DCIT CENT. CIR. - 3, MUMBAI v. M/s. KILLICK NIXON LTD., MUMBAI

ITA 519/MUM/2006 | 2001-2002
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 51919914 RSA 2006
Assessee PAN AAACK8526A
Bench Mumbai
Appeal Number ITA 519/MUM/2006
Duration Of Justice 4 year(s) 4 month(s) 7 day(s)
Appellant DCIT CENT. CIR. - 3, MUMBAI
Respondent M/s. KILLICK NIXON LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-05-2010
Date Of Final Hearing 20-05-2010
Next Hearing Date 20-05-2010
Assessment Year 2001-2002
Appeal Filed On 23-01-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI PRAMOD KUMAR (AM) AND SMT ASHA VIJAYARAGHAVAN (JM) ITA NO. 519/MUM/2006 (ASSESSMENT YEAR- 2001-02) DY . C OMMISSIONER OF INCOME TAX CENTRAL CIRCLE- 17(3) 9 TH FLOOR OLD CGO BLDG. ANNEXE M.K. ROAD MUMBAI 400 020 VS. M/S. KILLICK NIXON LTD. BASEMENT COMMERCIAL UNION HOUSE 9 WALLACE STREET FORT MUMBAI 400 001. PAN NO.:- AAACK 8526 A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AJIT KUMAR SINHA ( CIT - DR) RESPONDENT BY: SHRI VIJAY KOTHARI O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 17.11.2005 PASSED BY THE CIT(A)- CENTRAL CIRCLE - I MUMBAI UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 FOR THE ASSES SMENT YEAR 2001-02. THE REVENUE HAS RAISED THREE GROUNDS OF APPEAL AGAINST THE ORDER OF THE CIT(A) DELETING THE PENALTY UNDER SECTION 271(1)(C). 2. AT THE THRESHOLD THE LEARNED COUNSEL SHRI VIJAY KOTHARI SUBMITTED THAT IN THE QUANTUM APPEAL IN ITA NO.746/MUM/2005 A ND ITA NO.883/MUM/2005 THE HONBLE ITAT MUMBAI C BENCH HAS DECIDED THE ISSUES. 3. GROUND NO.1 RAISED BY THE REVENUE READS AS FOLLO WS: - ON THE FACTS AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING PENALTY IMPOSED U/S.271(1)(C) OF THE ACT ON THE AM OUNT OF DISALLOWANCE OF RS.1 61 33 800/- BEING THE INTEREST ON FUNDS ITA NO.519/MUM/2006 M/S. KILLICK NIXON LTD. A.Y. 2001-02 2 FROM M.P. STATE DEVELOPMENT CORPORATION LTD. GLOBA L TRUST BANK & OTHERS ADVANCED DIVERTED FOR NON BUSINESS PURPOSE S. 4. WITH REGARD TO GROUND NO.1 THE LEARNED COUNSEL DREW OUR ATTENTION TO THE QUANTUM ORDER WHEREIN IT HAS BEEN HELD AS FO LLOWS: - AS FAR AS GROUND NO.5 IS CONCERNED AFTER HEARING BOTH THE PARTIES WE FIND THAT CERTAIN INTEREST WERE DISALLO WED BECAUSE ACCORDING TO HIM SOME INTEREST BEARING FUNDS WERE DIVERTED FOR OTHER PURPOSES. ON APPEAL THE ADDITION HAS BEEN CON FIRMED BY THE CIT(A). BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE MAIN LY SUBMITTED THAT IDENTICAL ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE AO FOR THE ASSESSMENT YEAR 1999-2000 AND IN THIS REGARD HE REF ERRED TO PARAS 111 TO 114 OF THE TRIBUNAL ORDER PLACED AT PA GE 58 TO 59 OF THE PAPER BOOK. HE ALSO FILED A COPY OF THE ASSESSM ENT ORDER OF EARLIER YEAR RELEVANT TO THE ASSESSMENT YEAR TO POI NT OUT THAT THE NATURE OF DISALLOWANCE WAS SIMILAR TO THE ASSESSMEN T YEAR IN QUESTION. ON THE OTHER HAND THE LEARNED DR SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE ORD ERS OF THE TRIBUNAL IN VARIOUS YEARS PARTICULARLY FOR THE ASSE SSMENT YEAR 1999-2000 IN ITA NO. 842/M/03 WE SET ASIDE THE ORD ER OF THE LEARNED CIT(A) AND REMIT THE SAME BACK TO THE FILE OF THE AO WITH DIRECTION TO RE-EXAMINE THE WHOLE ISSUE IN THE LIGH T OF THE DIRECTIONS GIVEN IN THE PREVIOUS YEARS. 5. GROUND NO.2 RAISED BY THE REVENUE READS AS FOLLO WS: - ON THE FACTS AND IN LAW THE LEARNED CIT(A) ERRED I N DELETING PENALTY IMPOSED ON LONG TERM CAPITAL GAIN ON SALE O F LAND DUE TO ENHANCEMENT OF FAIR MARKET VALUE OF THE LAND BAS ED ON DVO REPORT. THE VALUATION REPORT WAS NECESSITATED DUE T O FAILURE ON THE PART OF THE ASSESSEE TO FURNISH CORRECT FAIR MA RKET VALUE ON THE DAY OF TRANSFER. ITA NO.519/MUM/2006 M/S. KILLICK NIXON LTD. A.Y. 2001-02 3 6. WITH REGARD TO GROUND NO.2 THE LEARNED COUNSEL POINTED OUT THAT THE TRIBUNAL HAS HELD THAT IN THE QUANTUM APPEAL IN PAR A 53 HAD HELD AS FOLLOWS: - WE FIND FORCE IN THE LAST SUBMISSION OF THE LEARNE D COUNSEL FOR THE ASSESSEE IN THIS RESPECT THAT THE LEARNED CIT(A ) WAS BOUND TO CONSIDER THE OBJECTIONS RAISED BEFORE HIM IN RESPEC T OF THE VALUATION REPORT OF THE DVO. PAGE 66 OF THE PAPER BOOK CLEARLY SHOWS THAT THROUGH LETTER DATED OCTOBER 12 2004 SO ME OBJECTIONS WERE RAISED REGARDING VALUATION PREPARED BY THE DVO . PARTICULARLY THE OBJECTION REGARDING THAT THE ASSES SEE DOES NOT FALL IN K(E) AREA BUT FELL UNDER L AREA AS PER NO TIFICATION PACED AT PAGES 79/85 OF THE PAPER BOOK. THEREFORE IN THE IN TEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE LEARNED CIT( A) ONLY TO THE EXTENT OF MEETING AND ADJUDICATING THE OBJECTION RA ISED BEFORE HIM REGARDING VALUATION TO HIS FILE. NEEDLESS TO SAY T HAT ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY TO PUT FORTH I TS CASE. 7. GROUND NO.3 OF THE APPEAL READS AS FOLLOWS: - ON THE FACTS AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING PENALTY IMPOSED ON THE DIFFERENCE IN THE VALUATION OF LAND ARISING ON AMOUNT OF TRANSFER OF FIXED ASSET TO STOCK-IN-TR ADE ON THE DAY OF TRANSFER FOR DETERMINING CONSIDERATION ON ACCOUN T OF DEEMED TRANSFER U/S.45(2) OF THE ACT. 8. WITH REGARD TO GROUND NO.3 THE TRIBUNAL HAS HELD IN THE QUANTUM APPEAL AT PARA 91 ON PAGE 56 AS FOLLOWS: - ON CAREFUL PERUSAL OF THE ASSESSMENT ORDER SHOWS T HAT ASSESSING OFFICER HAS COMPUTED THE CAPITAL GAINS AT PARA 4.10 AND THERE HE HAS TAKEN THE VALUE OF CONSIDERATION A T RS.94 79 69 059/- WHICH IS THE SAME AMOUNT AS RETUR NED BY THE ASSESSEE. IT SEEMS THAT THE ASSESSING OFFICER HAS N OT DEALT WITH THE ISSUE REGARDING TAXABILITY OF PROFITS UNDER SEC TION 45(2) OF THE ACT. THE LEARNED CIT(A) HAS LATER ON CHANGED THE A MOUNT OF CAPITAL GAINS BUT HE HAS DEALT WITH ONLY REGARDING THE COST OF ACQUISITION I.E. FAIR MARKET VALUE AS ON 1.4.1981 W HICH HE HAS REVISED AS PER THE REPORT OF THE DVO AND HE ALSO SE EMS TO HAVE NOT DEALT WITH THE ISSUE REGARDING PROFITS U/S.45( 2) OF THE ACT. THEREFORE IN THE INTEREST OF JUSTICE WE RESTORE T HIS ISSUE BACK TO THE FILE OF THE A.O. WITH DIRECTION TO RE-EXAMINE T HE ISSUE AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. ITA NO.519/MUM/2006 M/S. KILLICK NIXON LTD. A.Y. 2001-02 4 9. WE HAVE HEARD BOTH THE PARTIES WE ARE OF THE OP INION THAT WHEN THE QUANTUM ORDER IS SET ASIDE TO THE FILE OF THE ASSES SING OFFICER WITH DIRECTION TO RE-EXAMINE THE ISSUE AFTER GIVING ADEQUATE OPPOR TUNITY TO THE ASSESSEE THE PENALTY GETS CANCELLED. IT IS FOR THE ASSESSING OFFICER TO INITIATE THE PENALTY PROCEEDINGS AFRESH WHILE DECIDING THE SET A SIDE ORDER IF HE DETERMINES TO DO SO. 10. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MAY 2010. SD/- SD/- PRAMOD KUMAR ASHA VIJAYARAGHA VAN (ACCOUNTANT MEMBER) (JUDICI AL MEMBER) MUMBAI DATED 31 ST MAY 2010. NEELAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR C BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO.519/MUM/2006 M/S. KILLICK NIXON LTD. A.Y. 2001-02 5 DATE INITIALS 1 DRAFT DICTATED ON: 25.05.2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 26.05.2010 ______ SR . PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _____ ____ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ S R. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _____ ____ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______