GLOBAL FINTCH P.LTD MUMBAI vs DCIT 9(1) MUMBAI

आयकर अपीलीय अिधकरण, मंुबई Ûयायपीठ ‘जी’ मंुबई । IN THE INCOME TAX APPELLATE TRIBUNAL “G ” BENCH, MUMBAI सवर्Įी जी.ई.वीरभद्रÜपा, अÚयक्ष, एवं Įी अिमत शुक्ला, Ûया.स. के समक्ष । BEFORE SHRI G.E.

VEERABHADRAPPA, HON'BLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER आयकर अपील सं./ ITA No.7743/Mum/2010. (िनधार्रण वषर् / Assessment Year: 2004-2005) Global Fintch P.

Ltd., Flat No.102 & 103, 1st Floor, Arihant Bldg.

Opp.

Dara House, 15th Rd, Bandra (W)., Mumbai-400 050.

Vs.

DCIT 9(1), Mumbai èथायी लेखा सं./जीआइआर सं./PAN No.

AAACG 1389 B (अपीलाथीर् /Appellant) : (प्र×यथीर् / Respondent) एवं/ AND आयकर अपील सं./ ITA No.7755/Mum/2010 (िनधार्रण वषर् / Assessment Year: 2004-2005) DCIT 9(1), Mumbai Vs.

Global Fintch P.

Dara House, 15th Rd, Bandra (W)., Mumbai-400 050. èथायी लेखा सं./जीआइआर सं./PAN No.

AAACG 1389 B (अपीलाथीर् /Appellant) : (प्र×यथीर् / Respondent) िनधार्िरती की ओर से / Assessee by : Mr.

Arun Sathe & Mr.

Kalpesh Turalkar राजèव की ओर से/ Revenue by : Mr.

Parthsarathi Naik सुनवाई की तारीख / Date of Hearing : 21st June 2012 घोषणा की तारीख /Date of Pronouncement :6th July, 2012 आदेश / O R D E R PER AMIT SHUKLA (J.M.) : These are the cross appeals filed by the assessee as well as the department against the order dated 19-8-2010, passed by the CIT (A)- ITA Nos : 7743/10, &7755/10 2 19, Mumbai in relation to penalty proceedings under Section 271(1)(c) for the assessment year 2004-2005.

Since the common issues are involved in both the appeals, therefore, for the sake of convenience, both the appeals are being disposed off by this consolidated order.

2.

For the quantum of assessment passed under Section 143(3) vide order dated 20-10-2006, following additions/disallowances were made :- i) Loss on sale of flats and expenses on sale 61,65,800 ii) Disallowance under s.14A 27,77,355 iii) Out of travelling and conveyance 19,63,982 iv) Out of Misc. t of Misc. expenses 7,73,028 The said disallowance/additions were also confirmed by the CIT(A) vide order dated 5-10-2007.

The Assessing Officer initiated the penalty proceedings under Section 271(1)(c) for concealment of income/furnishing of inaccurate particulars of income on the ground that the entire disallowance/additions have been confirmed by the CIT(A).

It was submitted before the Assessing Officer by the assessee that the matter is still pending before the ITAT and, therefore, requested the Assessing Officer to keep the penalty proceedings in abeyance till disposal of the appeal by the ITAT.

The Assessing Officer held that since no explanation or information have been furnished, he levied the penalty of `.41,78,420/- on the entire additions.

ITA Nos : 7743/10, &7755/10 3 3.

In the first appeal, the Ld.

CIT(A) confirmed the penalty and additions of `.61,65,800/- on account of loss on sale of flats and expenses on sale.

However, with regard to disallowance made under Section 14A, travelling and conveyance and miscellaneous expenses, he deleted the penalty.

Against this, both the assessee and the department have come in appeal before us.

4.

At the outset, learned counsel on behalf of the assessee submitted that in the quantum proceedings, the matter was set aside and restored back to the file of the Assessing Officer vide order dated 24-11-2010 passed in ITA No.149/Mum/2008.

He further brought to our notice that in pursuance of the ITAT’s order, the assessment order has already been passed vide order dated 30-5-2011, wherein relief on account of loss on sale of flats and expenses on sale and disallowance under Section 14A has been given and the entire additions stands deleted by the Assessing Officer himself in set aside proceedings.

Thus, the impugned penalty proceedings have become infructuous.

On the other hand, learned DR did not dispute this fact.

5. s fact.

5.

We have carefully considered the rival submissions and also perused the ITAT’s order in the quantum proceedings and also the assessment order passed in pursuance of ITAT’s order.

So far as the issue of loss on sale of flats and expenses on sale and disallowance under Section 14A, the same stands deleted in the assessment order dated 30-5-2011, passed under Section 143(3) r.w.s.254.

Therefore, ITA Nos : 7743/10, &7755/10 4 the penalty on these amounts do not survive, hence, the same is deleted.

6.

As regards the expenses on account of travelling and conveyance and other miscellaneous expenses, it is seen that the same has been made on ad hoc basis by estimation.

The CIT(A) in the impugned order has held that these expenses have been disallowed merely on estimated/ad hoc basis, therefore, penalty under Section 271(1)(c) for concealment of income is not leviable.

In view of these facts, we do not find any infirmity in such a finding as no penalty can be levied on additions made on ad hoc basis.

Accordingly the entire penalty stands deleted.

7.

In the result, the appeal of the assessee is allowed and appeal that of the revenue is dismissed. पिरणामतः िनधार्िरती की अपील èवीकृत की जाती है एवं राजèव की अपील खािरज की जाती है । Order pronounced in the open court on 6th July, 2012 . आदेश की धोषणा खुले Ûयायालय मɅ िदनांकः 6th July,2012 को की गई । Sd/- Sd/- ( जी.ई.वीरभद्रÜपा ) ( अिमत शुक्ला ) ( G.E.

VEERABHADRAPPA) (AMIT SHUKLA) अÚयक्ष / PRESIDENT Ûयाियक सदèय/JUDICIAL MEMBER मंुबई Mumbai; िदनांक Dated 06 / July /2012 प्र.कु.िम/pkm.िन.स./PS ITA Nos : 7743/10, &7755/10 5 आदेश की प्रितिलिप अग्रेिषत/Copy of the Order forwarded to : 1. अपीलाथीर् / The Appellant 2. प्र×यथीर् / The Respondent.

3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. िवभागीय प्रितिनिध, आयकर अपीलीय अिधकरण, मंुबई / DR, ITAT, Mumbai 6. गाडर् फाईल / Guard file. स×यािपत प्रित //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.

Registrar) आयकर अपीलीय अिधकरण, मंुबई / ITAT, Mumbai mbai