Shri Premal Harshad Patel, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2(4), RAJKOT-GUJARAT

ITA 1059/RJT/2009

• Counselvise Citation: 105924914 RSA 2009
• Duration Of Justice: 3 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-07-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 30-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE DR CAEC
• Assessee Lawyers: KALPESH DOSHI CA C O
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

O D , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . R - . . - - BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 4 53/RJT/2008 CA A / ASSESSMENT YEAR 200 5 - 0 6 THE INCOME - TAX OFFICER, WARD - 2 ( 4 ), RAJKOT. ( . / APPELLANT) SHRI PREMAL HARSHADBHAI PATEL, C/O.KALPESH S. DOSHI & CO., CHARTERED ACCOUNTANTS 411,COSMO COMPLEX, MAHILA C OLLEGE CHOWK,RAJKOT. PAN : A IHPP9083H '. / RESPONDENT ITA NO. 1259/RJT/2009 CA A / ASSESSMENT YEAR 2005 - 06 SHRI PREMAL HARSHADBHAI PATEL, C/O.KALPESH S. DOSHI & CO., CHARTERED ACCOUNTANTS 411,COSMO COMPLEX, MAHILA COL LEGE CHOWK,RAJKOT. PAN : AIHPP9083H ( . / APPELLANT) THE INCOME - TAX OFFICER, WARD - 2(4), RAJKOT. '. / RESPONDENT C / REVENUE BY SHRI VILAS V. SHINDE, DR CAEC / ASSESSEE BY SHRI KALPESH DOSHI, CA C O / DATE OF HEARING 31 - 07 - 2013 C O / DATE OF PRONOUNCEMENT 14 - 08 - 2013 / ORDER . . , R - / T. K. SHARMA, J. M. : BOTH THESE APPEAL S FOR THE ASSESSMENT YEAR 2005 - 06 WERE HEARD ON THE SAME DAY, ARGUED BY COMMON REPRES ENTATIVES, THEREFORE WE PROCEED TO DECIDE THE SAME BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 453/RJT/2008: - 2. THIS APPEAL IS AGAINST THE ORDER DATED 05 - 05 - 2008 OF LD. CIT (A) - III, RAJKOT FOR THE ASSESSMENT YEAR 2005 - 06. 3. T HE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CON STRUCTION OF RESIDENTIAL BUILDING . FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 23 - 08 - 2005 ITA 453 - 2008 & 1059 - 2009 2 DECLARING T OTAL INCOME OF RS.1,08,213/ - . AO F RAMED THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT, 1961 ON 2 4 - 12 - 200 7 WHEREIN HE MADE THE FOLLOWING ADDITIONS FOR THE DETAILED REASONS GIVEN IN PARAS - 3,4,5,6 AND 7 OF THE ASSESSMENT ORDER : - 1 . ON A/C OF UNDISCLOSED PROFIT FROM SHARE TRANSACTION RS.1,00, 00 0 2 . ON A/C OF UNEXPLAINED INVESTMENT RS.9,78,711 3 . ON A/C OF AMOUNT DEPOSITED IN BANK RS.1,89,228 4 . ON A/C OF STOCK OF SHARES RS. 4,495 5 . ON A/C OF INVESTMENT IN SHARE TRANSACTION RS.1,00,000 ASSESSED TOTAL INCOME RS.14,80,647 I.E. RS.14,80,6 50/ - . 4. ON APPEAL IN THE IMPUGNED ORDER, THE LD. CIT (A) ALLOWED THE PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED WITH THE ORDER OF LD. CIT (A), THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS: - 1 ) THE LD. CIT (A) HAS VIOLATED THE PROV ISIONS OF SUB - RULE 2 OF RULE 46A BY NOT RECORDING IN WRITING THE REASONS FOR ADMISSION OF FRESH EVIDENCES AT THE APPELLATE STAGE EVEN THOUGH THE ADMISSION WAS OBJECTED TO BY THE A.O. IN HIS REPORT DATED 10.4.2008 NO. ITO WARD - 2(4)/R.R./PHP/0 8 - 09. 2 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION AND ALLOWING RELIEF TO THE TUNE OF RS.36,337/ - OUT OF THE ADDITION ON ACCOUNT OF UNDISCLOSED PROFIT FROM SHARE TRANSACTION. 3 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADD ITION OF RS.1,33,922/ - WHICH IS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN LAND OUT OF THE ADDITION OF RS.9,78,711/ - . 4 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.95,000/ - FOR UNEXPLAINED INVESTMENT IN SHARES. 5 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF YAT H A SHAKTI JAMA YOJNA OF RS.98,250/ - . 6 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT O F UNEXPLAINED BANK DEPOSITS OF RS.5,00,000/ - . 7 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF U NEXPLAINED INVESTMENT IN NSC OF RS.22,000/ - 8 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF U NEXPLAINED INVESTMENT IN VEHICLE OF RS.60,000/ - . 9 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF U NEXPLAINED CASH ON HAND OF RS.25,539/ - 10 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF U NEXPLAINED DEPOSIT WITH NATHDWARA DEVELOPERS PV T. LTD. OF RS.40,000/ - . ITA 453 - 2008 & 1059 - 2009 3 11 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF U NEXPLAINED DEPOSIT OF RS.1,89,228/ - . 12 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF DIFFERENCE IN STOCK O F SHARES OF RS.4,495/ - . 13 ) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF U NEXPLAINED INVESTMENT IN SHARE TRANSACTIONS OF RS.1,00,000/ - . 14 ) ON THE FACT OF THE CASE AND IN LAW, THE LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF AO. 15 ) IT IS THEREFORE PRAYED THAT THE ORDER OF LD. CIT (A) KINDLY BE QUASHED AND THE ASSESSMENT ORDER MAY BE PLEASE BE RESTORED BACK TO THE ABOVE EXTENT. 5. AT THE TIME OF HEARING ON BEHALF OF REVENUE, SHRI VILAS V. SHINDE, DR APPEARED AND POINTED OUT THAT THE LD. CIT (A) HAS VIOLATED THE PROVISIONS OF SUB - RULE 2 OF RULE 46A BY NOT RECORDING THE REASONS FOR ADMISSION OF FRESH EVIDENCES AT THE APPELLATE STAGE EVEN THOUGH THE ADMISSION WAS OBJECTED TO BY A.O. IN HIS REPORT DATED 10 - 0 4 - 2008 . HE ACCORDINGL Y POINTED OUT THAT MATTER BE REMANDED TO THE FILE OF AO FOR PASSING A SPEAKING ORDER AS REQUIRED UNDER SUB - RULE 2 OF RULE 46A OF THE I.T. ACT, 1961. ON INQUIRING FROM THE BENCH THAT WHAT HE HAS TO SAY ABOUT PARTIAL RELIEF IN RESPECT OF VARIOUS GROUNDS, THE LD. DR POINTED OUT THAT HE RELIED ON THE ORDER OF AO. AS AGAINST THIS, THE COUNSEL OF THE ASSESSEE POINTED OUT THAT AO FRAMED THE ASSESSMENT U/S.143(3) OF THE I.T. ACT. ALL THE BOOKS OF ACCOUNTS WERE PRODUCED. VARIOUS ADDITIONS WERE MADE ON DOUBT AND SUS PICION AND LD. CIT (A) AFTER APPRECIATING THE FACTS , DELETED THE ADDITION. WITH REGARD TO VIOLATION OF SUB - RULE 2 OF RULE 46A, COUNSEL OF THE ASSESSEE DREW OUR ATTENTION TO PARA - 4.2 OF THE IMPUGNED ORDER DATED05 - 05 - 2008 OF LD. CIT (A) - III, RAJKOT AND POINT ED OUT THAT ASSESSEE MERELY FURNISHED THE EXPLANATION OF SOURCE OF EACH ITEMS WHICH ARE TABULATED BY LD. CIT (A) IN PARA - 4.1 OF HIS IMPUGNED ORDER. NO SERIOUS OBJECTION WAS RAISED BY THE AO EXCEPT TECHNICAL ADMISSION. THE POWER OF LD. CIT (A) IS CO - TERMINA TE TO THAT OF AO. NOW LD. CIT (A) HAS NOT POWER TO SET ASIDE ANY ISSUE TO THE FILE OF AO . T HEREFORE IT WAS THE DUTY OF THE AO TO FILE THE OBJECTIONS, IF ANY, AFTER EXAMINING THE EXPLANATION/DOCUMENTS AVAILABLE ON RECORD. SINCE THIS WAS NOT DONE BY THE AO, THE LD. CIT (A) HIMSELF EXAMINED EACH AND EVERY EXPLANATION/EVIDENCE AND THEN ALLOWED THE PARTIAL RELIEF TO THE ITA 453 - 2008 & 1059 - 2009 4 ASSESSEE THEREFORE, ORDER OF LD. CIT (A) BE UPHELD. THE COUNSEL OF THE ASSESSEE ALSO TOOK US TO REASONING GIVEN BY LD. CIT (A) IN RESPECT OF EA CH AND EVERY GROUND WHICH IS CONTAINED IN PARA - 4.3 TO PARA - 7.2 AND CONTENDED THAT LD. CIT (A) AFTER CONSIDERING THE REASONING GIVEN BY AO AND OBJECTION OF THE ASSESSEE THEREON, ALLOWED THE PARTIAL RELIEF THEREFORE, VIEW TAKEN BY LD. CIT (A) BE UPHELD. 6. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT NOW LD. CIT (A) HAS NO POWER TO SET ASIDE THE ASSESSMENT. WHATEVER EXPLANATION IS FURNISHED BEFORE THE LD. CIT (A), SAME WA S FORWARDED TO THE AO . THE AO SIMPLY RAISED A TECHNICAL OBJECTION BUT HAS NOT EXAMINED THE SAME AND SUBMITTED THE REMAND REPORT ON MERIT. THE POWERS OF 1 ST APPELLATE AUTHORITY ARE CO - TERMINUS WITH THAT OF AO. HE CAN DO WHAT ITO CAN DO AND ALSO DIRECT HIM TO DO WHAT HE F AILED TO DO AS HELD BY SUPREME COURT IN THE CASE OF CIT VS. KANPUR COAL SYNDICATE (1964) 53 ITR 225(SC). THEREAFTER, IN THE CASE BEFORE US, LD. CIT (A) WAS HAVING NO OPTION BUT TO EXAMINE THE EXPLANATION OF THE ASSESSEE, EVIDENCES AVAILABLE ON RECORD AND T HEREAFTER HE HAS ALLOWED THE RELIEF TO THE ASSESSEE IF ADMISSIBLE. THIS IS WHAT LD. CIT (A) HAS DONE IN THIS CASE. WE HAVE CAREFULLY GONE THROUGH THE REASONING GIVEN BY LD. CIT (A) IN RESPECT OF EACH AND EVERY GROUNDS AND WE ARE CONVINCED THAT HE HAS GIVE N COGENT REASON S FOR ALLOWING PARTIAL RELIEF TO THE ASSESSEE. THEREFORE, WE DECLINED TO INTERFERE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO.1059 /RJT/2009: - 8. THIS APPEAL IS AGAINST THE ORDER OF LD. CIT (A) DTED19 - 08 - 2009 CONFIRM ING THE PENALTY OF RS.16,606/ - LEVIED BY AO U/S.271(1)(C) OF THE I.T. ACT. 9. THE FACTS, IN BRIEF, ARE THAT WHILE PASSING THE ASSESSMENT U/S.143(3) OF THE I.T. ACT, 1961. AO MADE THE VARIOUS ADDITIONS TO THE TUNE OF RS.13,72,434/ - WHICH ARE TABULATED BY LD. CIT (A) IN PARA - 3 OF THE IMPUGNED ORDER IN QUANTUM APPEAL. THE LD. CIT (A) VIDE ORDER DATED 05 - 05 - 2008 RESTRICTED THE ADDITION TO THE TUNE OF RS. 63,663/ - OUT OF THE TOTAL OF RS.1,00,000/ - AND DELETED THE REMAINING ITA 453 - 2008 & 1059 - 2009 5 ADDITIONS OF RS.13,08,771/ - . IN RESPE CT OF THIS ADDITION CONFIRMED, AO LEVIED PENALTY OF RS.16,606/ - U/S. 271(1)(C) OF THE I.T. ACT VIDE HIS ORDER DATED 18 - 03 - 2009 BEING 100% OF TAX SOUGHT TO BE EVADED. 10. ON APPEAL AGAINST THE PENALTY ORDER, THE LD. CIT (A) IN THE IMPUGNED ORDER CONFIRMED THE PENALTY FOR THE DETAILED REASONS GIVEN IN PARA - 3.8 , WHICH READS AS UNDER: - 3.8 . ON PERUSAL OF FACTS, I FIND THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF FACTS NOTICED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT APPE LLANT WAS SHOWING INVESTMENT IN SHARES AMOUNTING TO RS.342500/ - AND HIS D - MAT ACCOUNT ALSO SHOWED THAT APPELLANT CARRIED NUMEROUS SHARE TRANSACTIONS DURING THE YEAR, HOWEVER, NO PROFIT ON ACCOUNT OF BUSINESS IN SHARES WAS DISCLOSED BY THE APPELLANT IN THE RETURN OF INCOME. THEREFORE, ASSESSING OFFICER MADE ADDITION OF RS.100000/ - AS PROFIT ON SALES OF SHARES. IN APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THAT HE WAS HAVING A JOINT D - MAT ACCOUNT WITH HIS FATHER, AND HE CARRIED OUT SOME SHARE TRANSACTIONS BY INVESTING IN SHARES AND SECURITIES AND ALSO EARNED PROFIT ON SALE OF SHARES. THE APPELLANT ALSO FILED RECONCILED D - MAT ACCOUNT ALONG WITH BROKERAGE NOTE FOR PURCHASE AND SALE OF SHARES ACCORDING TO WHICH PROFIT ON SALE OF SHARES WAS CALCULATED AT RS.63 663/ - . THE CIT (A), THEREFORE, RESTRICTED THE ADDITION FOR UNACCOUNTED PROFIT ON SALE OF SHARES TO RS.63663/ - . FROM THE ABOVE FACTS, IT IS CLEAR THAT THE APPELLANT WAS HAVING PROFIT ON SALE OF SHARES AMOUNTING TO RS.63663/ - DURING THE YEAR BUT SAME WAS NO T DISCLOSED IN THE RETURN OF INCOME FILED ON 23 - 8 - 2005. THUS, FROM THE ABOVE FACTS, IT IS CLEAR THAT THE ASSESSING OFFICER AFTER MAKING INQUIRIES WAS ABLE TO DETECT CONCEALMENT OF INCOME OF RS.63663/ - . THUS, KEEPING IN VIEW THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF A.M. SHAH & CO. VS. CIT (1999) 238 ITR 414, IT IS HELD THAT APPELLANT HAS FILED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS.63663/ - ON WHICH PENALTY IS LEVIABLE AS EXPLANATION FILED BY THE APPELLANT IS FOUND TO BE NON - BO NAFIDE, AND THEREFORE, THE EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT WILL BE APPLICABLE IN THE CASE OF APPELLANT. IN VIEW OF ALL ABOVE FACTS AND LEGAL POSITION AS DISCUSSED ABOVE, I HAVE NO HESITATION IN HOLDING THAT THIS IS A FIT CASE OF LEVY OF PEN ALTY U/S.271(1)(C) OF THE ACT. A CCORDINGLY PENALTY OF RS.16606/ - U/S.271(1)(C) LEVIED BY THE ASSESSING OFFICER IS HEREBY CONFIRMED. AGGRIEVED WITH THE ORDER OF LD. CIT (A), THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 11. AT THE TIME OF HEARING BEFORE US, SHRI KALPESH DOSHI, CA, APPEARING ON BEHALF OF THE ASSESSEE COULD NOT RECONCILE THE D - MAT ACCOUNT DIFFERENT OF RS.63,663/ - . WE ARE THEREFORE CONVINCED THAT KEEPING IN VIEW THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF A.M. SHAH & CO . VS. CIT (1999) 238 ITR 414, THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF ITA 453 - 2008 & 1059 - 2009 6 RS.63663/ - . THE AO LEVIED THE MINIMUM PENALTY I.E. 100% SOUGHT TO BE EVADED. WE THEREFORE DECLINED TO INTERFERE. THE APPEAL OF THE ASSESSEE IS DISMISSE D. 12. RESULTANTLY, BOTH THE APPEALS ARE DISMISSED. 13. THIS O RDER IS PRONOUNCED IN OP EN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . D. K. SRIVASTAVA ) ( O . . A / T. K. SHARMA) / ACCOUNTANT MEMBER C / JUDICIAL MEMBER / ORDER DATE 14 - 08 - 2013. /RAJKOT NVA/ - 8 RJO O / COPY OF ORDER FORWARDED TO: - 1 . . / APPELLANT - THE INCOME - TAX OFFICER, WARD - 2 ( 4 ), RAJKOT. 2 . '. / RESPONDENT - SHRI PREMAL HARSHADBHAI PATEL, C/O.KALPESH S. DOSHI & CO., CHARTERED ACCOUNTANTS, 411,COSMO COMPLEX, MAHILA COLLEGE CHOWK,RAJKOT 3 . D T / CONCERNED CIT - II , RAJKOT. 4 . T - / CIT (A) - I II , RAJKOT. . 5 . 'CCD , O D , / DR, ITAT, RAJKOT 6 . A / GUARD FILE. / BY ORDER TRUE COPY. PRIVATE SECRETARY, ITAT, RAJKOT