Sri. PARVESH VAISH, MUMBAI v. ACIT Rg. - 26(2), MUMBAI

ITA 6785/MUM/2006 | 2001-2002
Pronouncement Date: 14-01-2011 | Result: Allowed

Appeal Details

RSA Number 678519914 RSA 2006
Bench Mumbai
Appeal Number ITA 6785/MUM/2006
Duration Of Justice 4 year(s) 30 day(s)
Appellant Sri. PARVESH VAISH, MUMBAI
Respondent ACIT Rg. - 26(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 14-01-2011
Date Of Final Hearing 06-01-2011
Next Hearing Date 06-01-2011
Assessment Year 2001-2002
Appeal Filed On 15-12-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI B. RAMAKO TAIAH (AM) ITA NO.6785/MUM/2006 ASSESSMENT YEAR : 2001-02 PARESH VAISH C/O. BMR & ASSOCIATES 3F CONTRACTOR BUILDING R. KAMANI MARG BALLARD ESTATE MUMBAI 400 001. ..( APPELLANT ) P.A. NO: (ABUPV 5359 E) VS. ASSTT. COMMISSIONER OF INCOME TAX RANGE- 26(2) FLOOR 6 SMT. K.G. MITTAL BUILDING CHARNI ROAD MUMBAI-400 002 ..( RESPONDENT ) APPELLANT BY : SHR I DIVESH CHAWLA RESPONDENT BY : SHRI S.K. SINGH O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 1.9.2006 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2001-02. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL DERIVES INCOME FROM SALARY AND OTHER SOURCES. HE FILED RETURN DECLARING TOTAL INCOME OF RS.4 77 04 500/-. D URING THE COURSE OF ASSESSMENT IT WAS OBSERVED BY THE ASSESSING OFFICER THAT TH E SALARY INCOME OF THE ASSESSEE INCLUDES PERQUISITES OF RS.3.00 LACS O N ACCOUNT ITA NO.6785/M/06 A.Y:01-02 2 OF UNFURNISHED ACCOMMODATION PROVIDED BY THE EMPLOYER I.E. RENT PAID AT RS.25 000/- PER MONTH. HOWEVER THE ASSESSING OFFICER WAS OF THE VIEW THAT THE FLAT WHICH WAS PROVIDED TO THE ASSESSEE IN THE POSH LOCALITY I.E. DR. ANNIE BESANT ROAD HAJI ALI WORLI MUMBAI AND FOR THAT PURPOSE THE EMPLOYER HAS GIVEN INTEREST FREE DEP OSIT TO THE LANDLORD AND DUE TO INTEREST FREE DEPOSIT LESSER AMOU NT OF RENT WAS CHARGED. THE AO HAD ADOPTED 10% OF THE SALARY DUE TO THE ASSESSEE AS VALUE OF THE UNFURNISHED ACCOMMODATION PROVIDED TO T HE ASSESSEE I.E. THE FLAT WHICH WAS WORKED OUT AT RS. 47 44 670/- AND ACCORDINGLY THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.5 21 21 67 0/- INCLUDING AN ADDITION OF RS.47 44 670/- ON ACCOUNT OF PERQUISITE VALUE OF RENT FREE ACCOMMODATION VIDE ORDER DATED 31.10.2 003 PASSED U/S.143(3) OF THE INCOME TAX ACT 1961 (THE ACT). ON APPEAL THE LD. CIT(A) UPHELD THE SAID ADDITION MADE BY THE ASSESSING OF FICER . IN THE MEANWHILE THE ASSESSING OFFICER ON THE BASIS OF PROCEEDING INITIATED U/S.271(1)(C) IN THE ASSESSMENT ORDER ISSUED NOTICE TO THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE IMPOSED. IN REPLY IT WAS STATED BY THE ASSESSEE THAT THE PENALTY PROCEEDING MAY BE KEPT IN ABEYANCE TILL THE DISPOSAL OF THE APPEAL BY THE ITAT. HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEE'S REQUEST AND WAS OF THE VIEW THAT SINCE THE ASSESSEE HAS NOT SHOWN THE PERQUISITE V ALUE OF THE HOUSE THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOM E TO THE TUNE OF RS.44 11 670/- AND ACCORDINGLY ON THE SAID AMO UNT HE IMPOSED PENALTY OF RS.13 23 501/- VIDE ORDER DATED 30 .3.2006 PASSED U/S. 271(1)(C) OF THE ACT. ON APPEAL THE LD. CIT(A) FOR THE SAME REASONS UPHELD THE PENALTY IMPOSED BY THE ASSESSING OFFICER . ITA NO.6785/M/06 A.Y:01-02 3 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE SU STENANCE OF PENALTY IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE TRIBUNAL IN QUANTUM APPEAL IN THE ASSESSEE'S OW N CASE IN PARESH VAISH VS. ACIT IN ITA NO.9325/MUM/2004 FOR ASSE SSMENT YEAR 2001-02 ORDER DATED 31.5.2010 HAS ALLOWED THE ASSESSEE'S APPEAL THEREFORE THE PENALTY IMPOSED BY THE ASSESSING OFFICER A ND SUSTAINED BY THE LD. CIT(A) BE DELETED. 5. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) . 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND MER IT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL HAS D ELETED THE ADDITION ON WHICH THE ASSESSING OFFICER HAS IMPOSED THE PEN ALTY. THE TRIBUNAL WHILE ALLOWING THE QUANTUM APPEAL HAS HELD VIDE PARA-4 AND 5 OF ITS ORDER DATED 31.5.2010 AS UNDER :- 4 AS THE FACTS OF THE ASSESSEES CASE ARE IDENTICA L WITH THE CASE OF SHRI SANKAR KRISHNAN (SUPRA) WE THEREFORE FOLLOWING THE REASONS GIVEN BY THE TRIBU NAL IN THE SAID CASE HOLD THAT THE ACTUAL LEASE RENT PAID BY THE EMPLOYER COMPANY SHOULD BE THE VALUE OF THE PERQUIS ITE IF IT IS LESS THAN 20% OF THE SALARY WHICHEVER IS LOW ER. 5 IN THIS CASE THE ACTUAL RENT PAID BY THE EMPLOYE R COMPANY IS LESS THAN 20% OF THE SALARY OF THE ASSES SEE; WE THEREFORE FOLLOWING THE DECISION OF THE TRIBUN AL IN THE CASE OF SANKAR KRISHNAN (SUPRA) DIRECT THE AO TO AD OPT THE VALUE OF THE UNFURNISHED ACCOMMODATION PROVIDED BY ITA NO.6785/M/06 A.Y:01-02 4 THE EMPLOYER AT ACTUAL RENT PAID I.E. RS. 3 LACS PE R ANNUM. IN VIEW OF THE FACT THAT IN THE QUANTUM APPEAL THE A SSESSEE'S CLAIM HAS BEEN ACCEPTED AND THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE VIRTUALLY THE BASIS FOR IMPOSITION AND LEVY OF PENALT Y U/S. 271(1)(C) IS NOT AVAILABLE. WHEN SUCH IS THE POSITION THE IMPOSITIO N OF PENALTY IS NOT IN ACCORDANCE WITH LAW AND ACCORDINGLY THE PENALTY I MPOSED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS DELET ED. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. 7. IN THE RESULT ASSESSEE'S APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.1.2011. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 14.1.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.