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Shri Ashok Kumar Damani, Surya Mahal, 1st Floor, 5, Burjoriji Bharucha Marg, Fort, Mumbai-400 023 Vs. DCIT 4(1), Mumbai
December, 17th 2014

                  BEFORE      SHRI R.C.SHARMA, AM
                             SHRI SANJAY GARG, JM
                                  ITA No.249/Mum/2013
             (              Assessment Year :2009-2010)
     Shri Ashok Kumar Damani, Vs. DCIT 4(1), Mumbai
     Surya Mahal, 1st Floor, 5,
     Burjoriji Bharucha Marg, Fort,
     Mumbai-400 023
                                  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



        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
                                                                ITA No.249/13

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/-

was imposed.

3.    By the impugned order, the CIT(A) confirmed the penalty.

4.    Against the above order of CIT(A), assessee is in further appeal

before us.

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
             D. Damani;
      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.
                                                               ITA No.249/13

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.

                     Sd/-                                 Sd/-
           (      )                                  (       )
        (SANJAY GARG)                              (R.C.SHARMA)
               / JUDICIAL MEMBER                  / ACCOUNTANT MEMBER
     Mumbai;           Dated      12/12/2014
      /pkm,     PS
                                                            ITA No.249/13

                   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.
                              //True Copy//
                                                                   / BY ORDER,

                                                         (Asstt.   Registrar)
                                                               / ITAT, Mumbai
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