Income Tax Appellate Tribunal - Mumbai
Bright Warehouse & Leasing P. Ltd , ... vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "B", MUMBAI
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND
SHRI A.L. GEHLOT, ACCOUNTANT MEMBER
ITA No. 583/M/2009
Assessment Year: 2002-03
Income-tax Officer - 8(1)2, ... Appellant
Room No. 205, 2 n d Floor,
Aayakar Bhavan, M.K. Road,
Mumbai - 20.
Vs.
M/s Bright Warehousing & Leasing Pvt. Ltd., ...Respondent
D-35, Jyoti Apartments,
Seven Bunglows, J.P. Road,
Andheri(W), Mumbai - 58.
(PAN - AABCB4454F)
Appellant by : Mr. Aarsi Prasad
Respondent by : Mr. G.C. Lalka
ORDER
PER A.L. GEHLOT, A.M.:
This appeal filed by the Revenue is directed against the order of CIT (A)- VIII, Mumbai, passed on 26.11. 2008 for the assessment year 2002-03, wherein the revenue has raised the following grounds of appeal:-
"On the f acts and in the circumstances of the case and in law, the CIT (A) erred in disallowing the penalty u/s 271(1)(c) without appreciating the f acts and circumstances of the cases.
The appellant prays that the order of the CIT (A) on the above ground to be set aside and that of the ITO/AC/DCIT be restored. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary."2 ITA NO.583/M/09
M/s Bright Warehousing & Leasing Pvt. Ltd.
2. The assessee company acquired a land situated at Taloja on tenancy vide agreement dated 03.04.96 from Mr. K.M. Patel and Mrs. K.K. Patel and the same was leased out to M/s Hyundai Motors India Ltd. in the year 1998 for storing its motor cars. The assessee received the lease rent amounting to Rs. 25, 50,735/- and claimed it as business income. The AO treated the said rent as income from house property, which was confirmed by the CIT (A). Thereafter, the AO initiated penalty proceedings u/s 271(1) (c) and levied penalty of Rs. 4, 99,200/-. Against this penalty, the assessee carried the matter before the CIT (A). Before the CIT(A), the assessee submitted that this similar issue was involved in AY 2001-02 in his own case and the learned CIT(A) deleted the penalty by relying upon the decision of Hon'ble Mumbai Tribunal in the case of ITO Vs. Roborant Investment P. Ltd. in ITA No. 3937/Mum/2002, which was reported in 7 SOT 181. In the case under consideration, the CIT(A) following the decision of his predecessor in AY 2001-02, deleted the penalty levied by the AO by holding that there is no change in the facts of the for the year under consideration and moreover, the Hon'ble Tribunal has already decided the issue in favour of the assessee. The learned DR submitted that in AY 2001-2002 the revenue did not file the appeal against the order of CIT (A) where penalty under section 271(1)(c) was cancelled, because of the tax effect.
3. We have heard the learned representatives of the parties and perused the record. We find that the CIT (A) after considering order of the ITAT in the case of ITO Vs. Roborant Investment P. Ltd. in ITA No. 3937/Mum/2002, which was reported in 7 SOT 181 has cancelled the penalty. We further find that the view taken by the ITAT in the case of ITO Vs. Roborant Investment P. Ltd. in ITA No. 3937/Mum/2002, which was reported in 7 SOT 181 has been confirmed by the Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd., [2010] 322 ITR 158(SC).The Apex Court held that making incorrect claim 3 ITA NO.583/M/09 M/s Bright Warehousing & Leasing Pvt. Ltd.
does not amount to concealment of particulars of income u/s 271(1)(c) of the Act. The findings of the Hon'ble Supreme court are extracted below:-
"A glance of the provisions of section 271(1)© of the Income Tax Act, 1961,, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word 'particulars' used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return f iled by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous.
Where there is no f inding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself , will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to f urnishing inaccurate particulars."
4. The law laid down by the apex court in the said case is very clear that making incorrect claim does not amount to concealment of particulars. In the case under consideration the assessee claimed the lease rent as business income but the revenue authorities treated the same as income from house property. Merely the fact that the assessee claimed an income under a particular head and the AO assessed under some different head that does not automatically amounts to concealment of particular of income or furnishing inaccurate particular of the income leading to levy of penalty u/s 271(1)(c) of the Act. In view of the law laid down by the Apex Court we 4 ITA NO.583/M/09 M/s Bright Warehousing & Leasing Pvt. Ltd.
are of the view that the CIT(A) has rightly cancelled the penalty of Rs. 4,99,200/-levied by the AO u/s 271(1)(c).
5. In the result, the appeal of the revenue is dismissed.
Pronounced on this 22 nd day of April, 2010
Sd/- Sd/-
(D. MANMOHAN) (A.L. GEHLOT)
VICE PRESIDENT ACCOUNTANT MEMBER
Dated: 22 n d April, 2010
Copy to:-
1) The Appellant.
2) The Respondent.
3) The CIT (A) concerned.
4) The CIT concerned.
5) The Departmental Representative, "B" Bench, I.T.A.T.,
Mumbai.
By Order
//true copy//
Asst. Registrar,
I.T.A.T., Mumbai.
Kv