Shri Jagdishbhai B. Chandarana, Ahmedabad V. The Asstt. Commissioner of Income Tax, Circle-7(2), Ahmedabad

ITA 2199/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6035 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 24-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources

Judgement Text

, . . , 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.2199/AHD/2016 ( / ASSESSMENT YEAR : 2011-12) SHRI JAGDISHBHAI B.CHANDARANA PLOT NO.77, VIKRAM BUNGALOWS THAKKARBAPA NAGAR AHMEDABAD-382 350 / VS. THE ACIT CIRCLE-7(2) AHMEDABAD # ./ ./ PAN/GIR NO. : ABMPC 3209 Q ( #% / APPELLANT ) .. ( &#% / RESPONDENT ) #%' / APPELLANT BY : SHRI DHIREN SHAH, AR &#%(' / RESPONDENT BY : SHRI JAMES KURIAN, SR.DR )*(+ / DATE OF HEARING 19/12/2017 ,-./(+ / DATE OF PRONOUNCEMENT 13/02/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTA NCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-7, AHMEDABAD [CIT(A) IN SHORT] DATED 23/06/2016 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12 WHEREIN AC TION OF THE ITA NO.2199/AHD /2016 SHRI JAGDISHBHAI B. CHANDARANA VS. ACIT ASST.YEAR 2011-12 - 2 - ASSESSING OFFICER (AO) IMPOSING PENALTY UNDER S.271 AAA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE ACT') AMOUNTING TO RS.20 LAKHS WAS CONFIRMED BY THE CIT(A). 2. BRIEFLY STATED, A SEARCH ACTION UNDER S.132 OF THE ACT WAS INTER- ALIA CARRIED OUT ON 06/01/2011 IN THE RESIDENTIAL PREMI SES OF THE ASSESSEE ALONG WITH OTHER GROUP CONCERNS. THE ASSESSEE AN INDIVIDUAL FILED HIS RETURN OF INCOME ON 30/12/2011 FOR AY 2011-12 DECLA RING TOTAL INCOME OF RS.9,23,27,790/-. THE AFORESAID RETURN INCLUDED DISCLOSURE OF RS.2 CRORES MADE BY THE ASSESSEE IN THE COURSE OF SEARCH IN HIS INDIVIDUAL CAPACITY PURSUANT TO STATEMENT RECORDED UNDER S.132 (4) OF THE ACT. THE ASSESSMENT WAS COMPLETED UNDER S.143(3) AND THEREAF TER PENALTY OF RS.20 LAKHS WAS IMPOSED ON THE ASSESSEE BY INVOKING SECTI ON 271AAA OF THE ACT ON SUCH DISCLOSURE MADE DURING THE COURSE OF SE ARCH ACTION. 3. THE ASSESSEE PREFERRED APPEAL AGAINST THE AFORES AID PENALTY ORDER PASSED BY THE AO BEFORE THE CIT(A). THE CIT(A), H OWEVER, DECLINED TO ENTERTAIN THE CASE MADE OUT BY THE ASSESSEE FOR NON -IMPOSITION OF PENALTY. CONSEQUENTLY, LEVY OF PENALTY RS.20 LAKHS UNDER S.2 71AAA OF THE ACT WAS CONFIRMED BY THE CIT(A). 4. AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL BEF ORE THE TRIBUNAL. ITA NO.2199/AHD /2016 SHRI JAGDISHBHAI B. CHANDARANA VS. ACIT ASST.YEAR 2011-12 - 3 - 5. THE LD.AR FOR THE ASSESSEE MR.DHIREN SHAH SUBMIT TED AT THE OUTSET THAT THE AFORESAID DISCLOSURE OF RS.2 CRORES GIVING RISE TO THE PENALTY PROCEEDINGS WAS MADE VOLUNTARY AND SUO MOTU FOR WHICH NO INCRIMINATING RECORD OR MATERIAL OR NOTINGS WERE FO UND DURING THE COURSE OF SEARCH PROCEEDINGS. THE LD.AR THEREAFTER ADVERT ED OUT ATTENTION TO THE STATEMENT RECORDED UNDER S.132(4) (PAGE NO.208 OF THE PAPER-BOOK) AND SUBMITTED THAT DESPITE ABSENCE OF ANY INCRIMINA TING DOCUMENT, THE DISCLOSURE OF RS.2 CRORES WAS MADE WITH A VIEW TO E XTEND COOPERATION TO THE REVENUE AUTHORITIES. THE LD.AR EMPHASIZED THAT NO SPECIFIC QUESTION WAS RAISED TOWARDS MANNER IN WHICH THE ALLEGED U NDISCLOSED INCOME WAS EARNED. THUS, THE ASSESSEE WAS NOT UNDER ANY O BLIGATION TO FURNISH ANY DETAIL IN RESPECT OF MODUS OPERANDI BY WHICH TH E ASSESSEE WAS EARNED THE UNDISCLOSED INCOME. THE LD.AR THEREAFTER SUBMI TTED THAT IT WAS POINTED OUT TO AO THAT THE ASSESSEE DECLARED THE AF ORESAID INCOME OUT OF CERTAIN LAND DEALINGS AND THEREFORE MANNER OF EAR NING ALLEGED UNACCOUNTED INCOME STANDS DISCLOSED. THE LD.AR SUB MITTED THAT IN THE ABSENCE OF ANY QUERY REGARDING THE MANNER OF INC OME DERIVED SUBSTANTIATION THEREOF, THE INGREDIENTS FOR IMPOS ING PENALTY UNDER S.271AAA OF THE ACT ARE NOT FULFILLED. THE LD.AR S UBMITTED THAT THE ASSESSEE HAS COMPLIED WITH THE SUBSTANTIAL REQUIRE MENTS FOR ELIGIBILITY OF IMMUNITY FROM PENALTY UNDER S.271AAA OF THE ACT. I T WAS POINTED OUT THAT THE INCOME DISCLOSED IN THE SEARCH PROCEEDINGS WERE DULY INCLUDED IN ITA NO.2199/AHD /2016 SHRI JAGDISHBHAI B. CHANDARANA VS. ACIT ASST.YEAR 2011-12 - 4 - THE RETURN OF INCOME AND TAXES WERE PAID THEREON ON SUCH UNDISCLOSED INCOME. 6. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE AO AND CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE SHORT CON TROVERSY IN THE PRESENT APPEAL IS TOWARDS MAINTAINABILITY OF IMPOSITION OF PENALTY UNDER S.271AAA OF THE ACT. IT IS THE CASE OF THE ASSESSE E THAT THE ORDER OF THE AO IMPOSING PENALTY IS NOT SUSTAINABLE SINCE THE PR E-REQUISITES SPECIFIED UNDER S.271AAA(2) OF THE ACT ARE BROADLY SATISFIED TO CLAIM IMMUNITY FROM IMPOSITION OF PENALTY. 8. IN THIS REGARD, WE NOTICE THAT THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INCOME PEGGED AT RS.2 CRORES FOR THE FI NANCIAL YEAR (FY)2010-11 RELEVANT TO AY 2011-12 IN QUESTION. IT WAS CLAIMED ON BEHALF OF THE ASSESSEE THAT THE DISCLOSURE WAS MADE VOLUNTARY AND SUO MOTU AND THE UNDISCLOSED INCOME HAS BEEN EARNED BY WAY OF LAND DEALING TRANSACTIONS FOR WHICH NO RECORDS WERE MAINTAINED A ND NO INCRIMINATING MATERIAL OR NOTINGS IN CONNECTION THERETO WERE FOUN D AT THE TIME OF SEARCH. A BARE PERUSAL OF STATEMENT RECORDED UNDER S.132(4) SHOWS THAT NO SPECIFIC QUESTION WERE CONFRONTED TO THE ASSESS EE ABOUT THE MANNER ITA NO.2199/AHD /2016 SHRI JAGDISHBHAI B. CHANDARANA VS. ACIT ASST.YEAR 2011-12 - 5 - IN WHICH THE AFORESAID UNDISCLOSED INCOME WERE EARN ED AND TOWARDS SUBSTANTIATION THEREOF. IT IS WELL SETTLED BY LO NG LINE OF JUDICIAL PRECEDENTS INCLUDING THE DECISION OF HONBLE GUJARA T HIGH COURT IN THE CASE OF CIT VS. M/S.MAHENDRA D.SHAH REPORTED IN 299 ITR 307 (GUJ.) AND PR.CIT VS. MUKESHBHAI RAMANLAL PRAJAPATI REPORT ED IN 398 ITR 170 (GUJ.) TO HOLD THAT IN THE ABSENCE OF ANY QUERY RAISED BY THE REVENUE TOWARDS MANNER OF DERIVING UNDISCLOSED INCOME AND SUBSTANTIATION OF THE MANNER, THE OBLIGATION TO MEET THE AFORESAID REQUIREMENT FOR CLAIMING IMMUNITY CANNOT BE FASTENED ON THE ASSESSE E. 9. ADMITTEDLY, THE ASSESSEE HAS INCLUDED THE UNDISC LOSED INCOME AS RECORDED UNDER S.132(4) OF THE ACT AND PAID TAXES T HEREON TOGETHER WITH INTEREST WHILE FILING THE RETURN OF INCOME. THEREF ORE, IN OUR CONSIDERED VIEW, THE ASSESSEE HAS SUBSTANTIALLY COMPLIED WITH THE CONDITIONS SPECIFIED UNDER S.271AAA(2) OF THE ACT FOR EXONERAT ION FROM THE CLUTCHES OF PENALTY PROCEEDINGS UNDER S.271AAA OF T HE ACT. THEREFORE, WE FIND MERIT IN THE APPEAL OF THE ASSESSEE. CONSE QUENTLY, THE AO IS DIRECTED TO DELETE THE PENALTY IMPOSED UNDER S.271A AA OF THE ACT. ITA NO.2199/AHD /2016 SHRI JAGDISHBHAI B. CHANDARANA VS. ACIT ASST.YEAR 2011-12 - 6 - 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 13/ 02/2018 SD/- SD/- () ( ) (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 13/ 02 /2018 3..),.)../ T.C. NAIR, SR. PS !'#' / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &#% / THE RESPONDENT. 3. 456+ 7+ / CONCERNED CIT 4. 7+ ( ) / THE CIT(A)-7, AHMEDABAD 5. 89:+)56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<* / GUARD FILE. / BY ORDER, &8++ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.2.18 (DICTATION-PAD 14- P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2.2.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.13.2.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.2.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER