M/S. UNI TEX PRODUCTS P. LTD, MUMBAI v. THE ACIT CIR 2(3), MUMBAI

ITA 4719/MUM/2008 | 2002-2003
Pronouncement Date: 06-04-2010 | Result: Allowed

Appeal Details

RSA Number 471919914 RSA 2008
Bench Mumbai
Appeal Number ITA 4719/MUM/2008
Duration Of Justice 1 year(s) 8 month(s) 20 day(s)
Appellant M/S. UNI TEX PRODUCTS P. LTD, MUMBAI
Respondent THE ACIT CIR 2(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 06-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 06-04-2010
Date Of Final Hearing 31-03-2010
Next Hearing Date 31-03-2010
Assessment Year 2002-2003
Appeal Filed On 16-07-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI R.S.SYAL AM AND SMT.ASHA VIJAYARAGHAVAN JM ITA NOS.4718 & 4719/MUM/2008 : ASST.YEARS 2001-2002 & 2002-2003 M/S.UNI TEX PRODUCTS PRIVATE LIMITED SAPT BUILDING J.N.HEREDIA MARG BALLARD ESTATE MUMBAI 400 001. PA NO.AAACU0760G. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 2(3) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y.P.TRIVEDI & MS.USHA DALAL RESPONDENT BY : SHRI VIRENDRA OJHA O R D E R PER R.S.SYAL AM : THESE TWO APPEALS BY THE ASSESSEE ARISE OUT OF THE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON 13. 5.2008 IN RELATION TO THE ASSESSMENT YEARS 2001-2002 AND 2002-2003 SUSTAINING PENALTY U/S.271(1)(C) OF THE ACT. SINCE THE ISSUES INVOLVED IN BOTH THE APPEALS ARE COMMON AND IDENTICAL GROUNDS HAVE BEEN TAKEN WE ARE THEREFORE PROCEED ING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ASSESSMENT YEAR 2001-2002 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED ITS RETURN DECLARING INCOME OF RS.1.15 CRORE. ASSESSMENT U/S. 143(3) WAS COMPLETED BY DETERMINING TOTAL INCOME AT RS.1.96 CRORE. THE ASSE SSEE HAD SHOWN RENTAL INCOME FROM SAPT BUILDING JEEVAN JYOTI FLAT AND WAREHOUSI NG AS CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSI ON AND ALSO ACCORDINGLY CLAIMED DEDUCTION ON ACCOUNT EXPENSES INCLUDING SECURITY EX PENDITURE IN RESPECT OF JEEVAN JYOTI FLAT AS WELL AS DEPRECIATION ALLOWANCE. THE ASSESSING OFFICER DID NOT ACCEPT THE TREATMENT GIVEN TO RENTAL INCOME BY THE ASSESSE E AND PROCEEDED TO TAX SUCH INCOME UNDER THE HEAD `INCOME FROM HOUSE PROPERTY. HE THEREFORE DID NOT ALLOW ITA NOS.4718 & 1719/MUM/2008 M/S.UNI TEX PRODUCTS PRIVATE LIMITED. 2 DEDUCTION FOR EXPENSES AND ALLOWANCE BUT ALLOWED DE DUCTION U/S.24 OF THE ACT. THIS RESULTED INTO ENHANCEMENT OF INCOME ON WHICH T HE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) AMOUNTING TO RS.33 66 864. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT THE ASSESSEE LODGED A CLAI M FOR TAXATION OF RENTAL INCOME FROM THESE THREE PROPERTIES UNDER THE HEAD BUSINES S INCOME WHICH WAS UPSET BY THE ASSESSING OFFICER. IN THIS PROCESS THE EXPENSES AND DEPRECIATION ALLOWANCE CLAIMED BY THE ASSESSEE WERE DISALLOWED AND DEDUCTI ON WAS GRANTED AS PER SECTION 24 OF THE ACT BY TREATING IT AS FALLING UNDER THE H EAD INCOME FROM HOUSE PROPERTY. APART FROM THAT THERE IS NO FINDING IN ASSESSMENT O R THE PENALTY ORDER THAT THE ASSESSEE FILED ANY INCORRECT OR ERRONEOUS OR FALSE DETAILS IN THE RETURN OF INCOME. IT IS A SIMPLE CASE OF A CLAIM MADE BY THE ASSESSEE IN A PARTICULAR MANNER DISCLOSING COMPLETE PARTICULARS OF SUCH CLAIM WHICH WAS NOT AC CEPTED BY THE AUTHORITIES. IN OUR CONSIDERED OPINION IT IS NOT A GOOD CASE FOR I MPOSITION OF PENALTY NOTWITHSTANDING THE FACT THE ACTION OF THE AO MAY H AVE BEEN UPHELD IN QUANTUM PROCEEDINGS. RECENTLY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. [(2010) 322 ITR 158 (SC)] HAS HELD THAT MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WIL L NOT ATTRACT PENALTY U/S.271(1)(C). THE HONBLE SUPREME COURT FURTHER HELD THAT WHEN TH E ASSESSEE FURNISHED ALL THE MATERIAL IN RETURN WHICH WAS NOT FOUND TO BE INCORR ECT IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT BUT THE SA ME COULD NOT BE CONSIDERED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN OUR CONSIDERED OPINION THE RATIO DECIDENDI OF THIS JUDGEMENT IS FULLY APPLICABLE TO THE FACTS OF THE INSTANT CASE. WE THEREFORE OVERTURN THE IMPUGNED ORDER AND DIRECT THE DELETION OF PENALTY. ITA NOS.4718 & 1719/MUM/2008 M/S.UNI TEX PRODUCTS PRIVATE LIMITED. 3 4. BOTH THE PARTIES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THE APPEAL FOR ASSESSMENT YEAR 2002-2003 ARE SIMILAR TO THOSE OF ASSESSMENT YEAR 2001- 2002 EXCEPT FOR THE FACT THAT THE LEARNED CIT(A) LE VIED PENALTY ON RENTAL INCOME ALSO APART FROM THE DISALLOWANCE OF EXPENSES AND DE PRECIATION. IN OUR CONSIDERED OPINION THE RATIONALE OF THE JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) WILL SQUARELY APPLY IN RELATION TO PENALTY IMPOSED IN RESPECT OF RENTAL INCOME AS WELL. INSOFAR AS THE DISALLOWANCE OF EXPE NSES AND DEPRECIATION ALLOWANCE IS CONCERNED THE VIEW TAKEN BY US IN ASSESSMENT YE AR 2001-2002 (SUPRA) WILL BE OPERATIVE . WE THEREFORE ORDER FOR THE DELETION OF PENALTY FOR THIS YEAR AS WELL. 5. IN THE RESULT BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED ON THIS 6 TH DAY OF APRIL 2010. SD/- SD/- ( ASHA VIJAYARAGHAVAN ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI : 6 TH APRIL 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A) - XXX MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.