Shri Bhavin Mahendra Dagli, Bhavnagar V. The ACIT, Circle-2, Bhavnagar

ITA 2574/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0272 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 31-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Assessee Lawyers: P M MEHTA
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 2574/AHD/2013 (ASSESSMENT YEAR: 2007-08) SHRI BHAVIN MAHENDRA DAGLI 509, KAHAN JYOT, OPP: DIGMBER JAIN MANDIR, SONGADH, BHAVNAGAR-364250 V/S ACIT, CIRCLE-2,BHAVNAGAR (APPELLANT) (RESPONDENT) PAN: ADYPD0074C APPELLANT BY : SHRI P. M. MEHTA, A.R. RESPONDENT BY: SHRI PRADIPKUMAR MAJUMDAR, SR. D.R . ( )/ ORDER DATE OF HEARING : 17 -10-201 6 DATE OF PRONOUNCEMENT : 20 -10-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-I, AHMEDABAD DATED 20.09.2013 PERTAINING TO A.Y. 2007- 08. ITA NO. 2574 /AHD/2013 . A.Y. 2007-0 8 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE L EVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 31.12.2009 MADE U/S. 143(3) OF THE ACT. THE ASSESSM ENT WAS COMPLETED BY MAKING FOLLOWING ADDITIONS/DISALLOWANCES:- SR. NO. NATURE OF ADDITION AMOUNT (RS.) 1 ON ACCOUNT OF NSC MATURITY 1,14,072/- 2 ON ACCOUNT OF INTEREST INCOME ON VARIOUS S/B ACCOUNT INCLUDING FDR 4,07,238/- 3 ON ACCOUNT OF ACCRUED INTEREST ON HDFC BANK 12,18,981/- 4 ON ACCOUNT OF ACCRUED INTEREST INCOME IN VIEW OF PROVISIONS U/S. 64(II) 4,84,734/- 5 ON ACCOUNT OF INTEREST INCOME 19,22,500/- 6 ON ACCOUNT OF UNEXPLAINED CREDITS IN THE VARIOUS BANK ACCOUNTS. 34,323/- 4. THE QUANTUM ADDITIONS WERE AGITATED BEFORE THE FIRS T APPELLATE AUTHORITY AND THE LD. CIT(A) GAVE FOLLOWING RELIEF THE ASSESS EE:- SR. NO. NATURE OF ADDITION AMOUNT (RS.) 1 ON ACCOUNT OF NSC MATURITY 60,000/- 2 ON ACCOUNT OF INTEREST INCOME ON VARIOUS S/B ACCOUNT 3,24,934/- 3 ON ACCOUNT OF ACCRUED INTEREST ON HDFC BONDS 10,40,000/- 4 ON ACCOUNT OF ACCRUED INTEREST INCOME U/S. 64(II) 4,84,734/- 5 ON ACCOUNT OF INTEREST INCOME 19,22,500/- ITA NO. 2574 /AHD/2013 . A.Y. 2007-0 8 3 5. TAKING A LEAF OUT OF THE FINDINGS OF THE FIRST APPE LLATE AUTHORITY, THE A.O. LEVIED PENALTY U/S. 271(1)(C) OF THE ACT AT RS. 1,1 1,640/-. 6. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT THE LEVY OF PENALTY IS UNJUSTIFIED AS NEITHER THE ASSESSEE H AS FILED INACCURATE PARTICULARS OF INCOME NOR HE HAS CONCEALED ANY INCO ME. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTHORITIES. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. A PERUSAL OF THE ORDER OF THE FIRST APPELLAT E AUTHORITY IN QUANTUM PROCEEDINGS SHOWS THAT INTEREST ON NSC RS. 54,072/- WAS NEITHER SHOWN BY THE ASSESSEE ON MATURITY OF NSC NOR AN ACCRUAL BASI S. SIMILARLY INTEREST ON SAVINGS ACCOUNT OF RS. 64,304/- WAS ADMITTED BY THE ASSESSEE AS NOT SHOWN IN THE RETURN OF INCOME. TO THIS EXTENT, LEVY OF PE NALTY IS JUSTIFIED. THE A.O. IS DIRECTED TO RE-COMPUTE THE PENALTY ON THE ADDITI ON OF RS. 1,18,376/-. 9. SO FAR AS THE INTEREST ADDITION ON HDFC BONDS AMOUN TING TO RS. 21,32,840/- IS CONCERNED, WE FIND THAT THE ASSESSEE HAD COMPUTE D THE SIMPLE RATE OF INTEREST INSTEAD OF COMPOUND RATE OF INTEREST. THIS MAY BE CONSIDERED AS AN INADVERTENT MISTAKE AND LEVY OF PENALTY IS NOT JUST IFIED. WE, ACCORDINGLY, ITA NO. 2574 /AHD/2013 . A.Y. 2007-0 8 4 MODIFY THE FINDINGS OF THE LD. CIT(A) AND DIRECT TH E A.O. TO RESTRICT THE PENALTY TO THE ADDITION OF RS. 1,18,376/-. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 20 - 10- 2016. SD/- SD/- (S.S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY 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