UNITED SALES CORPORATION, MUMBAI v. ITO WD 19(3)(4), MUMBAI

ITA 4199/MUM/2011 | 2005-2006
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 419919914 RSA 2011
Assessee PAN AABFU2092D
Bench Mumbai
Appeal Number ITA 4199/MUM/2011
Duration Of Justice 10 month(s) 7 day(s)
Appellant UNITED SALES CORPORATION, MUMBAI
Respondent ITO WD 19(3)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 30-03-2012
Assessment Year 2005-2006
Appeal Filed On 23-05-2011
Judgment Text
ITA NO.4199 OF 2011 UNITED SALES CORPORATION MUMBAI PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH MUMBAI BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 4199/MUM/2011 (ASSESSMENT YEAR: 2005-06) UNITED SALES CORPORATION VS INCOME TAX OFFICER SHOP NO.10 NATRAJ BUILDING WARD 19(3)4 68 HILL ROAD BANDRA (W) PIRAMAL CHAMBERS MUMBAI 400 050 LAL BAUGH PAN AABFU 2092 D MUMBAI 400012 (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI D.S. SUNDER SINGH DR DATE OF HEARING: 22/03/2012 DATE OF PRONOUNCEMENT: 30/03/2012 O R D E R PER B. RAMAKOTAIAH A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDERS OF THE CIT (A)-30 MUMBAI DATED 25.03.2011 REGARDING LEVYI NG OF PENALTY UNDER SECTION 271(1)(C). 2. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE HAS RECEIVED AN AMOUNT OF ` .4 40 000/- DURING THE YEAR FROM M/S FABINDIA OVERSEAS PVT. LTD. TDS ON THE SAME HAS BEE N DEDUCTED BY THE SAID PARTY AND THE NATURE OF RECEIPTS WAS SHOWN AS RENT. HOWEVER THE ASSESSEE HAS TREATED THE SAME AS DEVEL OPMENT CHARGES AND EXPENSES HAVE BEEN DEBITED IN THE PROFIT & LOSS A/C. THE RECEIPTS OF THE ASSESSEE FROM M/S FABINDIA AS STATE D ABOVE WERE TREATED AS INCOME FROM HOUSE PROPERTY INSTEAD OF IN COME FROM BUSINESS AS CLAIMED BY THE ASSESSEE. RELIANCE IN TH IS REGARD WAS PLACED ON THE DECISION OF APEX COURT IN THE CASE OF M/S SHAMBHU INVESTMENTS PVT. LTD (263 ITR 143) THEREBY DETERMIN ING INCOME OF ITA NO.4199 OF 2011 UNITED SALES CORPORATION MUMBAI PAGE 2 OF 4 ` .3 08 000/- UNDER THAT HEAD IN THE ORDER U/S 144. P ENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE ALSO INITI ATED FOR INACCURATE PARTICULARS OF INCOME. 3. THE ASSESSING OFFICER HAS MENTIONED IN THE PENALTY ORDER THAT NO EXPLANATION/SUBMISSIONS WERE FURNISHED BY THE AS SESSEE DURING THE PENALTY PROCEEDINGS WITH REGARD TO THE ADDITION OF ` .3 08 000/-. THIS BEING SO THE ASSESSING OFFICER HELD THAT THE A SSESSEE HAD KNOWINGLY AND DELIBERATELY FURNISHED INACCURATE PAR TICULARS OF INCOME TO THE TUNE OF ` .3 08 000/- BEING ITS INCOME FROM HOUSE PROPERTY. THE ASSESSING OFFICER FURTHER HELD THAT I T IS A FIT CASE WHERE THE ASSESSEE HAS KNOWINGLY AND DELIBERATELY T RIED TO MISLEAD THE DEPARTMENT BY FURNISHING INACCURATE PARTICULARS OF INCOME AND THEREFORE THE CASE OF THE ASSESSEE SQUARELY FALLS WITHIN THE AMBIT OF EXPLANATION 1 TO SECTION 271(1(C) OF THE INCOME TAX ACT. HE ACCORDINGLY LEVIED A MINIMUM PENALTY OF ` .1 09 956/- UNDER SECTION 271(1)(C) OF THE I.T. ACT. 4. THE PENALTY WAS CONFIRMED BY THE CIT (A) BY STATING AS UNDER: 7. I HAVE CAREFULLY GONE THROUGH THE IMPUGNED PENA LTY ORDER SUBMISSIONS OF THE APPELLANT AND THE FACTS O F THE CASE. AT THE OUTSET IN THE QUANTUM APPEAL I HAVE A LREADY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R OF ` .3 08 000/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY VIDE MY APPELLATE ORDER NO.CIT (A)-30/INC OME TAX OFFICER-19(3)(4)IT-447/09-10 DATED 25.03.2011. IN THIS CASE TAX WAS DEDUCTED AT SOURCE BY M/S FABINDI A OVERSEAS PVT. LTD WHILE MAKING PAYMENT TO THE APPELLANT. IN THE TDS CERTIFICATE THE NATURE OF RE CEIPT IS SHOWN AS RENT. THEREFORE FROM THE VERY BEGINNING IT WAS CLEAR THAT THE RECEIPT OF ` .4 40 000/- IS IN THE NATURE OF RENT AND CONSEQUENTLY THE SAME SHOULD BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVE R THE APPELLANT TREATED THIS RECEIPT AS BUSINESS INC OME AND FURNISHED THE RETURN ACCORDINGLY. IT IS IN THIS SENSE THAT THE APPELLANT HAD SUBMITTED INACCURATE PARTICU LARS OF ITS INCOME WITH A VIEW TO CONCEAL THE INCOME. FURTH ER I FIND A LOT OF FORCE IN THE FINDINGS OF THE ASSESSIN G OFFICER THAT THE APPELLANT HAS KNOWINGLY AND DELIBERATELY ITA NO.4199 OF 2011 UNITED SALES CORPORATION MUMBAI PAGE 3 OF 4 FURNISHED INACCURATE PARTICULARS OF INCOME TO THE T UNE OF ` .3 08 000/- BEING ITS INCOME FROM HOUSE PROPERTY FO R THE YEAR AS DISCUSSED ABOVE. THE APPELLANT HAD EVEN FAI LED TO DISCHARGE ITS ONUS IN THIS REGARD. THE APPELLANT HAS FAILED TO PROVE THAT IT HAD NOT DELIBERATELY AND KN OWINGLY CONCEALED ITS INCOME. ON THE CONTRARY IT HAS BEEN ESTABLISHED BEYOND DOUBT THAT THE APPELLANT HAS DELIBERATELY ACTED IN CONSCIOUS DISREGARD OF LAW IN ORDER TO EVADE TAXES AS PER THE DISCUSSION ABOVE. I AM FU RTHER OF THE OPINION THAT THE APPELLANTS CASE SQUARELY F ALLS WITHIN THE AMBIT OF EXPLANATION 1 TO SECTION 271(1) (C) AND THE APPELLANTS CASE IS A FIT CASE FOR LEVY OF PENA LTY. THE APPELLANT HAS KNOWINGLY AND DELIBERATELY TRIED TO MISLEAD THE DEPARTMENT AND HAS ATTEMPTED TO FURNISH INACCURATE PARTICULARS OF ITS INCOME. FURTHER THE CASE LAWS CITED BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT DO NOT HELP THE CAUSE OF THE APPELLANT AS THE SAME ARE FOUND TO BE ON DIFFERENT FOOTING. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATI VE AS THE ASSESSEE FAILED TO APPEAR BEFORE US INSPITE OF ISSUING A NOTICE FIXING THE HEARING ON 22/03/2012. AFTER CONSIDERING THE RECORD AND SUBMISSIONS OF THE DEPARTMENTAL REPRESENTATIVE WE ARE OF THE VIEW THAT THERE IS NO CASE FOR LEVY OF PENALTY UNDER SEC TION 271(1)(C). THE PENALTY WAS LEVIED NOT FOR CONCEALMENT OF INCOME B UT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. MAKING A CLAIM AN D NOT SUSTAINING IT CANNOT BE CONSIDERED AS INACCURATE PA RTICULARS FOLLOWING THE PRINCIPLES LAID DOWN BY THE HON'BLE S UPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LT D (2010) 322 ITR 158 (SC). WE DO NOT SEE ANY REASON TO UPHOLD PENALT Y UNDER SECTION 271(1)(C) AS THE ASSESSEE HAS OFFERED INCOME UNDER THE HEAD BUSINESS WHEREAS THE ASSESSING OFFICER TREATED I T AS INCOME FROM HOUSE PROPERTY IN THE EX-PARTE ORDER PASSED. JUST BY CHANGING THE HEAD OF INCOME WE ARE OF THE OPINION THAT THERE IS NO SCOPE FOR PENALTY UNDER SECTION 271(1)(C) WHEN SUCH TREATMEN T WAS ACCEPTED IN EARLIER YEARS. ACCORDINGLY THE PENALTY LEVIED UN DER SECTION 271(1)(C) IN THIS CASE HAS BEEN CANCELLED. ITA NO.4199 OF 2011 UNITED SALES CORPORATION MUMBAI PAGE 4 OF 4 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2012. SD/- SD/- (R.S.PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 30 TH MARCH 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR BENCH ITAT MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI