The ACIT, Central Circle 1, Baroda V. M/s. Krishna Developers, Anand

ITA 2062/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94606 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 29-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 05-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Documents seized
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO: 2062/AHD/2013 (ASSESSMENT YEAR: 2010-11) A.C.I.T., CENTRAL CIRCLE-1, BARODA V/S M/S. KRISHNA DEVELOPERS, 208, 2 ND FLOOR, KISHOR PLAZA, ANAND (APPELLANT) (RESPONDENT) PAN: AAGFK1889D APPELLANT BY : SHRI SOMOGYAN PAL, SR. D.R RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 29-09-2015 DATE OF PRONOUNCEMENT : 16-10-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-IV, AHMEDABAD DATED 10.05.2013 FOR A.Y. 2010-11. ITA NO. 2062 /AHD/2013 . A.Y. 2010-20 11 2 2. IN THIS CASE, NONE APPEARED ON BEHALF OF ASSESSEE. WE THEREFORE PROCEED TO DECIDE THE APPEAL, EX PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. A SEARCH ACTION U/S. 132 O F THE ACT WAS CARRIED OUT IN BARODA BUSHING & INSULATORS GROUP INCLUDING THE ASSESSEE ON 10.09.2009. IN THE STATEMENT RECORDED U/S. 132(4) O N 11.09.2009, SMT. SANGITABEN PATEL, THE PARTNER OF THE ASSESSEE FIRM, ADMITTED THE RECEIPT OF ON MONEY AGGREGATING TO RS. 45 LACS IN RESPECT OF SALE OF 3 BUNGALOWS IN KRISHNA SADAN BUNGALOWS. THE ASSESSEE THEREAFTER FILED ITS RETURN OF INCOME FOR A.Y. 2010-11 ON 15.10.2010 DECLARING TOT AL INCOME OF RS. 47,60,149 WHICH INCLUDED RS. 45 LACS THAT WAS ADMIT TED DURING THE COURSE OF SEARCH PROCEEDINGS. SUBSEQUENTLY ASSESSEE REVISED THE COMPUTATION OF INCOME ON 25.11.2011 SHOWING TOTAL INCOME OF RS. 65 ,44,762/-. THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 25.11.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS. 65,44,762/- BEING THE REVISED INCOME FILED BY THE ASSESSEE. ON THE AMOUNT OF RS. 45 LACS THAT WAS DISCLOSED DURING THE COURSE OF SEARCH AND INCLUDED IN THE RETURN OF INCO ME, A.O VIDE ORDER DATED 31.05.2012 LEVIED PENALTY U/S. 271AAA OF RS. 4,50,0 00/- (BEING 10% OF THE AMOUNT DISCLOSED) AS HE WAS OF THE VIEW THAT THE ST ATEMENT GIVEN BY ASSESSEE U/S. 132(4) WAS A GENERAL STATEMENT AND TH E ASSESSEE HAD NOT SPECIFIED THE MANNER OF RECEIPT OF ON MONEY. AGG RIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 10 TH MAY, 2013 DELETED THE PENALTY LEVIED BY A.O BY HOL DING AS UNDER:- ITA NO. 2062 /AHD/2013 . A.Y. 2010-20 11 3 6.2 FROM THE STATEMENT RECORDED U/S 132(4) OF THE A CT DURING THE COURSE OF SEARCH, IT IS QUITE EVIDENT THAT THE APPELLANT HAS ADMITTED THE F ACT OF UNDISCLOSED SALES BY WAY OF RECEIPT OF ON-MONEY IN RESPECT OF SALE OF 03 BUNGAL OWS ON THE BASIS OF ENTRIES MADE IN THE SEIZED PAPERS. IT IS ALSO CLEARLY ADMITTED BY THE A PPELLANT THAT SUCH UNDISCLOSED INCOME OF RS.45,00,000/- IS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. THEREFORE, SUCH INCOME WHICH IS BASED ON THE UNDISCLOSED TRANSACTIONS FOUN D AS PER THE INCRIMINATING DOCUMENTS SEIZED DURING THE COURSE OF SEARCH IS UNDOUBTEDLY T HE UNDISCLOSED INCOME OF THE ASSESSEE SINCE ANY SUCH INCOME FOUND DURING THE COURSE OF SE ARCH BASED ON THE UNDISCLOSED TRANSACTIONS IS COVERED AS PER THE DEFINITION OF 'U NDISCLOSED INCOME. 6.3 IT IS THE CONTENTION OF THE APPELLANT THAT THE APPELLANT HAS DULY ADMITTED THE UNDISCLOSED INCOME IN THE STATEMENT RECORDED U/S 13 2(4) OF THE ACT DURING THE COURSE OF SEARCH AND HAS ALSO SPECIFIED AND SUBSTANTIATED THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAID TAX TOGETHER WITH INTEREST AN D, THEREFORE, IS ENTITLED FOR IMMUNITY FROM PENALTY U/S 271 AAA OF THE ACT. SO FAR AS THE MANNER OF EARNING OF THE SAID UNDISCLOSED INCOME IS CONCERNED, I AGREE WITH THE A PPELLANT THAT THE APPELLANT IN THE STATEMENT RECORDED U/S. 132(4) OF THE ACT HAS CLEAR LY MENTIONED THE MANNER OF EARNING SUCH INCOME WHICH IS MAINLY ON ACCOUNT OF ON-MONEY RECEIPT IN RESPECT OF SALE OF 03 BUNGALOWS. 6.4 SO FAR AS SUBSTANTIATING THE MANNER IN WHICH IN COME HAS BEEN EARNED, IT IS QUITE OBVIOUS AS PER THE STATEMENT THAT THREE BUNGALOWS H AVE BEEN SOLD IN RESPECT OF WHICH ON- MONEY OF RS.15,00,000/- ON SALE OF EACH SUCH BUNGAL OW HAS BEEN RECEIVED. THUS, THE DETAILS FROM WHOM SUCH ON-MONEY HAS BEEN RECEIVED A RE QUITE APPARENT AS PER THE RECORDED SALE TRANSACTIONS IN RESPECT OF SALE OF 03 BUNGALOWS TILL THE DATE OF SEARCH DURING THE YEAR. THUS EVEN THE MANNER OF EARNING UN DISCLOSED INCOME IS SUBSTANTIALLY SUBSTANTIATED. EVEN OTHERWISE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY SUCH QUESTION WAS ASKED TO THE APPELLANT EITHER IN THE S TATEMENT RECORDED U/S 132(4) OF THE ACT OR EVEN DURING THE ASSESSMENT PROCEEDINGS. IT IS NO TED THAT THE APPELLANT HAS RESPONDED TO ALL THE QUESTIONS ASKED U/S 132(4) OF THE IT ACT RELATING TO THE FINANCIAL AFFAIRS. UNLESS SPECIFIC QUESTION IS ASKED TO THE APPELLANT EITHER IN THE STATEMENT RECORDED U/S 132(4) OR EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, I T MAY NOT BE PROPER TO ATTRIBUTE THE FAILURE, IF ANY, FOR NOT SPECIFYING THE MANNER AND SUBSTANTIATING THE MANNER IN WHICH ITA NO. 2062 /AHD/2013 . A.Y. 2010-20 11 4 INCOME WAS EARNED BY THE APPELLANT. IN THIS REGARD THE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF MAHENDRA C. SHAH [2 008] 299 ITR 305 (GUJ) WHICH IS IN THE CONTEXT OF IMMUNITY FROM PENALTY U/S 271(1)(C) READ WITH EXPLANATION 5 ARE REPRODUCED AS UNDER : '15. INSOFAR AS THE ALLEGED FAILURE ON THE PART OF THE ASSESSEE TO SPECIFY IN THE STATEMENT UNDER SECTION 132(4) OF THE ACT REGARDING THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, SUFFICE IT TO STATE THAT W HEN THE STATEMENT IS BEING RECORDED BY THE AUTHORIZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN THE PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SHORT AT A PARTI CULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE ST ATEMENT. THE REASON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE, THE STATEMENT IS BE ING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN A SSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY THE PRO VISIONS CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED, AS NOTED BY ALLAHABAD HIGH COURT IN CASE OF RADHA KISHAN GOEL (SUPRA) SECONDLY, CONSIDE RING THE SOCIAL ENVIRONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE, WHET HER LITERATE OR ILLITERATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY EXCEPTION NO.2 WHILE MAKING STATEMENT UNDER SECTION 132(4) OF THE ACT. THE VIEW TAKEN BY THE TRIBUNAL AS WELL AS ALLAHABAD HIGH COURT TO THE EFF ECT THAT EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON PAID, THERE WOULD BE SUBST ANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER EXCEPTION NO.2 IN EXPLANATION 5 IS COMMENDABLE.' 6.5 IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OP INION THAT SO FAR AS THE MANNER OF EARNING THE INCOME AND SUBSTANTIATING THE SAME IS C ONCERNED, THE APPELLANT HAS, IN MY VIEW, SPECIFIED THE MANNER OF EARNING THE UNDISCLOS ED INCOME AS WELL AS SUBSTANTIATED THE SAME TO THE EXTENT OF QUESTIONS HAVING BEEN ASKED I N THIS REGARD IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE APPELLANT HAS FAILED TO RESPOND TO ANY OF THE QUESTIONS RELAT ING TO THE MANNER AS WELL AS SUBSTANTIATING THE SAME EVEN DURING THE COURSE OF A SSESSMENT PROCEEDINGS. IN VIEW OF ITA NO. 2062 /AHD/2013 . A.Y. 2010-20 11 5 THIS, THE APPELLANT HAS FULFILLED THE FIRST TWO CON DITIONS FOR AVAILING OF IMMUNITY FROM PENALTY PROCEEDINGS U/S 271AAA OF THE ACT. THERE IS NO DISPUTE ABOUT THE THIRD CONDITION AS THE APPELLANT HAS PAID TAX WITH INTEREST ON THE UNDISCLOSED INCOME. THUS, THE APPELLANT HAS FULFILLED ALL THE CONDITIONS REQUIRED FOR IMMUN ITY FROM LEVY OF PENALTY U/S 271AAA OF THE ACT. 6.6 IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OP INION THAT THE APPELLANT IS ELIGIBLE FOR IMMUNITY FROM PENALTY U/S. 271AAA OF THE ACT AND, T HEREFORE, PENALTY LEVIED BY THE A.O OF RS. 4,50,000/- IS HEREBY CANCELLED. 5. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NO W IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS. 4,45,00 0/- FOR A.Y. 2010-11 LEVIED U/S.271AAA OF THE I T ACT, DESPITE ASSESSEE HAVING NOT SATISFIED THE CONDITIONS MENTIONED' IN CLAUSE (I) & (II) OF SECTION 271 AAA( 2) OF THE ACT. 6. BEFORE US, LD. D.R. SUBMITTED THAT PENALTY U/S. 271 AAA WAS RIGHTLY LEVIED BY THE A.O ON THE AMOUNT DISCLOSED AT THE TIME OF S EARCH. HE THUS SUPPORTED THE ORDER OF A.O. 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED TH AT IN THE STATEMENT OF THE PARTNER OF THE ASSESSEE THAT WAS RECORDED U/S. 132 (4) OF THE ACT, ASSESSEE HAD ADMITTED THE FACT OF RECEIPT OF ON MONEY IN R ESPECT OF SALE OF 3 BUNGALOWS AND HAD ADMITTED THE UNDISCLOSED INCOME. HE HAS FURTHER NOTED THAT IN THE STATEMENT RECORDED U/S. 132(4), ASSESSE E HAD ALSO SPECIFIED THE ITA NO. 2062 /AHD/2013 . A.Y. 2010-20 11 6 MANNER OF EARNING THE UNDISCLOSED INCOME. HE THEREA FTER CONSIDERING THE FACTS AND RELYING ON THE DECISIONS CITED THEREIN, H AD CONCLUDED THAT ASSESSEE HAD FULFILLED ALL THE CONDITIONS STIPULATED IN SECT ION 271AAA OF THE ACT FOR AVAILING IMMUNITY FOR PENALTY PROCEEDINGS U/S. 271A AA OF THE ACT. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD T O CONTROVERT THE FINDINGS OF LD. CIT(A). IN VIEW OF THE AFORESAID FACTS, WE F IND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16 - 10 - 2015 . SD/- SD/- (RAJPAL YADAV) (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,AHME DABAD