R R ENTERPRISES, MUMBAI V. DCIT CC 46, MUMBAI

ITA 2786/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62434 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 09-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: SNEHAL R SHAH
• Keywords: Accommodation entries
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D,MUMBAI BEFORE SHRI R.S. SYAL (AM) SHRI VIJAY PAL RAO (JM ) I.T.A. NO. ASSTT. YEAR. 2761/MUM/2010 2002-03 2762/MUM/2010 2003-04 2760/MUM/2010 2004-05 2786/MUM/2010 2005-06 2759/MUM/2010 2006-07 2758/MUM/2010 2007-08 M/S. R.R. ENTERPRISES, 281, SAMUEL STREET, VADGADI, MUMBAI-400 003. PAN: AAAFR3906N. VS. DY.COMMR. OF INCOME-TAX, CENTRAL CIRCLE-46, MUMBAI. APPELLANT RESPONDENT APPELLANT BY SHRI SNEHAL R. SHAH. RESPONDENT BY SHRI C .G.K. NAIR. DATE OF HEARING 16-05-2012 DATE OF PRONOUNCEMENT 18-05-2012 O R D E R PER BENCH : THIS BATCH OF SIX APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08 IS AGAINST THE UPHOLDING OF PENALTY WHI CH WAS IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C). SINCE ALL THESE APPEALS ARE BASED ON SIMILAR FACTS AND COMMON GROUND OF APPEAL, WE ARE, THEREFOR E, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE O F CONVENIENCE. ITA NOS.2761, 2762, 2760, 2786, 2759 & 2758/MUM/2010 (R.R. ENTERPRISES). 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH & SEIZURE ACTION WAS TAKEN ON THE ASSESSEE ON 12-04-2006. THE MAIN ALLEG ATION WAS THAT THE ASSESSEE WAS INVOLVED IN GIVING ACCOMMODATION ENTRIES IN THE FORM OF BOGUS BILLS TO VARIOUS BENEFICIARIES. THE ASSESSEE MADE SURRENDER OF CERTAIN AMOUNT IN RELATION TO ALL THE YEARS UNDER CONSIDERATION AND ACCORDINGL Y FILED RETURNS INCORPORATING SUCH SURRENDERED INCOME IN THE RETURNS FILED IN RES PONSE TO NOTICE U/S.153A. FOR ASSESSMENT YEAR 2002-03, THE ASSESSEE HAD EARLIER F URNISHED RETURN U/S.139(1) DECLARING INCOME OF RS.8,50,430/-. HOWEVER, IN RESP ONSE TO NOTICE U/S. 153A AND PURSUANT TO THE SURRENDER MADE DURING THE COURSE OF SEARCH, THE ASSESSEE FILED RETURN U/S.153A DECLARING INCOME OF RS.10,90,370/- . THE AO ASSESSED THE TOTAL INCOME AT THE SAME LEVEL I.E. RS.10,90,370/- WITHOU T MAKING ANY FURTHER ADDITION. SIMILAR ARE THE FACTS FOR THE OTHER YEARS . FOR THE ASSESSMENT YEAR 2007- 08, THE ASSESSEE FILED RETURN U/S. 139(1) DECLARING INCOME OF RS.74.22 LAKHS. HOWEVER, RETURN U/S. 153A WAS FILED DECLARING TOTAL INCOME OF RS.77.76 LAKHS AND THE ASSESSMENT WAS ACCORDINGLY MADE ON THE SAME INCOME WITHOUT MAKING ANY ADDITION TO SUCH INCOME DECLARED IN THE RETURN. 3. THE AO IMPOSED PENALTY U/S. 271(1)(C) FOR ALL TH E YEARS IN QUESTION ON DIFFERENCE BETWEEN THE INCOME EARLIER RETURNED U/S. 139(1) AND THE AMOUNT OF INCOME RETURNED U/S. 153A. SUCH PENALTIES FOR ASSES SMENT YEARS 2002-03 TO 2007-08 CAME TO BE LEVIED AT RS.85,660/-, RS.1,14,6 32/-, RS.1,16,355/-, RS.1,36,762/-, RS.3,93,095/- AND RS.1,19,434/- RESP ECTIVELY. THE LD. CIT(A) ITA NOS.2761, 2762, 2760, 2786, 2759 & 2758/MUM/2010 (R.R. ENTERPRISES). 3 UPHELD THE PENALTY ORDERS THEREBY DISMISSING THE AP PEALS FILED BY THE ASSESSEE FOR ALL THE YEARS UNDER CONSIDERATION. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS FOUND AS AN ADMITTED FACT THAT THE ONLY DIFFERENCE BETWEEN THE INCOME RETURNED IN RESPONSE TO NOTICE U/S. 153A AND AS ORIGINALLY DECLARED IN RETURNS U/S.139(1) IN RESPECT OF ALL THE YEARS IS ON ACCOUNT OF SURRENDER MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH. FURTHER, IT IS OBSERVED THAT NO OTHER ADDITION HAS BEEN MADE BY THE AO AND THE TOTAL AMOU NT OF INCOME RETURNED U/S. 153A HAS BEEN FINALLY ACCEPTED BY THE AO. THE LD. A R HAS RELIED ON EXPLANATION 5 TO SEC. 271(1)(C) IN SUPPORT OF THE ARGUMENT THAT PENALTY OUGHT NOT TO HAVE BEEN SUSTAINED IN SUCH CIRCUMSTANCES. IN THE CASE O F ACIT VS. KIRIT DAYABHAI PATEL (2009) 121 ITD 159 (AHD.) (THIRD MEMBER), IT HAS BEEN HELD THAT IMMUNITY U/S. 271(1(C), EXPLANATION 5, IS AVAILABLE ONLY TO THE RETURN FOR THE YEAR IN RESPECT OF WHICH THE PREVIOUS YEAR IS YET TO END OR EVEN THOUGH ENDED, THE TIME FOR FILING RETURN U/S. 139(1) IS YET TO EXPIR E. WHEN WE CONSIDER THE DATE OF SEARCH AS 12-04-2006, IT BECOMES APPARENT THAT THE TIME FOR FILING RETURN U/S. 139(1) WAS STILL AVAILABLE IN RESPECT OF ASSESSMENT YEAR 2006-07. SIMILARLY, FOR ASSESSMENT YEAR 2007-08, THE PREVIOUS YEAR ENDS ON 31-3-2007 AND AT THE TIME OF SEARCH AND MAKING SURRENDER, TIME WAS AVAILABLE F OR FILING THE RETURN FOR SUCH YEAR. IN VIEW OF THE ABOVE REFERRED THIRD MEMBER OR DER, NO PENALTY CAN BE UPHELD IN RESPECT OF ASSESSMENT YEARS 2006-07 AND 2 007-08. HOWEVER, THE OTHER ITA NOS.2761, 2762, 2760, 2786, 2759 & 2758/MUM/2010 (R.R. ENTERPRISES). 4 EARLIER ASSESSMENT YEARS BEGINNING WITH 2002-03 TO 2005-06 ARE HIT BY THE SAID THIRD MEMBER ORDER AND RESULTANTLY IMMUNITY UNDER E XPLANATION 5 CANNOT BE EXTENDED TO SUCH EARLIER YEARS. WE, THEREFORE, PART LY MODIFY THE IMPUGNED ORDER TO ABOVE EXTENT. 5. IN THE RESULT, APPEALS FOR ASSESSMENT YEARS 2002 -03, 2003-04, 2004-05 AND 2005-06 ARE DISMISSED AND THOSE FOR ASSESSMENT YEAR S 2006-07 AND 2007-08 ARE ALLOWED. ORDER PRONOUNCED ON THE 18TH DAY OF MAY, 2 012. SD/- SD/- (VIJAY PAL RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 18TH MAY, 2012. NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A)-38, MUMBAI. 4 CIT, CENTRAL-IV, MUMBAI. 5.DR,D BENCH, MUMBAI. ITA NOS.2761, 2762, 2760, 2786, 2759 & 2758/MUM/2010 (R.R. ENTERPRISES). 5 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI.