The ITO, Ward - 3(3)(8), Ahmedabad V. Motibhai Revabhai Prajapati, Ahmedabad

ITA 1027/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7029 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJAN KUMAR SINGH
• Assessee Lawyers: RUDIKA R NAGAR
• Section: 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.1027/AHD/2016 / ASSESSMENT YEAR: 2012-13 ITO, WARD-3(3)(8) AHMEDABAD. VS MOTIBHAI REVABHAI PRAJAPATI 14, NIRMAL PARK CO-OP. HSG. SOCIETY LTD. 220/1, RADHE CHAMBERS NR. CTM CHAR RASTA OPP: N.H. NO.8, AHMEDABAD PAN : AAMPP 2426 R / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI RANJANKUMAR SINGH, SR.DR ASSESSEE BY : MS.RUDIKA R. NAGAR, AR / DATE OF HEARING : 07/01/2019 /DATE OF PRONOUNCEMENT : 9 /01/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A) 11, AHMEDABAD DATED 3.12.2015 PASSED FOR THE ASSESSMENT YEAR 2012 -13. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN DELETING PENALTY OF RS.29,50,690/- WHICH WAS IMPOSE D BY THE AO UNDER SECTION 271AAA OF THE INCOME TAX ACT, 1961. ITA NO.1027/AHD/2016 - 2 - 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE ACTION AS CARRIED OUT IN THE CASE OF GALAXY GROUP ON 21.7.2011. ENTI RE GROUP WAS CONSISTED OF FOUR SUB-GROUPS. THE CASE OF THE ASSESSEE BELON GS TO MADHAV GROUP. DURING THE COURSE OF SEARCH CERTAIN DOCUMENTS FOUND AND SEIZED. DISCLOSE WAS MADE AT RS.2,95,06,876/-. IN RESPONSE TO THE NOTICE UNDER SECTION 153A, THE ASSESSEE HAS FILED RETURN AND INC LUDED THE AMOUNT ADMITTED DURING THE COURSE OF SEARCH IN A STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. THE LD.AO HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271AAA OF THE ACT AND IMPOSED PENALTY OF RS.29,50,690/-. DISSATISFIED WITH THE ORDER OF THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). IT WAS CONTENDED BEFO RE THE LD.CIT(A) THAT STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTIO N 132(4) OF THE ACT. IT WAS ADMITTED IN THE STATEMENT THAT ON-MONEY WAS RECEIVED FOR SALE OF LAND AT GATRAD WHICH WAS NOT ACCOUNTED IN THE BOOKS . THE ASSESSEE HAS PAID TAXES ALONG WITH INTEREST ON THIS UNDISCLOSED INCOME ADMITTED DURING THE COURSE OF SEARCH. THE LD.CIT(A) WAS SAT ISFIED WITH THE EXPLANATION OF THE ASSESSEE AND OBSERVED THAT HE HA S FULFILLED ALL THE CONDITIONS OF SUB-SECTION (2) OF SECTION 271AAA AND THEREFORE ASSESSEE DOES NOT DESERVES TO BE VISITED WITH PENALTY. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. FOR APPRECIATING THE CONTROVERSY INVOLVED, IT IS INCUMBENT UPON US TO TAKE NOTE OF SECTION 271AAA. THE RELEVANT PART OF THIS SECTION READS AS UNDER: 271AAA. PENALTY WHERE SEARCH HAS BEEN INITIATED.( 1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS B EEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSE SSEE SHALL PAY BY WAY OF ITA NO.1027/AHD/2016 - 3 - PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF T HE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I ) IN THE COURSE OF THE SEARCH, IN A S TATEMENT UNDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPEC IFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II ) SUBSTANTIATES THE MANNER IN WHICH T HE UNDISCLOSED INCOME WAS DERIVED; AND (III ) PAYS THE TAX, TOGETHER WITH INTERES T, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN R ESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). 5. A BARE PERUSAL OF THIS SECTION WOULD INDICATE TH AT SUB-SECTION (1) AUTHORISE THE AO TO LEVY PENALTY AT THE RATE OF 10% OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. SUB-SECTION (2) PROVI DES CONDITIONS ON WHOSE FULFILLMENT THE ASSESSEE COULD BE ABSOLVED FROM THE LEVY OF PENALTY. A PERUSAL OF SUB-SECTION (2) WOULD INDICATE THAT IT POSTULATE S THREE CONDITIONS FOR AN ASSESSEE ON WHOSE FULFILLMENT HE WILL BE ABSOLVED F ROM LEVY OF PENALTY. IN THE PRESENT CASE, WE HAVE PERUSED THE STATEMENT RECORDE D UNDER SECTION 132(4) OF THE ACT AT THE TIME OF SEARCH. THUS, SO FAR AS FIR ST CONDITION IS CONCERNED, THE ASSESSEE SHOULD ADMIT THE UNDISCLOSED INCOME IN A S TATEMENT GIVEN UNDER SUB- SECTION (4) OF SECTION 132, THAT CONDITION HAS BEEN FULFILLED THE ASSESSEE HAS ADMITTED ADDITIONAL INCOME OF RS.40 CRORES WHOSE BR EAK UP HAS BEEN GIVEN IN THE EXPLANATION GIVEN BEFORE BOTH THE REVENUE AUTHO RITIES. THE ASSESSEE HAS PAID TAXES AS WELL AS INTEREST. THE DISPUTE BETWEE N THE ASSESSEE AND REVENUE PERTAINED TO CONDITION NO.2 THAT IS WHETHER THE ASS ESSEE HAS DISCLOSED MANNER AND SUBSTANTIATE THAT MANNER. 6. A PERUSAL OF THE RECORD WOULD INDICATE THAT THE LD.CIT(A) HAS RECORDED A FINDING THAT SEARCH PARTY DID NOT ASK PA RTICULAR QUESTION FROM ITA NO.1027/AHD/2016 - 4 - THE ASSESSEE IN WHOSE REPLY HE COULD DEMONSTRATE MA NNER OF EARNING THE INCOME; NEITHER IN THE ASSESSMENT PROCEEDINGS AO HA S ASKED THE MANNER OF EARNING OF INCOME FROM THE ASSESSEE. HOWEVER, T HE ASSESSEE HIMSELF HAS DISCLOSED DURING THE COURSE OF SEARCH THAT THIS WAS ON-MONEY RECEIVED ON SALE OF GATRAD LAND. THUS, THE ASSESSE E HAS DISCLOSED MANNER AND ALSO FULFILLED CONDITIONS NO.2. THE LD .CIT(A) HAS RIGHTLY APPRECIATED THIS ASPECT AND HAS RIGHTLY DELETED THE PENALTY. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD.CIT(A), HENCE , APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 9 TH JANUARY, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 9/01/2019