HIRAL HIMANSHU KANAKIA, MUMBAI V. ACIT CEN CIR 23, MUMBAI

ITA 2028/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4072 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 04-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 27-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAI
• Assessee Lawyers: ANUJ KISHADWALA
• Keywords: Unexplained investment; Business income; Deemed to accrue or arise in india
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 2028/MUM/2012 ASSESSMENT YEAR: 2008-09 SMT. HIRAL HIMANSHU KANAKIA 215-ATTRIUM, 10 TH FLOOR, NEXT TO MARRIOT HOTEL, ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI- 400 069 PAN: AAGPK 6526 R VS. ACIT CEN CIR 23 AAYAKAR BHAVAN, 4 TH FLOOR, M.K. ROAD, NEW MARINE LINES MUMBAI-400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANUJ KISHADWALA REVENUE BY : SHRI AJAI DATE OF HEARING : 04.07.2013 DATE OF PRONOUNCEMENT : 19.07.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF T HE ORDER OF THE LD.CIT(A) -40, MUMBAI DATED 10.01.2012 CONFIRMING THE LEVY OF PENA LTY OF RS.21,230/- IMPOSED BY THE AO U/S 27(1)(1) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY STATED, THE ASSESSE, AN INDIVIDUAL DERIV ING INCOME FROM HOUSE PROPERTY, BUSINESS INCOME, CAPITAL GAIN AND INCOME FROM OTHER SOURCES WHO BELONGS TO KANAKIA GROUP OF CASES WHEREIN SEARCH U/S. 132 WAS CARRIED OUT ON 19 TH JULY, 2007. DURING THE SEARCH PROCEEDINGS, JEWELLERY WORTH RS.2 ,98,000/- WAS FOUND AND DECLARED IN THE HANDS OF SHRI HIMANSHU KANAKIA, HUS BAND OF THE ASSESSEE. OUT OF THE SAME, JEWELLERY WORTH RS.62,447/- WAS CLAIMED I N THE HANDS OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND POS T SEARCH, THE ASSESSEE WAS UNABLE TO GIVE SATISFACTORY EXPLANATION OF THE SAID JEWELLERY. THE AO THEREFORE, TREATED THE SAME AS DEEMED INCOME OF THE ASSESSEE U /S.69A. CONSEQUENT TO THE ASSESSMENT PROCEEDINGS, THE AO LEVIED THE PENALTY O F RS.21,230/- BEING 30% OF THE ITA NO. 2028/MUM/2012 SMT. HIRAL HIMANSHU KANAKIA ASSESSMENT YEAR: 2008-09 2 UNEXPLAINED INVESTMENT U/S 271(1)(C) OF THE ACT FOR PROVIDING INACCURATE PARTICULARS AND CONCEALMENT OF PARTICULARS OF INCOME. 3. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ACTION OF THE AO AS THE QUANTUM ADDITION HAD BECOME FINAL IN THE CASE OF THE ASSESS EE. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS PO INTED OUT THAT THE ASSESSEES CASE IS COVERED BY THE DECISION OF THE ITAT IN THE CASE OF DCIT VS. SUBHASH M. PATEL IN IT (SS) A NO. 256/AHD/2012 FOR THE ASSESSMENT YE AR 2009-10 WHEREIN IT HAS BEEN HELD THAT IN CASE OF ACTION U/S 132 IS INITIAT ED ON OR AFTER 01.06.2007, PENALTY CANNOT BE LEVIED U/S 271 (1)(C) OF THE ACT, BY VIRT UE OF THE PROVISIONS OF SECTION 271 AAA AND HENCE THE PENALTY IMPOSED UNDER THE WRONG P ROVISION TO BE DELETED. ON THE OTHER HAND THE LD. DR HAS RELIED ON THE ORDERS OF THE AO AND LD.CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE RELEVANT A.Y. UNDER CONSIDERATION IS 2008-09. IT IS AN ADMITTED FACT THAT A SEARCH U/S 132 HAS BEEN CARRIED OUT ON 19.07.2007 IN KANAKIA G ROUP TO WHICH THE ASSESSEE BELONGS. FROM THE PROVISIONS OF SECTION 271 AAA OF THE INCOME TAX ACT, IT IS CLEAR THAT WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER 01.06.2007, PENALTY CAN BE LEVIED ONLY UNDER SECTION 271 AAA AN D NOT U/S 271(1)(C) OF THE ACT. THUS, IN VIEW OF THE FACT THAT THE AO HAS NOT INVOK ED THE CORRECT PROVISIONS OF LAW FOR LEVYING THE PENALTY IN THE PRESENT CASE, THE LD .CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY. IN VIEW OF THAT MAT TER, THE IMPUGNED PENALTY IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JULY, 2013. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 19.07.2013. *SRIVASTAVA ITA NO. 2028/MUM/2012 SMT. HIRAL HIMANSHU KANAKIA ASSESSMENT YEAR: 2008-09 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR H BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.