Shri Patel Shankarlal Ambalal, Kadi V. The Income Tax Officer, Patan Ward-4, Mehsana

ITA 2330/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6263 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 14-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI DOHRI JOINT
• Assessee Lawyers: S N DIVETIA
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2330/AHD/2014 (ASSESSMENT YEAR: 2008-09) PATEL SHANKARLAL AMBALAL P:ROP: JAY KISHAN PETROLEUM SERVICE, KADI- KALOL ROAD, KADI-382715 V/S INCOME TAX OFFICER, PATAN WARD-4, MEHSANA (APPELLANT) (RESPONDENT) PAN: ABRPP8809N APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SMT. MEENAKSHI DOHRI, JOINT CIT ( )/ ORDER DATE OF HEARING : 18 -01-201 8 DATE OF PRONOUNCEMENT : 23-01-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A), GANDHINAGAR, AHMEDABAD DATED 28.05.2014 PERTAINING TO A.Y. 2008-09. ITA NO. 2330 /AHD/2014 . A.Y. 2008-09 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 14,2 4,060/- U/S. 271(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 17.10.2011 FRAMED U/S. 147 R.W.S. 143(3) OF THE ACT. 4. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AS PER AIR INFORMATION, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF FUNDS FOR PURCHASING PLOTS OF RS. 41,81,700/-. 5. ON 05.10.2011, THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS AND AGREED FOR THE ADDITION OF RS. 41,81,700/- ON ACCOUNT OF U NEXPLAINED INVESTMENT IN PURCHASE OF 41 PLOTS. THE ASSESSEE ALSO AGREED FOR THE PAYMENT OF TAX AND STATED THAT HE IS AGREEING TO BUY PEACE OF MIND SUB JECT TO LIBERAL VIEW FOR PENALTY. SINCE THE ASSESSEE AGREED FOR THE ADDITION , RS. 41,81,700/- WAS ADDED TO THE RETURN INCOME OF THE ASSESSEE. PENALTY PROCE EDINGS WERE SEPARATELY INITIATED. 6. THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN WHY PENALTY SHOULD NOT BE LEVIED U/S. 271(1)(C) OF THE ACT. THE ASSESSEE EXPLAINED THAT H E HAS NOT SHOWN INVESTMENT IN THE BUSINESS ACCOUNTS AS THE LAND BEING HIS PERS ONAL PROPERTY AND IN ABSENCE OF PROPER ADVICE HE PAID MONEY FROM HIS AGRICULTURE INCOME AS WELL PERSONAL OTHER AVAILABLE BALANCES WITH HIM AND LOANS. IT WAS FURTHER EMPHASIZED THAT DUE TO NO GENUINE DIRECTION OR ADVICE RECEIVED BY THE A SSESSEE TO BUY MENTAL PEACE OF MIND AND GET RELIEF FROM PENAL PROCEEDINGS, HE A GREED FOR THE SAID ADDITIONS. ITA NO. 2330 /AHD/2014 . A.Y. 2008-09 3 THE CONTENTION OF THE ASSESSEE WAS NOT FOUND TO BE ACCEPTABLE BY THE A.O. AND THE A.O. LEVIED PENANLTY OF RS. 14,24,060/- 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. THE RELEVANT FINDINGS OF THE LD. CIT(A) READ AS UNDER:- 6. I HAVE CONSIDERED THE FACTS OF THE CASE, PENALTY ORDER, SUBMISSION FILED BY THE APPELLANT AND CASE LAWS RELIED UPON. AFTER GOING THROUGH THE OBSERVATIONS MADE BY THE AO IN THE PENALTY ORDER, I FIND THAT APPELLANT HAD PURCHASED 41 PLOTS OF LAND TOTAL ING RS.41,81,700/- IN CASH AND APPELLANT'S CONTENTION FOR NOT SHOWING THIS TRANSAC TIONS IN THE AUDITED BUSINESS ACCOUNT OR RETURN FILED IN HIS INDIVIDUAL CAPACITY IS STATED BEFORE THE AO DUE TO NON-GENUINE DIRECTION OR ADVISE RECEIVED BY THE APP ELLANT WHICH WAS REJECTED BY THE AO. FURTHER, THE AO HAS CONTENDED IN HIS ORDER THAT THE APPELLANT HAS NEVER REVISED HIS RETURN OF INCOME DISCLOSING THIS INVEST MENT. IT IS ALSO A FACT THAT APPELLANT HAD AGREED FOR THE ADDITION BUT ON THE CO NTRARY ADDITIONS WERE MADE BY THE AO CONSIDERING ALL THE FACTS AND CIRCUMSTANC ES AND GOING THROUGH THE SUBMISSION MADE BY THE APPELLANT BEFORE HIM WHO PRO VES BEYOND DOUBT THAT APPELLANT HAD CONCEALED HIS PARTICULARS OF INCOME A ND AS SUCH PENALTY PROCEEDINGS WERE INITIATED AND LEVIED. THE APPELLANT HAS CONTENDED THAT THE APPEAL AGAINST QUANTUM ORDER WAS FILED BY THE APPELLANT BUT SUBSEQUENTLY WITHDRAWN FEARING TH AT THE APPEAL OF THE APPELLANT WOULD BE CONFIRMED WHICH AGAIN PROVES APP ELLANTS MENS REA THAT THERE WAS CONCEALMENT OF INCOME. FURTHER, APPELLANT HAS S TATED THAT HE POSSESSES ANCESTRAL AGRICULTURAL LAND AND IT WAS CULTIVATED S INCE LONG AND AGRICULTURAL INCOME HAS BEEN SHOWN. HE HAS ALSO PRODUCED SALE BI LLS OF AGRICULTURAL PRODUCE. IN HIS CONTENTION, APPELLANT HAS ALSO STATED THAT H E POSSESSES ORNAMENTS IN HIS NAME WHICH WAS ACQUIRED FROM ANCESTRAL AGRICULTURAL INCOME. THE APPELLANT HAS CONTENDED THAT HE HAD PURCHASED THE PLOTS OF LAND O UT THESE INCOME BUT APPELLANT HAS CATEGORICALLY STATED THAT NO SALE BIL L OF ORNAMENTS WERE AVAILABLE WITH HIM. THE CASE LAWS RELIED UPON BY THE APPELLANT ARE CLEA RLY DISTINGUISHABLE FROM THE FACTS OF THE CASE OF THE APPELLANT. THOUGH THE APPE LLANT CONTENDS THAT HE HAD AGREED FOR THE ADDITION TO BUY PEACE OF MIND AND SUBJECT TO LIBERAL VIEW DURING ITA NO. 2330 /AHD/2014 . A.Y. 2008-09 4 PENALTY PROCEEDINGS, CANNOT BE ACCEPTED AS QUANTUM PROCEEDINGS AND PENALTY PROCEEDINGS ARE DISTINCT AND HE HAS TO PROVE HIS CL AIM WITH MATERIAL EVIDENCES TO THE SATISFACTION OF THE AO, WHICH HE HAS FAILED, IN SUCH CIRCUMSTANCES, I HOLD THAT THE ACTION OF THE AO IS JUSTIFIABLE AND THE PENALTY LEVIED BY THE AO OF RS.14,24,060/- U/S 271(1)(C) OF THE ACT IS HELD JUS TIFIED AND IS CONFIRMED. THE GROUND OF APPEAL IS REJECTED. 8. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE L D. COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT THE ASSESSEE AGREED FOR THE ADDITION TO PURCHASE PEACE OF MIND AND THERE IS NO CASE FOR THE CONCEALMENT OF ANY INCOME. IT IS THE SAY OF THE LD. COUNSEL THAT THE PURCHASES OF 41 PLOTS WERE NOT REFLECTED IN THE BOOKS OF ACCOUNTS BECAUSE THE BOOKS OF ACCOUNTS PERTAINED TO THE BUSINESS OF THE ASSESSEE AND THE PLOTS WERE PURCHASED IN INDIVIDUAL CAPACITY. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT ASSESSEES HUF HAD AGR ICULTURAL INCOME AND THERE WERE PERSONAL JEWELLERIES OF FAMILY MEMBERS WHICH W ERE SOLD TO PURCHASE THE SAID 41 PLOTS. THE LD. COUNSEL CONCLUDED BY STATING THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN NOT APPRECIATING THE FACT S IN TRUE PERSPECTIVE. THEREFORE, THE PENALTY LEVIED SHOULD BE DELETED. P ER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTH ORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT WAS THE AIR INFORMATION WHICH TRIGGERED T HE ASSESSMENT PROCEEDINGS. THERE IS NO DISPUTE THAT THE ASSESSEE HAD PURCHASED 41 PLOTS IN HIS NAME. EVEN, IF THE PLOTS SO PURCHASED WERE NOT BUSINESS ASSETS OF THE ASSESSEE AND THEREFORE DID NOT FIND ANY PLACE IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE WHICH PERTAINED TO THE BUSINESS OF THE ASSESSEE, THEN ALSO THE SOUR CES OF INVESTMENT HAVE TO BE EXPLAINED WITH SUPPORTING DOCUMENTARY EVIDENCES. IN OUR CONSIDERED OPINION, HAD THERE BEEN NO AIR INFORMATION, THE ASSESSEE WOU LD HAVE GOT SCOT-FREE BY NEITHER PAYING THE TAXES NOR PENALTY ON THE SAID UN EXPLAINED INVESTMENT. ITA NO. 2330 /AHD/2014 . A.Y. 2008-09 5 10. ON THE ONE HAND, THE ASSESSEE STATES THAT HE HAS AG REED FOR THE ADDITION TO PURCHASE PEACE OF MIND AND ON THE OTHER HAND, HE CO NTESTED THE ASSESSMENT BEFORE THE FIRST APPELLATE AUTHORITY. THIS CONTRADI CTORY STAND BY THE ASSESSEE ITSELF SHOWS THAT WHEN THE ASSESSEE WAS CAUGHT WITH THE PURCHASE OF 41 PLOTS TO COME OUT FROM THE CLUTCHES OF TAXATION AND PENALTY, THE ASSESSEE HAD NO OPTION BUT TO AGREE FOR THE ADDITION. WE DO NOT FIND ANY S UBSTANCE ON THE CLAIM OF WRONG ADVICE/ILL-ADVICE, THE ASSESSEE AGREED FOR AD DITION BECAUSE THE ASSESSEE HIMSELF HAS ATTENDED THE ASSESSMENT PROCEEDINGS WIT HOUT ANY COUNSEL AND THEREFORE THERE IS NO QUESTION OF ANY WRONG ADVICE/ ILL-ADVICE. 11. EVEN IN THE PENALTY PROCEEDINGS, THE ASSESSEE COULD NOT SUBSTANTIATE THE SOURCES OF INVESTMENT, AS CLAIMED BY HIM, BY ANY SU PPORTING EVIDENCES. THERE IS NO DOCUMENTARY EVIDENCE TO SUGGEST THAT THE HUF OF THE ASSESSEE WAS HAVING SUBSTANTIAL AGRICULTURAL INCOME. FURTHER, THERE ARE NO DOCUMENTARY EVIDENCES TO SHOW ANY SALE OF JEWELLERY BY THE FAMILY MEMBERS OF THE ASSESSEE. TO COME OUT FROM THE RIGOR OF THE PENALTY PROCEEDINGS, THE ASSE SSEE CAME OUT WITH A STORY UNSUBSTANTIATED. 12. CONSIDERING THE FACTS OF THE CASE IN HAND IN TOTALI TY, WE HAVE NO HESITATION TO HOLD THAT THE ASSESSEE CONCEALED THE PARTICULARS OF HIS INCOME AND THEREBY EXPOSED HIMSELF TO THE PENALTY LEVIABLE U/S. 271(1) (C) OF THE ACT. WE, THEREFORE, DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE ASSESSEE IS DISMISSED. 13. THE LD. COUNSEL FOR THE ASSESSEE HAD RELIED UPON CE RTAIN JUDICIAL DECISIONS WHICH ARE FOUND TO BE IRRELEVANT ON THE FACTS OF THE CASE IN HAND. FOR EXAMPLE, THE DECISION RELIED UPON IN THE CASE OF INDIAN & OVERSE AS TRADING CO. BY THE ITA NO. 2330 /AHD/2014 . A.Y. 2008-09 6 TRIBUNAL LUCKNOW BENCH, THE CO-ORDINATE BENCH FOUND THAT THERE WAS NOTHING ON RECORD BROUGHT BY THE A.O. TO SHOW THAT THE SURR ENDER WAS MADE WHEN THE ASSESSEE WAS CORNERED BY THE ASSESSING OFFICER. CON TRARY TO THIS IN THE CASE IN HAND, IT WAS THE AIR INFORMATION WHICH WAS CONFRONT ED TO THE ASSESSEE AND BECAUSE OF WHICH HE AGREED FOR THE ADDITION. ANOTHE R DECISION RELIED UPON BY THE ASSESSEE IN 85 TAXMANN.COM 90, WE FIND THAT THE HONBLE HIGH COURT OF BOMBAY DISTINGUISH THE FACTS OF THE CASE WITH THE F ACTS OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. 358 ITR 593. THE HONBLE HIGH COURT OBSERVED THAT IN THE CASE IN HAN D, THE ASSESSEE HAD MADE VOLUNTARY DISCLOSURE BUT AFTER THAT IT WAS CONSISTE NTLY WRITING TO THE AUTHORITIES THAT THERE IS NO EXCESS STOCK AND THE MANNER IN WHI CH THE STOCK TAKING HAS BEEN DONE IS NOT CORRECT. FURTHER, THE HIGH COURT ACCEPT ED ASSESSEES CONTENTION THAT IT WAS SUBJECT TO CENTRAL EXCISE CONTROL AND N O PROCEEDING FOR CLANDESTINE REMOVAL OF GOODS ETC. WERE INITIATED AGAINST THE RE SPONDENT. ON SUCH FACTS, THE HONBLE HIGH COURT DELETED THE LEVY OF PENALTY. BUT SUCH IS NOT THE FACTS OF THE CASE IN HAND. 14. RELIANCE ON THE DECISION OF THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF SMT. ANITA KUMARAN 293 CTR 454 IS ALSO FOUND MISPLA CED INASMUCH AS IN THAT CASE ON THE ADVICE OF AN ACCOUNTANT, THE ASSESSEE C LAIMED TRAVELLING EXPENDITURE U/S. 57 OF THE ACT WHEREAS IN THE CASE IN HAND, THE ASSESSEE HIMSELF ATTENDED THE PROCEEDING AND AGREED FOR THE ADDITION. 15. THE JUDGMENT OF HONBLE HIGH COURT OF PUNJAB & HARY ANA IN THE CASE OF RAJNISH NATH AGGARWAL 219 CTR 590 IS ALSO FOUND NOT TO BE RELEVANT AS IN THAT CASE, THE ASSESSEE AGREED FOR THE ADDITION OF FREIG HT CHARGES DEBITED IN PROFIT AND LOSS ACCOUNT. THOUGH THE PAYMENTS OF TRANSPORT CHARGES WERE MADE ITA NO. 2330 /AHD/2014 . A.Y. 2008-09 7 DIRECTLY BY THE SUPPLIERS AND NOT BY THE ASSESSEE. ON SUCH FACT, THE HONBLE HIGH COURT HELD THAT THERE IS NO QUESTION OF CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF. 16. AS MENTIONED ELSEWHERE, THE FACTS OF THE CASE IN HA ND ARE TOTALLY DIFFERENT FROM THE FACTS OF THE DECISION RELIED BY THE LD. COUNSEL . ORDER PRONOUNCED IN OPEN COURT ON 23 - 01- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER AHMEDABAD: DATED 23 /01/2018 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