Shri Shamjibhai R. Kewadia,HUF, Surat V. The Income tax Officer,Ward-8(4), Surat

ITA 1679/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5937 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-05-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 15-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI LAXMI
• Assessee Lawyers: DENNIS N CHOKSI
• Keywords: Wrong claim
• Section: 271(1)(c); 143(3); 205

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AT SURAT CAMP BEFORE S/SHRI T.K. SHARMA, JM AND D.C.AGRAWAL, AM SHRI SHAMJIBHAI R. KEWADIA, HUF, A/15, HARI DARSHAN SOCIETY, OPP. BHULABHAI PARK, KATARGAM, SURAT. VS . INCOME-TAX OFFICER, WARD 8(4), SURAT. (APPELLANT) .. (RESPONDENT) APPELLANTS BY :- SHRI DENNIS N. CHOKSI, AR RESPONDENT BY:- SMT. JYOTI LAXMI, SR.DR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUND:- (1) THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C ) OF THE ACT, AMOUNTING TO RS.61,435/- AS IMPOSED BY THE LD. ITO WARD 8(4) SURAT FOR ADDITION MADE OF RS.2,81,744/- FOR AGRICU LTURAL INCOMES ALLEGEDLY TREATED AS INCOME FROM UNDISCLOSE D SOURCES WITHOUT APPRECIATING THE FACT THAT THE SUBSTANCE OF THE INITIATION OF PENALTY PRO CEEDINGS BEING ADDITION OF RS.2,81,744/- MADE FOR AGRICULTURAL INC OMES ALLEGEDLY TREATED AS INCOME FROM UNDISCLOSED SOURCE S, WAS ALREADY DELETED BY THE SAME LD. CIT(A)-V, SURAT VID E HIS APPELLATE ORDER DATED 27.02.2007 (APPEAL NO.CAS-V/9 7/2006- 07). ITA NO.1679/AHD/2008 ASST. YEAR:2003-04 2 THAT PENALTY U/S 271(1)(C) IS LEVIABLE FOR CONCEALM ENT OF INCOME OR FILING OF INACCURATE PARTICULARS AND NOT IN RESP ECT OF ADDITION MADE ON ESTIMATES AND AD HOC BASIS PURELY ON CONJEC TURES, SURMISES AND GUESS WORK. 2. THE APPEAL IS AGAINST LEVY OF PENALTY UNDER SECT ION 271(1)(C). THE FACTS OF THE CASE ARE THAT ASSESSEE HAD FILED RETUR N OF INCOME FOR ASST. YEAR 2003-04 AT A LOSS OF RS.17,733/- ALONG WITH NE T AGRICULTURAL INCOME OF RS.3,54,590/- SHOWING GROSS RECEIPT OF AT RS.4,5 4,733/-. IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) ON 28. 3.2006, THE AO DID NOT TREAT A SUM OF RS.2,81,741/- AS AGRICULTURAL IN COME AND MADE THE ADDITION THEREOF AS INCOME FROM OTHER SOURCES. IN A DDITION TO THIS, AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) AND FINALLY LEVIED THE PENALTY OF RS.61,435/- TREATING THE SUM OF RS.2 ,81,754/- AS CONCEALED INCOME. IN QUANTUM PROCEEDINGS THE MATTER WENT BEFO RE THE LD. CIT(A). WHO CONFIRMED THE ADDITION OF RS.81,960/-ONLY AND D ELETED THE REST. IN APPEAL AGAINST THE LEVY OF PENALTY LD. CIT(A) CONFI RMED THE LEVY OF PENALTY ON THE GROUND THAT ASSESSEE HAS FAILED TO D ISCHARGE THE BURDEN AS LAID DOWN IN EXPLANATION -1. IN THIS REGARD HE OBSE RVED AS UNDER :- I HAVE CONSIDERED THE CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FACTS LEADING TO LEVY OF PENALTY HAVE ALS O BEEN CAREFULLY CONSIDERED BY ME. INACCURATE PARTICULARS MAY BE FU RNISHED IN ORDER TO STRENGTHEN CONCEALMENT OF INCOME. THEREFORE, THOUGH THE EXPRESSIONS 'CONCEALED THE PARTICULARS OF HIS INCOME' AND 'FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME' ARE USED IN DISJUNCTIVE TERMS IN S. 271(1)(C) OF THE IT, ACT, 1961, AND THESE ARE TWO SEPARATE OFFENCES, THE COMMISSION OF ONE DOES NOT EXCLUDE THE POSSIBILITY OF THE COMMISSION OF THE OTHER. THE TWO CHARGES CAN, AND VERY OFTEN, DO SUBSIST TOGETHER AS LAID DOWN IN (130 ITR 602(CAL) RAHMAT D EVELOPMENT AND ENGINEERING CORPORATION). EXP.-L AFTER AMENDMENTS, W.E.F, 10/09/86, PROVIDES THAT WHERE IN RESPECT OF ANY FACTS MATERIA L TO THE COMPUTATION OF TOTAL INCOME, ANY PERSON FAILS TO OFFER AN EXPLANAT ION, OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE OR WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE ITS BONAFIDE AND TH AT ALL THE FACTS RELATING 3 THERETO AND MATERIAL TO THE COMPUTATION OF HIS TOTA L INCOME HAVE BEEN DISCLOSED, THEN THE AMOUNT ADDED OR DISALLOWED SHAL L BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. (B.A.BALSUBRAMANIAM & BROTHERS CO. V S. CIT (1999) 236 ITR 977, 978 (SC)), THE BURDEN IS ON THE ASSESSEE T O SHOW THAT THERE WAS NO CONCEALMENT OF ANY PARTICULARS OF ANY INCOME(C]T VS. T. J.MATHAI (2004) 269 ITR 492 (KERALA)) IN WHICH THE APPELL ANT HAS MISERABLY FAILED IN THE FACTS AND CIRCUMSTANCES OF THE CASE A ND THEREFORE AO'S ACTION OF LEVYING THE PENALTY IS UPHELD. 3. BEFORE US, LD. AR FOR THE ASSESSEE SUBMITTED THA T IT IS ONLY A QUESTION OF ESTIMATE OF AGRICULTURAL EXPENSES. THE ASSESSEE HAS TAKEN AGRICULTURAL EXPENSES AT 22% WHEREAS THE LD. CIT(A) HAS TAKEN THE EXPENSES AT 40%. IN FACT THERE IS NO EVIDENCE EITHE R OF FILING OF INACCURATE PARTICULARS IN TERMS OF EXPENSES OR OF CONCEALING P ARTICULARS OF INCOME. THE DEPARTMENT HAS ALSO NOT PREFERRED ANY APPEAL AG AINST THE QUANTUM ORDER. FURTHER THE LD. AR SUBMITTED THAT THE CASE O F THE ASSESSEE CANNOT COME UNDER EXPLANATION-1 AS ALL NECESSARY EVIDENCE HAS BEEN FURNISHED. 4. THE LD. DR ON THE OTHER HAND, SUPPORTED THE ORDE R OF LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. THE ADDITION SURVIVES OF THIS IS OF RS.8 1,960/-. THIS ADDITION IS SUSTAINED ON ACCOUNT OF ESTIMATING AGRICULTURAL EXP ENSES. THE ESTIMATE MADE BY THE ASSESSEE HAS BEEN SUBSTITUTED BY THE ES TIMATE MADE BY LD. CIT(A). THEREFORE, WE DO NOT FIND ANY CASE FOR SUST AINING THE PENALTY. WE DERIVE SUPPORT FROM THE HON. APEX COURT IN THE C ASE OF CIT VS. RELIANCE PETRO PRODUCTS (SC)322 ITR 158 (SC) WHERE PENALTY CANNOT BE LEVIED MERELY FOR MAKING UNSUSTAINABLE CLAIM. FURTH ER IT HAS BEEN HELD BY VARIOUS COURTS SUCH AS ADDL.CIT VS. SMT. CHANDRAKAN TA & ANR.(1994) 205 ITR 607 (MP), CIT VS. SHRI KRISHNA TRADING CO. (2002) 253 ITR 645 (KER), CIT VS.CHANDRA VILAS HOTEL (2007) 291 IT R 202 THAT WHERE 4 ADDITION IS MADE ON ESTIMATE BASIS AND THERE IS NO EVIDENCE OF ANY WRONG CLAIM THEN PENALTY FOR CONCEALMENT CANNOT BE SUSTAI NED. IN VIEW OF THIS, WE CANCEL THE PENALTY. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER WAS PRONOUNCED IN OPEN COURT ON 18/06/2010 SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 18/06/ 2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD