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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI PAWAN SINGH, JM
O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals) dated 17.06.2014 and pertains to the assessment year 2005- 06.
The grounds of appeal
read as under:
1. The learned CIT(A) erred in law and /on facts in concluding penalty appeal u/s 271(l)(c) without proper and reasonable opportunity to plead the case before passing the appellant order.
(A.Y.2005-06) Shri Monir D. Doshi vs. ITO 2. Without prejudice to the Leviability of the penalty u/s 271(1)(c), The learned CIT(A) erred in law and on fact in calculating penalty on amount Rs.45,52,727/- in spite of the addition of Rs.18,33,000/- were deleted in appeal by the Tribunal and balance addition is under appeal with High Court.
The learned CIT(A) erred in law and/on facts in not considering the Tribunal's Order before levy penalty.
As the entire diamond market is shifted from Opera House (Charni Road) to BKC (Bandra). The assessee had also shifted to Bandra and all notices was dispatched by the learned CIT(A) at previous address hence, assessee was not aware of it. As soon as the assessee become aware of this fact he appointed Authorized Representative as his legal counselor but before any action can be taken, the appeal was dismissed.
3. Brief facts of the case are as under: Initially assessment was completed u/s. 144 of the Act by making estimated addition towards GP of Rs.1.66 crore apart from unexplained cash credit of Rs.50.75 lakh, suppression of stock of Rs.2.74 lakh and addition u/s. 41(1) of Rs.9.56 lakh, apart from income from undisclosed sources of Rs.1.35 lakh, amount claimed as LIC refund of Rs.81,755/- and unexplained expenditure of Rs.12.60 lakh. However, Ld.CIT(A) sustained the addition only to the tune of Rs.28.41 lakh out of the addition made of Rs.50.75 lakh u/s. 68 of the Act. Similalry, addition u/s. 41(1) of the Act was also sustained apart from the addition of Rs.7.5 lakh on account of GP. Thus, addition to the extent of Rs.45,52,727/- was confirmed by the ld. CIT(A).
4. On this amount penalty u/s. 271(1)(c) of the Act was also levied. Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) referred to several case laws and confirmed the levy of penalty.
Against this order, the assessee is in appeal before us.
At the outset, the ld. Counsel of the assessee submitted a chart showing that addition made and relief granted in the appeals in this case reads as under:
(A.Y.2005-06) Shri Monir D. Doshi vs. ITO
Particulars Original Addition by Relief by Relief by Total Appeal Income A.O. u/s. 144 C.I.T(A) ITAT Relief pending in High Court Returned income 239877 Addition on a/c of gross 16631123 15881123 750000 16631123 profit Unexp Credit u/s. 68 5075000 2232000 124000 2356000 2719000 Stock Value Supression 274310 274310 274310 Cesassation Ofliab u/s. 41(1) 956891 0 956891 956891 Unexp 1. Expenditure 1260000 1260000 1260000 Claimed as dividend 135507 133507 133507 Claimed as LIC Refund 84755 84755 84755 239877 24417586 19867695 1830891 21698586 2719000
Referring to the above chart, the ld. Counsel of the assessee submitted that the penalty has been levied with reference to a different addition than what has been sustained finally by the ITAT. He further submitted that on amount of the final addition sustained by the ITAT, question of law has been admitted before the Hon'ble Bombay High Court. He referred to case laws from ITAT for the proposition that when on an issue question of law is admitted before the Hon’ble High Court, the matter becomes debatable and penalty levied u/s. 271(1)(c) of the Act is not sustainable. In this regard, the ld. Counsel of the assessee referred to the decision of the ITAT in the case of Schrader Duncan Limited v. ACIT (in vide order dated 01.01.2015).
Per contra, the ld. Departmental Representative relied upon the orders of the authorities below.
We find that in the present case, the Hon'ble Bombay High Court has admitted substantial question of law against the ITAT order passed in the quantum appeal in this case vide order dated 15.3.2013 which reads as under:
(A.Y.2005-06) Shri Monir D. Doshi vs. ITO Heard, Admit on the following substantial question of law: “Whether on the facts and in the circumstances of the case of the appellant and in law, the Tribunal has erred in not entertaining additional evidence sought to be furnished by the appellant and thereby not doing substantial justice to the appellant”
From the above, it is undisputed that the Hon'ble Bombay High Court has admitted the appeal against the ITAT order in the assessee’s own case. It is also clear that the addition on which penalty has been levied in this case has been substantially reduced by the ITAT in the quantum appeal. Hence, it is clear that the present quantum of appeal on which the addition has made does not survive. Hence, on the facts and circumstances of the case, the issue needs to be remitted to the file of the Assessing Officer for fresh consideration and computation in accordance with the higher appellate orders.
In the result, this appeal by the assessee stands allowed for statistical purposeS. प�रणामतः �नधा�रती क� अपील सां�यक�य उ�दे�य के �लए �वीकृत क� जाती है । Order pronounced in the open court on 05.03.2018