Dhruv Transport Services, Baroda V. The ACIT, Circle-2,

ITA 1112/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1794 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-12-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 05-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 133A; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND N. S. SAINI, AM) ITA NO.1112/AHD/2006 A. Y.: 2000-01 TANSUKHRAI N., GAUR, DHRUV TRANSPORT SERVICES, 12, ADARSHNAGAR SOCIETY, NEAR CHHANI JAK, VADODARA PA NO. AEBPG 0408 B VS THE A. C. I. T. , CIORCL2, VADODARA (APPELLANT) (RESPONDENT) APPELLANT BY URVASHI SHODHAN, AR RESPONDENT BY SHRI M. C. PANDIT, DR DATE OF ORDER RESERVED O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-II, BARODA DATED 07 -02-2006 FOR THE ASSESSMENT YEAR 2000-01, CHALLENGING THE LEVY OF PE NALTY U/S 271 (1) (C) OF THE INCOME TAX ACT. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. 3. A SURVEY WAS CONDUCTED U/S 133A OF THE INCOME TA X ACT ON 11-01-2002 AT THE PREMISES OF THE ASSESSEE. DURING THE COURSE OF SURVEY, STATEMENT OF THE ASSESSEE WAS RECORDED. SUBSEQUENTL Y THE STATEMENT WAS ALSO RECORDED U/S 131 OF THE INCOME TAX ACT. IN THE STATEMENT THE ASSESSEE HAD CLEARLY ADMITTED THAT HE HAD INFLATED EXPENSES ON SALARY, ITA NOS.1112/AHD/2006 TANSUKHRAI N.GAUR 2 MISC. EXPENSES, TRIPS, REPAIRS & MAINTENANCE ETC. T HE ASSESSEE HAD FURTHER ADMITTED THAT HE HAD NOT RECORDED THE PROFI T OF RS.60,000/- EARNED BY HIM BY WAY OF SALE OF SCRAP OF OLD TYRES AND OTHER THINGS. THE ASSESSEE FURTHER ADMITTED THAT HIS UNACCOUNTED HOUS EHOLD EXPENSES WERE TO THE TUNE OF RS.2,40,000/- WHICH WERE INCURR ED IN CASH AND THIS CASH WAS GENERATED BY WAY OF INFLATED CLAIM OF VARI OUS EXPENDITURE. THE AO STATED IN THE ASSESSMENT ORDER THAT ADDITION ON ACCOUNT OF DISALLOWANCES OF VARIOUS EXPENSES AND ALSO ON ACCOU NT OF UNRECORDED SALE OF SCRAP HAS BEEN MADE BUT NO SEPARATE ADDITIO N HAS BEEN MADE ON ACCOUNT OF UNACCOUNTED HOUSEHOLD EXPENSES SINCE THE SAME ARE CLAIMED TO HAVE BEEN MET OUT OF CASH GENERATED BY INFLATION OF EXPENSES. IT WAS ALSO MENTIONED BY THE AO THAT IN CASE DISALLOWANCE MADE ON ACCOUNT OF INFLATED EXPENSES GETS REDUCED TO A FIGURE OF BELOW RS.2,40,000/- IN SUBSEQUENT PROCEEDINGS, A SEPARATE ADDITION ON ACCO UNT OF HOUSEHOLD EXPENSES WILL BE CALLED FOR. THE LEARNED CIT(A) CON FIRMED THE ADDITION ON ACCOUNT OF INFLATED EXPENSES, HOWEVER, THE AO WAS D IRECTED TO RESTRICT THE ADDITION TO RS.2,40,000/- BEING UNACCOUNTED HOUSEHO LD EXPENDITURE. PENALTY PROCEEDINGS WERE SEPARATELY INITIATED AND V IDE SEPARATE ORDER PENALTY WAS IMPOSED. IT WAS CONTENDED BY THE ASSESS EE THAT OUT OF TOTAL ADDITION OF RS.3,96,730/- ON 4 GROUNDS, INCLUDING 3 IN RESPECT OF PENALTY PROCEEDINGS WERE INITIATED, LEARNED CIT(A) HAS GRA NTED RELIEF TO THE EXTENT OF RS.1,56,730/-, THEREFORE, IT IS NOT POSSIBLE TO WORK OUT AS TO HOW MUCH ADDITION HAS BEEN MADE. IT WAS ALSO SUBMITTED THAT PENALTY IS IMPOSED ON THE BASIS OF ESTIMATED ADDITION AND THAT THE ASS ESSEE RETRACTED FROM THE STATEMENT MADE DURING THE COURSE OF SURVEY. THE REFORE, THE PENALTY IS UNJUSTIFIED. IT WAS ALSO SUBMITTED THAT THE PENALTY IS CONFIRMED ONLY ON THIS ISSUE. THEREFORE, IT IS NOT A FIT CASE OF FURN ISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE REFORE, PENALTY SHOULD NOT BE IMPOSED MERELY ON THE BASIS OF STATEM ENT GIVEN BY THE ASSESSEE ADMITTING ADDITIONAL INCOME. THE LEARNED C IT(A) CONSIDERING THE STATEMENT OF THE ASSESSEE RECORDED AT THE SURVEY PR OCEEDINGS AND LATER ITA NOS.1112/AHD/2006 TANSUKHRAI N.GAUR 3 ON, NOTED THAT THE ASSESSEE MADE THE STATEMENT VOLU NTARILY ADMITTING CONCEALED INCOME AND MEETING OUT OF THE HOUSEHOLD E XPENDITURE BY INFLATING THE EXPENDITURE, THEREFORE, IT IS A FIT C ASE FOR IMPOSITION OF PENALTY. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND ALSO SUBMITTE D THAT ITAT AHMEDABAD D BENCH IN THE CASE OF THE ASSESSEE ON QUANTUM APPEAL IN ITA NO. 1360/AHD/2004 VIDE ORDER DATED 01-08-2008 R ESTORED THIS ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. COPY OF THE ORDER IS FILED. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVE N IF THE MATTER IS REMANDED TO THE AO ON QUANTUM PROCEEDINGS, BUT IT I S NOT A FIT CASE TO HOLD CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF IMPOSING PENALTY IN THE MATTER. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT PENALTY MAY BE CANC ELLED IN THE MATTER. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE THE ASSE SSEE ADMITTED CONCEALED INCOME BY WAY OF INFLATION OF EXPENDITURE FOR THE PURPOSE OF MEETING OUT HOUSEHOLD EXPENDITURE. THEREFORE, AUTHO RITIES BELOW WERE JUSTIFIED IN IMPOSING PENALTY U/S 271 (1) ( C ) OF THE INCOME TAX ACT AGAINST THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IT IS ADMITTED FACT THAT ITAT A HMEDABAD D BENCH IN THE CASE OF SAME ASSESSEE ON QUANTUM ADDITION OF RS .2,40,000/- RESTORED THIS ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION VIDE ORDER DATED 01-08-2008(SUPRA). THE TRIBUNAL IN THIS ORDER RELIED UPON EARLIER ORDER OF THE BENCH IN WHICH IT WAS HELD THAT STATEM ENT GIVEN BY THE ASSESSEE AT THE TIME OF SURVEY HAS TO BE CORROBORAT ED BY SOME OTHER EVIDENCES. THE TRIBUNAL, THEREFORE, NOTED THAT SINC E NO CORROBORATIVE EVIDENCES WERE PRODUCED ON RECORD, THEREFORE, IT WA S OBSERVED FROM THE ITA NOS.1112/AHD/2006 TANSUKHRAI N.GAUR 4 STATEMENT OF THE ASSESSEE THAT HOUSEHOLD EXPENSES W ERE MADE OUT OF WITHDRAWALS MADE BY HIS WIFE AND BROTHER AS WELL AS WITHDRAWALS OF THE ASSESSEE IN THE ASSESSMENT YEAR IN QUESTION ARE SHO WN AT RS.1,44,266/-. THE TRIBUNAL ON CONSIDERING THESE FACTS ON RECORD N OTED THAT THESE EVIDENCES HAVE NOT BEEN CONSIDERED BY THE AUTHORITI ES BELOW. THEREFORE, MATTER WAS REMANDED TO THE FILE OF THE AO FOR RE-CO NSIDERATION. IN THE FACTS AND CIRCUMSTANCES OF THE ABOVE AND IN THE LIG HT OF THE QUANTUM ORDER OF THE TRIBUNAL, ON THE ISSUE ON WHICH PENALT Y IS IMPOSED, WE ARE OF THE VIEW THAT THE MATTER ON THE PENALTY ALSO REQ UIRE RE-CONSIDERATION AT THE LEVEL OF THE AO. THE PENALTY IS ENTIRELY DEPEND ENT UPON THE QUANTUM ADDITION WHICH IS YET TO BE DECIDED BY THE AO AS PE R DIRECTION OF THE TRIBUNAL. WE MAY ALSO NOTE THAT THE AUTHORITIES BE LOW HAVE FAILED TO NOTICE THE FACT THAT SURVEY IS CONDUCTED ON 11-01-2 002, IT MEANS IT WAS NOT CARRIED IN THE ASSESSMENT ORDER UNDER APPEAL. T HEREFORE, THE FACTUAL FOUNDATION SHOULD HAVE BEEN BUILT ON RECORD AS TO H OW THE STATEMENT OF THE ASSESSEE WAS RELEVANT IN RESPECT OF THE ASSESSM ENT YEAR UNDER APPEAL WHEN ADMITTEDLY NO SURVEY IS CONDUCTED IN THE ASSES SMENT YEAR IN QUESTION. THESE FACTS ARE SUFFICIENT TO HOLD THAT T HE MATTER REQUIRES RE- CONSIDERATION EVEN ON PENALTY. WE ACCORDINGLY SET A SIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE PENALTY MATTER TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THE PENALTY MATTER BY GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AFTER DECISION ON QUANTUM MATTER AS PER THE DIRECTION OF THE TRIBUNAL AS REFERRED TO ABOVE. 6. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18 TH DECEMBER 2009 SD/- SD/- (N. S. SAINI) ACOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 18-12-2009 LAKSHMIKANT/- ITA NOS.1112/AHD/2006 TANSUKHRAI N.GAUR 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD