ACIT CC 14, MUMBAI v. UTTAMCHAND BIRAWAT (HUF), MUMBAI

ITA 294/MUM/2013 | 2005-2006
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 29419914 RSA 2013
Assessee PAN AAAHB4200M
Bench Mumbai
Appeal Number ITA 294/MUM/2013
Duration Of Justice 2 year(s) 6 month(s) 22 day(s)
Appellant ACIT CC 14, MUMBAI
Respondent UTTAMCHAND BIRAWAT (HUF), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 31-07-2015
Date Of Final Hearing 03-06-2014
Next Hearing Date 03-06-2014
Assessment Year 2005-2006
Appeal Filed On 09-01-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH MUMBAI . . BEFORE MS. SUSHMA CHOWLA JM AND SHRI N.K. BILLAIYA AM ./ ITA NO S . 263 & 264/MUM/2013 ( / ASSESSMENT YEARS : 2005 - 06 & 2006 - 07 ) INCOME TAX OFFICER - 17(3)(4) 615 PIRAMAL CHAMBERS LALBAUG MUMBAI 400012 / VS. M/S. VASANTRAJ BIRAWAT (HUF) 105 106 305 - 306 B. BLOCK DEEPAK JYOTI TOWER G.D. AMBEDKAR MARG KALACHOWKI MUMBAI 400033 ./ PAN : AAAHB4200M ( / APPELLANT ) .. ( / RESPONDENT ) ./ ITA NO S. 29 4 & 295 /MUM/2013 ( / ASSESSMENT YEARS : 2005 - 06 & 2006 - 07 ) INCOME TAX OFFICER - 17(3)(4) 615 PIRAMAL CHAMBERS LALBAUG MUMBAI 400012 / VS. M/S. UTTAMCHAND BIRAWAT (HUF) 100/104 MOTIWALA BLDG. DHANI STREET MUMBAI 400033 ./ PAN : AAAHB4201 M ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SIDDARAMAPPA KAPPATTANAVAR / RESPONDENT BY : SHRI AJAY NAGPAL / DATE OF HEARING : 22.07. 2015 / DATE OF PRONOUNCEMENT : 31 .07 .2015 / ORDER PER SUSHMA CHOWLA J.M. OUT OF THIS BUNCH OF FOUR APPEALS BY THE REVENUE TWO APPEALS ARE AGAINST THE ASSESSEE M/S. VASANTRAJ BIRAWAT (HUF) AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) DATED 31.10.2012 RELATING TO ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 RELATING TO PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. FURTHER THE REVENUE HAS FILED APPEALS IN THE CASE O F M/S. UTTAMCHAND ITA NO. 264/MUM/2013 M/S. VASANTRAJ BIRAWAT (HUF 2 BIRAWAT (HUF) WHICH ARE AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) DATED 31.10.2012 RELATING TO ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 2. THE ONLY ISSUE RAISED IN THESE APPEALS IS AGAINST THE DELETION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. ALL THE FOUR APPEALS RELATIMG TO RELATED PERSONS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER REFERENCE BEING MADE TO THE FACTS IN ITA NO. 264/MUM/2013 IN ORDER TO ADJUDICATE THE ISSUE. 3. BRIEFLY IN THE FACTS OF THE PRESENT CASE SEARCH AND SEIZURE OP ERATIONS WERE CARRIED OUT ON THE PREMIS ES OF BIRAWATS UNDER SECTION 132 OF THE ACT ON 10.10.2007. PURSUANT TO THE SEARCH IT WAS NOTED THAT THE ASSESSEE GROUP HAD INDULGED IN DECLARING ARTIFICIAL/BOGUS LONG TERM CAPITAL GAINS ON SALE OF PENNY STOCK. THE SAI D SHARES WERE CLAIMED TO HAVE BEEN PURCHASED BY VARIOUS FAMILY MEMBERS OF THE BIRAWAT GROUP AT VERY LOW PRICE AND THE SAME WERE THEREAFTER SOLD AT HIGH PRICE. ASSESSMENTS WERE COMPLETED UNDER SECTION 153A OF THE ACT. THE AO WHILE COMPLETING THE ASSESSMENT HAD MADE ADDITION OF ` 40 68 640/ - IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF THE FOLLOWING ISSUES : - A.Y. RETURNED INCOME ( ` ) UNACCOUNTED MONEY USED FOR FABRICATED SHARE TRANSACTIONS ( ` ) 5% OF UNACCOUNTED MONEY PAID TO OBTAIN ACCOMMODATION ENTRIES ( ` ) TOTAL INCOME ( ` ) 2005 - 06 11 43 510 27 96 770 1 39 838 33 27 980 2006 - 07 10 10 115 29 12 878 1 45 643 40 68 640 4. THE CASE OF THE AO WAS THAT THE ASSESSEE HAD DECLARED ARTIFICIAL/BOGUS LONG TERM CAPITAL GAINS AND CLAIMED IT AS EXEMPT FROM TAX. THE SAID ADDITION WAS UPHELD BY THE CIT(A) CONSEQUENT TO WHICH PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED AGAINST THE ASSESSEE. THE AO HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS AND PENALTY OF ` 9 73 398/ - WAS LEVIED AGAINST THE ASSESSEE. 5. THE CIT(A) DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF ITA NO. 264/MUM/2013 M/S. VASANTRAJ BIRAWAT (HUF 3 CIT VS. R ELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC). THE REVENUE IS IN APPEAL AGAINST THE SAID ORDER OF THE CIT(A). 6. THE LEARNED A.R. FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE QUANTUM ADDITION MADE IN THE HANDS OF THE ASSESSEE WERE DELETED B Y THE TRIBUNAL VIDE CONSOLIDATED ORDER DATED 20.02.2015 IN THE CASE OF VARIOUS PERSONS OF BIRAWAT GROUP. THE LEARNED A.R. FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND THE AO WAS DIRECTED TO DELETE THE ASSESS MENT ON GROSS SALE PROCEEDS AS INCOME FROM OTHER SOURCES IN THE HANDS OF VARIOUS ASSESSEES IN ALL THE YEARS UNDER CONSIDERATION AND WAS ALSO DIRECTED TO ACCEPT THE LONG TERM CAPITAL GAINS DECLARED BY THE ASSESSEE. CONSEQUENT ADDITION ON ASSESSING 5% OF T HE GROSS SALE RECEIPTS AS UNACCOUNTED INCOME WAS ALSO DELETED BY THE TRIBUNAL. THE LEARNED A.R. FOR THE ASSESSEE THUS PLEADED THAT THERE WAS NO BASIS FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF ASSESSMENT IN THE HANDS OF THE ASSESSEE BY TREATING THE LONG TERM CAPITAL GAINS DECLARED BY HIM AS BOGUS TRANSACTION. FU RTHER ADDITION WAS MADE ON ACCOUNT OF 5% OF UNACCOUNTED MONEY PAID FOR OBTAINING ACCOMMODATION ENTRIES. 8. THE APPEAL AGAINST THE QUANTUM ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS ADJUDICATED BY THE TRIBUNAL VIDE CONSOLIDATED ORDER DATED 20.02.2015 WITH LEAD ORDER IN THE CASE OF SHRI VASANTRAJ BIRAWAT VS. ACIT IN ITA NO. 989 990 & 982/MUM/2010 RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2006 - 07. THE APPEALS OF THE ASSESSEE BEFORE US I.E. M/S. VASANTRAJ BIRAWAT (HUF) IN ITA NO. 7400 & 7401/MUM/2010 RELATING TO ASSESSMENT YEARS 2005 - 06 & 2006 - 07 WERE ALSO ADJUDICATED VIDE CONSOLIDATED ORDER. THE TRIBUNAL HAD DIRECTED THE AO TO ACCEPT THE LONG TERM CAPITAL GAINS DECLARED BY THE ASSESSEE IN ALL THE YEAR UNDER CONSIDERATION IN THE HANDS OF BIRAWAT GROUP. FURTHER TH E ADDITION MADE ON ACCOUNT OF 5% OF GROSS SALE RECEIPTS AS UNACCOUNTED INCOME WAS ALSO DELETED BY THE TRIBUNAL. THE TRIBUNAL IN MA NO. 58/MUM/2015 RELATING TO A.Y. 2005 - 06 WITH LEAD ORDER IN MA NO. 55/MUM/2015 IN THE CASE OF SMT. CHANCHALLABEN BIRAWAT VIDE ITA NO. 264/MUM/2013 M/S. VASANTRAJ BIRAWAT (HUF 4 CONSOLIDATED ORDER DATED 01.05.2015 MODIFIED THE ORDER PASSED BY THE TRIBUNAL AND IT WAS DIRECTED THAT THE AO HAS TO ACCEPT THE LONG TERM CAPITAL GAINS AND SHORT TERM CAPITAL GAINS DECLARED BY THE ASSESSEE IN ALL THE YEARS UNDER CONSIDERATION. 9. P ENALT Y UNDER SECTION 271(1)(C) WAS LEVIED AGAINST THE ASSESSEE PURSUANT TO THE ORDER PASSED BY THE AO IN WHICH ADDITIONS WERE MADE BY TREATING THE TRANSACTIONS OF SALE AND PURCHASE OF SHARES AS BOGUS. IN VIEW OF THE SAID TRANSACTION BEING ACCEPTED BY THE TRIBUN AL THERE IS NO MERIT IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY WE UPHELD THE ORDER OF THE CIT(A) IN DELETING THE SAID PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT THOUGH ON DIFFERENT GROUND. 10. IN THE RESULT ALL THE AP PEALS FILED BY THE REVENUE AGAINST THE ASSESSEES ARE DI S MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY 2015. 31.07.2015 SD/ - SD/ - ( N.K. BILLAIYA ) ( SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 3 1 ST JULY 201 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 37 4. / CIT CENTRAL - 1 5. / DR F BENCH ITAT MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) /ITAT MUMBAI N.P.