Shri Ravi R. Varma, Ahmedabad V. The Income Tax Officer, Ward-10(4), Ahmedabad

ITA 2519/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0494 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 25-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA WITH G M THAKOR
• Keywords: Gift
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NOS: 2519 & 2520/AHD/2013 (ASSESSMENT YEAR: 2007-08) SHRI RAVI R. VARMA 31-B, GOVERNMENT SERVANT SOCIETY, NR. MUNICIPAL MARKET, NAVRANGPURA, AHMEDABAD-380009 PAN NO. AAPPV 6505L SHRI MAHESH R. VARMA 31- B, GOVERNMENT SERVANT SOCIETY, NR. MUNICIPAL MARKET, NAVRANGPURA, AHMEDABAD-380009 PAN NO. AAPPV 6503N V/S V/S INCOME TAX OFFICER, WARD- 10 (4), AHMEDABAD INCOME TAX OFFICER, WARD- 10 (3), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P.M. MEHTA WITH G.M.THAKOR, A. R. RESPONDENT BY : SHRI RAJ DEEP SINGH, SR. D.R . ( )/ ORDER DATE OF HEARING : 19 -09-201 6 DATE OF PRONOUNCEMENT : 20 -09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NO. 2519 & 2520/AHD/2013 . A.Y. 2007-0 8 2 1. ITA NOS. 2519 & 2520/AHD/2013 ARE APPEALS BY TWO DI FFERENT ASSESSEES BELONGING TO THE SAME GROUP, PREFERRED AG AINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-XVI, AHMEDABAD D ATED 29.08.2013 PERTAINING TO A.Y. 2007-08. 2. IN BOTH THESE APPEALS, THE GRIEVANCE RELATES TO THE PENALTY LEVIED BY THE A.O. U/S. 271(1)(C) OF THE ACT WHICH WAS CONFIR MED BY THE CIT(A). 3. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 4. THE CAUSE FOR LEVY OF PENALTY IS THAT A SEARCH ACTI ON U/S 132 OF THE ACT WAS CARRIED OUT IN THE GROUP CASES OF SWAGAT GROUP ON 10.05.2006. ADDITIONS WERE MADE ON ACCOUNT OF UNEXPLAINED CASH FOUND FROM THE BANK LOCKERS. THE ADDITIONS MADE IN THE ASSESSMENT TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 15/0 6/2016 IN IT(SS)A NO. 96/AHD/2011 AND OTHERS DELETED THE ADDITION OF RS. 11,04,193/- FROM THE HAND OF SHRI RAVI VARMA BUT CONFIRMED THE ADDITION OF RS. 40,000/- IN THE HANDS OF SHRI MAHESH VARMA. THE REL EVANT FINDINGS OF THE TRIBUNAL READ AS UNDER:- 59.. IN FACTS AND CIRCUMSTANCES, WE ARE OF THE VI EW THAT CASH FOUND FROM CUSTODY OF ASSESSEES AS DISCUSSED ABOVE IS NOTHING BUT INCOME OF RALSON INFRASTRUCUTRE PVT. LTD. FROM ON GOING HARIOM VILLA SCHEME KEPT WITH ASSESSEE FOR ABOVE SAID PURPOSES. THIS TAKE CARE OF CASH OF RS. 6,13,921/- FROM RESIDENCE OF MAHESH VARMA IN A.Y. 2007-08 AND RS. 49,97,832/- FO UND FROM LOCKER NO. 919 WITH RAJKOT NAGRIK SAHKARI BANK LTD. OF RAVI VARMA FOR A.Y. 2006-07 AND RS. 11,04, 193/- FOUND FROM RESIDENCE OF RAVI VARMA FOR A.Y. 2007-08 AS DISCUSSED ABOVE. 60. REGARDING THE ADDITION OF RS. 40,000/- OF THE C ASH RECEIPT WHICH WERE FOUND FROM RESIDENCE OF MAHESH VARMA CLAIMED TO BE KEPT F OR HOUSEHOLD PURPOSE. THE EXPLANATION GIVEN BY ASESSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER AS WELL AS LD. CIT(A). TAKING ALL FACTS AND CIRCUMSTANCES, THI S ADDITION MADE BY AUTHORITIES BELOW IS CONFIRMED. ITA NO. 2519 & 2520/AHD/2013 . A.Y. 2007-0 8 3 5. SINCE THE QUANTUM ADDITIONS HAVE BEEN DELETED IN TH E CASE OF SHRI RAVI VARMA IN ITA NO. 2519/AHD/2013 BEFORE US, THER EFORE, WE DO NOT FIND ANY BASIS FOR THE LEVY OF PENALTY U/S. 271(1)( C) OF THE ACT. WE, ACCORDINGLY DIRECT THE A.O. TO DELETE THE PENALTY S O LEVIED IN THE CASE OF SHRI RAVI VARMA. 6. COMING TO THE APPEAL OF SHRI MAHESH VARMA IN ITA NO . 2520/AHD/2013, A PERUSAL OF THE ORDER OF THE AUTHOR ITIES BELOW SHOWS THAT DURING THE COURSE OF THE SEARCH PROCEEDINGS AN AMOUNT OF RS. 56,750/- WAS FOUND. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE, IT WAS EXPLAINED THAT THE MONEY WAS OUT OF SAVING, RECEIVED ON VARIOUS SOCIAL OCCASIONS AS GIFTS AND ALSO REFERENC E WAS MADE TO THE SOCIAL STATUS OF THE ASSESSEE. HOWEVER, THIS EXPLAN ATION WAS NOT ACCEPTED TO THE EXTENT OF RS. 40,000/- AND ACCORDIN GLY ADDITION OF RS. 40,000/- WAS MADE WHICH WAS CONFIRMED BY THE TRIBUN AL AS MENTIONED ELSEWHERE. HOWEVER, IN OUR CONSIDERED OPINION, MERE LY BECAUSE A BONA FIDE EXPLANATION DID NOT FIND FAVOUR IN THE QUANTUM PROCEEDINGS WOULD NOT JUSTIFY THE LEVY OF PENALTY U/S. 271(1)(C) OF T HE ACT. WE, ACCORDINGLY, SET ASIDE THE FINDINGS OF THE LD. CIT( A) AND DIRECT THE A.O TO DELETE THE PENALTY SO LEVIED IN THE CASE OF SHRI MAHESH VARMA. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EES ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20 - 09- 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH