IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI "F" BENCH, MUMBAI
BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL
MEMBER,
AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER.
ITA. No. 3037/Mum/2013
(Assessment Year:2001-02)
Income Tax Officer 12(3)(2),
Mumbai Appellant
Vs.
Mr. Vinod Kumar Gupta
162-C, Mittal Tower, Nariman
Point, Mumbai 400 021 Respondent
PAN: AAIPG6320M
/By Appellant : Shri Rajesh Ranjan, D.R.
/By Respondent :None
/Date of Hearing
: 16.09.2015
/Date of
Pronouncement : 30.09.2015
ORDER
PER SHAILENDRA KUMAR YADAV, J.M:
This appeal has been filed by Revenue against the order of
Commissioner of Income-Tax (Appeals)-10, Mumbai, dated
01.01.2013 for A.Y. 2001-02 on following grounds:
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"1. On the facts and in the circumstances of the case and
in law, the ld. CIT(A) has erred in directing the
Assessing Officer to delete penalty u/s.271(1)(c)
amounting to Rs.7,13,859/- levied on account of
inaccurate particulars of income on a/c of interest &
difference in capital account.
2. The appellant prays that the order of the CIT(A) on the
above ground be set aside and that of the Assessing
Officer be restored."
2. Assessee is an individual and carryies on business
through his partnership concern under the name and style of
M/s. M.P. Impex. The firm deals in oxygen cylinders, selenium
metal powder, video components etc.
3. Assessing Officer levied penalty in respect of three
additions which are as under:
Concealed/inaccurate particulars of income on
a/c of interest: Rs.22,97,072/-
Inaccurate particulars of income:
Difference in capital account: Rs.1,22,470/-
Capital gain on sale of jewellery Rs. 9,16,268/-
Total Rs.33,35,810/-
3.1 First point of levying penalty in respect of interest amount
to Rs.22,97,072/- on loan taken for investment in shaes.
While completing the assessment, Assessing Officer had held
that certain transactions relating to purchase and sale of
shares through M/s. Mangala Capital Services are speculative
in nature. The amount in this regard was Rs.3,40,10,015/-.
Assessee had also incurred interest on loans for financing
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these transactions. The interest on loan amounted to
Rs.22,97,072/-. Assessing Officer treated the loss on sale of
shares as well as interest on loans as speculative in nature.
However, in course of appellate proceeding, CIT(A) held that
both loss on sale and purchase of shares as well as interest
attributable to the same were not speculative in nature.
Assessing Officer has however still levied penalty in respect of
interest cost of Rs.22,97,072/-. In this regard, it was
submitted on behalf of assessee before the CIT(A) that on
interest of Rs. 22,97,072/-, CIT(A) has granted full relief and
therefore, there was no question of levy of penalty. Having
considered the same, CIT(A) observed that there is no
disallowance of interest, as such, Assessing Officer has merely
categorized the interest as attributable in share transaction
and hence held that interest cost also forms part of speculative
loss. However, in course of appeal in quantum proceeding,
CIT(A) accepted the assessee's stand and allowed the assessee
to treat the share transaction as well as interest cost as short
term capital gains. Therefore, there was no question of
concealment of income on this issue and in fact, CIT(A) had
accepted the stand of assessee. In any case, full particulars
relating to interest claimed were disclosed by assessee and at
best Assessing Officer has come to a different view on
evaluation of relevant facts. Hence, penalty levied in respect of
addition of Rs.22,97,072/- was rightly deleted by CIT(A). This
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reasoned finding of CIT(A), whereby he has deleted penalty in
question, needs no interference from our side. We uphold the
same.
4. Next point is with regards to addition on account of
difference in opening balance of share capital. This issue is
explained by Assessing Officer at para 12 of assessment order.
He observed that assessee's capital in its proprietorship firm is
disclosed at Rs.1,85,67,047/- in books of proprietary business
whereas in assessee's personal books, share capital in
proprietorship concern was disclosed at Rs.1,81,42,831/-.
After taking into consideration, the profits of the year of
Rs.3,01,747/-, Assessing Officer has worked out the difference
in opening balance at Rs.1,22,469/-. This amount has been
brought to tax by Assessing Officer as unexplained cash credit
in assessee's books of accounts.
4.1 Matter was carried before First Appellate Authority in
quantum addition and addition made on this account was
confirmed by CIT(A). No further appeal has been filed by
assessee. Hence, Assessing Officer imposed penalty as
assessee failed to explain the difference in two amounts. In
penalty proceeding, matter was carried in penalty matter before
the First Appellate Authority, wherein various contentions were
raised on behalf of assessee and having considered the same
CIT(A) observed that difference arose on account of earlier
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years and similar discrepancy was therein the earlier year
balance also. Thus, it was evident that discrepancy in issue
has been brought forward from earlier years and is not a
question of concealment of income or furnishing inaccurate
particulars of income. Accordingly, penalty was deleted on this
account. This reasoned finding of CIT(A) needs no interference
from our side. We uphold the same.
5. As a result, appeal filed by Revenue is dismissed.
Pronounced in the open Court on this the 30th day of
September, 2015.
Sd/- Sd/-
(RAMIT KOCHAR) (SHAILENDRA KUMAR YADAV)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai: Dated 30/09/2015
True Copy
S.K.SINHA
/ Copy of Order Forwarded to:-
1. / Revenue
2. / Assessee
3. / Concerned CIT
4. - / CIT (A)
5. , , /
DR, ITAT, Mumbai
6. / Guard file.
By order/ ,
/ ,
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