TRIBHOVANDAS BHIMJI ZAVERI WESTEND, MUMBAI V. ASST CIT 19(1), MUMBAI

ITA 1508/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78948 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARESH VAKHARIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 1508/MUM/2013 ( / ASSESSMENT YEAR: 2006-07) TRIBHOVANDAS BHIMJI ZAVERI WESTEND 442, CHITRAKAR DHURANDHAR MARG, KHAR (W), MUMBAI-400 052 / VS. ASST. CIT, CENTRAL CIRCLE 19(1), PIRAMAL CHAMBERS, LAL BAUG, PAREL, MUMBAI-400 012 ' ./# ./PAN/GIR NO. AACFT 7935 P ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ ' ( / APPELLANT BY : SHRI PARESH VAKHARIA %&'$ ' ( / RESPONDENT BY : SHRI MAURYA PRATAP )* + ' , / DATE OF HEARING : 21.05.2014 -./ ' , / DATE OF PRONOUNCEMENT : 21.05.2014 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI (CIT(A) FOR SHORT ) DATED 05.11.2012, CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) IN ITS CASE FOR THE ASSESSMENT YEAR (A.Y.) 2006-07 VID E ORDER DATED 29.03.2011. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, A FIRM DEALING IN JEWELLERY AND PRECIOUS STONES, WAS SUBJECT TO SURVEY ACTION U/S.1 33A OF THE ACT DURING THE RELEVANT PREVIOUS YEAR ON 05.10.2005, WHEREAT AN INVENTORY O F ITS STOCK-IN-TRADE WAS TAKEN, AND 2 ITA NO. 1508/MUM/2013 (A.Y. 2006-07) TRIBHOVANDAS BHIMJI ZAVERI WESTEND VS. ASST. CIT PHYSICAL STOCK FOUND TO BE IN EXCESS OF THE BOOK ST OCK, LEADING TO DETECTION OF EXCESS STOCK, BY RS.87,97,484/-. THE ASSESSEE CONCEDED TO THE SAID EXCESS. ACCORDINGLY, A DISCLOSURE VIDE STATEMENT DATED 06.08.2010 TOWARD T HE SAME IN THE SUM OF RS.90 LACS WAS MADE, AGREEING TO PAY TAX THEREON. THE ASSESSEE, HO WEVER, OFFERING ONLY A SUM OF RS.87.97 LACS PER ITS RETURN OF INCOME FOR THE YEAR , ADDITION FOR THE BALANCE RS.2,02,516/-, WHICH WAS EXPLAINED TO HAVE REMAINED UNDISCLOSED TH ROUGH OVERSIGHT, WAS MADE. THE PRESENT PROCEEDINGS ARE IN RELATION TO THE LEVY OF PENALTY U/S. 271(1)(C) IN RESPECT OF THIS ADDITION, HAVING BEEN SINCE CONFIRMED BY THE FIRST APPELLATE AUTHORITY, SO THAT THE ASSESSEE IS IN SECOND APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE ARE CLEARLY UNABLE TO APPRECIATE THE REVENUES CASE. DISCREPANC Y IN BOOK STOCK TO THE EXTENT OF RS.87.97 LACS WAS FOUND DURING SURVEY, AGAINST WHIC H THE ASSESSEE, TO COVER SCOPE FOR ANY OTHER DISCREPANCY OR OMISSION, MADE A LUMP-SUM DISC LOSURE AT RS.90 LACS, AND WHICH STOOD GIVEN EFFECT TO BY ACCEPTING THE ADDITION FOR THE BALANCE AMOUNT OF RS.2.03 LACS IN ASSESSMENT AND, THUS, HONORING THE DISCLOSURE MADE DURING SURVEY. THAT BY ITSELF WOULD NOT MAKE IT A GROUND FOR CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME. WHAT, WE WONDER, ARE THE PARTICULARS OF INCOME THAT THE ASSESSEE HAS CONCEALED OR INACCURATELY FURNISHED, WHEN ALL THAT THE REVENUE H AS AGAINST THE ASSESSEE IS A DISCLOSURE STATEMENT MADE AT A ROUND FIGURE TO COVER UP THE CO NTINGENCY OF ANY OTHER DISCREPANCY. UNLESS, THEREFORE, A DISCREPANCY OR MISSTATEMENT IN THE RETURN IS DETECTED, THERE IS NO BASIS FOR ALLEGING SO. IN FACT, AS ALSO OBSERVED DURING H EARING, THE BOARD HAS ITSELF TIME AND AGAIN EXHORTED ITS OFFICERS TO UTILIZE SEARCH AND SURVEY PROCEEDINGS FOR GATHERING MATERIALS RATHER THAN BALD DISCLOSURES, WHILE IN TH E INSTANT CASE IT WOULD NOT QUALIFY AS DISCLOSURE, BEING ONLY MADE TO COVER ANY ERROR OR OMISSION IN WORKING THE EXCESS STOCK, WHILE NONE WAS FINALLY FOUND. THE PRINCIPLE LAID D OWN BY THE APEX COURT IN CIT VS. SURESH CHANDRA MITTAL [2001] 251 ITR 9 (SC) WOULD IN OUR VIEW CLEARLY AP PLY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. WE, AC CORDINGLY, VACATING THE FINDINGS OF THE AUTHORITIES BELOW, DELETE THE LEVY OF THE IMPUGNED PENALTY. WE DECIDE ACCORDINGLY. 3 ITA NO. 1508/MUM/2013 (A.Y. 2006-07) TRIBHOVANDAS BHIMJI ZAVERI WESTEND VS. ASST. CIT 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 0/ 1 )2 30 ' * 4 ' 56 ORDER PRONOUNCED IN THE OPEN COURT ON MAY 21, 2014 SD/- SD/- (AMIT SHUKLA ) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 7+ MUMBAI; 8) DATED : 23.05.2014 *.)../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. ;*< = %)>2 , , >2/ , 7+ / DR, ITAT, MUMBAI 6. = ?3 @ + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 7+ / ITAT, MUMBAI