Ace Infrastructure Pvt. Ltd., Nadiad V. The Asstt. Commissioner of Income Tax, Nadiad

ITA 1415/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5909 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: S N DIVETIA
• Keywords: Search and seizure; Peak credit
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1415/AHD/2016 (ASSESSMENT YEAR: 2008-09) ACE INFRASTRUCTURE PVT. LTD. 501, CITY POINT, NR. PARAS CINEMA, COLLEGE ROAD, NADIAD V/S ASSISTANT COMMISSIONER OF INCOME TAX, NADIAD (APPELLANT) (RESPONDENT) PAN: AAFCA 2444J APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SHRI G.C. DAXINI, SR. D.R. ( )/ ORDER DATE OF HEARING : 01 -03-201 8 DATE OF PRONOUNCEMENT : 19-03-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-2, VADODARA DATED 01.03.2016 PERTAINING TO A.Y. 2008-0 9. ITA NO. 1415 /AHD/2016 . A.Y. 2008-0 9 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S. 271AAA OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE FILED ITS RETURN OF INCOME ON 30.09.2008 SHOWING LOSS OF RS. 51,11,401/ -. A SEARCH AND SEIZURE ACTION WAS CONDUCTED ON 03.04.2008 AND PURSUANCE TO THE NOTICE U/S. 153A OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME DE CLARING LOSS OF RS. 13,81,860/- ON 31.03.2009. IN THIS RETURN, THE ASSESSEE INCLUDE D THE DISCLOSED INCOME. THE ASSESSMENT WAS COMPLETED AFTER MAKING ADDITION OF R S. 2,34,84,455/-. 4. PENALTY PROCEEDINGS U/S. 271AAA WERE SEPARATELY INI TIATED. 5. THE ADDITIONS MADE BY THE A.O. WERE SUBSTANTIALLY R EDUCED BY THE LD. CIT(A). THEREFORE, THE ONLY ADDITION SURVIVED RELATED TO TH E ADDITION ON ACCOUNT OF PEAK CREDIT + ARITHMETICAL DIFFERENCE IN THE WORKIN G OF THE PEAK CREDIT WHICH WERE DISCLOSED DURING THE COURSE OF THE SEARCH PROC EEDINGS AND OFFERED FOR TAXATION IN THE RETURN OF INCOME. THE OTHER ADDITIO NS/DISALLOWANCES STAND DELETED. THE ONLY ADDITION SURVIVED FOR THE LEVY OF PENALTY RELATED TO THE PEAK CREDIT ADDITIONS WHICH WERE ACCEPTED AT THE TIME OF SEARCH AND INCLUDED IN THE RETURN OF INCOME AND THE TAXES WERE PAID THEREON. 6. ON THESE FACTS, LET US CONSIDER THE PROVISIONS OF S ECTION 271AAA OF THE ACT:- 271AAA. PENALTY WHERE SEARCH HAS BEEN INITIATED. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHER E 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 UNDISCLOSED INCOME OF THE SPECI FIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, ITA NO. 1415 /AHD/2016 . A.Y. 2008-0 9 3 (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MAN NER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISC LOSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF AN Y, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF TH E UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, SO 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 REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACT IONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARC H IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE REL ATING TO SUCH PREVIOUS YEAR; OR (B ) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMIS SIONER OR COMMISSIONER BEFORE THE DATE OF THE SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B ) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS YEA R (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 FOR SUC H YEAR HAS NOT EXPIRED BEFORE THE ITA NO. 1415 /AHD/2016 . A.Y. 2008-0 9 4 DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED.] 7. IN THE LIGHT OF THE AFORE-STATED PROVISIONS OF SECT ION 271AAA AND FACTS OF THE CASE, THERE IS NO DISPUTE THAT THE DEFINITIONS OF SPECIFIED PREVIOUS YEAR APPLY IN THE CASE OF THE ASSESSEE. CLAUSE (2) GIVES IMMUN ITY FROM THE LEVY OF PENALTY IF THOSE CONDITIONS ARE FULFILLED. THERE IS NO DISPUTE THAT THE ADMITTED UNDISCLOSED INCOME HAS BEEN SHOWN IN THE RETURN OF INCOME. THE ASSESSEE HAS ALSO PAID TAXES THEREON WITH INTEREST. 8. CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF T HE AFOREMENTIONED PROVISIONS OF SECTION 271AAA OF THE ACT, WE DO NOT FIT THIS TO BE A FIT CASE FOR THE LEVY OF PENALTY U/S. 271AAA OF THE ACT. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALT Y SO LEVIED. 9. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19- 03- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 19/03/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD.