Income Tax Appellate Tribunal - Mumbai
Immortal Financial Services Pvt. Ltd., ... vs Assessee on 30 April, 2013
आयकर अपील य अ धकरण,
धकरण मंब
ु ई यायपीठ 'आई
आई'
आई मंब
ु ई।
IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI
BEFORE S/SHRI B.R.MITTAL,(JM) AND SANJAY ARORA (AM)
सव ी बी.आर
बी आर.
आर म ल,
ल या यक सद य एवं ी संजय अरोड़ा,
अरोड़ा लेखा सद य के सम
आयकर अपील सं./I.T.A. No.2563/M/2012
( नधारण वष / Assessment Year:2007-08)
Immortal Financial बनाम/
बनाम DCIT 2(2),
Services Pvt.Ltd., Vs. Aayakar Bhavan, M.K. Road,
28, Great Western Bldg., Mumbai
130, S.B.S.Marg, Opp.
Lion Gate, Fort, Mumbai
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. : AABCI 3874 N
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri Anant N Pai
यथ क ओर से/Respondent by : Shri Amit Kamat
सनवाई
ु क तार ख / Date of Hearing : 30.4.2013
घोषणा क तार ख /Dat e of Pronouncement : 30.4.2013
आदे श / O R D E R
Per B.R.Mittal, JM:
The assesee has filed this appeal for assessment year 2007-08 against order dated 21.12.2011 of ld CIT(A) disputing the confirmation of levy of penalty of Rs.41,96,900/- u/s.271(1)(c) of the Act.
2. The relevant facts giving rise to this appeal are that assessee is a Private Limited Company and is involved in the business of trading in shares and securities and providing financial consultancy services. During the assessment year under consideration, the Assessing Officer noted from the statement of total income that total income of Rs.1,45,49,690/- consisted of short term capital gain on sale of shares amounting to Rs.1,39,29,733/- and profits of the business (from sale of shares) of Rs.6,19,960/-. That this is the first year of business of the assessee. The Assessing Officer stated that what is claimed by the assessee as short term capital gain is the 2 I.T.A. No.2563/M/2012 Assessment Year:2007-08 profit on sale of shares and treated the said amount as profits and gain of business which is subject to normal rate of taxation. It is relevant to state that assessee disputed the assessment order in the quantum proceedings before the first appellate authority and second appellate authority but the order of the AO was confirmed treating the profit on account of purchase on sale of shares as income from business. Pursuant thereto, AO initiated penalty proceedings u/s.271(1)(c) of the Act and stated that assessee furnished inaccurate particulars of income and, accordingly, levied penalty u/s.271(1)(c) @ 100% of tax sought to be evaded, which comes to Rs.41,96,900/-. Being aggrieved, assessee filed appeal before ld CIT(A).
3. Ld CIT(A) by the impugned order confirmed the action of AO to levy penalty. Hence, this appeal before the Tribunal.
4. During the course of hearing, ld A.R. submitted that assessee has not furnished inaccurate particulars of income. That assessee claimed short term capital gain on sale of shares but the AO treated the said short term capital gain of Rs.1,39,29,733/- as business income. He submitted that all the requisite statement of facts were stated in the return filed and the AO only changed the head of income from short term capital gain to business income and amount remained the same as disclosed by the assessee. Ld A.R. submitted that AO has levied penalty treating that levy of penalty is automatic if the head of income is changed though there is no concealment of facts or furnishing of wrong particulars by the assessee and the reliance placed by the authorities below on the decision of Hon'ble apex Court in the case of Dharmendra Textiles Processors & Ors, 306 ITR 277(SC) is not correct. Ld A.R. submitted that it is a debatable issue and relying on the decision of Hon'ble Delhi High Court in Income tax Appeal No.683/2012 dated 21.12.2012 in the case of CIT vs. Amit Jain, copy placed at pages 20-21 of PB submitted that on similar facts as to whether income declared as short term capital gain but assessed as income from business could be subject to levy of penalty u/s.271(1)(c) of the Act on the ground of furnishing inaccurate particulars of income, Hon'ble Delhi High Court dismissed the appeal of the revenue by confirming order of the Tribunal that levy of penalty is not justified. The amount in question which formed the basis for the AO to levy penalty was in fact truthfully reported in the returns. Merely because the AO chose to treat the income under some other head cannot characterize the particulars or 3 I.T.A. No.2563/M/2012 Assessment Year:2007-08 reported in the return as inaccurate particulars or as suppression of facts. Ld A.R. also referred the decision of ITAT, Mumbai in the case of Sukdham Construction & Developers vs DCIT (I.T.A. No.2172/M/2011), copy placed at pages 17 to 19 of PB and submitted that on similar facts, the Tribunal cancelled the penalty levied by authorities below by observing that issue of treatment of income is debatable issue and the view taken by the assessee in treating the same as capital gain, though was not acceptable but could not ipso facto lead to the conclusion that assessee concealed the particulars of income or furnished inaccurate particulars of income. Ld A.R. submitted that levy of penalty u/s.271(1)(c) is not justified and same be deleted.
5. On the other hand, ld D.R. relied on order of ld CIT (A).
6 We have considered submissions of ld representatives of parties, orders of authorities below, order of the Tribunal in quantum appeal dated 20.10.2010, copy placed at pages 1 to 16 of PB, order of the Tribunal in the case of Sukdham Construction & Developers (supra) and also the decision of Hon'ble Delhi High Court in the case of Amit Jain (supra).
7. We are of the considered view that above decision of the Tribunal squarely applies to the facts of the case before us as the AO considered income of Rs.1,39,29,733/- declared by the assessee as short term capital gain as business income and, accordingly, has levied penalty thereon @ 100% of tax sought to be evaded. We observe that assessee has furnished all the details of its income in the return filed and AO while making the assessment considered the said income as business income instead of treating the same as short term capital gain as claimed by the assessee in the return filed. We agree with ld A.R. that change of head of income does not ipso facto lead to the conclusion that assessee concealed particulars of income or furnished inaccurate particulars as held by Hon'ble Delhi High Court in the case of Amit Jain (supra) and also the Tribunal in the case of Sukdham Construction & Developers (supra). We agree with ld A.R. that it is a debatable issue and thus, there is no suppression of facts or furnishing of inaccurate particulars of income by the assessee. Hence, we hold that levy of penalty u/s.271(1)(c), on the facts and in the circumstances of the case, is not justified. Accordingly, we delete the penalty of Rs.41,96,900/- by allowing ground of appeal taken by the assessee.
4 I.T.A. No.2563/M/2012Assessment Year:2007-08
8. In the result, appeal filed by assessee is allowed,.
प रणामतः नधा रती क अपील वीकत ृ क जाती है ।
Order pronounced in the open court on 30th April, 2013 .
आदे श क घोषणा खले ु यायालय म दनांकः 30th April, 2013 को क गई ।
Sd/- sd/-
(संजय अरोड़ा/SANJAY ARORA) (बी.आर. म ल/B.R.MITTAL)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
मंब
ु ई Mumbai; दनांक Dated 30 / 04/2012
व. न.स./ Parida , Sr. PS
आदे श क त ल प अ े षत/Copy
षत of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु (अपील) / The CIT(A)-
4. आयकर आयु / CIT
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब
ु ई / DR, ITAT,
Mumbai
6. गाड फाईल / Guard file.
आदे शानसार
ु / BY ORDER,
स या पत त //True Copy//
सहायक पंजीकार (Asstt. Registrar)
आयकर अपील य अ धकरण,
धकरण मंब
ु ई / ITAT, Mumbai