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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 22/06/2010 of the ld. First Appellate Authority, Mumbai, confirming penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act).
During hearing, none was present for the assessee in spite of issuance of registered AD notice to the assessee, which was duly received by the assessee as is evident from acknowledgment available on record. It seems that the assessee is not interested to pursue its appeal, therefore, we have no option but to proceed ex-parte, qua the assessee, and tend to dispose of the appeal on the basis of material available on record. On the other hand, the ld. DR, Shri Yogesh Kamat defended the imposition as well as confirmation of penalty by contending that disallowance was rightly made on the claimed expenses under the head short term capital gain.
2.1. We have considered the submissions of ld. DR and perused the material available on record. The facts, in brief, are that the assessee is a Limited Company, declared taxable income of Rs.50,61,430/- in its return filed on 29/10/2004.
The case of the assessee company was selected for scrutiny, therefore, required notices u/s 143(2) and 142(1) were issued and served upon the assessee. While completing the assessment, it was noticed that the assessee claimed following expenses under the head short term capital gain:-
Sl. Expenses Amount (in Rs.) No. 1 Portfolio management fees 2,96,182/- 2 Other expense as per TB of ASK Raymond 1,34,167/-
Other expenses (difference between the 62,275/- estimated expenses and actual bill of the port management fees) on estimation basis The ld. Assessing Officer disallowed these expenses on the plea that neither these expenses are for the improvement of the capital asset nor in connection with transfer of capital asset. Penalty proceedings u/s 271(1)(c) of the Act were initiated against the assessee. On appeal, the stand of the ld. Assessing Officer was affirmed, therefore, the assessee is in further appeal before this Tribunal.
2.2. Under the aforementioned facts, now question arises, whether the penalty was rightly imposed/confirmed. Undisputed fact is coming out that the impugned expenses were claimed by the assessee under the professional advice of the chartered accountant. Even if it is presumed that the professional advice was wrong, still it cannot be construed that either the assessee furnished wrong particulars of concealed its income because mere making a false claim in itself does not lead to the conclusion that anything was hidden by the assessee. Our view find support from the decision from Hon’ble Apex Court in Reliance Petro products Pvt. Ltd. (322 ITR 158) (SC), wherein, it was held that mere making a wrong claim itself does not tantamount to concealment of income or furnishing of inaccurate particulars of such income. Even otherwise, the ld. Assessing Officer is empowered to allow, if legally claimed, or disallow, if not permitted by the provision of the Act, but certainly, it cannot be concluded that the assessee made a wrong claim. It is also noted that the assessee is assisted by professional chartered accountants and on the basis of their advice, such claim was made by the assessee, therefore, from this angle also, we are in agreement with the view that for the mistake of the chartered accountant, the assessee should not suffer as was held in various decisions. Like Manjoj Ahuja vs ACIT 150 ITR 696 (P & H), ratio laid down in Smt. Shefali Godha vs ITO (ITA No.550/Ind/2009) order dated 15/02/2010, Vipul Chattar (ITA No.146/Ind)2013) order dated 03/06/2013 and Shantilal Jain (ITA No.2123/Mum/2015) order dated 11/01/2016. In view of the aforementioned facts and the judicial pronouncements discussed hereinabove, we are of the view that it may be a good case for quantum addition but not for imposing penalty, therefore, we direct the ld. Assessing Officer to delete the penalty of Rs.1,25,460/- imposed by him and confirmed by Ld. Commissioner of Income Tax (Appeals), therefore, the appeal of the assessee is allowed.
Finally, the appeal of the assessee is allowed.
This Order was pronounced in the open in the presence of ld. DR at the conclusion of hearing on 11/02/2016.