Shri Jethanand Khemchand Luhana, Godhra V. DCIT, Central Circle-1, Baroda

ITA 1456/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3653 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-04-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIRMIT ME H TA
• Section: 271(1)(c); 54F; 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, HONBLE VICE-PRESIDENT AND SHRI T.S. KAPOOR HONBLE ACCOUNTANT MEMBER ITA.NO.1456/AHD/2018 / ASSTT.YEAR : 2008-09 SHRI JETHANAND KHEMCHAND LUHANA 27/2, ANKUR SOCIETY BAMROLI ROAD,GODHRA 389 001 PAN: AASPL 5243 D VS DCIT, CENT.CIR.1 BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI NIRMIT MEHTA, AR REVENUE BY : SHRI VINOD TANWANI, SR.DR / DATE OF HEARING : 03/03/2020 / DATE OF PRONOUNCEMENT: 4/03/2020 !'/ O R D E R PER RAJPAL YADAV, VICE-PRESIDENT ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-12, AHMEDABAD DATED 23.3.2018 PASSED FOR THE ASSESSMENT YEAR 2008-09. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.2,22,058/- WHICH WAS I MPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. ITA NO.1456/AHD/2018 2 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 153A OF THE ACT WAS CARRIED OUT AT THE PREMISES OF DHANJIMAMA GROUP OF CASES ON 3.7.2012. A NOTICE UNDER SECTION 153A WAS ISSUED UPON THE ASSES SEE, AND HE FILED HIS RETURN OF INCOME ON 14.8.2014 DECLARING TOTAL INCOM E AT RS.1,65,30,860/-. THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME OF RS. 9,98,000/-. THE FACTS WITH REGARD TO DISCLOSURE OF THIS ADDITIONAL INCOME, AND HOW THE LD.AO HAS INITIATED PENALTY PROCEEDINGS QUA THIS ADDITIONAL INCOME IS BEING NOTICED BY THE AO IN THE BRIEF ASSESSMENT ORDER DATED 31.1.2015. THE R ELEVANT PART READS AS UNDER: 4. THE ASSESSEE IN HIS RETURN OF INCOME HAS OFFERE D ADDITIONAL INCOME OF RS. 9,80,000/- WHICH IS AS PER THE DISCLOSURE OF ADDITIONAL INCOME MADE DURING THE COURSE OF SEARCH PROCEEDINGS. THIS ADDITIONAL INCOME HAS BEEN OFFERED DUE TO SEARCH ACTION AND THE FINDI NGS THEREOF, THUS THE AMOUNT OF RS. 9,80,000/- IS UNDISCLOSED INCOME OF T HE ASSESSEE. THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IT ACT ARE INITIATED FOR THIS DEFAULT. 5.1 DURING THE ASSESSMENT PROCEEDINGS, IT WAS OBSER VED THAT THE ASSESSEE HAD SOLD ONE CAPITAL (LAND) ON 4.8.2007 I. E. F.Y.2007-08 (A.Y.2008-09) RESULTING .INTO TAXABLE CAPITAL GAIN. AS AGAINST THIS, THE ASSESSEE HAD MADE INVESTMENT IN THE RESIDENTIAL HOU SE PROPERTY AND ACCORDINGLY A DEDUCTION U/S 54F TO THE TUNE OF RS.5 0 LACS WAS CLAIMED IN THE RETURN OF INCOME FILED BY THE ASSESSEE U/S 1 39(1) OF THE IT ACT IN THE REGULAR COURSE. HOWEVER, WHILE FILING THE RETUR N U/S 153A OF THE IT ACT, THE ASSESSEE HAD REVISED THE CLAIM TO RS.40,20 ,000/- AS AGAINST THE ORIGINAL CLAIM OF RS.50 LACS THEREBY WITHDRAWING TH E CLAIM TO THE EXTEND OF RS.9,80,000/-. 4. HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 2 71(1)(C) READ WITH EXPLANATION-5A, AND THEREAFTER IMPOSED PENALTY OF R S.2,22,068/-. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE . 5. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT DURING THE COURSE OF SEARCH NO MATERIAL WAS FOUND EXHIBITI NG THE FACT THAT THE ASSESSEE HAS MADE EXCESSIVE CLAIM UNDER SECTION 54F OF THE ACT IN HIS ORIGINAL ITA NO.1456/AHD/2018 3 RETURN OF INCOME. THE ASSESSEE HIMSELF HAS VOLUNTA RILY WITHDRAWN PART OF THE CLAIM, AND DISCLOSED ADDITIONAL INCOME. THE AO HAS NOT MADE ANY REFERENCE TO THE SEIZED MATERIAL IN THE ASSESSMENT ORDER. HE TOOK US THROUGH PARA 4 AND 5.1 OF THE ASSESSMENT EXTRACTED (SUPRA). THUS, ON THE STRENGTH OF THE TRIBUNALS ORDER IN ITA NO.1266/AHD/2019 AND OTHERS , HE CONTENDED THAT NO PENALTY CAN BE IMPOSED UPON THE ASSESSEE. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDER OF THE LD.CIT(A). 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. EXPLANATION 5A APPENDED TO SECTION 271(1)(C) HAS A DIRECT BEARING ON THE CONTROVERSY, AND THEREFORE, WE DEEM IT APPROPRIATE TO TAKE NOTE OF THIS EXPLANATION , WHICH READS AS UNDER: '[EXPLANATION 5A.WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSE SSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOL LY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND CLAIMS THAT SUCH ENTR Y IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS I NCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE D ATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.]' ITA NO.1456/AHD/2018 4 7. A PERUSAL OF THE ABOVE EXPLANATION WOULD INDICATE THAT THIS EXPLANATION COULD BE INVOKED IF DURING THE COURSE OF SEARCH AN Y INCRIMINATING MATERIAL REPRESENTING ANY MONEY, BULLION, JEWELLERY OTHER VALUABLES ARTICLES OR THINGS OR ENTRY IN ANY BOOKS OF ACCOUNTS FOUND DURI NG THE COURSE OF SEARCH, BASED ON SUCH MATERIAL, ADDITION IS BEING MADE. TH IS EXPLANATION CANNOT BE INVOKED SIMPLY FOR THE REASON THAT, HAD THE SEARCH NOT BEEN CARRIED OUT, THE ASSESSEE WOULD NOT HAVE DISCLOSED THIS ADDITIONAL I NCOME. SOMEWHAT AN IDENTICAL SITUATION WAS CONSIDERED BY THE ITAT, RAJ KOT BENCH IN THE CASE OF SHRI MANSUKHBHAI R. SORATHIA AND OTHERS, IN IT(SS)A .NO.46 TO 52/RJT/2012, WHEREIN QUESTION BEFORE THE TRIBUNAL WAS, WHEN NO M ONEY, BULLION, JEWELLERY OR BOOK ENTRY WAS FOUND AT THE TIME OF SEARCH, AND ONLY EVIDENCE AGAINST THE ASSESSEE IS AN ADMISSION OF ADDITIONAL INCOME MADE IN THE STATEMENT UNDER SECTION 132(4), WHETHER SUCH ADMISSION TANTAMOUNT T O DISCLOSURE OF MONEY, BULLION, JEWELLERY OR DIARY AND INCOME DISCLOSED IS TO BE CONSIDERED AS CONCEALED INCOME OR NOT? THIS ASPECT HAS BEEN CONS IDERED BY THE TRIBUNAL, WHEREIN IT HAS BEEN HELD ON THE STRENGTH OF AUTHORI TATIVE PRONOUNCEMENT OF HONBLE HIGH COURTS THAT SOLELY ON THE BASIS OF DEC LARATION, ADDITION IS NOT POSSIBLE. THEREFORE, RESPECTFULLY FOLLOWING THE ABO VE DECISION OF THE ITAT, RAJKOT BENCH, WE FIND FORCE IN THE CONTENTION OF TH E LD.COUNSEL FOR THE ASSESSEE AND DELETE THE IMPUGNED PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 4 TH MARCH, 2020 AT AHMEDABAD. SD/- SD/- ( T.S. KAPOOR ) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 04/03/2020