IN INCOME TAX APPELLATE TRIBUNAL BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI RAMIT KOCHAR, AM ITA No.6431/Mum/2013 (A.Y:2002-03) Longulf Trading (India) Pvt. Ltd., Vs. Dy. Commissioner of Times Square, Wing, 5th floor, Income Tax, Circle 2(2), Unit 1B, Marol, Andheri Kurla Mumbai Road, Andheri (East), Mumbai -59 PAN: AAACL 075D Appellant .. Respondent Appellant by .. Shri Sanjay Parikh, AR Respondent by .. Shri A. Ramachandran, DR Date of hearing .. 20-10-2016 Date of pronouncement .. 20- 10- 2016 ORDER PER MAHAVIR SINGH, JM: This appeal by assessee is arising out of order of CIT-(A)-41, Mumbai in appeal No.CIT(A)-17/IT-21/2011-12 dated 23-08-2013. Assessment was framed by DCIT, Circle- 2(2), Mumbai for assessment year 2002-03 vide his order dated 28-03-2005 u/s 143(3) of Income Tax Act, 1961 (hereinafter Act ). Penalty u/s 271 (1) (c) of Act was levied by DCIT- 8(2), Mumbai vide his order dated 25-03-2011. 2. only issue in this appeal of assessee is against order of CIT (A) confirming levy of penalty u/s 271 (1) of Act. 3. At outset, learned Counsel for assessee submitted that quantum appeal on which penalty was levied was challenged by assessee before Tribunal in ITA No.2528/Mum/2010 and Tribunal vide order dated 02-03-2016 has allowed appeal by deleting disputed addition on which penalty was levied. In view of this, he requested that penalty levied on assessee be deleted. 4. We have heard rival contentions and gone through facts and circumstances of case. On perusal of records, we find that quantum addition has been made by AO on account of freight paid (inland waterways IN INCOME TAX APPELLATE TRIBUNAL BENCH, MUMBAI 2 ITA No.785/Mum/2016 BEFORE SRI MAHAVIR SINGH, JM AND SRI RAMIT KOCHAR, AM ITA No.785/Mum/2016 (A.Y:2008-09) Lalit D. Soni, 5, Sotta Bhavan, L. T. Vs. Principal Comm issioner Road, Mulund (East), Mumbai - 81 of Income Tax -29, C-10, 3 r d PAN:AAFPS 7764L Floor, Prat yakshakar Bhavan, Bandra Kurla Complex, Bandra (E), Mumbai 400 051 Appellant .. Respondent Appellant by .. Shri Bhadresh Doshi, AR Respondent by .. Shri R. P. Meena, CIT DR Date of hearing .. 19-10-2016 Date of pronouncement .. 19- 10- 2016 ORDER PER MAHAVIR SINGH, JM: This appeal by assessee is arising out of order of Principal CIT- 29, Mumbai in appeal No.Pr.CIT-29/263/29 (2)(2)/15-16 dated 21-12-2015. Assessment was framed by ITO, Ward -23(2)(4), Mumbai for assessment year 2008-09 vide his order dated 18-02-2014 u/s 143(3) read with section 147 of Income Tax Act, 1961 (hereinafter Act ). 2. only issue in this appeal of assessee against order of Principal CIT-29, Mumbai revising assessment u/s 263 of Act i.e. assessment framed u/s 143(3) read with section 147 dated 18-02-2014. Principal CIT directed AO to verify claim in respect to assessee s transaction with M/s. Alliance Intermediaries and Network Pvt. Ltd. amounting to Rs.28,34,081/-, purchase and sale of shares worth Rs.13,00,665/- and transaction of Rs.6,31,228/- of Mrs. Hansa Lalit Soni i.e. wife of assessee. 3. At outset, learned Counsel for assessee took us through reasons recorded by AO while reopening assessment u/s 148 of Act and relevant portion of said reasons reads as under:- During course of verification of records, it was found that during year under consideration, assessee was engaged in activities of bogus share transactions including speculation profit/loss, bogus short/long term capital gains, commodities profit/loss transactions etc. 3 ITA No.785/Mum/2016 Also there was income from various sources. During year there was sale of shares worth Rs.28,34,081/- through M/s. Maha Sagar Group of companies. Earning from all transactions including bogus transactions like short/long term capital gains, speculation profit/loss, commodities transaction profit/loss other sources etc. which was in excess of Rs. 1 lakh not offered for taxation. In this case assessment u/s 143 (1) was completed. Therefore I have reason to believe that earning from above activities has escaped assessment within meaning of section 147 of I. T. Act. notice u/s 148 is therefore required to be issued to assessee. learned Counsel also took us through reply filed vide letter dated 07-01- 2014 and relevant portion of same reads as under:- We are here with submitting copy of Income Tax Return for Asst. Year: 2008-09 along with Computation of total income, Capital account, Balance sheet for year ended on 31.03.2008, Copy of TDS Certificate from Interest and Brokerage for year ended on 31.03.2008. We are herewith submitting copy of bank passbook for year ended on 31.03.2008 We have to state that we had not escaped any income in Ass Year 2008- 09. This is to inform you that we want copy of evidence and statement recorded for reopening of assessment proceedings U/S 148 of Income tax Act 1961. As mansions in reasons for reopening given by honour pertaining to purchases and sales carried out through M/s. Mahasagar Group as claimed by you. Further we have to state that we do not have any purchase and sale of share with said group. Therefore, in interest of natural justice you please provide us complete details of description of shares purchased and sold, number of shares, date of purchase and sale and other relevant information. In view of above, learned Counsel for assessee stated that during reassessment proceedings transactions of Rs.28,34,081/- was totally denied and assessee was not aware about any transactions for amount of Rs.13,00,665/-. He also took us through assessee s accounts and stated that only transaction in assessee s bank account maintained with Bank of Baroda, Mulund (East) Branch, Mumbai, copy of which is enclosed in pages 8 to 14 of assessee s paper book and he took us through page 10 of assessee s paper book wherein transaction of Rs.6,31,238/- is shown in name of assessee s wife. To prove his point, learned Counsel for 4 ITA No.785/Mum/2016 assessee stated that this bank account is in joint name i.e. assessee is second holder and assessee s wife Mrs. Hansa Lalit Soni is first account holder. Further, to prove his point, learned Counsel for assessee took us through assessment framed in case of assessee s wife i.e. Mrs. Hansa Lalit Soni framed u/s 143(3) read with section147 of Act dated 05-03-2014 wherein this transaction of Rs.6,32,290/- is considered and added in hands of assessee s wife u/s 68 of Act. learned Counsel for assessee stated that they have accepted this transaction in hands of assessee s wife and further accepted same as her transactions. When this facts were confronted to learned CIT DR, he only urged that this facts need verification. 4. After hearing both sides and going through facts of case, we noticed that first two transactions i.e. transaction with M/s. Alliance Intermediaries and Network Pvt. Ltd. amounting to Rs.28,34,081/- does not at all exist. Further, there is no transaction as alleged by Principal CIT amounting to Rs.13,00,665/-. only transaction remains for examination is amounting to Rs.6,31,238/- being sale of shares has already been added in hands of Mrs. Hansa Lalit Soni and she has accepted same transaction belong to be in her name. learned Counsel for assessee candidly accepted that same is under challenge before CIT (A) but ownership is not in dispute. In given facts and circumstances, we are of view that assessment framed by AO u/s 143(3) read with section 147 of Act dated 18-02-2014 is neither erroneous nor prejudicial to interest of Revenue. Accordingly, we quash revision order passed by Principal CIT u/s 263 of Act. Resultantly, assessee s appeal stands allowed. 5. In result, appeal of assessee is allowed. Order pronounced in open court on 19-10-2016. Sd/- Sd/- (RAMIT KOCHAR) (MAHAVIR SINGH) ACCONTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 19-10-2016 Lakshmikanta Deka/Sr.PS 5 ITA No.785/Mum/2016 Copy of Order forwarded to: 1. Appellant 2. Respondent. 3. CIT (A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER, Assistant Registrar ITAT, MUMBAI Sr. Particulars Date Initials Member No. Concerned 1 Dictation given on 19/10/16 LK Deka JM 2 Draft placed before author 20/10/16 3 Draft proposed/placed before second Member 4 Draft discussed/approved by Second member 5 Approved Draft comes to Sr.PS 6 Kept for pronouncement on 7 File sent to Bench Clerk 8 Date on which file goes to Head Clerk 9 Date of dispatch of Order Longulf Trading (India) Pvt. Ltd. v. Dy. Commissioner of Income-tax, Circle 2(2), Mumbai