Shri Firoz Y. Kaliwala, Bhavnagar V. The Income Tax Officer, Ward-6(1), Bhavnagar

ITA 1149/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6068 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 03-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Income from undisclosed sources; Tangible material

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.1149/AHD/2016 ( / ASSESSMENT YEAR : 2005-06) SHRI FIROZ Y. KALIWALA PLOT NO.474, PRABHUDAS LAKE NEAR SHISHUVIHAR CIRCLE BHAVNAGAR / VS. THE INCOME TAX OFFICER WARD-1(1) BHAVNAGAR $ ./ ./ PAN/GIR NO. : AGCPK 2191 G ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI PARIN SHAH, AR ($'*) / RESPONDENT BY : SHRI V.K. SINGH, SR.DR +,*- / DATE OF HEARING 20/02/2018 ./0*- / DATE OF PRONOUNCEMENT 23/ 02 /2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESS EE AGAINST THE PENALTY ORDER PASSED UNDER S.271(1)(C) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 13/03/ 2014 BY THE ASSESSING OFFICER (AO) RELEVANT TO ASSESSMENT YEAR (AY) 2005- 06 AND CONFIRMED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMED ABAD [CIT(A) IN SHORT] VIDE ORDER DATED 24/02/2016. ITA NO. 1149/AH D/2016 FIROZ Y. KALIWALA VS. ASST.YEAR 2005-06 - 2 - 2. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HAS ASSAILED THE ACTION OF THE CIT(A) IN CONFIRMING THE PENALTY OF RS.18,49 ,480/- LEVIED BY THE AO UNDER S.271(1)(C) OF THE ACT ON QUANTUM ADDITION S/DISALLOWANCES CONFIRMED IN QUANTUM PROCEEDINGS. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LD. AR FOR THE ASSESSEE REFERRED TO THE PENALTY ORDER UNDER S.271( 1)(C) OF THE ACT AND SUBMITTED THAT THE PENALTY HAS BEEN IMPOSED ON THE ESTIMATED ADDITIONS MADE TOWARDS ALLEGED UNACCOUNTED SALES AND TOWARDS ESTIMATED SEED CAPITAL INVESTMENT ADDITIONS AS REDUCED BY THE ITAT IN QUANTUM PROCEEDINGS TO A LUMP SUM AMOUNT OF RS.10 LAKHS FRO M RS.54.94 LAKHS CONFIRMED BY THE CIT(A). THE LD.AR SUBMITTED THAT THE ENTIRE ADDITION IN THE QUANTUM PROCEEDINGS WAS BASED ON ESTIMATIONS AND ASSUMPTIONS WITHOUT ANY TANGIBLE MATERIAL IN THIS REGARD. THER EFORE, WHILE QUANTUM ADDITIONS MAY BE PLAUSIBLE TO SOME EXTENT, THE PENA L PROCEEDINGS ON SUCH ESTIMATIONS IS NOT PERMISSIBLE UNDER S.271(1)(C) OF THE ACT HAVING REGARD TO DIFFERENT NATURE AND SCOPE OF THE PENALTY PROC EEDINGS. 4. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND PLACED ON R ECORD. WE OBSERVE THAT THE COORDINATE BENCH OF THE TRIBUNAL IN THE QU ANTUM PROCEEDINGS ITA NO. 1149/AH D/2016 FIROZ Y. KALIWALA VS. ASST.YEAR 2005-06 - 3 - (IT(SS)A NO.447/AHD/2012 AND ORS. ORDER DATED 29/03 /2017) HAS FOUND MERIT IN THE DISALLOWANCE ON ACCOUNT OF ESTIMATED G ROSS PROFITS OUT OF UNACCOUNTED SALES AS WELL AS TOWARDS SEED CAPITAL I NVESTMENT ADDITIONS IN PRINCIPLE. HOWEVER, THE COORDINATE BENCH HAVING RE GARD TO THE FACTS AND THE CIRCUMSTANCES OF THE CASE HAS GRANTED SUITABLE RELIEF ON QUANTIFICATION OF SUCH ADDITIONS ARISING OUT OF AFORESAID ACTION. THEREFORE, IT IS NOT POSSIBLE TO ACCEPT THE PLEA ON BEHALF OF THE ASSESS EE THAT THE ADDITIONS MADE GIVING RISE TO THE PENALTY PROCEEDINGS ARE SOL ELY BASED ON ASSUMPTIONS AND PRESUMPTIONS. THE AO HAS NOTED THA T THE ASSESSEE HAD ALSO ACQUIESCED ON THE EXISTENCE OF AN UNACCOUNTED INCOME IN THE STATEMENT MADE UNDER S.132(4) OF THE ACT AND UNDER S.131 OF THE ACT HAS REFERRED TO THE ORDERS IN THE ORDERS OF THE APPELLA TE AUTHORITIES. HOWEVER, DECLARATIONS MADE WERE LATER RETRACTED. THE UNAC COUNTED SALES HAVE SURFACED FROM THE SEARCH PROCEEDINGS UNDER S.132 OF THE ACT. THE SEED CAPITAL INVESTMENT ON SUCH UNACCOUNTED SALE IS A NA TURALLY COROLLARY TO SUCH UNACCOUNTED SALES THE ESTIMATION OF WHICH HAS BEEN JUDICIALLY NOTICED BY THE COORDINATE BENCH. THEREFORE, CONSEQ UENCE OF PENALTY TOWARDS SUCH ADDITION IS INESCAPABLE. HENCE, WITH OUT REPEATING THE FINDINGS OF CIT(A), WE DECLINE TO INTERFERE WITH TH E ORDER OF THE CIT(A) CONFIRMING THE IMPOSITION OF PENALTY. NEEDLESS TO S AY, THE QUANTIFICATION OF PENALTY WILL DEPEND ON ULTIMATE ADDITIONS/DISALL OWANCES SUSTAINED ON GIVING EFFECT TO THE APPELLATE ORDER IN QUANTUM PRO CEEDING. ITA NO. 1149/AH D/2016 FIROZ Y. KALIWALA VS. ASST.YEAR 2005-06 - 4 - 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 23 / 0 2 /201 8 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 23/ 02/2018 4..+,.+../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-6, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 20.2.18 (DICTATION-PAD 7- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.2.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.23.2.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23.2.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER