IN THE INCOME TAX APPELLATE TRIBUNAL " A", BENCH MUMBAI
BEFORE SHRI R.C.SHARMA, AM
SHRI SANJAY GARG, JM
( Assessment Year :2009-2010)
Shri Ashok Kumar Damani, Vs. DCIT 4(1), Mumbai
Surya Mahal, 1st Floor, 5,
Burjoriji Bharucha Marg, Fort,
PAN/GIR No. : AABDP 1845 K
( Appellant) .. ( Respondent)
/Assessee by : Shri Hiro Rai
/Revenue by : Shri Asghar Zain
Date of Hearing : 4th December, 2014
Date of Pronouncement 12th December, 2014
PER R.C.SHARMA (A.M):
This is an appeal filed by the assessee against the order of CIT(A)
dated 19-12-2012 for the Assessment Year 2009-10, in the matter of
penalty imposed u/s.271(1)(c) of the Act.
2. Rival contentions have been heard and record perused. Facts in
brief are that assessee has declared dividend income of Rs.1,07,63,886/-
claimed as exempt u/s.10(33). The assessee was asked to submit the
details of dividend received. In response to the same, the assessee's AR
has submitted the details of dividend received and also submitted that
dividend stripping u/s.94(7) was not disallowed in the computation of
income by oversight. As per the details submitted by the assessee the
loss disallowance u/s.94(7) on account of dividend stripping was
Rs.35,84,692/-. After verification, losses to the extent of Rs.35,84,692/- is
disallowed and added to the total income u/s.94(7) of the Act. Penalty
proceedings u/s.271(1)(c) of the IT Act were also initiated for furnishing
inaccurate particulars of income. Accordingly, penalty of Rs.12,18,437/-
3. By the impugned order, the CIT(A) confirmed the penalty.
4. Against the above order of CIT(A), assessee is in further appeal
5. It was argued by the learned AR that assessee has submitted
details of dividend stripping and also submitted that in computation of
income by oversight dividend stripping u/s.94(7) was not disallowed. The
same was offered for taxation and no appeal was filed. Learned AR also
drew our attention to the return of income filed by assessee in earlier
years, wherein he was also awarded certificate of highest tax payer. As
per learned AR only due to inadvertent mistake, which was accepted by
the assessee even before AO pointed out any such discrepancy,
therefore, penalty u/s.271(1)(c) was not imposable. For this purpose,
reliance was placed on the following decisions :-
i) Mumbai bench in ITA No.1625/Mum/2012, ACIT Vs. Mr. Ramesh
ii) 348 ITR 306 (SC) Price Waterhouse Coopers Pvt. Ltd. Vs. CIT;
iii) 259 CTR 383 (Bom) CIT Vs Bennett Coleman & Co. Ltd.;
iv) 352 ITR 592 CIT(Bom) Vs. Somany Evergree Knits Ltd.,
v) 348 ITR 339 (Del) CIT Vs. Brahmaputra Consortium Ltd.; and
vi) 44 SOT 26 (Mum-Trib) Walter Saldhana Vs. DC.
6. On the other hand, learned DR relied on the orders of lower
7. We have considered rival contentions, carefully gone through the
orders of authorities below and also deliberated on the judicial
pronouncements cited at bar. We found that exactly similar issue was
dealt by the Tribunal in case of Mr. Ramesh M. Damani, ITA
No.1625/Mum/2012, vide order dated 22-8-2014, wherein it was held that
under such circumstances, it was not a case of concealment of income
rather than bonafide mistake. Before the AO detected any concealment of
income, the assessee has filed details of disallowance u/s.94(7) in the
ordinary course of assessment proceedings. The facts and circumstances
in the instant case are exactly similar, wherein assessee has conceded
before any detection by the AO.
8. As the facts and circumstances during the year under consideation
are pari materia to the facts discussed by the Tribunal in case of Mr
Ramesh M. Damani (supra), respectfully following the decision of the
Tribunal, we direct the AO to delete the penalty so imposed.
9. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on this 12/12/2014.
( ) ( )
(SANJAY GARG) (R.C.SHARMA)
/ JUDICIAL MEMBER / ACCOUNTANT MEMBER
Mumbai; Dated 12/12/2014
Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. / The CIT(A), Mumbai.
4. / CIT
5. / DR, ITAT, Mumbai
6. Guard file.
/ BY ORDER,
/ ITAT, Mumbai