DCIT CIR 2, KALYAN V. MANOJ A RAJWANI, ULHASNAGAR

ITA 1998/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83769 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Keywords: Search and seizure
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 1998/MUM/2010 ASSESSMENT YEAR: 2006-07 ACIT CIR-2 KALYAN VS. SHRI MANOJ A RAJWANI PROP. M/S. KRISHNA FAB, 801, AMIT TOWER, ULHASNAGAR-2 PAN:ADBPR 7650 M (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. PARMINDER DATE OF HEARING : 28.08.2014 DATE OF PRONOUNCEMENT : 10.09.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-02, THANE DATED 03.12.2009 DELETING THE P ENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2006-07. 2. THE RELEVANT FACTS ARE THAT IN THE CASE OF THE A SSESSEE, THE ASSESSMENT WAS COMPLETED U/S 143(3) DETERMINING A TOTAL INCOME OF RS.73,77,775/- AS AGAINST THE INCOME RETURNED BY THE ASSESSEE AT RS.55,88,881/-. TOTAL ADDITION AMOUNTING TO RS.11,78,752/- WERE MADE DURING THE COURSE OF THE A SSESSMENT PROCEEDINGS ON ACCOUNT OF LOANS RAISED FROM THE EMPLOYEES AND OTHE R PERSONS WHICH WERE DISCLOSED/SURRENDERED BY THE ASSESSEE DURING THE CO URSE OF THE SURVEY U/S 133A OF THE ACT AS ADDITIONAL INCOME FOR THE YEAR UNDER CON SIDERATION. COSEQUENTLY, THE AO INITIATED THE PENAL PROCEEDINGS U/S 271(1)(C) OF TH E ACT, IN WHICH THE AO IMPOSE THE PENALTY OF RS.12,87,495/- ON THE ASSESSEE WHICH WAS 100% OF THE TAX SOUGHT TO BE EVADE. THE AO, WHILE PASSING THE PENALTY ORDER HAD OBSERVED THAT THOUGH THE ASSESSEE AT THE TIME OF SURVEY ACTION PLEADED THAT THE LOANS DRAWN FROM THE EMPLOYEE WERE GENUINE LOANS AND THE DECLARATION WAS MADE ONLY TO BUY THE PEACE OF MIND, THE ASSESSEES CONTENTION COULD NOT ACCEPT ED ON THE FACE VALUE PARTICULARLY ITA NO. 1998/MUM/2010 SHRI MANOJ A RAJWANI ASSESSMENT YEAR: 2006-07 2 BECAUSE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE EITHER DURING THE SURVEY PROCEEDINGS OR DURING THE SURVEY OF THE ASSESSMENT PROCEEDING TO PROVE THE GENUINENESS AND CREDIT WORTHINESS OF THE LENDERS. O N APPEAL THE LD. CIT(A) DELETED THE PENALTY LEVIED BY THE AO ON THE REASON THAT THE SURRENDERED AMOUNT OF RS.11,78,752/- DURING THE COURSE OF THE SURVEY ACTI ON WAS ACCEPTED, ASSESSED AND THE TAXED ACCORDINGLY. THE LD.CIT(A) FURTHER OBSERV ED THAT EVEN IN THE PENALTY ORDER WHICH FLOWS FROM THE ASSESSMENT ORDER, NO EFFORT HA D BEEN MADE BY THE AO TO ESTABLISH AND PROVE THAT THERE WAS AN EFFORT ON THE PART OF THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. AGGRIEVED BY THE IMPUGNED DECISIONS, THE REVENUE IS IN APPEAL BEFORE US. 3. NO ONE HAS APPEARED ON BEHALF OF THE ASSESSEE DU RING THE COURSE OF THE PROCEEDINGS. WE, THEREFORE, PROCEED TO DECIDE THE A PPEAL OF THE REVENUE EX PARTE AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED DR AND ALSO PERUSING THE ORDERS OF LOWER AUTHORITIES. THERE IS NO DISPUTE ABOUT THE FA CT THAT THERE HAS BEEN SURVEY ACTION U/S.133A AND THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS.11,78,752/- WHICH HAS BEEN DULY DECLARED IN THE RETURN OF INCOME. THE SAME HAS BEEN ACCEPTED, ASSESSED AND TAXED ACCORDINGLY. FURTHER, THE PERUSA L OF THE ASSESSMENT ORDER INDICATES THAT THE AO HAS COMPLETED THE ASSESSMENT TAKING INTO ACCOUNT OF THE SURRENDERED INCOME WITHOUT GIVING ANY FINDING REGAR DING THE CONCEALMENT OF THE INCOME OR FILING OF THE INACCURATE PARTICULARS ON T HE PART OF THE ASSESSEE NOR ANY SATISFACTION HAS BEEN RECORDED FOR THE SAME. NOW TH E QUESTION IS WHETHER THERE IS ANY JUSTIFICATION ON THE PART OF THE AO TO LEVY THE PENALTY U/S.271(1)(C) WHERE THERE IS NO DIFFERENCE IN THE RETURNED INCOME AND ASSESSE D INCOME. AS PER THE LANGUAGE USED BY THE LEGISLATURE, THE CONCEALMENT SHOULD BE THE OFFSHOOT OF THE RETURN FILED BY THE ASSESSEE. THE CONCEALMENT CAN ONLY BE DETECTED BY COMPARING THE RETURN OF INCOME AND FINAL ASSESSMENT ORDER. THE ONLY EXCEPTI ON WILL BE IN THE SEARCH AND SEIZURE CASES WHERE EXPLANATION- 5 TO SECTION 271(1 )(C) IS APPLICABLE. THIS VIEW IS SUPPORTED BY THE TRIBUNAL IN THE CASE OF SADHBAV BUILDERS VS. ITO IN ITA 1418/AHD/2008 ORDER DATED 21.01.2011 . THEREFORE, IT IS NECESSARY THAT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF INCOME BY THE ASSESSEE HAS TO BE IN THE INCOME-TAX RETURN FILED B Y THE ASSESSEE FOR THE PURPOSES OF ITA NO. 1998/MUM/2010 SHRI MANOJ A RAJWANI ASSESSMENT YEAR: 2006-07 3 INVOKING SECTION 271(1)(C) OF THE ACT. THEREFORE, W E DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) DELEATING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT AND THUS THE SAME I S UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (N.K. BILLAIYA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 10.09.2014 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR G BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.