Shri Jitendra Keshavlal Parekh, Godhra V. The ACIT, (OSD), Ward-1, Godhra

ITA 1380/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9244 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Keywords: Presumptive income; Business income; Income from undisclosed sources
• Section: 44AD; 133(6); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.1380/AHD/2014 (ASSESSMENT YEAR:2009-10) JITENDRA KESHAVLAL PAREKH C/O. M/S. SHREEJI TRACTORS, OPP. GIDC, MAIN GATE, LUNAWADA ROAD, GODHRA - 389001 APPELLANT VS. THE ACIT (OSD), WARD-1, GODHRA RESPONDENT PAN: AEUPP4388N & ITA NO.1381/AHD/2014 (ASSESSMENT YEAR:2009-10) DIPENKUMAR SUDHIRBHAI SHAH RANGOONWALA COMPOUND, OPP. PRABHA JAKAT NAKA, GODHRA - 389001 APPELLANT VS. THE ACIT (OSD), WARD-1, GODHRA RESPONDENT PAN: AOSPS7961N /BY ASSESSEE : SHRI A. C. SHAH, A.R. /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /DATE OF HEARING : 06.02.2017 /DATE OF PRONOUNCEMENT : 09.02.2017 ITA NOS. 1380 & 1381/AHD/2014 ( JITENDRA K. PAREKH & DIPENKUMAR S. SHAH VS. ACIT(OSD)) A.Y. 2009-10 - 2 - ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO DIFFERENT ASSESSEES HAVE FILED THEIR RESP ECTIVE APPEALS AGAINST CIT(A)-II, BARODAS ORDERS; BOTH DATED 28.0 1.2014, IN APPEAL NOS. CAB/II-248/13-14 & CAB/II-250/13-14, AFFIRMING ASSE SSING OFFICERS ACTION IMPOSING PENALTIES OF RS.6,05,920/- & RS.3,3 8,100/-; RESPECTIVELY, IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT, 1961; IN SHORT THE ACT. 2. WE HEARD THESE CASES TOGETHER ON 06.02.2017. LE ARNED COUNSEL REPRESENTING ASSESSEE SUBMITTED VERY FAIRLY THAT TH ESE TWO CASES RAISE IDENTICAL ISSUE QUA CORRECTNESS OF THE IMPUGNED PENALTY INVOL VING THE VERY NATURE OF FACTS. WE THUS TREAT ITA NO.1380/AHD/2014 AS THE L EAD CASE. 3. THE FORMER ASSESSEE SHRI JITENDRA K. PAREKH IN I TA NO.1380/AHD/2014 IS A PARTNER IN M/S. SHREEJI TRACT ORS AND SHREE RAM FINANCE & INVESTMENT CO. HE FILED RETURN ON 04.03. 2010 DECLARING TOTAL INCOME OF RS.2,39,040/-. THE SAME WAS SUMMARILY PR OCESSED. THE ASSESSING OFFICER THEREAFTER TOOK UP SCRUTINY. HE ISSUED DETAILED QUESTIONNAIRES U/S.142(1) R.W.S. 143(2) OF THE ACT. THE ASSESSEES AUTHORIZED REPRESENTATIVE SOUGHT ADJOURNMENT ON 11.07.2011. T HE SCRUTINY ASSESSMENT ACCORDINGLY WAS POSTPONED TO 25.07.2011. THE ASSES SING OFFICER IN THE MEAN TIME ISSUED SECTION 133(6) LETTER TO THE BRANC H MANAGER, AXIS BANK, GODHRA, SEEKING ASSESSEES ACCOUNTS STATEMENT FOR T HE RELEVANT PREVIOUS YEAR. HE HAD DEPOSITED CASH SUMS OF RS.14,55,000/- IN HIS SAVING ACCOUNTS MAINTAINED WITH THE SAID BANK. THE ASSESSING OFFIC ER FURTHER SOUGHT TO KNOW SOURCE OF THE SAID DEPOSITS. WE NOTICE FROM ASSESS MENT ORDER DATED 30.11.2011 THAT HE AFFORDED NUMEROUS OPPORTUNITIES TO THE ASSESSEE WHO FILED REPLY AT LAST ON 14.11.2011 STATING THEREIN THAT SO URCE OF THE ABOVE STATED ITA NOS. 1380 & 1381/AHD/2014 ( JITENDRA K. PAREKH & DIPENKUMAR S. SHAH VS. ACIT(OSD)) A.Y. 2009-10 - 3 - MONEY AS WELL AS A FURTHER SUM OF RS.4LACS DEPOSITE D WITH BANK OF BARODA, GODHRA WAS CONSTRUCTION RECEIPT LIABLE TO BE ASSESS ED @ 8% U/S.44AD OF THE ACT. THE ASSESSING OFFICER AGAIN ISSUED A SHOW CAU SE NOTICE ASKING HIM TO FILE SUPPORTIVE EVIDENCE DEMONSTRATING THE SAID CIV IL CONSTRUCTION WORK TO HAVE BEEN ACTUALLY CARRIED OUT ALONG WITH ALL NECES SARY DETAILS. THE ASSESSEE AGAIN CHOSE NOT TO APPEAR DESPITE AVAILING NUMEROUS OPPORTUNITIES. THIS MADE THE ASSESSING OFFICER TO ASSESS THE ABOVE STAT ED GROSS DEPOSITS SUM OF RS.18.55LACS AS INCOME FROM UNDISCLOSED SOURCES. H E FURTHER INITIATED THE IMPUGNED PENALTY PROCEEDINGS ALLEGING CONCEALMENT O F INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E ASSESSEE DID NOT PREFER ANY APPEAL. QUANTUM PROCEEDINGS ACCORDINGLY ATTAIN ED FINALITY. 4. WE NOW COME TO THE IMPUGNED PENALTY PROCEEDINGS. WE NOTICE FROM THE ASSESSING OFFICERS PENALTY ORDER THAT THE ASSE SSEE FILED A LETTER DATED 01.02.2012 PLEADING THEREIN TO HAVE DISCLOSED THE A BOVE CASH DEPOSITS VOLUNTARILY AS INCOME IN ORDER TO BUY PEACE AND AVO ID LITIGATION FOLLOWED BY PAYMENT OF TAXES. THE ASSESSING OFFICER QUOTED QUA NTUM DEVELOPMENTS AS WELL AS LACK OF MERIT IN ASSESSEES REPLY HEREINABO VE TO CONCLUDE THAT HE HAD DELIBERATELY FURNISHED INACCURATE PARTICULARS OF IN COME AS WELL AS CONCEALED HIS ABOVE STATED INCOME SO AS TO BE PENALIZED U/S.2 71(1)(C) OF THE ACT. HE THUS LEVIED THE IMPUGNED PENALTY OF RS.6,05,920/- A S CONFIRMED IN THE LOWER APPELLATE PROCEEDINGS. 5. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES. CASE FILE PERUSED. SHRI SHAH VEHEMENTLY ARGUES THAT BOTH THE LOWER AUT HORITIES HAVE ERRED IN IMPOSING THE IMPUGNED PENALTY WHEREIN NEITHER THE A SSESSEE HAS FILED ANY INACCURATE PARTICULARS OF INCOME NOR CONCEALED HIS TAXABLE INCOME. HE THEREAFTER QUOTES HONBLE JURISDICTIONAL HIGH COURT S DECISION IN CIT VS. WHITEFORD INDIA LTD. (2013) 38TAXMANN.COM15 (GUJ.) HOLDING THAT AN ASSESSING OFFICER HAS TO GIVE A CLEAR FINDING AS TO WHETHER THE PENALTY IN ITA NOS. 1380 & 1381/AHD/2014 ( JITENDRA K. PAREKH & DIPENKUMAR S. SHAH VS. ACIT(OSD)) A.Y. 2009-10 - 4 - QUESTION IS IMPOSED FOR FURNISHING OF INACCURATE PA RTICULARS OF INCOME OR CONCEALMENT OF INCOME. LD. DEPARTMENTAL REPRESENTA TIVE STRONGLY SUPPORTS BOTH THE LOWER AUTHORITIES ACTION UNDER CHALLENGE. 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSEE HAD N OT INCLUDED THE ABOVE STATED CASH DEPOSITS OF RS.14.55LACS MADE IN HIS AX IS BANK ACCOUNT WHICH SHOW LIGHT OF THE DAY ONLY AFTER ISSUANCE OF SECTIO N 133(C) NOTICE (SUPRA). THE ASSESSEE FAILS TO DISPUTE THIS FACTUAL POSITION . COUPLED WITH THIS, HE INCLUDED THE REMAINING DEPOSITS OF RS.4 LACS IN BAN K OF BARODA ACCOUNT WHICH HAD ALSO NOT BEEN INCLUDED IN THE RETURN ALRE ADY FILED. WE OBSERVE IN THIS FACTUAL BACKDROP THAT ASSESSEE HAD NOT FILED I TS RETURN INCLUDING THE ABOVE STATED DEPOSITS THEREIN. WE ACCORDINGLY ARE OF THE OPINION THAT THE ASSESSEES ABOVE ACT AND CONDUCT IS A CLEAR CUT INSTANCE OF FU RNISHING INACCURATE PARTICULARS OF INCOME. 7. WE COME TO ASSESSEES LATTER ARGUMENT THAT HE HA D NOT CONCEALED HIS TAXABLE INCOME FROM BEING ASSESSED. WE AGAIN REVER T BACK TO THE ABOVE NARRATED FACTS WHEREIN THE ASSESSEE MADE ALL HIS EF FORTS TO GET HIS CASH DEPOSITS OF RS.18.55 LACS ASSESSED @ 8% AS PRESCRIBED UNDER PR ESUMPTIVE RATE OF TAXATION U/S.44AD OF THE ACT THEREBY CLAIMING TH E SAME TO BE IN THE NATURE OF CONSTRUCTION BUSINESS RECEIPTS. HE HAD NOT OFFERED THESE SUMS FOR ASSESSMENT AT THE FIRST INSTANCE. WE PROVIDED AMPLE OPPORTUNITY TO LEARNED COUNSEL TO PLACE ON RECORD ANY EVIDENCE PROVING THE ASSESSEE TO HAVE CARRIED OUT ANY CONSTRUCTION BUSINESS ACTIVITY IN THE RELEVANT PREVIOUS YEAR. H E EXPRESSED HIS INABILITY TO PRODUCE ANY SUCH MATERIAL. ALL THIS INDICATES THAT THE ASSESSEE MADE A WILLFUL AND DELIBERATE ATTEMPT TO GET HIS CASH DEPOSITS ASS ESSED AT A LOWER RATE EVEN AT SECOND INSTANCE THEREBY MAKING A CLEAR CUT ATTEMPT TO CONCEAL HIS INCOME FROM BEING ASSESSED AT NORMAL RATE. WE OBSERVE IN THESE FACTS THAT BOTH LIMBS OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEALMENT OF INCOME APPLY IN THE INSTANT CASE. W E THUS FIND NO MERIT IN ITA NOS. 1380 & 1381/AHD/2014 ( JITENDRA K. PAREKH & DIPENKUMAR S. SHAH VS. ACIT(OSD)) A.Y. 2009-10 - 5 - ASSESSEES ARGUMENTS CHALLENGING THE IMPUGNED PENAL TY IN VIEW OF THE ABOVE STATED CASE LAW. THE CIT(A)S ORDER UNDER CHALLENG E IS AFFIRMED. ITA NO.1380/AHD/2014 FAILS. 8. SAME ORDER TO FOLLOW IN LATTER APPEAL ITA NO.138 1/AHD/2014 INVOLVING IDENTICAL PENALTY AS THE SAID ASSESSEE HA D ALSO DEPOSITED CASH SUMS OF RS.11,53,214/- AND CLAIMED TO HAVE CARRIED OUT C ONSTRUCTION ACTIVITY AS IN THE FORMER CASE HEREINABOVE WITHOUT ANY EVIDENCE SO AS TO BE COVERED UNDER PRESUMPTIVE TAXATION RATE OF 8% PRESCRIBED UNDER SE CTION 44AD OF THE ACT. SHRI SHAH HAS ALREADY STATED VERY FAIRLY THAT FACTS AS WELL AS THE RELEVANT ISSUE OF CORRECTNESS OF SECTION 271(1)(C) ARE IDENTICAL I N BOTH CASES. THIS LATTER APPEAL IS ALSO DECLINED ACCORDINGLY. 9. THESE TWO ASSESSEES APPEALS ARE DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 09 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( N. K. BILLAIYA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD: DATED 09/02/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0