DCIT, Cen. Cir.1, Nashik, Nashik V. Shri Inderchand Surajmal Bothra, Vaijapur

ITA 139/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56555 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Keywords: Search and seizure
• Section: 153A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 139/PN/2010 (ASSTT. YEAR: 2007-08) DY. COMMISSIONER OF INCOME TAX, ... APPELLANT CENTRAL CIRCLE -1, NASHIK V. SHRI. INDERCHAND SURAJMAL BOTHRA, ... RESPONDENT NANDLAL BUILDING, GUJRATHI GALLI, VAIJAPUR, DIST. AURANGABAD PAN : ABOPB 7045F APPELLANT BY : SHRI. S.K. AMBASTHA RESPONDENT BY : SHRI NIKHIL PATHAK DATE OF HEARING :18.10.2011 DATE OF PRONOUNCEMENT: 30.11.11 ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS : 1) THE LT. CIT(A) HAS ERRED IN DELETING THE PENA LTY LEVIED U/S. 271(1)(C ) ON THE INCOME DECLARED U/S 153A AS THERE IS NO EXP RESS PROVISION IN THE ACT GRANTING ANY IMMUNITY TO ASSESSEE FILING RETURN U/S . 153A OTHER THAN THOSE COVERED IN EXPLANATION 5 TO SEC. 271(1)(C). 2) THE LT. CIT(A) HAS ERRED IN DELETING THE PENALT Y LEVIED U/S. 271(1)(C) ON THE INCOME DECLARED U/S. 153A AFTER HOLDING THAT THE ASSESSEE WAS NOT ENTITLED TO IMMUNITY AS PER EXPLANATION 5 TO SEC. 2 71(1)(C). 2. THE RELEVANT FACTS ARE THAT THE RETURN OF INCOME FOR THE A.Y. 2007-08 UNDER CONSIDERATION WAS FILED BY THE ASSESSEE U/S. 139 ON 4.12.2007 DECLARING TOTAL INCOME OF RS. 11,90,286/- AND AGRICULTURAL INCOME O F RS. 5,40,000/-. THE TOTAL INCOME DECLARED INCLUDES THE ADDITIONAL INCOME OF R S. 10,00,000/- DECLARED BY THE ASSESSEE U/S. 132(4) OF THE ACT BEING INCOME FROM WATER TANKER SUPPLY BUSINESS. THE ASSESSEE WAS SUBJECTED TO SEARCH AND SEIZURE OP ERATION ON 22 ND NOVEMBER 2006. THE A.O ASSESSED THE TOTAL INCOME OF THE ASS ESSEE FOR THE A.Y. 2007-08 BY ITA . NO 139/PN/2010 SHRI INDERCHAND S. BOTHRA A.Y. 2007-08) PAGE OF 4 2 ACCEPTING THE INCOME RETURNED WITHOUT MAKING ANY A DDITION. THE A.O THEREAFTER LEVIED PENALTY U/S. 271(1)(C) ON THE INCOME OF RS. 10,00,000/- DECLARED BY THE ASSESSEE U/S. 132(4) OF THE ACT AND SHOWN IN THE RE TURN OF INCOME FILED U/S. 139. THE A.O HAS OBSERVED THAT THE ASSESSEE CANNOT BE G IVEN BENEFIT OF EXPLANATION 5 TO SECTION 271(1)(C ) OF THE ACT AS THE CLAUSE (II) OF EXPLANATION 5 BELOW SECTION 271(1)(C ) EXEMPTS ONLY THAT PART OF INCOME FROM TH E PENAL PROVISIONS, WHICH IS COVERED BY THE STATUTE U/S. 132(4) WHERE THE ASSE TS HAVE BEEN ACQUIRED BY THE ASSESSEE OUT OF ITS INCOME WHICH IS NOT DISCLOSED I N THE RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF THE TIME PRESCRIBED IN SECTION 139(1) AND SPECIFIED IN THE STATEMENT IN THE MANNER IN WHICH SUCH INCOME H AS BEEN DERIVED. THE A.O OBSERVED FURTHER THAT THE ASSESSEE HAS NOT SPECIFIE D IN ITS STATEMENT U/S. 132(4) THE MANNER IN WHICH SUCH INCOME HAD BEEN DERIVED EV EN THOUGH IN THE RETURN OF INCOME FILED U/S. 153A , SUCH INCOME HAS BEEN DISCL OSED. HE OBSERVED FURTHER THAT SUCH INCOME OR TRANSACTION HAVE NOT BEEN RECORDED BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR SUC H SOURCE OF INCOME. THE LD CIT(A) HAS DELETED THE ADDITION AFTER DISCUSSING TH E CASES OF THE ASSESSEE AS WELL AS THE A.O IN ITS FINDING IN PARA NO. 5.2 AND 5.3 OF THE FIRST APPELLATE ORDER REPRODUCED HEREUNDER : 5.2 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND PENALTY ORDER OF THE A.O. AND SUBMISSIONS OF THE APPELLANT MADE BEF ORE ME. THE ADDITIONAL INCOME OF RS. 10,00,000/- WAS DECLARED BY THE APPEL LANT IN THE STATEMENT U/S. 132(4) OF THE ACT AND THE SAID INCOME IS ALSO OFFERED TO TAX BY THE APPELLANT IN THE RETURN OF INCOME FILED U/S. 139 OF THE ACT. THE A.O HAS ALSO CONTENDED THAT THE APPELLANT HAS NOT POINTED-OUT T HE MANNER IN WHICH THE SAID ADDITIONAL INCOME WAS EARNED. IN FACT THE A.O HAS STATED IN PARA 6 OF THE ASSESSMENT ORDER THE MANNER WHICH THE APPELLANT HAD CLAIMED TO HAVE EARNED THE SAID INCOME DECLARED. IN THIS REGARD, I T IS PERTINENT TO NOTE HERE THAT IT HAS BEEN LAID DOWN BY THE HONBLE GUJARAT H IGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH 299 ITR 305 THAT IT IS NO T REQUIRED TO SPECIFY THE MANNER IN WHICH THE INCOME WAS EARNED IN RESPECT OF AMOUNT OFFERED TO TAX IN THE RETURN OF INCOME FILED PURSUANT TO SEARCH A CTION BY PAYING TAXES ITA . NO 139/PN/2010 SHRI INDERCHAND S. BOTHRA A.Y. 2007-08) PAGE OF 4 3 THEREON FOR AVAILING IMMUNITY FROM PENALTY UNDER EX PLANATION 5 OF SECTION 271(1)(C ) OF THE ACT. 5.3 IN VIEW OF ABOVE DISCUSSION, I AM OF THE CONSID ERED VIEW THAT THE PENALTY U/S. 271(1)(C ) OF THE ACT IS NOT LEVIABLE ON THE AMOUNT OF RS. 10,00,000/- OFFERED TO TAX BY THE APPELLANT IN THE RETURN OF INCOME FILED. 3. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES. CERTAIN UNDISPUTED MATERIAL FACTS ARE THAT WHEN SEA RCH U/S. 132 OF THE ACT WAS CONDUCTED ON BOTHARA GROUP OF CASES ON 22 ND NOVEMBER 2006, THE TIME FOR FILING OF RETURN OF INCOME U/S. 139(1) FOR THE A.Y. 2007-08 W AS STILL AVAILABLE. IN THE STATEMENTS RECORDED U/S. 132(4) OF THE ACT, THE ASS ESSEE HAD DECLARED ADDITIONAL INCOME OF RS. 10,00,000/- BEING INCOME FROM WATER T ANKER SUPPLY BUSINESS. IN THE RETURN OF INCOME FILED U/S. 153A, THE ASSESSEE DEC LARED THE TOTAL INCOME CONSISTING ADDITIONAL INCOME OF RS. 10,00,000/- DECLARED U/S. 132(4) OF THE ACT. THE A.O HAS ASSESSED THE TOTAL INCOME OF THE ASSESSEE FOR THE A .Y. BY ACCEPTING THE INCOME RETURNED WITHOUT MAKING ANY ADDITION. THE A.O HAS LEVIED THE PENALTY STATING THAT THE ASSESSEE CANNOT BE GIVEN BENEFIT OF EXPLANATION 5 TO SECTION 271(1)(C ) OF THE ACT AS THE CLAUSE (II) OF EXPLANATION 5 BELOW SECTI ON 271(1)(C ) EXEMPTS ONLY THAT PART OF THE INCOME FROM THE PENAL PROVISION, WHICH IS COVERED BY STATEMENT U/S. 132(4), WHERE THE ASSETS HAVE BEEN ACQUIRED BY THE ASSESSEE OUT OF HIS INCOME WHICH IS NOT DISCLOSED IN THE RETURN OF INCOME TO B E FURNISHED BEFORE THE EXPIRY OF THE TIME PRESCRIBED IN SECTION 139(1) AND SPECIFIED IN THE STATEMENT IN THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. WE THUS FI ND THAT THE A.O HAS LEVIED THE PENALTY MAINLY WITH THIS ALLEGATION THAT THE ASSESS EE HAS NOT SPECIFIED IN ITS STATEMENT U/S. 132(4) THE MANNER IN WHICH SUCH INCO ME HAD BEEN DERIVED. WE DO NOT FIND SUBSTANCE IN SUCH VIEW OF THE A.O SINCE UNDISPUTEDLY, THE ADDITIONAL INCOME OF RS. 10,00,000/- WAS DECLARED BY THE ASSES SEE IN HIS STATEMENTS U/S. 132(4) OF THE ACT AND ALSO OFFERED THE SAME TO TAX IN ITS RETURN OF INCOME FILED U/S. 139 OF THE ACT. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH , 299 ITR 305 (GUJ) FOLLOWED BY THE LD CIT(A), IT HAS BEEN HELD THAT IT IS NOT ITA . NO 139/PN/2010 SHRI INDERCHAND S. BOTHRA A.Y. 2007-08) PAGE OF 4 4 REQUIRED TO SPECIFY THE MANNER IN WHICH THE INCOME WAS EARNED IN RESPECT OF THE AMOUNT OFFERED TO TAX IN THE RETURN OF INCOME FILED PURSUANT TO SEARCH ACTION BY PAYING TAXES THEREON FOR AVAILING IMMUNITY FROM PEN ALTY UNDER EXPLANATION 5 OF SECTION 271(1)(C ) OF THE ACT. THE SAME DECISION HA S BEEN RELIED UPON BY THE LD. A.R. BEFORE US. SINCE THE ISSUE RAISED IS FULLY CO VERED BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH (SUPRA) FOLLOWED BY THE LD CIT(A), WE ARE NOT INCLINED TO INTERFERE WIT H THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUNDS ARE ACCOR DINGLY REJECTED. 4. IN RESULT, APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH NOVEMBER 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH NOVEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (CENTRAL), NAGPUR 4. THE CIT(A)-I, NASHIK 4. THE D.R. A BENCH, PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE