Aditya Satish Parakh, Nashik V. Assistant Commissioner of Income-tax,

ITA 1217/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5025 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Search and seizure
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1217 /P U N/201 6 / ASSESSMENT YEAR : 20 10 - 11 A DITYA SATISH PARAKH, ADITYA, 2 & 3, BEHIND ADITYA PETROL PUMP, IBP RESIDENTIAL COLONY, SAVARKAR COLONY, GANGAPUR ROAD, NASHIK 422013 PAN : ALIPP3411B ....... / APPELLANT / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK / RESPONDENT ASSESSEE BY : S HRI PRAMOD SHINGTE REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 07 - 08 - 201 8 / DATE OF PRONOUNCEMENT : 05 - 10 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 12, PUNE DATED 22 - 03 - 2016 FOR THE ASSESSMENT YEAR 20 10 - 11 , CONFIRMING LEVY OF PENALTY U/S. 271 AAA O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO . 1217/PUN/2016, A.Y. 2010 - 11 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE : A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF ASHOKA GROUP ON 20 - 04 - 20 10. THE ASSESSEE WAS PART OF ASHOKA GROUP, THEREFORE, WAS COVERED UNDER THE SEARCH. THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME U/S. 139 OF THE ACT. IN RESPONSE TO NOTICE U/S. 153A THE ASSESSEE FILED RETURN OF INCOME ON 17 - 10 - 2011 DECLARING TOTAL INCOME OF RS.28,30,517/ - . THE INCOME RETURNED BY THE ASSESSEE WAS ACCEPTED BY ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271AAA IN RESPECT OF CASH PAYMENTS MADE BY ASSESSEE ON VISAR PAVTI QUA TWO PARCELS OF LAN D I.E. : I . LAND AT KUKNE, TALUKA IGATPURI, GUT NO. 1018 RS.6,12,500/ - . II . LAND AT GANGAVARHE, TALUKA NASHIK, GUT NO. 46/1 RS.1,00,000/ - . THE ASSESSING OFFICER VIDE ORDER DATED 30 - 09 - 2013 LEVIED PENALTY OF RS.7 1,250/ - U/S. 271AAA OF THE ACT ON THE ADDITIONAL I NCOME DISCLOSED RS.7,12,500/ - . AGGRIEVED BY THE ORDER LEVYING PENALTY THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE EXPLANATION FURNISHED BY ASSESSEE SUBSTANTIATING THE MA NNER OF DERIVING UNDISCLOSED INCOME AND CONFIRMED LEVY OF PENALTY. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI PRAMOD SHINGTE APPEARING ON BEHALF OF THE ASSESSEE SUBM ITTED THAT THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 153A WAS ACCEPTED BY THE ASSESSING OFFICER WITHOUT MAKING ANY FURTHER ADDITION. THE ASSESSEE IN COMPUTATION OF INCOME HAD DISCLOSED THE MANNER OF 3 ITA NO . 1217/PUN/2016, A.Y. 2010 - 11 DERIVING ADDITIONAL INCOME , DISCLOSED IN THE RETURN OF INCOME. THE LD. AR FURNISHED THE COPY OF RETURN OF INCOME ALONG WITH COMPUTATION. THE LD. AR SUBMITTED THAT IT IS A WELL SETTLED LAW THAT WHERE ALL THE THREE CONDITIONS SPECIFIED UNDER S UB - SECTION (2) TO SECTION 271AAA ARE SATISFIED, NO PENALTY IS TO BE LEVIED. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF CO - ORDINATE BENCH OF TRIBUNAL IN THE CASE OF DY. COMMISSIONER OF INCOME TAX VS. SHRI BANARASIDAS R. JINDAL IN ITA NO. 1436/PN/2013 FOR ASSESSMENT YEAR 201 0 - 11 DECIDED ON 26 - 06 - 2015. 4. ON THE OTHER HAND SHRI M.K. VERMA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE MANNER IN WHICH ADDITIONAL INCOME DECLARED DURING SE ARCH WAS DERIVED BY THE ASSESSEE. THE LD. DR PRAYED FOR UPHOLDING THE IMPUGNED ORDER AND DISMISSING THE APPEAL OF ASSESSEE. 5. BOTH SIDES HEARD. ORDERS OF AUTHORITIES BELOW PERUSED. IT IS AN ADMITTED FACT THAT THE INCOME DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A WAS ACCEPTED BY THE ASSESSING OFFICER WITHOUT FURTHER ADDITION. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271AAA IN RESPECT OF ALLEGED CASH PAYMENTS MADE BY THE ASSESSEE IN RESPECT OF TWO PARCELS OF LAND. IMMUNITY FROM LEVY OF PENALTY U/S. 271AAA IS ALLOWED TO THE ASSESSEE IF THREE CONDITIONS ARE SATISFIED : I . THE ASSESSEE SHOULD BE ABLE TO SPECIFY THE MANNER IN WHICH INCOME DISCLOSED IN STATEMENT RECORDED U/S. 132(4) HAS BEEN DERIV ED. II . SUBSTANTIATE/CORROBORATE THE MANNER IN WHICH THE UNDISCLOSED INCOME IS DERIVED. III . PAYS TAX ALONG WITH INTEREST, IF ANY IN RESPECT OF UNDISCLOSED INCOME. 4 ITA NO . 1217/PUN/2016, A.Y. 2010 - 11 6. IN THE PRESENT CASE, IN SO FAR AS CONDITION NOS. I AND III MENTIONED ABOVE ARE CONCERNED , THE RE VENUE HAS RAISED NO DISPUTE. IT IS ONLY THE CONDITION NO. II THAT THE REVENUE IS NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE . WE FIND THAT ALONG WITH THE RETURN OF INCOME THE ASSESSEE HAS FURNISHED EXPLANATION AND CIRCUMSTANCES RESULTING IN GENERATION OF ADDITIONAL INCOME RS.7,12,500/ - . THE RELEVANT EXTRACT OF THE EXPLANATION FURNISHED BY ASSESSEE READS AS UNDER : 3) ADDITIONAL INCOME OF RS.7,12,500/ - COMPRISE OF I) DIFFERENCE OF RS.5,62,500/ - IN THE PRIC E OF LAND AT G. NO. / S. N. 1018 OF MUKANE, TAL : IGATPURI, AS PER VISAR PAVATI DATED 27/02/2010 AND PURCHASE DEED DATED 18/03/2010 IS ON ACCOUN T OF NEGOTIATED REDUCTION IN PRICE PAID FOR LAND DUE TO FALLING MARKET. HOWEVER, ASSESSEE APPREHENDS THAT THIS EXPLANATION OF ASSESSEE MAY NOT BE ACCEPTABLE TO THE I.T. DEPT. AUTHORITIES. HENCE, TO AVOID LITIGATION AND TO BUY PEACE OF MIND, ASSESSEE HAS DECLARED THE SAID SUM OF RS.5,62,500/ - , AS HIS ADDITIONAL INCOME FOR A.Y. 2010 - 11. II) SIMILARLY, SOURCE FOR THE ADVANCE PAYMENT OF RS.1,00,000/ - AGAINST PURCHASE OF LAND AT S. NO. 46/1 OF GANGAVARHE, NASHIK TO MR. W.H. GAIKAR AND OF RS.50,000/ - AGAINST PURCHASE OF LAND AT G. NO./S. NO. 1018 OF MUKANE, TAL: IGATPURI, CAN BE EXPLAINED. HOWEVER, ASSESSEE APPREHENDS T HAT HIS EXPLANATION MAY NOT BE ACCEPTABLE TO THE I.T. AUTHORITIES. THEREFORE, WITH A VIEW TO AVOID LITIGATION AND TO BUY PEACE OF MIND, ASSESSEE HAS DECLARED BOTH THE SAID SUMS AGGREGATING TO RS.1,50,000/ - AS HIS ADDITIONAL INCOME FOR A.Y. 2010 - 11. 7. A PERUSAL OF REASONING GIVEN BY THE ASSESSEE SUFFICIENTLY EXPLAIN S THE REASON FOR DISCLOSING ADDITIONAL INCOME AND HENCE, THE CONDITION SPECIFIED IN CLAUSE (II) OF SUB - SECTION (2) OF SECTION 271AAA IS COMPLIED WITH. 8. THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. MUNISH KUMAR GOYAL REPORTED AS 45 TAXMANN.COM 563 DELETED LEVY OF PENALTY U/S. 271AAA WHERE THE ASSESSEE SURRENDER ED CERTAIN INCOME IN THE COURSE OF SEARCH, FILED THE RETURN DISCLOSING THE SAID AMOUN T AND PAID TAXES THEREON. THE TRIBUNAL HELD THAT THERE IS SUFFICIENT COMPLIANCE OF PROVISIONS OF SECTION 271AAA( 2 ) OF THE ACT. 5 ITA NO . 1217/PUN/2016, A.Y. 2010 - 11 THUS, IN VIEW OF THE EXPLANATION OFFERED BY THE ASSESSEE WE ARE OF CONSIDERED VIEW THAT THE ASSESSEE HAS COMPLIED WITH THE CO NDITIONS SET OUT IN SECTION 271AAA(2) FOR SEEKING IMMUNITY FROM LEVY OF PENALTY. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 05 TH DAY OF OCTOBER, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 05 TH OCTOBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 12, PUNE 4. THE PR. C IT (CENTRAL), NAGPUR 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE