RAMCHANDRA KRISHNA PATIL, THANE V. ITO 4(3), THANE

ITA 2409/MUM/2012

• Counselvise Citation: 240919914 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-10-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: BHUPENDRA SHAH
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.2409/MUM/2012 ( / ASSESSMENT YEAR :2006-07) SHRI RAMCHANDRA KRISHNA PATIL, 11, JIVDANI KRIPA, CHIMGAR ALI, ACHOLE VILLAGE, NALLASOPARA (E), DIST.THANE. / VS. INCOME TAX OFFICER 4(3), THANE ( / APPELLANT) .. ( ! ' / RESPONDENT) ./ $% ./ PAN/GIRNO.:ALIPP3270C & / APPELLANT BY : SHRI BHUPENDRA SHAH !' ' & /RESPONDENT BY : SHRI NEIL PHILIP ( ) ' * + / DATE OF HEARING : 27.10.2014 ,- ' * + /DATE OF PRONOUNCEMENT : 29.10.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 14.12.2011 PASSED BY LD. CIT(A)-II, THANE AND IT R ELATES TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN CONFIRMING THE PENALTY OF RS.4,32,408/- LEVIED BY THE AO U/ S 271 (1)( C ) OF THE INCOME TAX ACT, 1961 (THE ACT). 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . DURING THE COURSE OF ASSESSMENT PROCEEDING THE AO NOTICED THAT THE ASSE SSEE HAD DEPOSITED CASH AGGREGATING TO RS.16.26 LAKHS IN THE BANK ACCOUNT M AINTAINED WITH UNITED I.T.A. NO.2409/MUM/2012 2 WESTERN BANK. WHEN THE AO ASKED THE ASSESSEE TO E XPLAIN THE SOURCE FOR MAKING CASH DEPOSITS, THE ASSESSEE SUBMITTED THAT H E HAD SOLD JEWELLERY TO DIFFERENT JEWELLERS ON VARIOUS DATES AND REALIZED A N AGGREGATE AMOUNT OF RS.14,17,323/- AND THE SAID PROCEEDS WERE UTILIZED FOR MAKING DEPOSITS. FROM THE DETAILS FURNISHED BY THE ASSESSEE, THE AO NOTIC ED THAT THE ASSESSEE HAS SOLD JEWELLERY ON DIFFERENT RATES ON THE VERY SAME DAY T O DIFFERENT JEWELLERS. FURTHER, THE AO ALSO ISSUED LETTERS U/S 133(6) OF THE ACT T O THE JEWELERS, TO WHOM JEWELLERY WAS SOLD. HOWEVER, ALL THE LETTERS WERE RECEIVED BACK FROM THE POSTAL AUTHORITY WITH THE REMARK NOT KNOWN. HENCE THE AO ISSUED SUMMONS TO THE ASSESSEE WHO APPEARED BEFORE THE AO AND SUBMITTED T HAT HE IS MORE THAN 77 YEARS OLD AND FURTHER AGREED FOR ADDITION OF RS.14 ,17,323/- REPRESENTING THE SALE VALUE OF GOLD. ACCORDINGLY, THE AO ASSESSED THE AB OVE SAID AMOUNT AS THE INCOME OF THE ASSESSEE. THE AO, THEREAFTER, INITIAT ED PENALTY PROCEEDINGS AND LEVIED PENALTY OF RS.4,32,408/- AND THE SAME WAS CO NFIRMED BY THE LD. CIT(A). 4. WE NOTICE THAT THE ASSESSEE HAS GIVEN FOLLOWING EXPLANATIONS BEFORE THE AO DURING THE COURSE OF PENALTY PROCEEDINGS: I. THE ASSESSEE HAS SOLD HIS JEWELLERY THROUGH HIS SON SUDAM PATIL; II) GOLD WAS SOLD IN THE FY 2005-06 AND THE CONFIR MATIONS WERE CALLED FOR IN THE FY 2008-09 AFTER ALMOST 2 YEARS AND IT IS POSSIBLE THAT THE PURCHASERS ARE NOT COOPERATING DUE TO FEAR AND UNWA NTED TROUBLE; III) THE ASSESSEE IS 77 YEARS OLD IT IS NOT POSSI BLE FOR HIM TO PERSONALLY GO TO PARTIES OR HE CANNOT FORCE HIS SON TO BE AFTER THESE PARTIES TO GET CONFIRMATIONS. UNDER THESE CIRCUMSTANCES TO HAVE P EACE OF MIND THE ASSESSEE AGREED FOR ADDITION ON THE GROUND THAT PEN AL PROCEEDINGS SHOULD NOT BE INITIATED. THE ASSESSEE HAS ALSO COOPERATED IN PAYING THE ASSESSMENT DUES PROMPTLY AND ALSO NOT PREFERRED ANY APPEAL AGAINST THE ASSESSMENT ORDER; IV) RELYING UPON THE DECISION IN THE CASE OF SHR I BAJRANG TRADING AND SUPPLY CO 187 ITR 299 IT IS CONTENDED THAT ADDITIO N IN ASSESSMENT BY INVOKING THE PROVISIONS OF SECTION 68A CANNOT FORM BASIS FOR PENALTY IN THE ABSENCE OF ANY MATERIAL UNMISTAKABLE PROVING THE CO NCEALMENT. VI) RELIANCE IS ALSO PLACED UPON THE DECISION IN T HE CASE OF GOKULDAS HARVALLABHDAS 34 ITR 98 I.T.A. NO.2409/MUM/2012 3 5. THUS, WE NOTICE THAT THE ASSESSEE HAS FURNIS HED EXPLANATIONS TO THE AO DURING THE COURSE OF PENALTY PROCEEDINGS. WE FURTH ER NOTICE THAT THE ASSESSEE FURNISHED DETAILS OF SALE OF JEWELLERY TO THE AO AL ONG WITH THE DETAILS OF JEWELLERS TO WHOM THE JEWELLERY WERE SOLD. THE ASSESSEE ALSO SUBMITTED THAT HE HAD TO DEPEND UPON HIS SON FOR SELLING THE JEWELLERY AS HE WAS 77 YEARS OLD AT THE RELEVANT POINT OF TIME. THE ASSESSEE HAS ALSO SUBM ITTED THAT THE AO HAS ASKED FOR DETAILS OF JEWELLARY SHOPS AFTER EXPIRY OF 2 YEARS AND HE WAS NOT IN A POSITION TO FORCE THE JEWELLERS TO CO-OPERATE WITH THE AO. UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAS ACCEPTED THE ASSESS MENT OF THE SALE VALUE OF GOLD JEWELLERY AS HIS INCOME. THUS, WE NOTICE THAT THE ASSESSEE HAS OFFERED EXPLANATION WITH REGARD TO THE ADDITION MADE AND TH E SAID EXPLANATION HAS NOT BEEN FOUND FAULT BY THE AO. IN FACT, DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THE AO HAD ISSUED LETTERS TO THE JEWEL ERS U/S 133(6) OF THE ACT BUT THEY HAVE BEEN RETURNED UNSERVED. WE NOTICE THAT TH EREAFTER THE AO DID NOT MAKE ANY FURTHER INQUIRY. IT IS WELL SETTLED PROP OSITION OF LAW THAT THE ADDITION MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS W ILL NOT AUTOMATICALLY LEAD TO PENALTY U/S 271(1)( C ) OF THE ACT. DURING THE COU RSE OF PENALTY PROCEEDINGS, THE AO HAS TO RE-APPRECIATE THE MATTER FIRST IN THE LI GHT OF EXPLANATION GIVEN BY THE ASSESSEE. IN THE INSTANT CASE, AS NOTED EARLIER, TH E ASSESSEE HAS OFFERED EXPLANATION FOR ACCEPTING THE ASSESSMENT OF SALE VA LUE OF GOLD AND THE SAID EXPLANATION HAS NOT BEEN FOUND FALSE. FURTHER, EVE N THOUGH THE ASSESSEE COULD NOT PROVE THE SALE OF JEWELLERY, YET THE ASSESSEE H AS FURNISHED ALL THE MATERIAL AVAILABLE WITH HIM TO THE AO. UNDER THESE CIRCUMST ANCES, WE ARE OF THE VIEW THAT THE PENALTY U/S 271(1)( C ) OF THE ACT CANNOT BE LEVIED IN THE INSTANT CASE, AS THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER THE EXPLANATION GIVEN U/S 271(1)( C ) OF THE ACT. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY LEV IED U/S 271(1)( C ) OF THE ACT FOR THE YEAR UNDER CONSIDERATION. I.T.A. NO.2409/MUM/2012 4 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN CO URT ON 29TH OCT, 2014 . ,- ( . /0 1 229TH OCT, 2014 - ' 7) 8 SD S D ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER / ( ) MUMBAI: 29TH OCT,2014. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ( :* ( ) / THE CIT(A)- CONCERNED 4. ( :* / CIT CONCERNED 5. 6. ;< 7 !*= , + = , / ( ) / DR, ITAT, MUMBAI CONCERNED 7 > ) / GUARD FILE. ? ( / BY ORDER, TRUE COPY @ $ (ASSTT. REGISTRAR) + = , / ( ) /ITAT, MUMBAI