Shri Manojbhai N. Jobanputra, JUNAGADH V. The Income Tax Officer, Ward-1(1), JUNAGADH

ITA 1326/RJT/2010

• Counselvise Citation: 132624914 RSA 2010
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-05-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 10-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA PRABHAKAR
• Assessee Lawyers: RD LALCHANDANI
• Keywords: Unexplained expenditure
• Section: 69C; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.1326/RJT/2010 (ASSESSMENT YEAR 2000-01) SHRI MANOJBHAI N JOBANPUTRA VS THE ITO, WD.1(1) PROP OF M/S MANOJ ELECTRONICS JUNAGADH DANA PITH, JUNAGADH PAN : ABRPJ8722A (APPELLANT) (RESPONDENT) DATE OF HEARING : 29-11-2011 DATE OF PRONOUNCEMENT : 02-12-2011 APPELLANT BY : SHRI RD LALCHANDANI RESPONDENT BY : SHRI KRISHNA PRABHAKAR O R D E R PER AL GEHLOT (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-IV, RAJKOT DATED 14-10-2010 FOR THE ASSESSMENT YEAR 200 0-01. 2. THE GROUND RAISED IN THE APPEAL IS IN RESPECT OF PENALTY OF RS.40,000 LEVIED U/S 271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/ S 133A OF THE ACT WAS CARRIED ON 17-12-1999. DURING THE COURSE OF SURVEY , THE ASSESSEE CONFESSED ADDITIONAL INCOME OF RS.2,53,184 ON ACCOUNT OF CASH OF RS.1,16,500; PROFIT ON SALE OF CASSETTES RS.85,900 AND DIFFERENCE IN STOCK OF RS.50,784. DURING THE ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSE SSEE HAS UNACCOUNTED ITA NO.1326/RJT/2010 2 SALES OF CASSETTES OF RS.4,29,500 FOR WHICH THE ASS ESSEE HAS DISCLOSED PROFIT @20% WHICH COMES TO RS.85,900 LEAVING THE AMOUNT OF RS. 3,43,600 AS UNEXPLAINED EXPENDITURE. THE ASSESSING OFFICER MAD E ADDITION OF RS.3,43,600 BEING UNEXPLAINED EXPENDITURE AS PER THE PROVISIONS OF SECTION 69C OF THE ACT. THE ASSESSEE CHALLENGED THE QUANTUM MATTER BEFORE T HE FIRST APPELLATE AUTHORITY AS ALSO BEFORE THE ITAT. THE ITAT, WHILE DECIDING THE QUANTUM MATTER IN ITA NO.603/RJT/2004 ORDER DATED 30-08-2005 AND RESTRICT ED THE ADDITION TO THE EXTENT OF RS.1,16,500. THE ASSESSING OFFICER LEVIED PENAL TY ON THE AMOUNT SUSTAINED BY THE ITAT ON THE GROUND THAT THE ASSESSEE HAS FURNIS HED INACCURATE PARTICULARS OF ITS INCOME. THE CIT(A) CONFIRMED THE PENALTY OF RS .40,000 LEVIED BY THE ASSESSING OFFICER AS UNDER: 3.8 ON PERUSAL OF FACTS, I FIND THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS REAL INCOME, WHICH HAVE BEEN DETECTED BY THE DEPARTMENT AT THE TIME OF SURVEY. WHILE FILING THE RETURN OF INCOME, THE ASSESSEE DID NOT FULLY DISCLOSE HIS CORRECT INC OME, AND DISCLOSED ONLY GROSS PROFIT, WHICH LEADS OF FURNISH ING OF INACCURATE PARTICULARS OF HIS INCOME. WHENEVER THERE IS A DEL IBERATE CONCEALMENT, WHICH IS PROVED BEYOND DOUBT, THE IMPO SITION OF PENALTY IS JUSTIFIED. IN THE INSTANT CASE, THERE W AS A DELIBERATE INTENTION ON THE PART OF THE APPELLANT, ALSO TO FUR NISH INACCURATE PARTICULARS OF INCOME. THE NON-BONA FIDE CONDUCT O F THE ASSESSEE IS APPARENT FROM THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. THEREFORE, I HOLD THAT THE A.O. IS CORRECT I N LEVYING A PENALTY U/S 271(1)(C) OF RS.40,000/- ON THE ABOVE AMOUNT OF RS.3,43,600/- AS UNACCOUNTED EXPENDITURE. IN VIEW OF ALL ABOVE F ACTS AND LEGAL POSITION AND CASE-LAWS, IT IS HELD THAT IT IS A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) OF THE I.T. ACT, 1961. IN VI EW OF THE ABOVE, THE PENALTY LEVIED OF RS.40,000/- U/S 271(1)(C) ON THIS COUNT STANDS CONFIRMED. ITA NO.1326/RJT/2010 3 4. THE LD.AR WHILE EXPLAINING THE FACTS OF THE CASE SUBMITTED THAT THE REVENUE AUTHORITY DID NOT APPRECIATE THE FACTS OF T HE CASE. HE SUBMITTED THAT THE IN QUANTUM APPEAL WHERE THE ASSESSEE CHALLENGED THE ADDITION OF RS. 3,43,600 MADE BY THE ASSESSING OFFICER ON THE GROUND THAT TH E MAXIMUM ADDITION THAT COULD BE MADE WAS ONLY RS.1,16,500 AS THE PEAK AMOU NT INVOLVED IN VARIOUS PURCHASES RECORDED IN THE SEIZED PAPER WAS ONLY THA T MUCH WHEREAS THE ASSESSING OFFICER MADE THE ADDITION OF THE GROSS AM OUNT OF RS.3,43,600. THE ITAT ACCEPTED THE ASSESSEES CONTENTION AND VIDE OR DER DATED 30-08-2005 HELD THAT THE ADDITION SHOULD BE RESTRICTED TO THE AMOUN T OF RS.1,16,500 PLUS THE PROFIT DECLARED OF RS.85,900. THE LD.AR SUBMITTED THAT TH E ASSESSEE HAS ALREADY OFFERED THAT AMOUNT OF RS.1,16,500. BUT THE ASSESS ING OFFICER WHILE GIVING EFFECT TO THE ORDER OF ITAT HAS NOT PROPERLY APPRECIATED T HE FACTS OF THE CASE. HE ALLOWED RELIEF OF RS.2,27,100 (RS.3,43,600 LESS RS. 1,16,500) WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAS ALREADY DISCLOSED TH IS AMOUNT IN THE RETURN OF INCOME. THE LD.AR FURTHER SUBMITTED THAT THOUGH TH E ASSESSEE HAS OPTED SECOND ROUND OF LITIGATION, BUT HE COULD NOT SUCCEED IN QU ANTUM APPEAL. THE LD.AR SUBMITTED THAT WHEN THE ASSESSEE HIMSELF INCORPORAT ED THE AMOUNT IN THE RETURN OF INCOME AND MERELY TO AVOID LITIGATION THE ASSESS EE HAS ACCEPTED THAT ADDITION WHICH WOULD NOT MEAN THAT THERE IS A CONCEALMENT OF PARTICULARS OR INACCURATE PARTICULARS FURNISHED BY THE ASSESSEE. 5. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DER OF CIT(A). ITA NO.1326/RJT/2010 4 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED. AFTER CONSIDERING THE FACTS OF THE CASE WE FIND SUB STANCE IN THE SUBMISSIONS OF THE LD.AR THAT THE FACTS OF THE CASE HAVE NOT BEEN PROPERLY APPRECIATED BY THE REVENUE AUTHORITIES. THE AMOUNT OF RS.1,16,500 STA TED TO BE DISCLOSED IN THE RETURN OF INCOME HAS NOT BEEN CONSIDERED WHILE GIVI NG EFFECT TO THE ORDER OF THE ITAT. WHEN THERE IS A CASE OF NON APPRECIATION OF FACTS AND SUCH CASE CANNOT BE HELD AS A CASE OF FURNISHING OF INACCURATE PARTI CULARS OR CONCEALING THE PARTICULARS. SINCE BOTH THE INGREDIENTS DOES NOT S ATISFY FOR LEVY OF CONCEALMENT PENALTY, WE ARE OF THE CONSIDERED VIEW THAT IN SUCH CASE, PENALTY U/S 271(1)(C) IS NOT LEVIABLE. THEREFORE, THE SAME IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02-11-2011. SD/- SD/- (T.K. SHARMA) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DT : 02 ND DECEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-IV, RAJKOT 4. THE CIT-III, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT