KANTABEN K. SHETH, MUMBAI v. DCIT CIR-1, MUMBAI

ITA 4410/MUM/2009 | 2004-2005
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 441019914 RSA 2009
Bench Mumbai
Appeal Number ITA 4410/MUM/2009
Duration Of Justice 9 month(s) 29 day(s)
Appellant KANTABEN K. SHETH, MUMBAI
Respondent DCIT CIR-1, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Assessment Year 2004-2005
Appeal Filed On 22-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A : MUMBAI BEFORE SHRI D.MANMOHAN HONBLE VICE PRESIDENT AND SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER ITA. NO. 4410 4411 & 4412/MUM/2009 ASSESSMENT YEARS 2004-2005 2005-2006 & 2006-2007 SMT. KANTABEN K. SHETH MUMBAI 400 002. PAN ANEPS-0336-A VS. DCIT CIR. 1 MUMBAI (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI DHARMESH SHAH FOR RESPONDENT : SHRI PEEYUSH JAIN ORDER PER D.MANMOHAN V.P. 1. PENALTY LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271 (1) (C) OF THE ACT FOR THREE YEARS UNDER CONSIDERA TION HAVING BEEN SUSTAINED BY THE LEARNED CIT(A) ASSESSEE IS IN APP EAL BEFORE US. 2. FACTS IN SHORT ARE THAT ASSESSEE DECLARED INCOM E FROM HOUSE PROPERTY AND OTHER SOURCES. CONSEQUENT TO THE SEARCH CARRIED OUT ON 17-3-2006 ON SMT. DAKSHA DILIP SHETH AND HER FAMILY MEMBERS NOTICE UNDER SECTION 153C WAS ISSUED ON THE ASSESSEE IN RESPONSE TO WHICH ASSESSEE DECLARED INCOME FROM HOU SE PROPERTY AND OTHER SOURCES. IN ALL THESE YEARS INCOME DECLARED B Y THE ASSESSEE UNDER THE HEAD PROPERTY INCOME WAS BROUGHT TO TAX BY THE ASSESSING OFFICER UNDER THE HEAD PROFITS AND GAINS OF BUSINE SS OR PROFESSION BY TREATING THE SAME AS COMMISSION INCOME AND THEREBY DISALLOWED CLAIM OF DEDUCTION UNDER SECTION 24 OF THE ACT. IN SO FAR AS THE ASSESSMENT YEAR 2006-2007 IS CONCERNED ASSESSING OFFICER DISAL LOWED CLAIM OF DEDUCTION REFERABLE TO INTEREST ON BORROWED CAPITAL OF RS.2 13 198/- WHICH WAS CLAIMED AGAINST THE RECEIPTS FROM ICICI. CONSEQUENT TO THE DISALLOWANCE OF CLAIM OF DEDUCTION AND INTEREST ON BORROWED CAPITAL (FOR ASSESSMENT YEAR 2006-2007 ONLY) PENALTY PROCEE DINGS WERE 2 INITIATED AND FOR THE DETAILED REASONS GIVEN IN THE PENALTY ORDER THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD D ELIBERATELY MADE CLAIMS WHICH HE KNEW THAT THE SAME WERE LEGALLY NOT TENABLE THEREBY AVODING/EVADING THE TAX LIABILITY BY FURNISHING INA CCURATE PARTICULARS AND HAD COMMITTED DEFAULT WITHIN THE MEANING OF PRO VISIONS OF SECTION 271 (1) (C) OF THE ACT READ WITH EXPLANATIONS THERE TO. LEARNED CIT(A) HAVING AFFIRMED THE ACTION OF THE ASSESSING OFFICER ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING LEARNED COUNSEL APPEAR ING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ITAT A BENCH MUMBAI IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2003-2 004 TO 2006- 2007 (ITA. NOS. 6580 6581 6582 & 6583/MUM/2008 DA TED 6 TH OCTOBER 2009) ACCEPTED THE PLEA OF THE ASSESSEE TH AT THE AMOUNT RECEIVED FROM RELIANCE WEB STORES PVT. LTD. IS ASSE SSABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. AS REGARDS D ISALLOWANCE OF CLAIM OF DEDUCTION AGAINST THE RECEIPTS FROM ICICI LEARNED COUNSEL SUBMITTED THAT THOUGH THE INTEREST ON BORROWED CAPI TAL WAS NOT ALLOWED BY THE ASSESSING OFFICER AND ACCEPTED BY TH E ASSESSEE UNDER IDENTICAL CIRCUMSTANCES PENALTY LEVIED BY THE ASSES SING OFFICER WAS CANCELLED BY THE ITAT VIDE ORDER DATED 22 ND MARCH 2010 IN THE CASE OF PUSHPABEN K. SETH (ITA. NOS. 3704 TO 3707/MUM/20 09 C BENCH). IN THE LIGHT OF AFORECITED DECISIONS LEARNED COUNSE L SUBMITTED THAT THERE IS NO CASE FOR LEVY OF PENALTY. 4. LEARNED DR FAIRLY ADMITTED THAT THE ISSUE STAND S COVERED BY THE DECISIONS CITED (SUPRA). HOWEVER LEARNED DR STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. SINCE THE MAIN DISALLOWANCE IS SET ASIDE BY THE ITAT IN ASSESSEES OWN CASE PENALTY IMPOSED BY THE ASSESSI NG OFFICER UNDER SECTION 271 (1) (C) OF THE ACT REFERABLE TO THE DIS ALLOWANCE OF CLAIM OF DEDUCTION UNDER SECTION 24 HAS NO LEGS TO STAND. S IMILARLY WITH REGARD TO INTEREST DISALLOWANCE IN THE LIGHT OF DE CISION OF THE ITAT 3 CITED (SUPRA) WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. BY RESPECTFULLY FOLLOWING THE DECISIONS CI TED (SUPRA) WE CANCEL THE PENALTY LEVIED BY THE ASSESSING OFFICER. AS PRO NOUNCED IN THE OPEN COURT APPEALS FILED BY THE ASSESSEE ARE ALLOWED. SD/- SD/- (J.SUDHAKAR REDDY) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATE 20 TH MAY 2010. VBP/- COPY TO 1. SMT. KANTABEN K. SHETH 66/142-F LALBAWA MANDIR BHULESHWAR MUMBAI 400 002. PAN ANEPS-0336-A 2. DCIT CIR. 1 MUMBAI. 3. CIT (A) CENTRAL-I MUMBAI 400 051. 4. CIT CENTRAL-I MUMBAI. 5. D.R. A BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR ITAT MUMBAI BENCHES MUMBAI.