Smt. Lopa Pankaj Dave, Mumbai V. The Dy. Commissioner of Income Tax, Central Circle-1, Baroda

ITA 1266/AHD/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1030 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-12-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 01-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K PATEL AR SHRI DEELIP KUMAR
• Keywords: Search and seizure; Cost of acquisition
• Section: 271(1)(c); 143(3); 153A; 274; 132; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER SL. NO(S) ITA NO(S) ASSESSMENT YEAR(S) APPEAL(S) BY APPELLANTS VS. RESPONDENT APPELLANT RESPONDENT 1. 1266/AHD/2019 2011-12 SMT. LOPA PANKAJ DAVE 91-92, ATLANTA 209, BACKBAY RECLAMATION NARIMAN POINT MUMBAI 400 021 PAN: AACPD 0399 P THE DCIT CENT.CIR.1, BARODA 2. 1267/AHD/2019 2011-12 LATE MANUBHAI BHAILAL PATEL THROUGH THE LEGAL HEIR SMT.PRABHABEN M.PATEL -ADDRESS SAME AS ABOVE- PAN: AADPP 7766 K -DO REVENUE 3. 1268/AHD/2019 2011-12 LATE SHRI RAMANBHAI BHAILAL PATEL THROUGH L/H. SMT.LOPA PANKAJ DAVE -ADDRESS SAME AS ABOVE- PAN: AADPP 7762 P -DO REVENUE 4. 1269/AHD/2019 2011-12 SMT. PRABHABEN M.PATEL -ADDRESS SAME AS ABOVE- PAN: AAFPP 3707 Q -DO REVENUE ASSESSEES BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI DEELIP KUMAR, SR.DR / DATE OF HEARING 11/12/2019 / DATE OF PRONOUNCEMENT 18 /12/2019 / O R D E R PER BENCH: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE DIFFERENT ASSESSEES AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 2 - INCOME TAX (APPEALS)12, AHMEDABAD [CIT(A) IN SHORT ] VIDE APPEAL NOS.CIT(A)-12/7, 8, 9 AND 10 /CC-1/2018-19 ALL DATE D 24/06/2019 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.153 A R.W.S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'TH E ACT') DATED 30/01/2015 AND PENALTY ORDER PASSED U/S.271(1)(C) O F THE ACT DATED 27/03/2018 RELEVANT TO ASSESSMENT YEAR (AY) 2011- 12. SINCE ALL THE APPEALS RELATE TO THE SAME ISSUE INVO LVING IDENTICAL FACTS AND CIRCUMSTANCES BUT TO DIFFERENT ASSESSEES, HENCE THE SAME ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER. FIRST WE TAKE UP THE APPEAL IN THE CASE OF SMT. LOP A PANKAJ DAVE IN ITA NO. 1266/AHD/2019 FOR AY 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- (1) THAT ON FACTS AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GRIEVOUSLY ERRED IN CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) R.W. EXPLANATION 5A OF THE ACT OF RS.2,06,00,000/-. (2) THAT ON FACTS, IN LAW, AND ON EVIDENCE ON RECORD, I T OUGHT TO HAVE BEEN HELD THAT THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) O F THE ACT AND EXPLAANTION 5A IS NOT APPLICABLE TO THE APPELLANT. (3) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO BY SUSTAINING THE PE NALTY OF 2,06,00,000/- AS PER THE EXPLANATION 5A OF SECTION 271(1)(C) THE OF THE ACT. ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 3 - 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN T HE PRESENT CASE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME IN RESPON SE TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT DECLARING TOTAL INCOM E AT RS. 14,55,57,930.00 INCLUSIVE OF THE ADDITIONAL INC OME OF RS. 10,00,00,000.00 DISCLOSED DURING THE SEARCH ON ACCO UNT OF LONG TERM CAPITAL GAIN ON THE SALE OF THE LAND. THERE WAS A S EARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT IN THE DHAN JIMAMA GROUP OF CASES DATED 3 RD JULY 2012. THE ASSESSEE BEING THE PART OF THE GROU P WAS ALSO COVERED UNDER SUCH SEARCH AND SEIZURE OPERATIO N CARRIED OUT DATED 3 RD JULY 2012. 2.1. SUBSEQUENTLY, THE AO INITIATED THE PENALTY P ROCEEDINGS UNDER EXPLANATION 5A TO SECTION 271(1)(C) READ WITH SECTI ON 274 OF THE ACT ON ACCOUNT OF THE ADDITIONAL INCOME OFFERED IN THE RET URN FILED AS DISCUSSED ABOVE IN THE ASSESSMENT FRAMED UNDER SECTION 153A/1 43(3) OF THE ACT. 2.2. THE ASSESSEE IN RESPONSE TO SUCH NOTICE VIDE LETTER DATED 20-03-2008 SUBMITTED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH PROCEEDINGS QUA THE ADDITIONAL INCOME OF RS. 10,00, 00,000.00 (10 CRORES) OFFERED TO TAX. AS SUCH, THE ENTIRE ADDITION WAS MA DE ON ACCOUNT OF THE DIFFERENCE IN RATE ADOPTED BY THE ASSESSEE VIS-A-VI S ADOPTED BY THE REVENUE WHILE DETERMINING THE VALUE AS ON 1 ST APRIL 1981 I.E. COST OF ACQUISITION. THE ASSESSEE HAS TAKEN THE RATE AT RS. 84.80 PER SQUARE FEET FOR ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 4 - THE ACQUISITION OF THE LAND WHEREAS THE AO HAS ADOP TED THE RATE AT RS. 8 PER SQUARE FEET FOR THE ACQUISITION OF SUCH LAND WH ICH WAS SUBSEQUENTLY DETERMINED BY THE LD. CIT-A AS RS. 15 PER SQUARE FE ET. THUS THE ADDITION WAS MADE ON ACCOUNT OF THE DIFFERENCE IN THE RATE A ND NOT ON THE BASIS OF ANY INCRIMINATING DOCUMENT FOUND DURING THE COURSE OF SUCH. ACCORDINGLY, THE ASSESSEE CLAIMED THAT THE ADDITIONAL INCOME OFF ERED TO TAX CANNOT BE SAID AS UNDISCLOSED INCOME AND CONSEQUENTLY THE PRO VISIONS OF EXPLANATION SECTION 5A TO SECTION 271(1)(C) OF THE ACT CANNOT B E APPLIED IN THE CASE ON HAND. 2.3. HOWEVER, THE AO DISAGREED WITH THE SUBMISSIO N OF THE ASSESSEE BY OBSERVING THAT THE ADDITIONAL INCOME WAS OFFERED TO TAX ON ACCOUNT OF SEARCH PROCEEDINGS UNDER SECTION 132 OF THE ACT. IN VIEW OF THE ABOVE, THE AO LEVIED PENALTY OF RS. 2,06,00,000/- BEING 100% O F THE AMOUNT OF TAX SOUGHT TO BE EVADED UNDER THE PROVISIONS OF SECTION 271(1) READ WITH EXPLANATION 5A OF THE ACT. 2.4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO T HE LEARNED CIT(A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE ADDITIONAL INCOME DECLARED IN THE RETURN FILED IN RESPONSE TO THE NOT ICE ISSUED UNDER SECTION 153A OF THE ACT AND ON ACCOUNT OF SEARCH INITIATED UNDER SECTION 132 OF THE ACT. ACCORDINGLY THE LEARNED CIT (A) CONFIRMED THE ORDER OF THE AO. ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 5 - BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. AR BEFORE US SUBMITTED THAT THE ADDI TIONAL INCOME WAS OFFERED TO TAX VOLUNTARILY BY THE ASSESSEE WHICH IS NOT BASED ON ANY SEIZED MATERIALS FOUND DURING THE SEARCH HAVING SOME INCRI MINATING VALUES. SIMILARLY, THERE WAS ALSO NOT ANY REFERENCE TO THE INCRIMINATING DOCUMENT FOUND DURING THE COURSE OF SEARCH IN THE ORDER OF T HE RESPECTIVE AUTHORITIES. 4. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE ADDITIONAL INCOME WAS OFFERED TO TAX BY THE ASSESSEE AS A RESULT OF SEARC H PROCEEDING CARRIED OUT UNDER SECTION 132 OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH T HE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE PENALTY IN T HE CASE ON HAND WAS LEVIED UNDER EXPLANATION 5A OF SECTION 271(1)(C) OF THE ACT WHICH READS AS UNDER: [EXPLANATION 5A.WHERE, IN THE CO URSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HI S INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE B OOKS OF ACCOUNT OR OTHER ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 6 - DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WH OLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THE REIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CO NCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.] 5.1. A PLAIN READING OF THE PROVISIONS REVEALS T HAT THE PENALTY SHALL BE LEVIED IF THE ASSESSEE IN THE COURSE OF SUCH INITIA TED UNDER SECTION 132 OF THE ACT WAS FOUND TO BE THE OWNER OF ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THERE IS SOME INCOME BASE D ON THE ENTRY IN THE BOOKS OF ACCOUNTS/DOCUMENTS. THEN, IT SHALL BE PRES UMED THAT THE ASSESSEE HAS EITHER CONCEALED THE PARTICULARS OF INCOME OR F URNISHED INACCURATE PARTICULARS OF INCOME. HOWEVER IN THE CASE ON HAND, WE NOTE THAT THERE IS NO SUCH ALLEGATION MADE BY THE AUTHORITIES BELOW AS DISCUSSED ABOVE. 5.2. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ASSESSEE HAS ALREADY DISCLOSED IMPUGNED LONG TERM CAPITAL GAIN IN THE RE TURN FILED UNDER SECTION 139 OF THE ACT. BUT THE ADDITION IN THE ASSESSMENT FRAMED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT WAS MADE ON ACCOUNT O F THE DIFFERENCE IN THE RATE ADOPTED BY THE ASSESSEE VIS-A-VIS ADOPTED BY T HE REVENUE AS ON 1 ST ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 7 - APRIL 1981. THE ASSESSEE HAS TAKEN THE RATE AT RS. 84.80 PER SQUARE FEET FOR THE ACQUISITION OF THE LAND WHEREAS THE AO HAS ADOP TED THE RATE AT RS. 15 PER SQUARE FEET FOR THE ACQUISITION OF SUCH LAND AS ON 1-4-1981. THUS THE ADDITION WAS MADE ON ACCOUNT OF THE DIFFERENCE IN T HE RATE AND NOT ON THE BASIS OF ANY INCRIMINATING DOCUMENT FOUND DURING TH E COURSE OF SEARCH. 5.3. AS SUCH, THE ADDITIONAL INCOME IN THE RETU RN FILED UNDER SECTION 153A OF THE ACT WAS VOLUNTARILY AND WITHOUT HAVING FOUND ANY INCOME/DOCUMENTS BY THE REVENUE IN THE MANNER PROVI DED UNDER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. AS SUCH, THERE WAS NOT FOUND ANY UNDISCLOSED INCOME BY THE REVENUE IN THE COURSE OF SUCH CONDUCTED UNDER SECTION 132 OF THE ACT. THUS, IT IS INFERRED THAT SUCH ADDITION WAS NOT BASED ON THE DOCUMENT FOUND DURING THE COURSE OF SEARCH. 5.4. NOW THE QUESTION ARISES, WHETHER THE ASSESS EE CAN BE VISITED WITH THE PENALTY WITH RESPECT TO THE INCOME DISCLOSED BY HIM IN SUCH PROCEEDINGS VOLUNTARILY AND WITHOUT FINDING ANY INC RIMINATING DOCUMENT DURING THE COURSE OF SEARCH. TO OUR MIND THE ANSWER STANDS IN FAVOUR OF THE ASSESSEE. IN HOLDING SO WE DRAW SUPPORT AND GUI DANCE FROM THE ORDER OF ITAT IN THE CASE OF AJAY TRADERS VS. DCIT REPORT ED IN 81 TAXMANN.COM 463, WHEREIN IT WAS HELD AS UNDER: THE ASSESSEE DISCLOSED AN ADDITIONAL INCOME ON ACC OUNT OF UNACCOUNTED SALES. BASED ON SAID DISCLOSURES, THE ASSESSING OFFICER IM POSED PENALTY UNDER SECTION 271(1)(C) BY INVOKING EXPLANATION 5A TO SAID SECTIO N. HELD THAT IT WAS UNDISPUTED FACT THAT DURING THE CO URSE OF SEARCH, NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE ASSESSEE SURRE NDERED THE ADDITIONAL INCOME ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 8 - UNDER SECTION 132(4) AT RS.15 LACS AND REQUESTED NO T TO IMPOSE PENALTY UNDER SECTION 271(1)(C). THE ASSESSING OFFICER IMPOSED THE PENALT Y BY INVOKING THE EXPLANATION 5A TO SECTION 271(1)(C). FOR IMPOSING THE PENALTY U NDER EXPLANATION 5A ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH, IT IS NECESSARY TO BE FOUND INCRIMINATING DOCUMENTS AND IS TO BE CONSIDERED AT THE TIME OF ASSESSMENT FRAMED UNDER SECTION 153A. AS NO INCRIMINATING DOCUMENTS W ERE FOUND DURING THE COURSE OF SEARCH, THEREFORE, EXPLANATION 5A TO SECTION 271(1) (C) IS NOT APPLICABLE. ACCORDINGLY, THE PENALTY WAS TO BE DELETED. 5.5. FROM THE ABOVE ORDER, IT IS CLEAR THAT THERE CANNOT BE ANY PENALTY UNDER EXPLANATION 5A TO SECTION 271(1)(C) OF THE AC T UNTIL AND UNLESS IT SUPPORTED ON THE BASIS OF INCRIMINATING DOCUMENT. 5.6. AT THE TIME OF THE HEARING, A QUERY WAS RA ISED TO THE LD. DR WHETHER THE INCOME DISCLOSED BY THE ASSESSEE IN PUR SUANCE TO THE SEARCH WAS BASED ON THE INCRIMINATING DOCUMENT, BUT HE FAI LED TO BRING ANY MATERIAL ON RECORD. THEREFORE, IN THE ABSENCE OF AN Y DOCUMENTARY EVIDENCE, WE INFER THAT THE ADDITIONAL INCOME OFFER ED TO TAX CANNOT BE SUBJECT TO THE PENALTY UNDER EXPLANATION 5A TO SECT ION 271(1)(C) OF THE ACT. 6. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.126 6/AHD/2019 FOR AY 2011-12 IS ALLOWED. COMING TO THE OTHER APPEALS FILED BY THE ASSESSEES BEARING ITA NOS. 1267 TO 1269/AHD/2019 FOR THE A.Y. 2011-12 ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 9 - 7. AT THE OUTSET, WE NOTE THAT IN THE IDENTICA L FACTS AND CIRCUMSTANCES, WE HAVE DELETED THE PENALTY IMPOSED UNDER SECTION 2 71(1)(C) OF THE ACT VIDE PARAGRAPH NOS.5.1. TO 5.6 OF THIS ORDER. RES PECTFULLY, FOLLOWING THE SAME, WE DELETE THE PENALTY IMPOSED BY THE AO WHICH WAS SUBSEQUENTLY CONFIRMED BY THE LD. CIT (A). HENCE, THE GROUND OF APPEAL(S) OF THE ASSESSEE(S) IS ALLOWED. 8. IN THE RESULT, THESE THREE APPEALS OF THE ASS ESSEES ARE ALSO ALLOWED. 9. IN THE COMBINED RESULT, ALL THE FOUR APPEALS O F ALL THE ASSESSEES ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18 /12/2019 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 18/12/2019 .. ,... / T.C. NAIR, SR. PS ITA NOS.1266 TO 1269/AHD/2019 SMT. LOPA PANKAJ DAVE, MUMBAI & THREE OTHERS VS. D CIT ASS T.YEAR 2011-12 - 10 - / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A)-12, AHMEDABAD 5. +,-'&' , &' , % / DR, ITAT, AHMEDABAD 6. -012 / GUARD FILE. / BY ORDER, #+' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 17.12.19 ( WORD PROCESSED BY HONBLE AM IN HIS COMPUTER BY DRA GON ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.12.19 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.18.12.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.12.19 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