Shri Manshukhbhai Hirjibhai Lukhi, Surat V. The Income tax Officer,Ward-6(3), Surat

ITA 187/AHD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67725 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: D K PARIKH
• Keywords: Unexplained investment; Revised return
• Section: 143(3)

Judgement Text

ITA NO 187/ AHD/20013 . A.Y. 2006- 07 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 187/AHD/2013 (ASSESSMENT YEAR: 2006-07) MANSHUKHBHAI HIRJIBHAI LUKHI 60,ISHVERKRUPA SOCIETY, OPP. CHOWPATY, NANA VARACHHA, SURAT (APPELLANT) VS. THE I.T.O WARD-6(3), SURAT (RESPONDENT) PAN: ABGPL2258L APPELLANT BY : SHRI D.K. PARIKH, A.R. RESPONDENT BY : SHRI O.P. BATHEJA. SR. D.R. ( )/ ORDER DATE OF HEARING : 19.-09-20 13 DATE OF PRONOUNCEMENT : 27 -09-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE PENALTY ORDER DATED 25.03.2011 PASSED U/S 271(1)(C) PASSED BY THE A.O. WHEREIN PENALTY OF RS. 1,83,115/- WAS LEVIED AND THE ORDER OF A.O. WAS UPHELD BY CIT(A) VIDE ORDER DATED 19.11.2012. 2. THE FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AU THORITIES ARE AS UNDER: 3. ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS O F CIVIL CONSTRUCTION. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2006-0 7 ON 28.12.2006 AND ITA NO 187/ AHD/20013 . A.Y. 2006- 07 2 DECLARED THE TOTAL INCOME OF RS. 1,40,022/- INCLUDI NG AGRICULTURE INCOME OF RS. 40,000/- FOR RATE PURPOSES. THE ASSESSMENT UNDER SECTION 143(3) WAS FINALIZED ON 19.12.2009 AND THE TOTAL INCOME WA S DETERMINED AT RS. 8,71,060/- BY MAKING THE FOLLOWING ADDITIONS. 1 UNACCOUNTED INVESTMENT U/S 69B OF THE ACT RS. 6, 38,139/- 2 AGRICULTURE INCOME TREATED AS OTHER SOURCE RS. 4 0,000/- 3 ESTIMATION OF CONSTRUCTION INCOME RS. 92,900/- TOTAL RS. 7,71,039 4. ON THE AFORESAID ADDITIONS OF RS. 7,71,039/- MADE A SSESSING OFFICER CIT(A) DELETED THE ADDITION OF RS. 9,29,00/- AND TH E BALANCE ADDITION WAS CONFIRMED. ON THE ADDITION OF RS. 6,78,139/- CONFIR MED BY CIT(A). A.O. LEVIED PENALTY OF RS. 1,83,115/- UNDER SECTION 271( 1)(C) OF THE ACT VIDE ORDER DATED 25.03.2011 AS HE WAS OF THE VIEW THAT W HEN THE ASSESSEE WAS ASKED TO FURNISH DETAILS REGARDING INVESTMENT AND E XPENDITURE ABOVE RS. 50,000/-, THE ASSESSEE DID NOT SUBMIT ANY DETAILS O F INVESTMENT BUT HOWEVER REVISED HIS RETURN OF INCOME ON 28.11.2008 WHEREIN THE ADDITIONAL INCOME OF RS. 6,38,200/- ON ACCOUNT OF I NVESTMENT IN LAND PROPERTIES WAS DISCLOSED. THE ASSESSING OFFICER WA S OF THE VIEW THAT THE REVISED RETURN WAS NOT FILED SUO MOTU BUT WAS FILED ONLY WHEN THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS. HE WAS THEREFORE OF THE VIEW THAT THE REVISION OF INCOME CANNOT BE CONSIDERED TO BE VOLUNTARY AND THEREFORE THE ASSESSEE HAD COMMITTED DEFAULT BY FUR NISHING INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALED THE INC OME. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED TH E MATTER BEFORE ITA NO 187/ AHD/20013 . A.Y. 2006- 07 3 CIT(A), CIT(A) VIDE ORDER DATED 19.11.2012 UPHELD T HE PENALTY LEVIED BY ASSESSING OFFICER BY HOLDING AS UNDER: 7. DECISION 7.1 THE APPELLANTS CONTENTION HAS BEEN EXAMINED. T HE RETURN OF INCOME WAS FILED IN 2006. HOWEVER, THE UNACCOUNTED INVESTMENT IN PROPERTY WAS ADMITTED ON 28.11.2008 BARELY A MONTH BEFORE THE ASSESSMENT PROCEEDINGS WERE GETTING TIME BARRED BY LIMITATION AND THAT TOO AFTER THE APPELLANT WAS ASKED TO FURNISH T HE DETAILS OF INVESTMENT. THE PROPERTY AGREEMENT WAS MADE MUCH E ARLIER. THE EXPLANATION OF THE APPELLANT THAT HE DETECTED THE M ISTAKE AFTER SUCH LONG GAP JUST BEFORE THE ASSESSMENT PROCEEDINGS WER E TO BE FINALIZED, FAILS THE TEST OF HUMAN PROBABILITIES. IT WAS NOT A VOLUNTARY ACT AS OBSERVED EXPLICITLY BY THE CIT(APPEALS) IN THE QUAN TUM APPEAL. 7.2 MOREOVER, IT WAS A CASE IN WHICH, FULL MATERIA L FACTS WERE NOT DISCLOSED BEFORE THE ASSESSING OFFICER. THEREFORE, THE PENALTY LEVIED TO THE EXTENT OF TAX ON RS. 6,38,200/- IS CONFIRMED . 8 AS REGARDS THE ADDITION OF RS 40,000/-, THE APP ELLANT CLAIMED IN THE RETURN THAT THIS AMOUNT IS AN AGRICULTURAL INCOME. AT THE TIME OF SCRUTINY PROCEEDINGS, THE APPELLANT WAS ASKED TO FI LE ALL THE DETAILS OF AGRICULTURAL LAND HOLDING. THEN HE CHANGED THE STAN D AND STATED THAT THE AGRICULTURAL INCOME BELONGS TO THE HUF AND THER EFORE, CANNOT BE TAXED IN HIS OWN HAND. IT WAS A STRANGE U-TURN AS T HE APPELLANT HAD HIMSELF SHOWN THIS AMOUNT OF RS 40,000/-- AS HIS AG RICULTURAL INCOME. ONCE IT CEASES TO BE AN AGRICULTURAL INCOME, THE ON LY HEAD UNDER WHICH IT COULD HAVE BEEN ASSESSED IS 'INCOME FROM O THER SOURCES. MOREOVER, AS HELD BY THE ASSESSING OFFICER DURING A SSESSMENT PROCEEDINGS AND THE CIT(APPEALS) IN THE QUANTUM APP EAL, THE APPELLANT COULD NOT FURNISH COMPLETE DETAILS TO EST ABLISH AGRICULTURAL INCOME IN THE HANDS OF HUF AS WELL. 8.1 CONSIDERING THE ABOVE FACTS, THE PENALTY LEVIE D IN RESPECT OF THIS ADDITION IS ALSO CONFIRMED. CONSEQUENTLY, THE APPEA L IS DISMISSED. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS N OW IN APPEAL BEFORE US. ITA NO 187/ AHD/20013 . A.Y. 2006- 07 4 6. BEFORE US, THE LEARNED A.R. SUBMITTED THAT THE ASSE SSEE IS BASICALLY AN AGRICULTURIST AN UNEDUCATED MAN AND HAD STARTED BUS INESS ON SMALL SCALE BY INVESTING MONEY OUT OF PAST SAVINGS FROM ANCESTR AL AGRICULTURAL INCOME. HE FURTHER SUBMITTED THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HIMSELF CAME FORWARD AND OFFERED THE ENTIRE INVESTMENT AS INCOME AND PAID TAXES THEREON TO BUY PEACE OF MIND AND AVOID FURTHER LITIGATION. HE FURTHER SUBMITTED THA T IN THE REVISED RETURN, THE AMOUNT WAS DISCLOSED BY THE ASSESSEE AND THE SA ME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AND THUS THE BASI S OF ADDITION IS THE DISCLOSURE BY THE ASSESSEE IN THE REVISED RETURN AN D NOT ANY INDEPENDENT INFORMATION. HE THEREFORE SUBMITTED THAT IN VIEW O F THE AFORESAID FACTS THE PENALTY LEVIED BY THE ASSESSING OFFICER BE DELE TED. HE ALSO PLACED RELIANCE ON THE DECISION OF TRIBUNAL IN THE CASE OF ACIT VS. ASHOK RAJNATH ITA NO. 2970/D/2912 ORDER DATED 31.08.2012, DECISION IN THE CASE OF ACIT VS. AGARWAL ROUND ROLLING MILLS LTD. I TA NO. 133/BLPR?2009 ORDER DATED 14 TH JULY, 2010 AND THE DECISION OF HON. PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS . RAJIV GARG (2008) 175 TAXMANN 184 (P & H). HE ALSO PLACED ON RECORD T HE COPIES OF THE AFORESAID DECISIONS HE THEREFORE SUBMITTED THAT THE PENALTY BE DELETED. . 7. THE LEARNED D.R. ON THE OTHER HAND STRONGLY RELIED FROM THE ORDER OF A.O. AND CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ADDITION ON ACCOU NT OF UNACCOUNTED INVESTMENT OF RS. 6,38,200/- WAS MADE BY THE ASSESS ING OFFICER WHILE FRAMING THE ASSESSMENT. IT IS ALSO AN UNDISPUTED F ACT THAT THE AFORESAID ITA NO 187/ AHD/20013 . A.Y. 2006- 07 5 AMOUNT WAS DISCLOSED BY THE ASSESSEE IN THE REVISED RETURN WHICH WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS H AD ALSO PAID THE TAXES AND THE ASSESSING OFFICER HAS ALSO CONSIDERED THE A FORESAID INCOME. 9. IN THE CASE OF ACIT VS. ASHOK RAJNATH 2970/D/2012 (SUPRA), THE CO- ORDINATE BENCH OF TRIBUNAL DELETED THE PENALTY BY H OLDING AS UNDER:- 9. IN THE INSTANT CASE, THE ASSESSEE VOLUNTARY DIS CLOSED ADDITIONAL INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND PAI D TAX THEREON. IN THE LIGHT OF VIEW TAKEN IN THE AFORESAID DECISIONS, IT CANNOT BE SAID IN THE CASE BEFORE US, ADDITIONAL INCOME DISCLOSED DURING THE C OURSE OF ASSESSMENT PROCEEDINGS WAS NOT VOLUNTARY OR THAT THE ASSESSEE WANTED TO CONCEAL THE INCOME. EVEN THOUGH THE REVISED RETURN WAS FOUND TO BE INVALID, THE A.O. ACCEPTED THE INCOME AS DECLARED IN THE REVISED RETU RN AND COMPUTATION. THE A.O. DID NOT BRING ANY MATERIAL ON RECORD THAT THE DECLARATION OF INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURN O R HIS EXPLANATION WAS NOT BONAFIDE. IN THESE CIRCUMSTANCES, THERE APPEAR S TO BE NO BASIS FOR IMPOSITION OF PENALTY ON THE GROUND THAT THE ASSES SEE FURNISHED INACCURATE PARTICULARS OF INCOME. SINCE THE REVENU E HAVE NOT PLACED BEFORE US ANY MATERIAL NOR BROUGHT TO OUR NOTICE AN Y CONTRARY DECISION SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MAT TER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO. 1 IN THE APPEA L IS DISMISSED. 10. IN THE CASE OF CIT VS. RAJIV GARG 92008) 175 TAXMAN N 184 (PUNJAB AND HARYANA), THE HON. HIGH COURT HAS HELD THAT PENALTY WAS NOT LEVIABLE WHEN THE ASSESSING OFFICER HAD SIMPLY RESTED HIS CO NCLUSION ON THE ACT OF ASSESSEE OF HAVING OFFERED ADDITIONAL INCOME IN THE REVISED RETURN AND HAD FAILED TO TAKE ANY OBJECTION THAT THE DECLARATI ON OF INCOME MADE BY THE ASSESSEE IN THE REVISED RETURN AND HIS EXPLANAT ION WERE NOT BONA FIDE. 11. CONSIDERING THE TOTALITY OF THE FACTS AND RELYING O N THE AFORESAID DECISIONS OF HIGH COURT AND THE CO-ORDINATE BENCH OF TRIBUNAL , WE ARE OF THE VIEW ITA NO 187/ AHD/20013 . A.Y. 2006- 07 6 THAT IN THE PRESENT CASE, PENALTY UNDER SECTION 271 (1)(C) IS NOT LEVIABLE AND THEREFORE DIRECT ITS DELETION. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 27 - 09 - 2013. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY 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. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD