Smt. Sarojben P.Patel L/h. of late Pravin N.Patel, Ahmedabad V. The Income tax Officer,Ward-2(3), Ahmedabad

ITA 1334/AHD/2011

• Counselvise Citation: 133420514 RSA 2011
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-03-2012
• Assessment Year: 1994-1995
• Appeal Filed On: 04-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO.1334 / AHD/2011 (ASSESSMENT YEAR 1004-95) SMT. SAROJBEN P PATEL, L/H OF LATE SHRI PRAVIN N PATEL, GURUKRUPA, NEAR BIDIWALA BUNGLOW, SHAHINBAUG, AHMEDABAD VS. ITO, WARD 2(3), AHMEDABAD PAN/GIR NO. : AAXPP0918K (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI SURESH GANDHI, AR RESPONDENT BY: SHRI VINOD TANWANI, SR. DR DATE OF HEARING: 07.03.2012 DATE OF PRONOUNCEMENT: 13.04.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) XVI, AHMEDABAD DATED 17.02.2011 FOR THE ASSESSMENT YEAR 1994-95. THE GROUNDS RAISED BY THE ASSESSEE IS REGARDING PENALTY IMPOSED BY THE A.O. AND CONFIRMED BY LD. CIT(A) OF RS.89,600/- U/S 271( 1)(C) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE TILL THE STAGE OF LE VY OF PENALTY BY THE A.O. ARE NOTED BY LD. CIT(A) IN PARA 2 OF HIS ORDER WHICH IS REPRODUCED BELOW: 2. IN THE PENALTY, ORDER, THE AO HAS STATED THAT WHILE FINALIZING THE ASSESSMENT UNDER SECTION 143(3), AN ADDITION OF RS. 18 .25 LAKH WAS MADE IN RESPECT OF WHICH PENALTY PROCEEDINGS WE RE INITIATED I.T.A.NO. 1334 /AHD/2011 2 BUT ONLY RS. 2 LACS ADDITION WAS CONFIRMED BY THE C IT (A). A SEARCH AND SEIZURE OPERATION HAD BEEN CONDUCTED UND ER SECTION '132 ON THE RESIDENTIAL PREMISES OF SHRI N PATEL FA THER OF THE ASSESSEE ON 22/03/1994. WHILE RECORDING THE STATEME NT UNDER SECTION 132 (4), THE DISCLOSURE OF RS. 20 LAKHS WAS MADE BY THE FATHER OF ASSESSEE IN THE NAME OF LATE PRAVIN N PAT EL AND THE ASSESSEE IS LEGAL HELD OF THIS PERSON. THE AO HAD L EVIED THE PENALTY UNDER SECTION 271(L)(C) OF RS. 9.8 LAKH ON THE CONC EALED INCOME OF RS. 12.25 LAKH. THE ITAT CONFIRMED THE ADDITION OF ONLY RS. 2 LAKH ON ACCOUNT OF DISCLOSURE NOT SHOWN IN THE INCO ME TAX RETURN. IN VIEW OF THIS REASON, THE AO STATED THAT THE PENA LTY LEVIED OF RS. 9.8 LAKH REQUIRED IT TO BE REDUCED IN VIEW OF THE P ROVISIONS OF SECTION 275 (1A). THE AO THEREFORE ISSUED A SHOW CA USE NOTICE AS TO WHY THE PENALTY IN RESPECT OF RS. 2 LAKH BE NOT RETAINED. THE ASSESSEE CONTENDED THAT MAJOR ADDITION MADE BY THE AO HAS ALREADY BEEN DELETED BY THE CIT APPEAL/ITAT. THE ASSESSEE FURTHER STATED THAT THE UNEXPLAINED INVESTM ENT IN AGRICULTURE LAND OF RS. 151250/-AND UNEXPLAINED CREDIT ENTRY OF RS. 2 LAKH ARE OUTSIDE THE PURVIEW OF PENALTY BECAUSE AFTER GIVING TELESCOPING EFFECT, AS PER THE ORDER OF CIT (A) DATED 22/01/201 0 .THE ADDITION WAS REDUCED TO NIL. THE AO DID NOT A CCEPT THIS EXPLANATION AND STATED THAT THE CONCEALED INCOME OF RS. 2 LAKH HAD BEEN SUSTAINED BY THE ITA T. AND THEREFORE PENALTY HAS TO BE KEPT IN RESPECT OF THIS AMOUNT. THE AO THEREFORE STATED THAT MINIMUM PENALTY AT THE RATE OF 100 PERCENT OF TAX SOUGHT TO BE EVADED ON THIS AMOUNT COMES TO RS. 89600/-. HE LEVIED 200% PENALTY AMOUNTING TO RS. 179200/-. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) WHO HAS CONFIRMED THE PENALTY TO THE EXT ENT OF 100% OF TAX SOUGHT TO BE EVADED AS AGAINST 200% PENALTY IMPOSED BY THE A.O. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT IS SUBMITTED BY THE LD. A.R. THAT THE TRIBUNA L ORDER IN QUANTUM PROCEEDING IS AVAILABLE ON PAGES 29-36 OF THE PAPER BOOK AND THE RELEVANT PARA IS PARA 5 OF THE TRIBUNAL ORDER WHICH CAN BE S EEN ON PAGE 31 OF THE PAPER BOOK. IT IS FURTHER SUBMITTED BY THE LD. A.R . THAT THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE A.O. AS PER LETTER DATED 19.02.2010 IN THE I.T.A.NO. 1334 /AHD/2011 3 COURSE OF PENALTY PROCEEDINGS IS AVAILABLE ON PAGES 34-47 OF THE PAPER BOOK AND IN PARTICULAR, OUR ATTENTION WAS DRAWN TO PAGES 36-37 OF THE PAPER BOOK AND IT WAS SUBMITTED THAT THE ASSETS FOU ND WERE ONLY WORTH RS.18 LACS WHEREAS THE DISCLOSURE OF RS.20 LACS WAS MADE IN THE PRESENT CASE IN THE STATEMENT U/S 132(4) OF HE ACT. HENCE, FOR SUCH AN ADDITION OF RS.2 LACS, PENALTY IS NOT JUSTIFIED. HE ALSO SUBMI TTED THAT SUBMISSIONS MADE BY THE ASSESSEE BEFORE LD. CIT(A) ARE AVAILABL E ON PAGES 48-51 OF THE PAPER BOOK IN WHICH RELIANCE HAS BEEN PLACED BY THE ASSESSEE ON VARIOUS JUDGMENTS AND RELIANCE ON SUCH JUDGEMENTS A RE PLACED BEFORE THE TRIBUNAL ALSO. 5. AS AGAINST THIS, LD. D.R. OF THE REVENUE SUPPORT ED THE ORDER OF LD. CIT(A). HE ALSO SUBMITTED THAT FULL TELESCOPYING W AS GIVEN BY THE A.O. BY PASSING APPEAL EFFECT ORDER ON 31.12.2007. HE S TRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IT IS NOTED BY THE LD. CIT(A) IN PARA 5 OF HIS ORDER THAT THE ASSESSEE HAS DISCLOSED A SUM OF RS.20 LACS WHICH IS UNDER CO NSIDERATION AND THIS DISCLOSURE WAS IN ORDER TO COVER VARIOUS UNDISCLOSE D ASSETS FOUND DURING THE COURSE OF SEARCH. HE HAS ALSO NOTED THAT ASSES SEE HAS NOT DISCLOSED THE MANNER IN WHICH INCOME WAS EARNED. IN THE LIGH T OF THESE FINDINGS OF LD. CIT(A), WE EXAMINE THE AMOUNT OF ACTUAL UNDISCL OSED ASSES FOUND IN THE COURSE OF SEARCH BELONGING TO THE ASSESSEE. ON PAGE 3 OF THE ASSESSMENT ORDER, BREAKUP OF THESE ASSETS ARE GIVEN BY THE ASSESSEE AS HAS BEEN REPRODUCED BY THE A.O. AND THE SAME IS OF RS.1 8 LACS ONLY. WHEN THE ASSETS OF RS.18 LACS WERE FOUND IN THE COURSE O F SEARCH AS PER THE ASSESSEE, AND NO FINDING IS GIVEN BY THE AUTHORITIE S BELOW THAT ANY ASSET I.T.A.NO. 1334 /AHD/2011 4 OVER AND ABOVE RS.18 LACS WAS FOUND IN THE COURSE O F SEARCH, WE ARE OF THE CONSIDERED OPINION THAT ALTHOUGH THE ADDITION H AS BEEN CONFIRMED BY THE TRIBUNAL ON THE BASIS OF THE DISCLOSURE MADE BY THE ASSESSEE U/S 132(4) OF RS.20 LACS, PENALTY IS NOT JUSTIFIED IN RESPECT OF SUCH ADDITION WHICH IS NOT SUPPORTED BY ANY UNDISCLOSED ASSETS WHICH HAS B EEN FOUND IN THE COURSE OF SEARCH AND THERE IS NO SOURCE OF INCOME A LLEGED BY THE A.O. WITH REGARD TO THIS ADDITIONAL INCOME OF RS.2 LACS. UNDER THESE FACTS, WE FEEL THAT PENALTY IS NOT JUSTIFIED AND HENCE, WE DE LETE THE SAME. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 10/4 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12/4.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 13/4 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.13/4 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13/4/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .