DCIT CIR 2(2), MUMBAI v. ORNATE MULTI MODAL CARRIERS P.LTD, MUMBAI

ITA 4101/MUM/2012 | 2006-2007
Pronouncement Date: 30-04-2014 | Result: Dismissed

Appeal Details

RSA Number 410119914 RSA 2012
Assessee PAN AAACO0797R
Bench Mumbai
Appeal Number ITA 4101/MUM/2012
Duration Of Justice 1 year(s) 10 month(s) 19 day(s)
Appellant DCIT CIR 2(2), MUMBAI
Respondent ORNATE MULTI MODAL CARRIERS P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 30-04-2014
Date Of Final Hearing 15-01-2014
Next Hearing Date 15-01-2014
Assessment Year 2006-2007
Appeal Filed On 11-06-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI . . ! # BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI N.K.BILLAIYA ACCOUNTANT MEMBER . / ITA NO.4101/MUM/2012 $ $ $ $ / ASSESSMENT YEAR 2006-07. THE ACIT CIR. 2(2) AAYKAR BHAVAN ROOM NO.545 5 TH FLOOR MK ROAD MUMBAI -400 020 / VS. M/S. ORNATE MULTI MODAL CARRIERS P. LTD. ORIENT HOUSE 4 TH FLOOR ADI MERZBAN PATH BALLARD ESTATE MUMBAI 400 038. . % ! ./ &' ./ PAN/GIR NO. : AAACO 0797R ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %( + / APPELLANT BY: SMT. PARMINDER )*%( + / RESPONDENT BY : SHRI HEENA DOSHI -.! / DATE OF HEARING : 30/04/2014 /0$ -.! / DATE OF PRONOUNCEMENT : 30/04/2014 1 / O R D E R PER I.P.BANSAL J.M: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-5 MUMBAI DATED 09.03.2012 FOR ASSESSMENT YEAR 2006- 07. GROUNDS OF APPEAL READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE EXT ENT IMPUGNED IN THE GROUND ENUMERATED BELOW: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FA CTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE CTT(A) ERRED IN DELETING PENALTY U/S 271(1)(C) HOLDING THAT PENALTY WILL NOT ATTRACT ON THE . / ITA NO.4101/MUM/2012 $ $ $ $ / ASSESSMENT YEAR 2006-07. 2 ADDITIONS MADE BECAUSE OF THE DEEMING PROVISIONS AN D FAILED TO APPRECIATE THE FACT THAT SECTION 271(L)(C) DOES NOT PROVIDE EXCEPT ION TO DEEMING PROVISIONS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE CIT(A) ERRED IN DELETING THE PENALTY U/S 271(L)(C) HOLDING THAT THE ADDITION WAS MADE BECAUSE OF DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 27(1)(C) WITHOUT BRINGING ON RECORD THE SIMILARITY OF THE FACTS IN A SSESSEES CASE AND CASE OF RENU HINGORANI DECIDED BY HON. ITAT MUMBAI. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANS PORTATION SHIPPING AND LOGISTIC SERVICES. THE PROPERTY KNOWN AS CIDCO LA ND WAS SOLD BY THE ASSESSEE VIDE AGREEMENT DATED 6/12/2006 FOR RS.36.00 LACS AN D ANOTHER PLOT VIDE AGREEMENT DATED 6/12/2005 FOR A SUM OF RS.17.00 LAC S. AS AGAINST SALE PRICE OF THE ASSESSEE STAMP VALUATION AUTHORITY HAD ASSES SED VALUES OF THESE PLOTS AT RS.50.38 LACS AND RS.20.97 LACS RESPECTIVELY AND ASSESSEE DID NOT CHALLENGE SUCH VALUATION. ACCORDINGLY LONG TERM CAPITAL GAI N WAS COMPUTED AT RS.13 02 481/- WHICH WAS ADDED TO THE INCOME OF TH E ASSESSEE. 3. THE SECOND ITEM WITH REGARD TO WHICH PENALTY WA S INITIATED IS REGARDING SHORT TERM CAPITAL GAIN ASSESSED IN RESPECT OF SALE OF PROPERTY KNOWN AS MAROL PROPERTY WHICH WAS SOLD VIDE AGREEMENT DATED 29/6/ 2006 FOR A CONSIDERATION OF RS.51.00 LACS. HOWEVER STAMP VALUATION AUTHORI TY ASSESSED THE MARKET VALUE OF THE SAID PROPERTY AT RS.62 29 860/-. THE ASSESSEE ALSO DID NOT CHALLENGE SUCH VALUE ASSESSED BY STAMP VALUATION A UTHORITY. SINCE ASSESSSEE WAS CLAIMING DEPRECIATION AFTER REDUCING WDV AS ON 1/4/2005 OF RS.27 25 503/- THE NET SHORT TERM CAPITAL GAIN WA S ASSESSED AT RS.35 04 357/-. FOR THESE ADDITIONS PENALTY PROCEE DINGS WERE INITIATED. THE TAX SOUGHT TO BE EVADED WAS COMPUTED AT RS.3 98 244 /- AND 100% CONCEALMENT PENALTY WAS LEVIED. 4. AN APPEAL WAS FILED BEFORE LD. CIT(A). IT WAS C ONTENDED THAT PENALTY HAS WRONGLY BEEN IMPOSED. RELIANCE WAS PLACED ON THE D ECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETR O PRODUCTS PVT. LTD. 322 ITR 158(SC) TO CONTEND THAT MERE NON-ACCEPTANCE OF CLAIM MADE BY THE . / ITA NO.4101/MUM/2012 $ $ $ $ / ASSESSMENT YEAR 2006-07. 3 ASSESSEE IN THE RETURN WILL NOT INVITE PENALTY UNDE R SECTION 271(1)(C) OF THE ACT AND RELIANCE WAS ALSO PLACED ON THE DECISION OF MUM BAI TRIBUNAL IN THE CASE OF RENU HINGORANI IN ITA NO.2210/MUM/2010 ORDER DATED 22/12/2010 TO CONTEND THAT PENALTY CANNOT BE IMPOSED ON SUCH TYPE OF ADDITIONS. LD. CIT(A) HAS DELETED THE PENALTY. THE DEPARTMENT IS AGGRIEV ED HENCE HAS FILED AFOREMENTIONED APPEAL. 5. AFTER NARRATING THE FACTS LD. DR RELYING UPON TH E PENALTY ORDER SUBMITTED THAT THE PENALTY WAS RIGHTLY IMPOSED BY THE A.O RELYING UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ZOOM COMMUNICATIONS PVT. LTD. 40 DTR 249. SHE SUBMITTED THAT THE ORDER PAS SED BY LD. CIT(A) SHOULD BE SET ASIDE AND THAT OF A.O BE RESTORED. 6. ON THE OTHER HAND LD. AR PRODUCED BEFORE US COP Y OF THE AFOREMENTIONED DECISION OF THE TRIBUNAL IN THE CAS E OF RENU HINGORANI VS. DCIT (SUPRA) AND PLEADED THAT ON SIMILAR ADDITIONS CONCEALMENT PENALTY WAS DELETED BY THE TRIBUNAL WITH THE FOLLOWING OBSERVAT IONS: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD . WE FIND THAT THE AO HAD MADE ADDITION OF RS.9 00 824/- BEING DIF FERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMENT AND THE VALUATI ON MADE BY THE STAMP VALUATION AUTHORITY. THUS THE ADDITION HAS BEEN MA DE BY THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE INCOME TAX ACT 1961. THE AO HAS NOT GIVEN ANY FINDING THAT TH E ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTI ONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT THE CASE OF T HE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS DOCUMENTS/MATERIAL INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOU BTED THE GENUINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND T HE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIR CUMSTANCES IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICU LARS OF INCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VA LUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCORDI NGLY THE ADDITION BECAUSE OF . / ITA NO.4101/MUM/2012 $ $ $ $ / ASSESSMENT YEAR 2006-07. 4 THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 271 (1)(C ). HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREM E COURT IN THE CASE OF CIT V/S RELIANCE PETROPRODUCTS PVT.LTD (SUPRA) THE PENALTY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. ON SIMILAR TYPE OF ADDITIONS CON CEALMENT PENALTY HAS BEEN DELETED BY THE TRIBUNAL IN THE CASE OF RENU HINGORA NI VS. ACIT (SUPRA). THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL HAS A LREADY BEEN REPRODUCED. RESPECTFULLY FOLLOWING THE SAME WE DECLINE TO INTE RFERE IN THE ORDER PASSED BY LD. CIT(A) VIDE WHICH PENALTY HAS BEEN DELETED. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/04/2014 1 /0$ ! 2 34 30 /04/2014 0 5 6 SD/- SD/- ( / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) ! / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 3 DATED 30/04/2014 1 1 1 1 )- )- )- )- 7$- 7$- 7$- 7$- / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- 4. 8 / CIT 5. 95 )- / DR ITAT MUMBAI 6. 5: ; / GUARD FILE. 1 1 1 1 / BY ORDER *- )- //TRUE COPY// < << < / = = = = & & & & (DY./ASSTT. REGISTRAR) / ITAT MUMBAI . . ./ VM SR. PS