Nowrosjee Wadia & Sons Ltd, Mumbai vs Assessee

आयकर अपीलीय अधिकरण, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES 'F' MUMBAI सर्वश्री आय.पी. बंसल, न्यायिक सदस्य एवं श्री राजेन्द्र, , लेखा सदस्य के समक्ष BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA , ACCOUNTANT MEMBER

ITA NO.4256/MUM/2012(A.Y. 2002-03) ITA NO.4257/MUM/2012(A.Y. 2003-04)

Nowrosjee Wadia & Sons Ltd. Nevillie House, J.N.Heredia Marg, Ballard Estate, Mumbai 400001 PAN:AAACN1836A (Appellant )

Vs. The DCIT 2(2), Aaykar Bhavan, MK Road, Mumbai 400020 (Respondent)

Appellant by : Shri Yogesh Thar Respondent by : Shri Pawan Kumar Beerla

Date of hearing 25/03/2015 Date of pronouncement 25/03/2015

ORDER PER I.P.BANSAL, J.M:

Both these appeals are filed by the assessee and these are directed against two separate orders passed by Ld. CIT(A)-5,Mumbai dated 14/3/2012 and 16/3/2012 for assessment year 2002-03 and 2003-04 respectively. Grounds of appeal in both the appeals read as under:

Grounds of appeal in ITA No.4256/Mum/2012,A.Y. 2002-03:

"The appellant objects to the order dated 14th March 2012 received on 25th April 2012 passed by the Commissioner of Income Tax (Appeals)-5 (hereinafter referred to as "CIT(A) Mumbai) in an appeal against an order u/s. 271(1)(c) of the Income Tax Act, 1961 ("The Act") on the following ground of appeal.

1. The learned CIT(A) has erred in confirming the penalty under section 271(1)(c) of the Act without appreciating the fact that the assessee has furnished full and accurate particulars of income.

2. The appellants; therefore, prays that the order of the CIT(A) be set aside and grant the relief from penalty."

3. The Appellants carve leave to add, alter or amend any of the foregoing grounds as and when necessary.

Grounds of appeal in ITA No.4257/Mum/2012,A.Y. 2003-04:

"The appellant objects to the order dated 16th March 2012 received on 25th April 2012 passed by the Commissioner of Income Tax (Appeals)-5 (hereinafter referred to as "CIT(A) Mumbai) in an appeal against an order u/s. 271(1)(c) of the Income Tax Act, 1961 ("The Act") on the following ground of appeal.

1. The learned CIT(A) has erred in confirming the penalty under section 271(1)(c) of the Act without appreciating the fact that the assessee has furnished full and accurate particulars of income.

2. The appellants; therefore, prays that the order of the CIT(A) be set aside and grant the relief from penalty."

3. The Appellants carve leave to add, alter or amend any of the foregoing grounds as and when necessary.

2. The impugned concealment penalty has been levied on assessee on the addition made in respect of certain expenditure incurred in relation to repair which were claimed by the assessee as revenue expenditure but held by the AO as capital in nature. The concealment penalty levied is a sum of Rs.2,27,198/- and Rs.3,80,625/- in respect of A.Y 2002-03 and 2003-04 respectively.

3. At the time of hearing it was brought to our notice that similar disallowance was made in respect of assessment year 2001-02 and concealment penalty levied was confirmed by Ld. CIT(A). The Tribunal vide its order dated 12/1/2015 in ITA No.4228/Mum/2013 has deleted the penalty. Copy of the said order was placed on our record and was also given to Ld. DR. Thus, it was claimed that the issue is covered in favour of the assessee and impugned penalty in respect of both the years should be deleted.

4. On the other hand, Ld. DR relied upon the order passed by AO and Ld. CIT(A).

5. We have heard both the parties and their contentions have carefully been considered. On similar disallowance in respect of assessment year 2001-02 penalty has been deleted by the Tribunal. The relevant portion of the observation of the Tribunal from the said order of the Tribunal are reproduced below.

"2. The brief facts are that the AO during the assessment proceedings disallowed certain expenditure made in relation to repairs claimed by the assessee as revenue expenditure but held by AO as capital in nature.

3. The ld. AR of the assessee has submitted that the assessee has neither furnished inaccurate particulars of income nor had concealed its income. He has submitted, whether expenditure incurred on repairs was allowable as revenue expenditure or was a capital expenditure, was a debatable issue. Hence, penalty should not have been levied by the lower authorities. On the other hand the ld. DR has relied upon the findings of the lower authorities.

4. We have considered the rival submissions. We find that it is not a case of furnishing of inaccurate particulars of income or concealment of income. Merely because certain claim have been observed when the same was capital in nature, that itself is not sufficient to justify for levy of penalty in this case under section 271(1)(c). Even the issue whether the expenditure incurred on repairs was a revenue expenditure or capital is otherwise also a debatable issue. We, accordingly do not find any justification on the part of the lower authorities for levy of penalty in this case. The penalty levied by lower authorities under section 271(1)(c) in this case is, therefore, is ordered to be deleted.

5. In the result, appeal of the assessee is hereby allowed."

6. Respectfully following the aforementioned order we delete the impugned penalty in respect of both the years and the appeals filed by the assessee are allowed.

7. In the result, both the appeals are allowed.

Order pronounced in the open Court on 25/03/2015 आदेश की घोषणा खुले न्यायालय में 25/03/2015 को की गई । Sd/- Sd/- (राजेन्द्र, /RAJENDRA ) (आय.पी. बंसल / I.P. BANSAL) लेखा सदस्य /ACCOUNTANT MEMBER न्यायिक सदस्य / JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated 25/03/2015

आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5.

विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण, मुंबई / DR, ITAT, Mumbai

6. गार्ड फाईल / Guard file.

आदेशानुसार/ BY ORDER, सत्यापित प्रति //True Copy//

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अधिकरण, मुंबई / ITAT, Mumbai व.नि.स./Vm, Sr. PS

Details Date Initials Designation 1 Draft dictated on 25/03/2015

Sr.PS/PS 2 Draft Placed before author 25/03/2015

Sr.PS/PS 3 Draft proposed & placed before the Second Member

JM/AM 4 Draft discussed/approved by Second Member

JM/AM 5. Approved Draft comes to the Sr.PS/PS

Sr.PS/PS 6. Kept for pronouncement on

Sr.PS/PS 7. File sent to the Bench Clerk

Sr.PS/PS 8 Date on which the file goes to the Head clerk

9 Date of Dispatch of order

PAGE 4 ITA NO.4256/MUM/2012(A.Y. 2002-03) ITA NO.4257/MUM/2012(A.Y. 2003-04)