Ashok Vishwanath Punjabi, Dhule V. ITO, Wd -3(1), Dhule, Dhule

ITA 1208/PUN/2005

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49733 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 12-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANT KUMAR LEUVA
• Keywords: Unexplained investment; Income from undisclosed sources; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI SHAILENDRA KUMAR YA DAV J UDICIAL MEMBER AND SHRI D. KARUNAKARA RAO A CCOUNTANT M EMBER ITA NO. 120 8 /PN/ 20 0 5 ( ASSTT. YEAR : 200 1 - 02 ) ASHOK VISHWANATH PUNJABI , APPELL ANT C/O. BHASIN MOTORS, NEAR GURUDWARA, MALEGAON ROAD, DHULE PAN : ABDPP3545R VS. I.T.O., WARD 3(1), DHULE RESPONDENT APP ELLANT BY : SHRI SUNIL GANOO RESPONDENT BY : SHRI HEMANT KUMAR LEUVA ORDER PER D KARUNAKARA RAO AM THIS IS THE APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF CIT(A) I, NASIK DATED 27.1.2005 IN CONNECTION WITH J LEVY OF PENALTY U/S. 271(1)(C ) OF THE INCOME TAX ACT IN RESPECT OF ADMITTED SUM OF RS. 83,000/ - ON ACCOUNT OF UNEXPLAINED INVES TMENT IN PROPERTY. 2. THE FACTS OF THE CASE ARE THAT THERE WAS A SEARCH OPERATION IN THE CASE OF THE ASSESSEE AND THE COST OF CONSTRUCTION OF PROPERTY WAS BONE OF CONTENTION DURING THE SAID PROCEEDINGS. THE PROPERTY WAS ONLY OWNED BY SIX CO - OWNERS INCLU DING THE ASSESSEE . DURING THE SURVE Y PROCEEDINGS, ASSESSEE OFFERED IN A STATEMENT ON OATH HIS SHARE OF UNACCOUNTED INVESTMENT AMOUNTING TO RS. 83,000/ - ON ESTIMATION BASIS. IN COMPLIANCE OF THE SAID STATEMENT, THE ASSESSEE FILED THE RETURN OF INCOME VAL IDLY AND INCORPORATED THE SAID AMOUNT WHILE FILING THE RETURN OF INCOME. IT IS AN ADMITTED FACT THAT THERE WAS NO INCRIMINATING MATERIAL TO SUBSTANTIATE THE UNACCOUNTED INVESTMENT IN THE ASSET BY WAY OF UNACCOUNTED COST OF CONSTRUCTION IN THE ASSET AND THUS, THE ABOVE DIS CLOSURE OF UNACCOUNTED INCOME. A.O. LEVIED THE PENALTY AFTER INITIATING THE SAME IN NORMAL COURSE AN D LEVIED PENALTY OF RS. 29,133/ - . DURING THE FIRST APPELLATE PROCEEDINGS, NOBODY APPEARED BEFORE HIM. HOWEVER, BASING ON THE WRITTE N SUBMISSION DATED. 5.1.2005, THE APPEAL WAS DISPOSED O F F CONFIRMING THE IMPUGNED PENALTY. ITA 1208 /PN/ 2005 ASHOK VISHWANATH PUNJABI ( A.Y. 2001 - 02 ) . 2 3. AGGRIEVED BY THE SAME, ASSESSEE IS IN APPEAL BEFORE US. LD COUNSEL FOR THE ASSESSEE MENTI O NED THAT RS. 83,000/ - IS MERE ESTIMATION AND IT WAS DULY DECLARED IN THE RETURN OF INCOME WHILE FILING THE RETURN OF INCOME. A.O. ACCEPTED THE INCOME WRITTEN BY THE ASSESSEE WITHOUT DISCOVERY OF ANY FURTHER CONCEALMENT OF INCOME OR PARTICULARS. CONSIDERING THE FACT THAT IT IS A CASE OF ESTIMATION AND NO INCRIMINATING MAT ERIAL CONNECTING TO THE IMPUGNED ADDITION IS FOUND DURING THE SURVEY PROCEEDINGS, THE COUNSEL ARGUED STATING THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. FURTHER, HE RELIED ON DELHI BENCH DECISION IN THE CASE OF SANT RAM PARMA NAND, 1 SOT 312 (DEL) FOR THE PROPOSITION THAT ONCE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED VALIDLY WHICH WAS ACCEPTED BY THE A.O, IT COULD NOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS OR HAD FURNISHED ANY INACCURATE PAR TICULARS OF INCOME. I N SUCH CIRCUMSTANCES, PENALTY BEING UNJUSTIFIED HAD TO BE CANCELLED. IN THIS REGARD, WE HAVE PERUSED THE ORDER OF THE CIT(A) IN GENERAL, PARA 4 IN PARTICULAR. FOR THE SAKE OF COMPLETENESS, PARA 4 IS REPRODUCED AS UNDER : 4. I HAVE CAREFULLY CONSIDERE D THE FACTS CONTAINED IN THE PENALTY ORDER AS WELL AS THE WRITTEN SUBMISSIONS OF THE APPELLANT. THERE IS NO DENIAL ON THE PART OF THE APPELLANT THAT THE TOTAL INCOME OF RS.83,000/ - ON ACCOUNT OF UNDISCLOSED INCOME IN PROPERTY HAS BEEN OFFERED AS A RESULT OF THE SURVEY OPERATION IN RESPECT OF THE BUSINESS PREMISES OF THE APPELLANT. SINCE, ADMITTEDLY THE ADDITIONAL INCOME HAS BEEN OFFERED AS A RESULT OF DISCLOSURE DURING THE COURSE OF SURVEY OPERATION, I AM INCLINED TO ACCEPT THE CONTENTION OF THE A.O. THAT THE AMOUNT IN QUESTION REPRESENTS THE CONCEALED INCOME OF THE APPELLANT AND THEREFORE, THERE IS NO REASON TO DEVIATE FROM THE FINDINGS AS GIVEN BY THE A.O. FOR LEVYING PENALTY IN QUESTION. 4 . FROM THE ABOVE, IT IS EVIDENT THAT CIT(A) CONFIRMED THE PENAL TY HOLDING THAT RS. 83,000/ - IS THE RESULT OF THE SURVEY PROCEEDINGS AND WHICH ITSELF IS SUFFICIENT FOR CONFIRMING THE PENALTY. WE DO NOT AGREE WITH THE ABOVE LINE OF APPROACH OF THE REVENUE IN VIEW OF THE ESTABLISHED PRINCIPLES RELATING TO THE PENALTY P ROCEEDINGS. IT IS THE DECISION OF THE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD., 322 ITR 158 (SC) THAT RETURN OF INCOME OF THE ASSESSEE IS THE STARTING POINT FOR COMING TO THE CONCLUSION IF THERE IS CONCEALMENT OF INCOME OR PARTICULARS OF INCOME. IF THIS PRINCIPLE IS ADOPTED, THE VALIDLY FILED RETURN OF INCOME BY ASSESSEE IS FREE FROM ANY SUCH INACCURACIES OR CONCEALMENT. IT IS NOT RELEVANT THAT WHAT IS THE BACKGROUND FOR GENERATING THE VALID RETURN OF INCOME WITH ACCURATE INCOME PARTIC ULARS. RELEVANT HELD PORTION OF THE SAID APEX COURT S JUDGMENT READ AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION ITA 1208 /PN/ 2005 ASHOK VISHWANATH PUNJABI ( A.Y. 2001 - 02 ) . 3 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETUR N IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION , THE PENALTY PROVISION CANNOT BE INVOKED. .. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE , BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME . WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILIT Y WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE I NCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASS ESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURN ISHING INACCURATE PARTICULARS. 5. THUS , THE RETURN OF INCOME OR VALID LY REVISED RETURN IS THE BASIS OR THE STARTING POINT FOR ARRIVING AT THE ACCURACY OR INACCURACY OF THE PARTICULARS/CLAIMS BE CAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME .. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS . IN THE LIGHT OF THE SAID SETTLED POSITION, WE HAVE EXAMINED THE FACTS OF THE INSTANT CASE, WHERE THE ASSESSEE FURNISHED THE VALID RETURN, WHICH WAS ACCEPTED BY THE AO WITHOUT POINTING OUT A SINGLE INACCURACY AND WITHOUT MAKING ANY FURTHER ADDITIONS IN THE ASSESSMENT. IN SUCH CIRCUMSTANCES, WE FIND THAT IT IS NOT A FIT CASE FOR LEVY PENALTY. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 20TH APRIL , 201 1 SD/ - SD/ - ( SHAILENDRA KUMAR YADAV ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED THE 20TH APRIL , 201 1 US COPY OF THE ORDER IS FORWARDED TO : 1. THE A PP ELLANT 2. THE RESPONDENT 3. THE CIT(A) - I , NASHIK 4. THE CIT - I , NASHIK 5. THE D.R. ITAT B BENCH 6. GUARD FILE BY ORDER ITA 1208 /PN/ 2005 ASHOK VISHWANATH PUNJABI ( A.Y. 2001 - 02 ) . 4 ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE