Smt. Sayar Devi Lunawat, UDAIPUR V. ACIT, UDAIPUR

ITA 246/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70186 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Assessee Lawyers: DEVENDRA MEHTA
• Keywords: Unexplained investment; Revised return
• Section: 133A; 153A; 131

Judgement Text

1 IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 246/JODH/2013 (A.Y. 2006-07) SMT. SAYAR DEVI LUNAWAT VS. ACIT, CENTRAL CIRCLE- 1, C/O. DINESH BHANDARI & COMPANY, UDAIPUR. TAX CONSULTANTS, 401, KRISHNA PLAZA, HAJARESHWAR COLONY, UDAIPUR. PAN NO. AQUPS 4850 J ITA NO. 247/JODH/2013 (A.Y. 2006-07) SMT. SUNIL LUNAWAT VS. ACIT, CENTRAL CIRCLE-1, C/O. DINESH BHANDARI & COMPANY, UDAIPUR. TAX CONSULTANTS, 401, KRISHNA PLAZA, HAJARESHWAR COLONY, UDAIPUR. PAN NO. AACPL 4778 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEVENDRA MEHTA. DEPARTMENT BY : DR. DEEPAK SEHGAL-CIT-(DR) DATE OF HEARING : 05/07/2013. DATE OF PRONOUNCEMENT : 19/08/2013. 2 ORDER PER HARI OM MARATHA, J.M. : THESE TWO APPEALS BY DIFFERENT BUT CONNECTED ASSES SEES FOR A.Y. 2006-07 ARE DIRECTED AGAINST THE COMMON ORDER OF LD . CIT(A), JAIPUR, DATED 26/03/2013, AND HAS EMANATED FROM THE ORDER O F PENALTY DATED 04/06/2009 PASSED U/S 271(1)(C) OF THE INCOME TAX ACT 1961 (THE ACT FOR SHORT). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IN THE CASE OF SMT. SAYAR DEVI ARE THAT IN COMPLIANCE TO N OTICE DATED 25/11/2008 ISSUED U/S 153A AS A CONSEQUENCE OF SEAR CH US/ 132(1) CONDUCTED ON 14/12/2006 AT ASSESSEES RESIDENCE AND THE OFFICE, THE ASSESSEE FILED HER RETURN OF INCOME (ROI) ON 28/11/ 2008 DECLARING TOTAL INCOME OF RS. 14,00,380/-. THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 26/12/2008 AT A TOTAL INCOME OF RS. 14, 17,530/-. THE INCOME OF RS. 14,00,380/- DECLARED BY THE ASSESSEE INCLUDED UNDISCLOSED INCOME OF RS. 6,47,220/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES DECLARED BY SEARCH IN HIS STAT EMENT RECORDED U/S 132(4) OF THE ACT AND DISALLOWANCE OF RS. 17,154/- ON ACCOUNT OF HOUSE TAX. 3 2.1 PENALTY PROCEEDINGS AS PER THE PROVISIONS OF SE CTION 271(1)(C) WERE INITIATED BY ISSUING NOTICE DATED 26/12/2008 O N ACCOUNT OF CONCEALMENT OF PARTICULAR OF INCOME AND ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF HER TOTAL INCOME. AGAINST THE PROPOSED ACTION, THE ASSESSEE SUBMITTED THAT ON ACCOUNT OF I NCOME SURRENDERED AS PER THE PROVISION OF SECTION 132(4) OF THE ACT N O PENALTY U/S 271(1)(C) IS ATTRACTED AS THIS SURRENDER ENJOINS AN IMMUNITY OF EXPLANATION 5 APPENDED TO SECTION 271(1)(C) AND THE HOUSE TAX IS AN ALLOWABLE DEDUCTION U/S 24 OF THE ACT. THE ASSESSEE PLACED RELIANCE ON VARIOUS DECISIONS INCLUDING THAT OF HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS KANHIYALAL SARUPARIA 299 ITR 19 (RAJ0. BUT LD. A.O. HAS NOT AGREED AND BY OBSERVING THAT BUT FOR THE SE ARCH THIS INCOME COULD HAVE NOT BEEN UNEARTHED, SO, HE IMPOSED A PEN ALTY OF RS. 2,26,310/- FOR A.Y. 06-07 U/S 271(1)(C) OF THE ACT, AFTER OBTAINING PRIOR APPROVAL OF ACIT (CENTRAL RANGE), UDAIPUR IN TERMS OF SECTION 274(2)(B) OF THE ACT. 2.2 AGAINST THIS PENALTY, THE ASSESSEE PREFERRED AP PEAL AND LD. CIT(A) HAS REDUCED THE PENALTY BY OBSERVING THAT PENALTY Q UA ADDITION OF RS. 17,154/- BEING RS. 5,843/- HAS BEEN DELETED. THE AS SESSEE IS FURTHER AGGRIEVED. 4 3 WE HAVE HEARD RIVAL SUBMISSIONS. BOTH PARTIES HAV E REITERATED THEIR EARLIER ARGUMENTS. THE CASE OF THE ASSESSEE I S THAT NO SUCH PENALTY IS LEVIABLE BUT THE LD. D.R. SAYS THAT SURR ENDER OF RS. 6,47,220/- WAS MADE U/S 132(4) AND AS PER EXPLANATI ON 5 NO PENALTY CAN BE IMPOSED ON THIS AMOUNT. 3.1 WE HAVE FOUND THAT THE REQUISITE CONDITIONS TO BAIL OUT ANY ASSESSEE FROM THE GUILLOTINE OF THE RIGOURS OF SECT ION 271(1)(C) STAND FULFILLED IN THIS CASE. IN FACT SHRI MANGILAL LUNAW AT MADE A STATEMENT DURING SEARCH AS THE HEAD OF THE FAMILY AND IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT ON 14/12/2006 AND 15/12/2006 WHILE REPLYING TO QUESTION NO. 21 HE HAS STATED THAT INCOME ON ACCOUN T OF UNEXPLAINED JEWELLERY VALUED AT RS. 19,75,059/- IS IN ADDITION TO UNDISCLOSED INCOME OF RS. 1.25 CRORES. THAT STATEMENT HAS BEEN SIGNED BY SHRI PARDEEP LUNAWAT AND SHRI SUNIL LUNAWAT. IN FACT WHE N REPLY TO QUESTION NO. 23 OF STATEMENT DATED 27/12/2006 RECOR DED U/S 131 OF THE ACT AND REPLY TO QUESTION NOS. 21, 22, AND 23 O F HIS STATEMENT DATED 14/12/2006 RECORDED U/S 133A OF SHRI MANGILAL LUNAWAT ARE CONJOINTLY READ, IT IS FOUND THAT HE HAS MADE A SUR RENDER OF UNDISCLOSED INCOME ON BEHALF OF HIMSELF AND ALL THE OTHER FAMIL Y MEMBERS INCLUDING THIS ASSESSEE. HE HAS ADMITTED ACQUISITIO N OF SHARES BY HIM AND HIS FAMILY MEMBERS FOR RS. 40,00,000/- (APPROXI MATELY) IN THE YEAR 5 2005 WHICH HAS BEEN OFFERED FOR TAXATION. IN RESPON SE TO QUESTION NO. 33OF HIS STATEMENT DATED 27/12/2006, HE HAS VOLUNTA RILY DISCLOSED INCOME OF RS. 1.25 CRORES ON 15/12/2006 IN REPLY TO QUESTION NO. 21). THIS AMOUNT OF RS. 40 LAKH RELATED TO INVESTMENT IN SHARES PURCHASED BY HIM AND HIS FAMILY MEMBERS AND RS. 35 LAKHS IN C ASH FOR THE PURCHASE OF PROPERTY IN CHENNAI. THUS THE SURRENDER MADE U/S 132(4) STAND EXPLAINED IN STATEMENTS RECORDED U/S 133 A AN D 131 OF ACT. BASED ON THAT STATEMENT VARIOUS FAMILY MEMBERS OF T HE ASSESSEE HAVE OFFERED FOR TAXATION THEIR PART OF THE UNDISCLOSED INCOME REPRESENTED BY INVESTMENT IN SHARES. IN THE CASE OF THIS ASSESS EE THIS AMOUNT IS RS. 6,47,220/-. ACCORDINGLY, THIS ASSESSEE IS SAVED BY THE EXPLANATION 5 OF SECTION 271(1)(C) OF THE ACT. IT IS AN UNDISPUTED F ACT THAT NO QUESTION WAS PUT TO SHRI MANGILAL LUNAWAT, THE HUSBAND OF TH IS ASSESSEE, OR FROM HER REGARDING THE MANNER OF EARNING THIS UNDISCLOSE D INCOME. THE DEPARTMENT CANNOT TAKE ADVANTAGE OF THIS SITUATION AS HELD IN THE CASE OF CIT VS. RADHA KISHAN GOEL 278 ITR 454 (ALL). LIK EWISE THE DEPARTMENT CANNOT TAKE ADVANTAGE OF THE POSITION WH EN STATEMENTS OF ALL THE FAMILY MEMBERS WERE NOT RECORDED SEPARATELY IN RESPECT OF THEIR INVESTMENT IN THE SHARES. THUS, NON-RECORDING OF STATEMENT OF THIS U/S 132(4) OF THE ACT IS NO FAULT OF THIS ASSE SSEE. MOREOVER, THE HUSBAND OF THE ASSESSEE HAS OFFERED THE ENTIRE UNDI SCLOSED INCOME OF 6 THE FAMILY IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. THIS ISSUE IS FOUND SQUARELY COVERED BY THE DECISION OF HONBLE K ARNATAKA HIGH COURT IN THE CASE OF CIT VS. SMT. MUKTA SRIDHAR (20 11) 16 TAXMANN COM 388. IT IS ALSO FOUND THAT THE UNDISCLOSED INCOME R ELATED TO EARLIER ASSESSMENT YEARS BUT NOT TO THE CURRENT YEAR. SUCH UNDISCLOSED INCOME IS ALSO SAVED IN VIEW OF THE JUDGMENT OF HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KANHAIYA LAL 299 ITR 1 9 (RAJ.) AND THAT OF CIT VS. S.D.V. CHANDRA 266 ITR 175 (MAD). THE DECIS IONS RELIED ON BY LD. CIT(A) ARE THOSE CASES IN WHICH NO SEARCH TOOK PLACE AND RECORDING OF STATEMENT U/S 132(4) WAS NOT INVOLVED. THOSE CAS ES WERE BASED ON REVISED RETURNS FILED AS A RESULT OF INQUIRIES MADE OR QUERIES RAISED BY THE A.O. OR WHERE THE A.O. BROUGHT TO THE NOTICE OF THE ASSESSEE SOME CASH CREDITS. ACCORDINGLY, NO PENALTY IS LEVIABLE I N THE GIVEN FACTS AND THE CIRCUMSTANCES OF THE ASSESSEES CASE. WE ORDER TO DELETE THE ENTIRE PENALTY AND ALLOW THE APPEAL. 4. FACTS, CIRCUMSTANCE, AND ARGUMENTS OF BOTH THE P ARTIES IN THE CASE OF SHRI SUNIL LUNAWAT ARE MUTATIS-MUTANDIS SIM ILAR TO THE FACTS IN THE CASE OF SMT. SAYAR DEVI. ACCORDINGLY, WE DELET E THE ENTIRE APPEAL IN THE CASE OF THIS ASSESSEE ALSO AND ALLOW THE APP EAL OF THE ASSESSEE. 7 5. IN THE RESULT, THE APPEALS OF THE ASSESSEES STAN D ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH AUGUST, 2013. VL COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR