WERE NOT GENUINE AND ALL THE RELEVAN T EVIDENCES TO PROVE THE TRANSACTION WAS FURNISHED. SUCH AN EXPLANATION OF THE ASSESSEE HAS NOT BEEN REBUTTED BY THE ASSESSING OFFICER. THE PEN ALTY HAS BEEN LEVIED SOLELY ON T HE GROUND THAT, DUE TO SURVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE, THE ASSESSEE HAD COME FORWARD AND FIL ED THE REVISED COMPUTATION. THERE IS NO WHISPER IN THE ASSESSMENT ORDER OR PENALTY ORDER AS TO WHAT WAS THE MATERIAL AGAINST THE ASSES SEE, WHICH PROMPTED THE ASSESSEE TO FILE THE REVISED STATEMENT. IN THE CASE OF RISHI R. OSWAL (HUF) AND OTHERS, THE TRIBUNAL ON SIMILAR SET OFF F ACTS HAS DELETED THE PENALTY AFTER OBSERVING AND HOLDING AS UNDER:- ITA NO. 8854/MUM/2011 ASSESSMENT YEAR: 2005-06 3 WE HAVE CONSIDERED THE ISSUE. AS FAR AS THE FACTS ARE CONCERNED THERE IS EVIDENCE THAT THE ASSESSEE HAS P URCHASED SHARES AS EARLY AS APRIL/ MAY 2002. THIS ASPECT HAS NOT BEEN DISPUTED BY THE REVENUE. IT IS ALSO TRUE THAT THE A SSESSEE HAS SHOWN NECESSARY INVESTMENTS IN ITS RETURN MADE EARL IER YEARS. IT IS ALSO ON RECORD THAT THE ASSESSEE HAS SOLD THE SH ARES THROUGH STOCK BROKER, RECEIVED THE PROCEEDINGS THROUGH BANK ACCOUNT AND THE STOCK BROKER ALSO CONFIRMED THE TRANSACTIONS. I T IS NOT A SINGLE TRANSACTION OF SALE BUT A SERIES OF TRANSACTIONS O F SALES OF 5,000 EACH HAPPENED FROM DECEMBER 2003 TO MARCH 2004, OVE R A PERIOD OF THREE MONTHS, AND THE ASSESSEE HAS RECEIV ED THE 'CONSIDERATION IN THE BANK ACCOUNT BY WAY OF CHEQUE S FROM THE SAID BROKER. IT IS NOT THE CASE OF THE A.O. THAT BO TH THE PURCHASE AND SALE ARE BOGUS. THE ONLY ENQUIRY MADE BY THE A. O. WAS WHETHER THE TRANSACTIONS ARE RECORDED IN THE STOCK EXCHANGE. THE STOCK EXCHANGE HAS INFORMED THAT THE TRANSACTIO NS ARE NOT RECORDED THERE. IT IS NOT VERIFIED BY THE A.O. WHET HER THE TRANSACTION ARE OFF MARKET TRANSACTIONS OR THROUGH THE STOCK EXCHANGE. NO FURTHER ENQUIRY WAS MADE. EVEN THOUGH THE STOCK BROKER HAS CO- FIRMED THE TRANSACTIONS THE A.O. HAS NOT MADE ANY FURTHER ENQUIRY. HE HAS ONLY, TREATED THE LONG TERM CAPITAL GAIN CLAIMED EXEMPT AS INCOME FROM OTHER SOURCES AND N OT EVE ENTIRE SALE PRICE. PRIMA FACIE THE SALE AND PURCHAS E SEEMS TO BE GENUINE AND CANNOT BE CONSIDERED AS BOUGUS TRANSACT IONS. AS THE ASSESSEE COULD NOT ESTABLISH AT A LATER POINT OF TI ME THE TRANSACTIONS OF SALE UNDERTAKEN AFTER THE SUB-BROKE R WAS BLACK LISTED FROM THE STOCK EXCHANGE PRUDENTLY FILED THE REVISED RETURN AND PAID THE TAX SO AS TO AVOID LITIGATION AND HARD SHIP. THE SAME WAS ALSO REITERATED BY THE AO IN PARA 6 OF THE ORDE R WHICH IS AS UNDER:- '6. ON 14-11-2006, THE ASSESSEE FILED A REVISED STA TEMENT OF INCOME WHEREIN THE LONG TERM CAPITAL GAIN DECLARED IN THE ORIGINAL RETURN OF INCOME HAS BEEN OFFERED TO TAX U NDER THE HEAD 'INCOME FROM OTHER SOURCES', WITH A COVERING LETTER DTD. 14-11- 2006, WHICH READS AS UNDER: 'I HEREBY ENCLOSE A REVISED STATEMENT OF TOTAL INCO ME FOR THE ABOVE YEAR FOR YOUR REFERENCE. I HEREBY REVISE SAID INCOME TO BUY PEACE TO AVOID LITIGATION AND HARDSHIP WITH A REQUE ST NOT TO LEVY PENAL INTEREST AND PENALTY 7/S 271(1)(C) OF THE I.T . ACT, 1961. 7. IN VIEW OF THIS, WE ARE OF THE OPINION THAT THE PRINCIPLES ESTABLISHED BY THE HONBLE SUPREME COURT IN THE CAS E OF SURESH CHANDRA MITTAL (SUPRA) WILL EQUALLY APPLY TO THE FA CTS OF THE CASE ITA NO. 8854/MUM/2011 ASSESSMENT YEAR: 2005-06 4 AS THE A.O. HAS ONLY MADE PERSISTENT ENQUIRIES AND HAS NOT ESTABLISHED EITHER CONCEALMENT OR FURNISHING OF INA CCURATE PARTICULARS. THE EXPLANATION OF THE ASSESSEE CAN BE TREATED AS BONA FIDE AND PENALTY IS NOT LEVIABLE. EVENTHOUGH T HE LEARNED COUNSEL REFERRED TO VARIOUS PRINCIPLES AND CASE LAW , THOSE NEED NOT BE CONSIDERED HERE AS THE FACTS ARE SIMILAR TO THE FACTS IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 9(SC) . THE HONBLE SUPREME COURT IN THE ABOVE SAID CASE HAS HE LD AS UNDER:- PENALTY UNDER SECTION 271(1)(C)-CONCEALMENT-REVISED RETURN FILED SHOWING HIGHER INCOME-ASSESSEE SURRENDERED THE INCO ME AFTER PERSISTENT QUERIES BY AO-HOWEVER, REVISED RETURNS H AVE BEEN REGULARIZED BY REVENUE-EXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BY PEACE AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BONA FIDE-PENALTY RI GHTLY CANCELLED- NO INTERFERENCE WARRANTED. 8. SINCE THE A.O. HAS NOT MADE ANY' FURTHER ENQUIRI ES EXCEPT THE ENQUIRY UNDER SECTION 133(6) AND SINCE THE ASSE SSEE HAS SURRENDERED THE AMOUNT EVENTHOUGH HE COULD ESTABLI SH IT WITH EVIDENCES/CONTINUOUS LITIGATION, WE ARE OF THE OPINION THAT THE EXPLANATION OF THE ASSESSEE CAN BE ACCEPTE D AS A BONA FIDE ONE. SINCE THE REVISED RETURN WAS FILED O N A CLEAR UNDERSTANDING THAT NO PENALTY PROCEEDING WILL BE LE VIED, BASED ON THE PRINCIPLES ESTABLISHED BY THE HONBLE SUPREME COURT IN THE ABOVE SAID CASE, WE HOLD THAT THERE IS NO NEED TO LEVY PENALTY IN THE GIVEN CIRCUMSTANCES. ACCORDI NGLY PENALTY IS CANCELLED. THIS ORDER OF THE TRIBUNAL HAS ALSO BEEN CONFIRMED BY THE HONBLE HIGH COURT IN THE APPEAL FILED BY THE DEPARTMENT, VIDE J UDGMENT AND ORDER DATED 16.06.2011. IN ASSESSEES OWN CASE FOR THE EA RLIER YEARS, SIMILAR PENALTY HAS ALSO BEEN DELETED. THEREFORE, RESPECTIV ELY FOLLOWING THE AFORESAID ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE AS WELL AS THE CASES OF OTHER FAMILY MEMBERS WHERE PENALTY WAS LEV IED BY THE AO ON SAME GROUND HAS BEEN DELETED WE ALSO THE DELETE THE PENALTY AND ITA NO. 8854/MUM/2011 ASSESSMENT YEAR: 2005-06 5 ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS CONFIRM ED. THUS, GROUND RAISED BY THE REVENUES IS DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH, 2015. SD/- SD/- (B.R. BASKARAN) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 25.03.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.