Rajesh Popli, Shimla V. DCIT, Chandigarh

ITA 1394/CHANDI/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6691 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 24-10-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMR RENU AMITABH CIT DR
• Section: 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BEN CH B, CHANDIGARH , ! . .., # $, %& BEFORE: SH. SANJAY GARG, JUDICIAL MEMEMBER & DR. B. R.R. KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 1394/CHD/ 2016 / ASSESSMENT YEAR : 2011-12 RAJESH POPLI HEMANT LODGE, MURRAY FIELD ESTATE NAV BAHAR, SHIMLA THE DCIT CENTRAL CIRCLE-II, CHANDIGARH ITO, HIMALAYA MARG, SECTOR 17 CHANDIGARH ./ PAN NO: ABLPP3283G / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI TEJ MOHAN SINGH (PROXY FOR SHR I VISHAL MOHAN) # ! ' / REVENUE BY : SMR. RENU AMITABH, CIT DR $ % ! &/ DATE OF HEARING : 14/02/2019 '()* ! &/ DATE OF PRONOUNCEMENT : 06/05/2019 %'/ ORDER PER DR. B.R.R. KUMAR, A.M THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-3, GURGAON DT. 26/09/2016. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE LEVY OF PENALTY UNDER SECTION 271AAA OF RS. 82,395/-. THE PENALTY SO IMPO SED IS ILLEGAL AND HAS WRONGLY BEEN UPHELD.. 3. FACTS TAKEN FROM THE ORDER OF THE LD. CIT(A) ARE TH AT A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE I.T. ACT, L961 WAS COND UCTED ON 08.10.2010 IN POPLI GROUP OF CASES. THE ASSESSEE HAD FILED RETURN U/S 139 OF THE INCOME TAX ACT,1961 ON 07.07.2012 SHOWING A TOTAL INCOME OF RS. 8,94,195/-. 4. DURING THE SEARCH AN AMOUNT OF RS. 21,46,150/- H AS BEEN FOUND AT THE PREMISES BELONGING TO THE ASSESSEE OUT OF WHICH AN AMOUNT OF RS. 640503/- WAS TREATED AS UNDISCLOSED INCOME. FURTHER JEWELLERY VA LUED RS. 10,85,530/- WAS FOUND OUT OF WHICH AN AMOUNT OF RS. 183450/- WAS TR EATED AS UNDISCLOSED INCOME. 2 5. AT THE OUTSET WE FIND THAT THE ADDITION ON ACCOU NT OF JEWELLERY WAS MADE ON PROTECTIVE BASIS AND HENCE THE PENALTY ERRONEOUS LY CONFIRMED BY THE LD. CIT(A) IS HEREBY DIRECTED TO BE OBLITERATED. 6. REGARDING THE AMOUNT OF RS. 640,503/- TREATED AS UNDISCLOSED INCOME, IT WAS SUBMITTED BY THE ASSESSEE THAT THE AMOUNTS BELO NGS TO FOUR ENTITIES WHICH ARE AS UNDER: A) CASH AS PER THE BOOKS OF SHRI. RAJESH POPLI, PROP. M/S NEW SHIMLA HARDWARE RS. 3,71,084.77 B) CASH AS PER THE BOOKS OF HEMANT POPLI RS. 13,4 5,647.07 C) CASH OF THE DAUGHTER OF THE ASSESSEE JYOTI KHAJU RIA RS. 3,00,000.00 D) CASH OF SHRI. VIJAY KISHAN SHARMA RS. 1,50,0 00.00 RS. 21,66,731.84 7. DURING THE ASSESSMENT PROCEEDINGS IT WAS FOUND T HAT THE EXTRACT OF CASH BOOK OF HP TRADERS AND CONTRACTORS ON THE DATE OF S EARCH WAS RS. 145647/- INSTEAD OF RS. 13,45,647/- AS CLAIMED BY THE ASSESS EE. SIMILARLY THE PROPRIETARY CONCERN OF HEMANT POPLI , SHIMLA HARDWARE AND WELDI NG WORKS HAS SHOWN CASH BALANCE OF RS. 71,084/- INSTEAD OF RS. 3,71,084/- . AFTER RECONCILIATION OF THE BALANCE SHEET THE ASSESSING OFFICER HAS MADE ADDITI ON OF RS. 8,00,503/-. THE TRIBUNAL AFTER EXAMINATION OF ALL THE FACTS ALLOWED FURTHER RELIEF OF RS. 160,000/- AND THE BALANCE OF RS. 6,40,503/-HAS BEEN CONFIRMED . WE HAVE CAREFULLY GONE THROUGH THE ARGUMENTS TAKEN BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. SECTION 271AAA READS AS UNDER: SECTION 271AAA OF INCOME-TAX ACT, 1961 DEALS WITH PENALTY WHERE SEARCH HAS BEEN INITIATED (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CAS E WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCL OSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES TH E MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; 3 (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT O F THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) UNDISCLOSED INCOME MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMI SSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FA LSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCT ED; (B) SPECIFIED PREVIOUS YEAR MEANS THE PREVIOUS YE AR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE S AID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 8. IN THE INSTANT CASE WE FIND THAT THE AMOUNT OF R S. 640503/- HAS NOT BEEN A MATTER OF DISCLOSURE UNDER SUB SECTION 4 OF SECTION 132 AND HENCE THE PROVISIONS OF 271AAA(2) ARE NOT APPLICABLE. THE AMOUNT OF RS. 6,40,503/- CAN BE TREATED AS UNDISCLOSED INCOME AS PER THE PROVISIONS OF SUB SEC TION 4(A) OF SECTION 271AAA AND ALSO THE EXPLANATION OF THE ASSESSEE HAS BEEN F OUND TO BE FALSE ON GOING THROUGH THE ENTIRE BUSINESS AFFAIRS AND BOOKS OF AC COUNTS IN THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE ABOVEMENTIONED PROVISIONS. HENCE, WE HEREBY DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT(A) ON THIS GROUND. 4 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- . .., # $, (SANJAY GARG ) ( DR. B.R.R. KUM AR, AM) / JUDICIAL MEMBER %& / ACCOUNTANT MEMBER 06/05/2019 (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR