SANTOSH KUMAR B SARAF, MUMBAI V. JCIT (OSD) 8(1), MUMBAI

ITA 260/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83848 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 22-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 08-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: S L JAIN
• Keywords: Unexplained cash credit
• Section: 68; 154

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI .., ! , ' , # BEFORE SHRI I.P.BANSAL, JM AND SHRI RAJENDRA, AM ITA NO.260 /MUM/2013 (A.Y. 2006-07) SANTOSH KUMAR SARAF, C/O. SHANKARLAL JAIN & ASSOCIATES, 12, ENGINEER BUILDING, 265, PRINCES STREET, MUMBAI 400002 PAN:ABUPS 6150F THE JCIT (OSD) 8(1), 1 ST FLOOR, AAYKAR BHAVAN, MUMBAI 400 002. ( $% / // / APPELLANT) ' ' ' ' / VS. ( ()$%/ RESPONDENT) $% * + * + * + * + /APPELLANT BY :SHRI S.L.JAIN ()$% * + * + * + * + /RESPONDENT BY : SHRI NEIL PHILIP ' * ,-' / / / / DATE OF HEARING : 22.09.2014 ./0 * ,-' / DATE OF PRONOUNCEMENT : 22.09.2014 1 1 1 1 / / / / O R D E R PER I.P.BANSAL (JM) : THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST ORDER PASSED BY LD. CIT(A)-16 MUMBAI DATED 9/10/2012 FOR ASSESS MENT YEAR 2006-07. GROUNDS OF APPEAL READ AS UNDER: 1. LD. CIT(A) ERRED IN CONFIRMING PENALTY IMPOSED U/S 271(1)(C) WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND LAW APPLICAB LE THERETO. 2. LD.CIT(A) WHILE CONFIRMING THE PENALTY SHOULD HA VE APPRECIATED THE FACT THAT FLAT NO. 51, SHUBH ASHISH IS BEING OCCUPIED BY ONE OF TH E CO-OWNERS AND BEING INCAPABLE OF EARNING INCOME COMPUTED ON PRESUMPTIVE BASIS U NDER THE PROVISIONS OF SECTION 23 SHOULD NOT BE HELD LIABLE FOR IMPOSITION OF PENA LTY. 3. LD. CIT(A) FURTHER ERRED IN NOT CONSIDERING THE FACT THAT ANNUAL LET OUT VALUE OF THE SAID FLAT IS NOT PROPERLY DETERMINED IN ASSESSMENT ORDER AND IS JUST BASED ON PRESUMED EXPECTED RENT WITHOUT ANY COMPARABLE CASE OF THE AREA. 4. THE LD. CIT(A) SHOULD HAVE APPRECIATED THAT FLAT AT G.K. APARTMENT REMAINED VACANT DURING WHOLE OF THE YEAR AND DID NOT FETCH I NCOME. THE APPELLANT HAVING RELIED UPON A DECISION OF HONBLE ITAT HOLDING THAT LET OUT VALUE OF SUCH VACANT PREMISES BE ADOPTED AT NIL UNDER THE PROVISIONS OF SECTION 23(1)(C). HENCE, THE ITA NO.260 /MUM/2013 (A.Y. 2006-07 ) 2 PRESUMED INCOME TAXED WHILE MAKING THE ASSESSMENT S HOULD NOT HAVE BEEN HELD LIABLE FOR IMPOSITION OF PENALTY. 5. THE LD. CIT(A) FAILED TO APPRECIATE THAT ADDITIO N OF RS.2.OO LAKHS UNDER THE PROVISIONS OF SECTION 68 IS NOT LIABLE FOR IMPOSITI ON OF PENALTY MERELY BASED ON ASSESSMENT.. 2. CONCEALMENT PENALTY HAS BEEN IMPOSED ON THE FOLL OWING ADDITIONS: S/N. ADDITION/DISALLOWANCE AMOUNT (RS.) 1. INCOME FROM HOUSE PROPERTY (I) FLAT NO.51,SHUBH ASHISH : RS. 3,63 ,000 (II)G.K.APARTMENT, ROW HOUSE : RS. 1,80,00 0 5,43,000 2. UNEXPLAINED CASH CREDIT U/S.68 2,00,000 TOTAL 7,43,000 3. SO FAR AS IT RELATES TO ADDITION OF RS.2.00 LAC S MADE UNDER SECTION 68 OF THE ACT, THE SAID ADDITION HAS BEEN DELETED BY THE TRI BUNAL IN QUANTUM APPEAL VIDE ORDER DATED 9/7/2014, COPY OF WHICH WAS PLACED ON O UR RECORD AND WAS ALSO GIVEN TO LD. DR. THEREFORE, CONCEALMENT PENALTY TO THE E XTENT IT RELATES TO THE ADDITION OF RS.2.00 LACS IS DIRECTED TO BE DELETED. 4. NOW COMING TO THE ADDITION REGARDING INCOME FROM HOUSE PROPERTY, DURING THE COURSE OF HEARING IT WAS OBSERVED THAT BOTH THE SE ISSUES HAVE BEEN SET ASIDE FIRSTLY IN RESPECT OF A SUM OF RS.3,63,000/- BY THE LD. CIT(A) IN THE IMPUGNED ORDER ITSELF, WHEREIN HE HAS REQUIRED THE AO TO VER IFY THE NUMBER OF CO-OWNERS FROM THE PURCHASE AGREEMENT AND THEN TO RE-WORK TH E INCOME FROM HOUSE PROPERTY AND REFERENCE CAN BE MADE TO THE FOLLOWING OBSERVATIONS: HOWEVER, IN ORDER U/S. 154 DATED 08/10/2012, PAS SED IN RESPECT OF THE APPELLATE ORDER IN APPEAL NO.CIT(A) -16/ACIT 8(1)/IT-238/2008 -09 DATED 10/01/2011, THE ASSESSING OFFICER HAS BEEN DIRECTED TO VERIFY THE NUMBER OF CO-OWNERS FROM THE PURCHASE AGREEMENT AND TO REWORK THE INCOME FROM HO SUE PROPERTY. THUS, IN RESPECT OF ADDITION MADE IN RESPECT OF FLAT NO.51, SHUBH AS HISH, THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTED PENALTY ACCORDINGLY. 4.1 SO FAR AS IT RELATES TO ANOTHER COMPONENT OF HO USE PROPERTY INCOME OF RS.1,80,000/- THE ISSUE IS RESTORED BACK IN THE QUA NTUM PROCEEDINGS BY THE TRIBUNAL VIDE AFOREMENTIONED ORDER DATED 9/7/2014 A S PER FOLLOWING OBSERVATIONS: 31. RESPECTFULLY FOLLOWING THE DECISION AS RENDER ED IN THE CASE OF MR. OM PRAKASH SARAF, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIR ECT THE AO TO DETERMINE THE ALV AS PER MUNICIPAL AUTHORITIES, AS DIRECTED IN THE ORDER OF THE MR. OM PRAKASH SARAF. ITA NO.260 /MUM/2013 (A.Y. 2006-07 ) 3 4.2 THUS, SO FAR AS IT RELATES TO ADDITION OF RS.5, 43,000/- IN RESPECT OF AFOREMENTIONED TWO PROPERTIES THE ISSUE IS PENDING BEFORE THE AO IN THE QUANTUM PROCEEDINGS. THEREFORE, AFTER HEARING BOTH THE PAR TIES IT IS CONSIDERED APPROPRIATE THAT THE ISSUE RELATING TO LEVY OR OTH ERWISE OF CONCEALMENT PENALTY ON THESE ITEMS SHOULD BE RECONSIDERED AND RE-ADJUDICAT ED BY THE AO AFTER DETERMINING APPROPRIATE QUANTUM. THE AO WILL DECI DE THE ISSUE REGARDING LEVY OF CONCEALMENT PENALTY AFRESH AFTER GIVING THE ASSE SSEE A REASONABLE OPPORTUNITY OF HEARING. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS TREATED TO BE ALLO WED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22.09. 2 014. 1 * ./0 2'3 22.09.2014 / * 9 SD/- SD/- ( ! /RAJENDRA) ( .. / I.P.BANSAL) ' ' ' ' / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 2' DATED : 22 ND SEPT. 2014. VM. 1 * (,: ; :0, 1 * (,: ; :0, 1 * (,: ; :0, 1 * (,: ; :0,/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. ()$% / THE RESPONDENT. 3. <() / THE CIT, MUMBAI. 4. < / CIT(A)-13, MUMBAI 5. :?9 (,' , , / DR, ITAT, MUMBAI 6. 9@ A / GUARD FILE. 1' 1' 1' 1' / BY ORDER, ):, (, //TRUE COPY// B BB B/ // /C C C C (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI