ACIT CC 39, MUMBAI vs. FIRST LAND INFRA. P.LTD, NAVI MUMBAI

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ITA 1372/MUM/2014Status: DisposedITAT Mumbai11 May 2016AY 2007-084 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order deleting the penalty. Since the underlying addition under section 69C was deleted by a previous ITAT order, the penalty levied on it could not survive.

What were the facts?

The Revenue appealed against the deletion of penalty under section 271(1)(c) by the CIT(A). The penalty was levied on an addition made under section 69C, which had been deleted by a coordinate bench of the ITAT.

What were the issues?

Whether penalty under section 271(1)(c) can be sustained when the addition under section 69C, on which it was based, has been deleted by a higher tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 69C,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, F Bench, Mumbai

Before: Shri Jason P. Boaz & Shri Sandeep Gosain

For Appellant: Shri A. Kumbhar
For Respondent: Shri Ramesh Jain
Hearing: 05.05.2016Pronounced: 11.05.2016

This appeal by the Revenue is directed against the order of the CIT(A)-41, Mumbai dated 30.11.2013 for A.Y. 2007-08 deleting the penalty of `47,30,481/- leived under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act') in the case on hand.

2.

The grounds raised by Revenue in this appeal are as under: - “1 Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting penalty levied u/s. 271(1)(c) stating that the addition under section 69C does not survive since the issue of action u/s. 153C and the quantum addition made under section 69C of the I.T. Act, 1969 has been deleted by the Hon'ble ITAT, Mumbai without appreciating the fact that department has preferred an appeal against the order of the Hon'ble ITAT, Mumbai before the Hon'ble Bombay High Court and the issues have not attained finality. The appellant prays that the order of the Commissioner of Income -tax (Appeal) on the above grounds be set aside and that the Income Tax Officer/AC/DC be restored. The appellant craves leave to amend or alter any grounds or add new ground which may be necessary.

M/s. First Land Infra. P. Ltd.

3.

We have heard both the learned D.R. for Revenue and the learned A.R. for the assessee in the matter in the case. At the outset, it was submitted before the Bench that the learned CIT(A) deleted the penalty of `47,30,481/- levied under section 271(1)(c) of the Act in A.Y. 2007-08, since the quantum addition of `1,53,09,000/- made under section 69C of the Act in respect of which the said penalty was levied has been deleted by the decision of a Coordinate Bench of this Tribunal in assessee’s own case in dated 22.03.2013 for A.Y. 2007-08. This fact is not disputed and forms part of the grounds raised

by Revenue (supra), in which it is also submitted that Revenue has not accepted the aforesaid decision of the Coordinate Bench (supra) and has preferred an appeal against the same before the Hon'ble Bombay High Court.

4. We find from a perusal of the order of the Coordinate Bench of this Tribunal in ITA No. 8251/Mum/2011 dated 22.03.2013 that at paras 18, 19, 22, 23, 24, 25 and 26 has held as under: - “18. ...... In the present case, impugned documents were not found from the possession of the assessee but was found from the possession of a third person i.e. Shri Dilip Dherai. Mere mention of the names of the villages where the companies may have purchased lands could not give any basis to assume/presume/surmise that the name of the companies are mentioned in the impugned document. The very foundation of Sec. 153C has been shaken by not fulfilling the condition precedent for the issue of notice ......

29. Considering the entire facts and circumstances in the light of the impugned seized documents, we have no hesitation to hold that action taken u/s. 153C of the Act is bad in law ..... 22. ..... The entire dispute revolves around the alleged cash payment amounting to Rs.43 crores approx. And which has been added u/s. 69C of the Act ..... 23. ..... the assessee must have been found to have incurred any expenditure to invoke the provisions of Sec. 69C of the Act ...... However, the allegations made by the lower authorities are not supported by actual cash passing hands. The entire additions are base on the seized documents and no other material has been adverted to and which could conclusively show that the huge account of the magnitude mentioned in the seized documents travelled from one side to the other. The Revenue authorities have not brought a single statement on record of the vendors of land in different villages. None of the seller has been examined to substantiate the claim of the Revenue that extra cash actually changed hands.

M/s. First Land Infra. P. Ltd. 24. ..... in the present case, none of the sellers have been examined by the A.O. to strengthen his views that cash has been paid over and above the registered amount. There is not even a single document/ evidence of parties involved in the sale of land at different villages brought o record to show that an amount other than the payment of consideration has changed hands. No confusion from the sellers have been brought on record ..... 25. ...... In our considerate view (sic), there being no evidence to support the Revenue’s case that a huge figure, whatever be its quantum, over and above the figure booked in the records and accounts changed hands between the parties, no addition could therefore be made u/s. 69C of the Act to the income of the assessee considering the entire facts brought on record, we have no hesitation to hold that even on merits, no addition could be sustained.

26.

Since we have allowed the issue in the case of the present assessee on both counts, i.e. on legal issue and on merit and the issue involved in all other appeals of other assessees are similar and identical though quantum may differ, for similar reasons, we quash the assessments and delete the additions on merit as well as on point of law in all other cases also.”

5.

It is evident from the order of the Coordinate Bench of this Tribunal (supra) that the Tribunal has not only quashed the assessments framed under section 153C of the Act but also deleted the additions of `1,53,09,000/- made under section 69C of the Act on merits. Since the order of assessment and the additions therein giving rise to the levy of penalty under section 271(1)(c) of the Act is quashed/deleted, the penalty of `47,30,481/- levied thereunder would not survive. In this view of the matter, respectfully following the decision of the Coordinate Bench of this Tribunal in the assessee’s own case in dated 22.03.2103, we uphold the order of the learned CIT(A) deleting the penalty of `47,30,481/- levied under section 271(1)(c) of the Act for A.Y. 2007-08 in the case on hand. Consequently, the grounds raised

by Revenue are dismissed.

6. In the result, the Revenue’s appeal for A.Y. 2007-08 is dismissed. Order pronounced in the open court on 11th May, 2016. Sd/- Sd/- (Sandeep Gosain) (Jason P. Boaz) Judicial Member Accountant Member Mumbai, Dated: 11th May, 2016

M/s. First Land Infra. P. Ltd.

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