M/S MURLIDHAR DEENDYAL, Jaipur V. INCOME TAX OFFICER, Ajmer

ITA 1389/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9190 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: HEMANG GARGIEYA
• Keywords: Unexplained investment
• Section: 271(1)(c); 133A; 73; 72; 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1389/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2010-11 M/S MURLIDHAR DEEN DAYAL, LAL KOTHI, KESAR GANJ, AJMER CUKE VS. ITO, AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFM0693D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. MAHENDRA GARGIEYA (ADV.) & SH. HEMANG GARGIEYA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 10/08/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 11/08/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), AJMER DATED 18.09.2018 WHEREIN THE ASSESSEE HAS TAK EN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE IMPUGNED PENALTY ORDER U/S 271(1)(C) OF THE ACT DATED 03.03.2017 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE QUASHED. 2. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FA CTS OF THE CASE IN CONFIRMING THE ORDER OF AO DATED 03.03.2017 IMPOSIN G PENALTY U/S 271(1)(C) OF THE ACT OF RS. 5,00,000/-. THE PENALTY SO IMPOSED, BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS , HENCE THE SAME KINDLY BE DELETED IN FULL. ITA NO. 1389-JP-2018 M/S MURL IDHAR DEEN DAYAL, JAIPUR VS. ITO, AJMER 3. THAT THE IMPUGNED SHOW CASE NOTICE ISSUED U/S 27 4 R/W 271(1)(C) OF THE ACT, IS QUITE VAGUE AND DID NOT AT ALL SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD B EEN INITIATED I.E., WHETHER FOR CONCEALMENT PARTICULARS OF INCOME OR FU RNISHING OF INACCURATE PARTICULARS OF INCOME. THE IMPUGNED PENALTY BASED O N SUCH A NOTICE BEING CONTRARY TO THE PROVISIONS OF LAW & FACTS KINDLY BE QUASHED. 2. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE FIRM DEALS IN THE BUSINESS OF CATTLE FEED ON WHOLE SALE BASIS. THE RETURN OF INCOME WAS FILED ON 14.10.2010 DECLARING TOTAL INCOME OF RS. 3 3,274/-. A SURVEY U/S 133A WAS CONDUCTED ON 15.09.2009 AT THE BUSINESS PREMISES OF GOYAL GROUP AT AJMER, WHICH ALSO INCLUDED THE ASSESSEE. DURING THE COURSE OF SURVEY, THE ASSESSEE OFFERED THE AMOUNT OF UNDISCLOSED INCOME ON ACCOUNT OF CASH & STOCKS OF RS. 14,55,858/- (RS. 1,55,858 CASH + RS. 13,00,000) . BUT THE SAME WERE NOT INCLUDED BY THE ASSESSEE IN ITS RETURN OF INCOME. T HEREAFTER, THE ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS. 15,00,390/- BY MAK ING ADDITIONS ON ACCOUNT OF THE ALLEGED EXCESS CASH OF RS. 1,55,858/-, ALLEGED INVESTMENTS IN THE UNACCOUNTED PURCHASED OF RS. 13,00,000/- AND GP ON SHORT STOCK OF RS. 754 WITH OTHERS, PURSUANT TO THE SURVEY. THE LD. CIT(A) HOWEVER, PAR TLY REDUCED THE IMPUGNED ADDITION AND SUSTAINED THE SAME AS RS. 13,00,000/-. 3. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS S INCE TAKEN THE MATTER BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 11.04.2019 IN ITA NO. 428/JP/2013 REJECTED THE APPROACH OF THE LOWER AUTH ORITIES AND RESTORED THE INCOME AS DECLARED OF THE RETURN OF INCOME AND THE RELEVANT FINDINGS OF THE TRIBUNAL READS AS UNDER:- 11. THE CO-ORDINATE JAIPUR BENCH OF ITAT HAS ALREA DY BEEN TAKING THIS VIEW IN THE CASE OF ITO VS. SURESH CHANDRA KOOLWAL (2004) 32 TW 23 (JP). VARIOUS BENCHES OF THE ITAT HAVE TAKEN SIMILAR VIEW SUCH AS IN THE CASES OF ITA NO. 1389-JP-2018 M/S MURL IDHAR DEEN DAYAL, JAIPUR VS. ITO, AJMER R. K. SYNTHETICS 30 TW 228 (JD). ASHOK KUMAR SONI V S. DCIT (2001) 72 TTJ 323 (JD), KARAM CHAND VS. ACIT (2000) 73 ITD 434 (C HD): (2000) 68 TTJ 789 (CHD) & RISHAB KUMAR JAIN VS. ACIT (1999) 63 TT J 236 (DEL). IN THE CASE OF RAJESH JAIN VS. DCIT (2006) 100 TTJ 929 (DE L), HELD THAT COMPUTATION OF UNDISCLOSED INCOME SOLELY ON THE BAS IS OF CONFESSIONAL STATEMENT OF THE ASSESSEE WAS NOT JUSTIFIED. 12. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, I DIRECT THE AO TO RESTRICT THE ADDITION TO THE EXTENT OF RS. 28,240/- BEING PROFIT ELEMENT ON UNACCOUNTED SALES. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 4. IT WAS ACCORDINGLY SUBMITTED THAT ONLY BASIS OF IMPOSITION OF THE PENALTY VIDE THE IMPUGNED PENALTY ORDER IS THE ADDITION OF RS. 13,00,000/- BEING ALLEGED UNEXPLAINED INVESTMENT MADE IN THE PURCHASE OF STOC K AND WHICH HAS SINCE HAS BEEN DELETED BY THE TRIBUNAL, THE CONSEQUENT PENALT Y LEVIED DESERVES TO BE DELETED. 5. PER CONTRA, THE LD. DR SUBMITTED THAT THE ADDITI ON HAS BEEN MADE BY THE AO PURSUANT TO SURVEY CONDUCTED BY THE DEPARTMENT A ND IT IS THEREFORE, NOT A CASE OF VOLUNTARILY DISCLOSURE BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT GIVEN THAT IN THE QUANTUM PROCEEDINGS, THE TRIBUNAL HAS R ESTRICTED THE ADDITION MADE BY THE AO TO THE EXTENT OF RS 28,240/-, THE MATTER MAY BE REMANDED TO THE FILE OF THE AO TO RECALCULATE THE QUANTUM OF PENALTY SO LEV IED U/S 271(1)(C) OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE PENALTY HAS BEEN LEVIED ON ADDITION OF RS 13,00,000/-, BEING INVESTMENT IN UNACCOUNTED PUR CHASES MADE BY THE AO PURSUANT TO SURVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE. THE TRIBUNAL IN THE QUANTUM PROCEEDINGS HAS HOWEVER HELD THAT IT WA S NOT A CASE OF UNEXPLAINED ITA NO. 1389-JP-2018 M/S MURL IDHAR DEEN DAYAL, JAIPUR VS. ITO, AJMER INVESTMENT/UNACCOUNTED PURCHASES AS WRONGLY UNDERST OOD BY THE AUTHORITIES BELOW AND IT WAS ONLY THE SUPPRESSED SALES MADE OUT OF RECORDED PURCHASES AND IN RESPECT OF UNDISCLOSED SALES, ONLY PROFIT ELEMEN T CAN BE ADDED AND THE AO WAS ACCORDINGLY DIRECTED TO RESTRICT THE ADDITION TO TH E EXTENT OF RS 28,240/-, BEING THE PROFIT ELEMENT ON UNACCOUNTED SALES. THEREFORE, WH ERE THE VERY BASIS OF LEVY OF PENALTY, BEING THE QUANTUM ADDITION, HAS BEEN RESTR ICTED TO RS 28,240/-, THE CONSEQUENT LEVY OF PENALTY SHALL ALSO STAND RESTRIC TED TO RS 28,240/-. NO OTHER ARGUMENTS HAVE BEEN TAKEN OR CANVASSED DURING THE H EARING IN SUPPORT OF GROUND NO. 2, HENCE THE SAME IS DISMISSED. IN THE RESULT, THE AO IS DIRECTED TO RESTRICT THE PENALTY TO RS 28,240/- AND THE REMAINING PENALT Y IS HEREBY DIRECTED TO BE DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/08/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADA V) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/08/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S MURLIDHAR DEEN DAYAL, AJMER 2. IZR;FKHZ@ THE RESPONDENT- ITO, AJMER 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1389/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR