M/s. J.K. Promoters, Anand V. The Income tax Officer,Ward-1, Anand

ITA 1944/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1224 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 31-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Assessee Lawyers: N C AMIN
• Keywords: Income from undisclosed sources; Revised return
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO.1944/AHD/2012 (ASSESSMENT YEARS:2003-04) M/S. J. K. PROMOTERS SHEFALI APARTMENT, B/H KALPANA CINEMA, ANAND - 388001 APPELLANT VS. INCOME TAX OFFICER, WARD-1, ANAND RESPONDENT PAN: AABFJ4166B /BY APPELLANT : SHRI N. C. AMIN, A.R. /BY RESPONDENT : SHRI SANTOSH KARNANI, SR. D.R. /DATE OF HEARING : 26.11.2015 /DATE OF PRONOUNCEMENT : 03.12.2015 ORDER PER RAJESH KUMAR, A.M: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-IV, BARODA, DATED 18.07.2012 FOR A.Y. 2003-04 ON FOLLOW ING GROUNDS: 2 ITA NO.1944 AHD 2012 (M/S. J. K. PROMOTERS VS. ITO ) 1. THAT THE LEARNED CIT(A)-IV, BARODA HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN DISMISSING THE APPEAL OF THE APPELLANT AGAINST LEVYING PENALTY OF RS.5,26,121/- U/S 271(1)(C) OF THE I.T.ACT 1961 BY THE LEARNED A.O. 2. THAT THE LEARNED CIT(A) HAS CONFIRMED THE APPEAL MERELY ON THE GROUNDS THAT THE LEARNED A.O. HAS CONFIRMED THE ADDITIONS OF RS.16,84,013/- BEING ALLEGED UNACCOUNTED AND UNRECORDED INCOME AND RS.20,000/- ALSO BEING UNACCOUNTED INCOME WHICH IS AGAINST THE MATERIAL FACTS LYING ON THE RECORD , OF T HE LEARNED A.O. AND CONSIDERING THE SAME PENALTY LEVIED ON BOTH THE AMOUNTS DESERVES T O BE DELETED. 3. THAT THE ASSESSMENT ORDER PASSED BY THE LEARNED A.O. ITSELF IS NOT INCONSONANCE WITH DECISION OF HON'BLE GUJARAT HIGH COURT AND HENCE PENALTY ORDER PASSED BY LEARNED A.O. AND CONFIRMED BY LEARNED CIT(A) DESERVES TO BE CANCELLED. 4. THAT THE LEARNED A.O. HERSELF HAS ADMITTED IN PARA 10(1) OF THE PENALTY ORDER THAT AMOUNT SHOWN IN THE DIARY IS CONTRACT RECEIPTS NOT ACCOUNTED FOR, IN BOOKS OF ACCOUNT AND AS SUCH PENALTY LEVIED ON INCORRECT INCOME DESERVES TO BE DELETED. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT PENALTY ORDER PASSED BY LEARNED A.O. AND CONFIRMED BY LEARNED CIT(A) REQUIRES TO BE CANCELLED. 6. THAT THE APPELLANT HAS FILED ITS REPLY IN DETAIL WITH VARIOUS DECISI ON TO THE LEARNED A.O. AND PAPER BOOK FILED BEFORE LEARNED CIT(A)WHICH HAS NOT BEEN PROPERLY APPRECIATED BEFORE DISMISSING THE APPEAL OF THE APPELLANT. 7. ON PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT, THE RE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING INACCURATE PARTICULARS OF INCOM E AND AS SUCH PENALTY ORDER U/S 271(1)(C) CONFIRMED BY LEARNED CIT(A) BE CANCELLED. 8. THAT THE PENALTY LEVIED BY LEARNED A.O. ON GROSS RECEIPTS AND NOT ON TAX OF INCOME EMBEDDED THEREIN IN VIEW OF JURISDICTIONAL HIGH COURT DECISION AND AS SUCH ORDER DESERVES TO BE CANCELLED. 3 ITA NO.1944 AHD 2012 (M/S. J. K. PROMOTERS VS. ITO ) 9. THAT THE PENALTY ORDER CONFIRMED BY LEARNED CIT(A) ON INCORRECT FACTS AND CONTRARY TO THE MATERIALS AVAILABLE ON RECORD AND MERELY QUANTUM ADDITIONS CONFIRMED, WHICH IS AGAINST PROVISIONS OF ACT, WHICH DESERVE S TO BE CANCELLED. 10.CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT, THE PENALTY LEVIED BY LEARNED A.O. AND CONFIRMED BY LEARNED CIT(A) BE DELETED. 2. THE COMMON ISSUE RAISED IN ALL GROUND OF APPEAL IS AGAINST CONFIRMING THE PENALTY OF RS.5,26,121/- BY CIT(A) U/S.271(1)(C ) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION. A SURVEY ACTION U/S.133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF ASSESSEE ON 23.09.2003. DURING THE COURSE OF SURVEY PROCEEDING, THE STATEMENT OF SHRI KAMLESHBHA I J. PATEL WAS RECORDED U/S.131, ONE OF THE PARTNER OF THE ASSESSEE FIRM. AFTER VERIFYING THE BOOKS OF ACCOUNTS COMPRISING THE CASH BOOK AND LEDGER, THE S AID PARTNER ADMITTED AND DECLARED THAT CASH ENTRIES IN DIARY NO. K-9 WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE TOTAL OF ALL SUCH FUND ENTRIES WAS RS.43,28,407/- SPANNING OVER TWO FINANCIAL YEARS I.E. A.Y. 2003-04 RS.22,82 ,559/- & A.Y. 04-05 RS.20,45,845/-. THEREAFTER, VIDE LETTER DATED 12.1 0.2003, THE ASSESSEE AFTER HAVING RECONCILED THE FIGURES STATED THAT THE DISCR EPANCIES IN RESPECT OF UNRECORDED ENTRIES AS FOUND DURING THE COURSE OF SU RVEY WERE RS.16,32,559/- FOR A.Y. 2003-04 AND 26,95,848/- FOR A.Y. 2004-05 M EANING THEREBY THAT THE AGGREGATE AMOUNTS REMAINED SAME. THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 23.07.2003 DECLARING AN INCOME OF RS.37,0 80/- WHICH WAS BEFORE THE DATE OF SURVEY. THEREAFTER, THE ASSESSEE FILED REVISED RETURN ON 20.10.2003DECLARING TOTAL INCOME OF RS.7,40,620/- B Y ACCOMPANYING THEREWITH THE AUDITED ACCOUNTS U/S.44AB OF THE ACT. WHILE FILING THE REVISED RETURN, THE ASSESSEE OFFERED RS.7,03,558/- AS AGAIN ST THE TOTAL UNRECORDED ENTRIES AS FOUND & ADMITTED DURING THE SURVEY OF RS .16,32,559/- BY STATING THAT THE DISCREPANCIES WERE RECONCILED. THE A.O. F RAMED THE ASSESSMENT U/S.143(3) AFTER REJECTING THE BOOKS OF ACCOUNT U/S .145(3) OF THE ACT AT 4 ITA NO.1944 AHD 2012 (M/S. J. K. PROMOTERS VS. ITO ) RS.33,33,121/- BY MAKING VARIOUS DISALLOWANCES/ADDI TIONS INTER ALIA OF RS.16,86,813/- ON ACCOUNT OF UNRECORDED AND UNACCOU NTED CASH TRANSACTION (ON MONEY) AS DISCUSSED IN PARA NO.22 OF THE ASSESS MENT ORDER. THE LD. A.O. ALSO ALLOWED DEDUCTION IN RESPECT OF WORK IN PROGRE SS DECLARED BY THE ASSESSEE AMOUNTING TO RS.7,03,558/- IN THE REVISED RETURN AS NARRATED IN PARA 25 OF ASSESSMENT ORDER. THE LD. CIT(A) CONFIRMED T HE ADDITION OF RS.16,86,830/- ON ACCOUNT OF UNRECORDED AND UNACCOU NTED INCOME AND ALSO SUSTAINED RS.41,000/- & RS.21,000/- ON ACCOUNT OF U NEXPLAINED INCOME. LD. A.O. IMPOSED A PENALTY OF RS.6,27,254/- ON THE GROU ND THAT THE ASSESSEE FAILED TO DISCLOSE ADDITIONAL INCOME AS ACCEPTED DU RING THE COURSE OF SURVEY AND THEREFORE, THE ASSESSEE CONCEALED ITS INCOME. 4. THE LD. CIT(A) ALSO CONFIRMED THE PENALTY OF RS. 6,27,254/- BY HOLDING THAT NON DISCLOSURE OF INCOME AS SURRENDERED DURING THE SURVEY AMOUNTED TO CONCEALMENT OF INCOME AND THUS DISMISSED THE APPEAL OF ASSESSEE. 5. THE LD. A.R. SUBMITTED THAT THE ASSESSEES CASE IS COVERED IN ITS FAVOUR BY ITS OWN CASE FOR THE SUCCEEDING ASSESSMENT YEAR 2004-05 WHEREIN PENALTY IMPOSED WAS DELETED BY THE TRIBUNAL ORDER DATED 21.02.2014 IN ITA NO 1945/AHD/2012. THE LD. COUNSEL FURTHER SUBMITTED TH AT AN ADDITION OF RS.43,28,407/- SPANNING OVER TWO A.YS., NAMELY, A. Y. 2003-04 RS.22,82,559/- AND A.Y. 2004-05 RS.20,45,848/- WHIC H WAS LATTER RECONCILE VIDE LETTER DATED 12 TH OCTOBER, 2013 AND THE REVISED UNRECORDED CASH ENTI RES WERE RS.16,32,559/- FOR A.Y. 2003-04 AND RS.26,95,8 48/-. THE LD. COUNSEL ALSO ARGUED THAT THOUGH THE ADDITION IN RESPECT OF BOTH THESE YEARS WERE SUSTAINED BY CIT(A) AND TRIBUNAL, HOWEVER, THE TRIB UNAL DELETED THE PENALTY IMPOSED U/S.271(1)(C) IN A.Y. 2004-05 AND THEREFORE , PRAYED THAT PENALTY LEVIED IN THE YEAR UNDER CONSIDERATION OF RS.6,27,2 54/- SHOULD BE DELETED. THE LD. D.R. ALSO DID NOT RAISE ANY OBJECTION TO TH E ARGUMENTS ADVANCED BY 5 ITA NO.1944 AHD 2012 (M/S. J. K. PROMOTERS VS. ITO ) THE LD. A.R. THAT PENALTY ON SAME FACTS QUA ADDITIO N IN THE A.Y. 2004-05 HAD BEEN DELETED BY THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT FOLLOWING A SURVEY U/S133A OF THE ACT SOME CASH ENTRIES WERE FOUND UNRECORDED WHICH RELATED TO TWO YEARS NAMELY 2003-04 AND 2004-05. THE FACTS WERE SIMILAR FOR BOTH THE YE ARS. THE QUANTUM ADDITIONS IN BOTH THE YEARS WERE CONFIRMED BY THE T RIBUNAL AGAINST THE ASSESSEE HOWEVER THE PENALTY FOR THE ASSESSMENT YE AR 2004-05 WAS DELETED BY THE TRIBUNAL BY HOLDING THAT REVENUE HAS NOT P ROVED THAT ASSESSEE HAS CONCEALED ITS INCOME OR FILED INACCURATE PARTICULAR S OF ITS INCOME VIDE ORDER DATED 21.02.2014 IN ITA NO 1945/AHD/2012.THE RELEVA NT PARA IS REPRODUCED AS UNDER:- 32. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF SURVEY U/S 133A AT THE PREMISES OF ASSESSEE DIARY WAS FOUND WHICH CONTAINED DETAILS OF CASH ENTRIES. THE CASH ENTRIES WAS ACCEPTED AS INCOME BY ONE OF THE PARTNER IN THE STATEMENT THAT WAS RECORDED AT THE TIME OF SURVEY. THE CASH ENTR IES FOUND IN THE DIARY WERE CONSIDERED AS INCOME BY THE AO WHICH WAS ALSO PARTLY CONFIRMED BY CIT(A). DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS THE SUBMISSIONS HAVE BEEN GIVEN BY ASSESSEE BUT THE SAME HAVE NOT BEEN PROVED TO BE FALSE OR UNTRUE BY THE REVENUE. A CASE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME HAS TO BE EVALUATED IN TERM S OF PROVISIONS OF EXPLANATION 1 TO SECTION. 271(1)(C), AS PER WHICH IF IN RELATION TO ANY ADDITION IN THE ASSESSMENT, THE ASSESSEE OFFERS NO EXPLANATION OR OFFERS EXPLANATION WHICH IS FOUND TO BE FALSE OR IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND IS ALSO NOT ABLE TO PROVE THAT THE EXPLANATION IS BONAFIDE, THE ADDITION MADE WOULD AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. IT IS A SETTLED LEGAL POSITION THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM ASSESSMENT PROCEEDINGS AND THE FINDINGS GIVEN IN THE ASSESSMENT THOUGH IT MAY CONSTITUTE GOOD EVIDENCE BUT SAME IS NOT CONCLUSIVE IN THE PENALTY PROCEEDINGS FURTHER, MERELY BECAUSE ADDITIONS HAVE BEEN CONFIRMED IN APPEAL IT CANNOT BE THE SOLE GROUND FOR COMING TO THE CONCLUSION THAT THE ASSESSEE HAD CONCEALED ANY INCOME. WE ARE OF THE VIEW THAT IN THE ABSENCE OF COMPLETE AND CONVINCING CORROBORATIVE EVIDENCE, THE REVENUE MAY JUSTIFY ADDITION, BUT IN THE MATT ER OF PENALTY PROCEEDINGS, THE ONUS LIES HEAVILY ON THE REVENUE TO PROVE THAT THE ASSESSEE HAD CONCEALED ITS INCOME OR HAS FILED INACCURATE PARTICULARS OF ITS INCOME. FURTHER THE DECISION RELIED UPON BY REVENUE IS DISTINGUISHABLE ON FACTS AND THEREFORE CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE . IN VIEW OF THE AFORESAID FACTS WE ARE OF THE VIEW THAT IN THE PRESE NT CASE NO PENALTY IS LEVIABLE U/S 271(1)(C) AND THEREFORE DIRECT ITS DELETION. THUS THIS GROUND OF ASSESSEE IS ALLOWED. 6 ITA NO.1944 AHD 2012 (M/S. J. K. PROMOTERS VS. ITO ) 7. IN VIEW OF THE ABOVE DECISION OF THE TRIBUNAL ON IDENTICAL FACTS IN THE ASSESSEES OWN CASE AND BY RESPECTFULLY FOLLOWING T HE ABOVE JUDICIAL DECISION IN ITA NO 1945/AHD/2012, WE DELETE THE PENALTY LEVI ED U/S 271(1)(C) OF THE ACT BY ALLOWING THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 3 RD DAY OF DECEMBER, 2015. SD/- SD/- (SHAILENDRA KUMAR YADAV) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 03/12/2015 TRUE COPY S K SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) , -./ 00'(1 '( 1 23& / DR, ITAT, AHMEDABAD 4 /56 / GUARD FILE. BY ORDER / 1 / 2 % '( 1 23&