M/s. Zaiki Builders, Surat V. The Income Tax Officer, Ward 5(4), Surat

ITA 2163/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9106 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-02-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 22-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 2163/AHD/2013 (ASSESSMENT YEAR: 2001-02) M/S. ZAIKI BUILDERS, 202, B WING, TARANOM APARTMENT, NR. NILKANTH MAHADEV TEMPLE, NANPURA, SURAT-0 V/S INCOME TAX OFFICER, WARD- 5 (4), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAAFZ1158Q APPELLANT BY : SHRI MEHUL SHAH, AR RESPONDENT BY : SHRI PRASOON KABRA , SR. D.R . ( )/ ORDER DATE OF HEARING : 08 -02-201 7 DATE OF PRONOUNCEMENT : 13 -02-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A)-I, SURAT DATED 20.06.2013 PERTAIN ING TO A.Y. 2001-02. ITA NO. 2163 /AHD/2013 . A.Y. 2001-0 2 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 12,77,512/- U/S. 271(1)( C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 29.03.2004 MADE U/S. 143(3) OF THE ACT. 4. A SURVEY ACTION WAS CONDUCTED AT THE PREMISES OF TH E ASSESSEE U/S. 133A OF THE ACT AND THE ASSESSEE HAS MADE A DISCLOSURE OF I NCOME OF RS. 40 LACS ON ACCOUNT OF ON MONEY RECEIVED FROM THE SALE OF FLATS . DURING THE COURSE OF THE SURVEY PROCEEDINGS, A LOOSE SHEET WAS FOUND ON WHICH THE FOLLOWING NOTINGS WERE MADE - FLAT NO. 802 2.92 FLAT NO. 301 3.60 FLAT NO. 801 3.60 5. THE A.O. EXTRAPOLATED THESE FIGURES AND CONVERTED T HEM TO 2.92 LACS, 3.60LACS AND 3.60 LACS. SINCE, THE ASSESSEE HAS SOL D 20 FLATS, THE A.O. TOOK THE HIGHEST FIGURE OF 3.60 LACS AND MULTIPLIED IT W ITH 20 FLATS AND CAME TO THE CONCLUSION THAT THE ASSESSEE HAS RECEIVED RS. 7 2 LACS AS ON MONEY. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAS PAID RS. 19,91,040/- TOWARDS THE PURCHASE OF LAND, THE SAID AMOUNT WAS DEDUCTED FROM THE ALLEGED ON MONEY OF RS. 72 LACS. THE A.O. FURTHER REDUCED RS. 19.50 LACS WHICH WAS ALREADY OFFERED TO TAX BY THE ASSESSEE IN THE RETUR N OF INCOME FILED ON 30.06.2002 AND THE BALANCE OF RS. 32,58,960/- WAS T REATED AS ON MONEY ITA NO. 2163 /AHD/2013 . A.Y. 2001-0 2 3 COLLECTED BUT NOT OFFERED TO TAX AND ADDED TO THE R ETURNED INCOME OF THE ASSESSEE. 6. PENALTY PROCEEDINGS WERE SEPARATELY INITIATED U/S. 271(1)(C) OF THE ACT. 7. THE ASSESSEE COULD NOT SUCCEED IN APPEALS AGAINST T HE ADDITIONS MADE BY THE A.O. IN THE PENAL PROCEEDINGS, THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN WHY PENALTY SHOULD NOT BE LEVIED U/S. 271(1)(C) OF THE ACT ON THE DIFFERENTIAL AMOUNT OF ON MONEY OF RS. 32,58,960/-. ON RECEIVING NO PLAUSIBLE REPLY, THE A.O. PROCEEDED BY LEVYING PENA LTY OF RS. 12,77,512/-. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 9. THE RELEVANT FINDINGS OF THE FIRST APPELLATE AUTHOR ITY READS AS UNDER:- 7. 1 EVEN ON MERITS, THE APPELLANT DID NOT DISCLOSE FULL MATERIAL FACTS IN RESPECT OF ON MONEY RECEIVED DURING THE COURSE OF ASSESSMENT PRO CEEDINGS AND ADDITIONAL ' ON MONEY ' RECEIVED WAS DETERMINED ON THE BASIS OF ENTR IES IN SEIZED MATERIALS. THEREFORE, IT CANNOT BE SAID THAT FULL MATERIAL FACTS WERE DIS CLOSED BEFORE THE ASSESSING OFFICER BY THE APPELLANT. CONSEQUENTLY, EXPLANATION-1 TO SUB S ECTION 271 (1)( C) OF THE I T ACT IS APPLICABLE IN THE CASE OF THE APPELLANT. CONSIDERIN G THESE FACTS, THE 2 ND AND 3 RD GROUNDS OF APPEAL FILED BY THE APPELLANT ARE DISMISSED AND CONSEQUENTLY, THE/PENALTY IMPOSED BY THE ASSESSING OFFICER IS CONFIRMED. 10. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE L D. COUNSEL FOR THE ASSESSEE REITERATED THE SEQUENCE OF EVENTS CONSIDERED AT THE TIME OF THE ASSESSMENT PROCEEDINGS. IT IS THE SAY OF THE LD. COUNSEL THAT THE A.O. HAS ESTIMATED THE ITA NO. 2163 /AHD/2013 . A.Y. 2001-0 2 4 ALLEGED ON MONEY BY EXTRAPOLATING THE NOTINGS FOUND ON A LOOSE SHEET OF PAPER AT THE TIME OF SURVEY. THE LD. COUNSEL VEHEME NTLY STATED THAT ENTIRE ADDITIONS HAVE BEEN MADE ON PRESUMPTION WHICH CANNO T JUSTIFY THE LEVY OF PENALTY. 11. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 12. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE FACTUAL MATRIX RESULTING INTO THE IMPUGN ED ADDITION OF RS. 32,58,960/- HAS BEEN EXPLAINED ELSEWHERE. IT IS TRU E THAT THE ADDITIONS HAVE BEEN MADE SOLELY ON THE BASIS OF THE NOTINGS FOUND ON A LOOSE SHEET OF PAPER. IT IS NOW SETTLED PROPOSITION OF LAW THAT SU CH LOOSE SHEETS DO NOT HAVE ANY EVIDENTIARY VALUE AS HELD BY THE HONBLE S UPREME COURT IN THE CASE OF COMMON CAUSE (A REGISTERED SOCIETY) AND OT HERS. VS. UNION OF INDIA AND OTHERS IN WRIT PETITION CIVIL APPEAL NO. 505 OF 2015. 13. IT IS TRUE THAT THE ASSESSEE COULD NOT SUCCEED IN Q UANTUM APPEALS. BUT PENAL PROCEEDINGS ARE SEPARATE AND DIFFERENT FROM THE ASS ESSMENT PROCEEDINGS AND THE SAME PIECE OF EVIDENCE CAN BE CONSIDERED AG AIN IN THE LIGHT OF THE JUDICIAL DECISIONS. 14. IN OUR CONSIDERED OPINION, SINCE THE QUANTUM ADDITI ON IS DEBATABLE, THE SAME CANNOT TRIGGER THE PROVISIONS OF SECTION 271(1 )(C) OF THE ACT. WE, ACCORDINGLY, SET ASIDE THE FINDINGS OF THE LD. CIT( A). ON THE GIVEN FACTS, THIS ITA NO. 2163 /AHD/2013 . A.Y. 2001-0 2 5 IS NOT A FIT CASE FOR THE LEVY OF PENALTY U/S. 271( 1)(C) OF THE ACT AND WE DIRECT THE A.O. TO DELETE THE PENALTY SO LEVIED. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 13 - 02- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 13/02/2017 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