Shri Kiritkumar Himatlal Dholakia, Ahmedabad V. The Income Tax Officer, Ward-5(1)(5), Ahmedabad

ITA 2187/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6943 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-07-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 29-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: K C THAKER
• Section: 271(1)(c)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 2187/AHD/2017 ( ASSESSMENT YEAR : 2011-12) KIRITKUMAR HIMATLAL DHOLAKIA 801, SUKAN APARTMENT, BODAKDEV ROAD, VASTRAPUR, AHMEDABAD / VS. ITO WARD 5(1)(5), AHMEDABAD ./ ./ PAN/GIR NO. : ABIPD2443B ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI K. C. THAKER, A.R. / RESPONDENT BY : SHRI RAJESH MEENA, SR.D.R. DATE OF HEARING 30/07/2019 # / DATE OF PRONOUNCEMENT 31/07/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, AHMEDABAD (CIT(A) IN SHORT), DATED 14.07.2017 ARI SING IN THE PENALTY ORDER DATED 09.03.2016 PASSED BY THE ASSESSING OFFI CER (AO) UNDER S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) CON CERNING AY 2011-12. ITA NO.2187/AHD/17 [KIRITKUMAR H. DHOLAKIA VS. ITO] A.Y. 2011-12 - 2 - 2. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HAS I MPUGNED THE ACTION OF THE CIT(A) IN IMPOSING PENALTY OF RS.2,90,000/- UNDER S. 271(1)(C) OF THE ACT. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE POINTED OUT THAT IN THE COURSE OF ASSESSME NT PROCEEDINGS, THE LEARNED AO OBSERVED THAT CERTAIN CASH DEPOSITS TO T HE EXTENT OF RS.9,60,000/- WAS FOUND TO BE MADE IN THE BANK ACCO UNT OF THE ASSESSEE. THE ITAT IN THE QUANTUM PROCEEDINGS IN ITA NO. 1491 /AHD/2015 ORDER DATED 10.11.2017 SUSTAINED THE ADDITION TO THE EXTE NT OF RS.4,60,000/- AND ACCEPTED SOURCE OF CASH DEPOSIT TO THE EXTENT OF RS .5 LAKHS TO BE VALID. IN THE MATTER, THE LEARNED AR SUBMITTED THAT HIS CASE IS TWO FOLD; (I) THAT THE SOURCE OF THE CASH BEING SALE OF CARS HAVE NOT BEEN DISPUTED AND RATHER ACCEPTED. THE CO-ORDINATE BENCH OF ITAT IN QUANTUM PROCEEDINGS HAS MERELY ASSIGNED LUMP SUM VALUE OF THE CARS TO BE AT RS.5 LAKHS AND THUS CONFIRMED THE BALANCE ADDITION. THEREFORE, SUCH AC TION IN THE QUANTUM PROCEEDINGS FOR REDUCING THE VALUE OF CARS SHOULD N OT LEAD TO IMPOSITION OF PENALTY TOWARDS THE CASH DEPOSITS. IT WAS SUBMITTE D THAT THE EXPLANATION OF THE ASSESSEE HAS BEEN PARTLY ACCEPTED AND NO MALAFI DES CAN BE ATTRIBUTED TO THE ASSESSEE IN THE EXPLANATION FOR THE CASH DEPOSI TS REMAINED UNEXPLAINED & (II) THE ACTION OF THE AO WHILE ISSUING NOTICE UN DER S. 271(1)(C) OF THE ACT AS WELL AS WHILE IMPOSING THE PENALTY VIDE ORDE R DATED 09.03.2016 IS VAGUE AND WITHOUT ASSIGNING DEFINITE CHARGE AGAINST THE ASSESSEE. THE LEARNED AR POINTED OUT THAT THE AO HAS NEITHER STRI KE OFF AND MADE SPECIFIC CHARGE TOWARDS CONCEALMENT OR FURNISHING OF INACCUR ATE PARTICULARS OF INCOME EITHER AS ISSUING NOTICE UNDER S.274 OF THE ACT NOR HAS SPECIFIED THE CHARGE SO LABELED EVEN IN THE PENALTY ORDER. IN TH E CIRCUMSTANCES, THE ACTION OF THE AO IS NOT SUSTAINABLE IN LAW. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS TOWARDS THE MAINTAINABILITY OF PENALTY UNDER S. 271(1)(C) OF TH E ACT. WE OBSERVE THAT THE ASSESSEE HAS INTER ALIA EXPLAINED THE SOURCE OF CASH DEPOSITS TO BE OUT OF SALE OF TWO CARS RS.4 LAKHS WAS STATED TO BE GEN ERATED OUT OF SALE OF SWIFT DZIRE AND RS.5 LAKHS WAS STATED TO BE GENERAT ED ON SALE OF TOYOTA ITA NO.2187/AHD/17 [KIRITKUMAR H. DHOLAKIA VS. ITO] A.Y. 2011-12 - 3 - QUALIS. THE ITAT HAS ESTIMATED LOWER VALUES ON SAL E OF SUCH CARS AND THUS SUSTAINED THE ADDITION TO THE EXTENT OF RS.4,60,000 /-. UNDER THE CIRCUMSTANCES, WHILE THE EXPLANATION TOWARDS SOURCE OF CASH DEPOSIT HAS NOT BEEN ACCEPTED TO BE FULLY JUSTIFIED, THE CASE M ADE OUT BY THE ASSESSEE TOWARDS SOURCE OF CASH DEPOSIT CANNOT BE STATED TO BE DOWNRIGHT FALSE IN SO FAR AS PENALTY PROCEEDINGS ARE CONCERNED. THE ASSES SEE HAS OFFERED EXPLANATION WHICH HAS BEEN ACCEPTED PARTIALLY IN TH E QUANTUM PROCEEDINGS AND THE REMAINING PART OF THE EXPLANATION IS ONLY U NPROVED. THUS, PENALTY, IN OUR VIEW, IN SUCH CIRCUMSTANCES, IS NOT EXIGIBLE . WE ALSO FIND MERIT IN THE SECOND LINE OF ARGUMENT OF THE ASSESSEE ALLEGIN G VAGUENESS IN THE SPECIFICATION OF CHARGE AGAINST THE ASSESSEE. THE AO IS REQUIRED TO BRING OUT SPECIFIC CHARGE AGAINST THE ASSESSEE WHILE IMPO SING PENALTY UNDER S. 271(1)(C) OF THE ACT. THE AO HAS CLEARLY FAILED TO DO SO. THE IMPOSITION OF PENALTY IN SUCH CIRCUMSTANCES IS NOT SUSTAINABLE IN LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 31/07/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 31/07/2 019