ACIT CC 39, MUMBAI V. SANDESH LAND P.LTD, NAVI MUMBAI

ITA 280/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4401 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK OJHA
• Assessee Lawyers: RAMESH JAIN
• Keywords: Unexplained expenditure; Search and seizure; Document seized; Retraction; Documents seized
• Section: 69C; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. 280/MUM/2014 (ASSESSMENT YEAR 2008-09) THE ACIT CC-39, R.NO.32(1),GROUND FLR., AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 ... APPELLANT VS. M/S. SANDESH LAND PVT. LTD., DRONAGIRI HOUSING COMPLEX, BLDG. NO.GH-10, FLAT NO.2, GR.FLOOR, SECTOR -30, POST BOKADVIRA VILLAE, URAN TALUKA, RAIGAD DIST, NAVI MUMBAI 400702 PAN: AALCS 1326F .... RESPONDENT APPELLANT BY : SHRI VIVEK OJHA RESPONDENT BY : SHRI RAMESH JAIN DATE OF HEARING : 04/01/2016 DATE OF PRONOUNCEMENT : 08/01/2016 ORDER PER JASON P. BOAZ, A.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS)-39, MUMBAI DATED 25/10/2013 DELETING T HE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2008-09. 2. THE FACTS OF THE CASE, BRIEFLY ARE AS UNDER:- 2 ITA NO. 280/MUM/2014 (ASSESSMENT YEAR 2008-09) 2.1 A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF JAI CORP. GROUP AND ITS ASSOCIAT ES WHO WERE IN THE PROCESS OF ACQUIRING LANDS, ONE OF WHOM WAS THE ASS ESSEE IN THE CASE ON HAND. THE SEARCH REVEALED THAT HUGE TRACTS OF L AND WERE BEING ACQUIRED, FOR WHICH THE PURCHASE CONSIDERATION WAS PAID PARTLY BY CHEQUE AND PARTLY BY CASH. SHRI DILIP DHERIA, DIR ECTOR IN CERTAIN COMPANIES OF THIS GROUP, IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT ADMITTED THAT THE FIGURES MENTION ED IN THE SEIZED DOCUMENTS REFLECTED CASH PAID OVER AND ABOVE THE CH EQUE PAYMENTS RECORDED IN THE BOOKS OF ACCOUNTS. THIS STATEMENT WAS SUBSEQUENTLY RETRACTED. ASSESSING OFFICER, HOWEVER, REJECTED TH E RETRACTION AND ON THE BASIS OF THE STATEMENT OF SHRI DILIP DHERIA REC ORDED UNDER SECTION 132(4) OF THE ACT, MADE ADDITIONS AMOUNTING TO RS.4 3.46 CRORES AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE AC T, WHICH WAS PROPORTIONATELY DISTRIBUTED TO ALL THE GROUP COMPAN IES WHO HAD PURCHASED LAND AT VARIOUS PLACES IN THE RATIO OF C OST OF LAND PURCHASED BY EACH COMPANY. IN THE CASE ON HAND, THE ASSESSIN G OFFICER ADDED RS.49,38,000/- AS UNEXPLAINED EXPENDITURE UNDER SE CTION 69C OF THE ACT. WHILE COMPLETING THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2008-09 IN THE CASE ON HAND, THE ASSESSING OFFICER SIMULTANEOUSLY INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ACT. AFTER CONSIDERING THE OBJECTIONS AND EXPLANATIONS OF THE ASSESSEE, THE ASSESSING OFFICER REJECTED THEM AND VIDE ORDER DAT ED 12/2/2013, PROCEEDED TO LEVY PENALTY OF RS.15,25,842/- UNDER S ECTION 271(1)(C) OF THE ACT ON THE FOR THE ASSESSMENT YEAR 2008-09; BE ING 100% OF THE TAX SOUGHT TO BE EVADED. 3 ITA NO. 280/MUM/2014 (ASSESSMENT YEAR 2008-09) 2.2 ON APPEAL, THE CIT(APPEALS)-39, MUMBAI VIDE ORD ER DATED 25/10/2013 CANCELLED THE AFORESAID PENALTY OF RS. 15,25,842/- LEVIED U/S. 271(1)(C) OF THE ACT. IN DOING SO, THE CIT(AP PEALS) FOLLOW THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.825/MUM/2011 DATED 22//3/2013, WHEREIN T HE QUANTUM ADDITIONS UNDER SECTION 69C OF THE ACT WAS NOT SUS TAINED. THE OPERATIVE PORTION OF THE IMPUGNED ORDER OF THE LD. CIT(A) AT PARA-6 THEREOF IS EXTRACTED HEREUNDER:- IT WAS SUBMITTED BY THE APPELLANT BEFORE ME THAT THE ADDITION MADE UNDER S. 69C HAS BEEN DELETED BY THE HONBLE ITAT VIDE IT S ORDER DATED 22/3/2013. A COPY OF THE SAID ORDER IN ITA NO.8254/M/11+66 FI LES DATED 22.03.2013 HAS BEEN FURNISHED AND IS PLACED ON RECORD. THE HONBL E ITAT HAD HELD THAT THE SEIZED DOCUMENTS HAVE NOT CONCLUSIVELY PROVED THE P AYMENTS IN CASH; ACCORDING TO THE TRIBUNAL THERE IS NOT A SINGLE DOC UMENT/EVIDENCE OF PARTIES INVOLVED IN THE SALE OF LAND AT DIFFERENT VILLAGES BROUGHT ON RECORD TO SHOW THAT AN AMOUNT OTHER THAN THE PAYMENT OF CONSIDERAT ION HAS EXCHANGED HANDS. THE ADDITION UNDER S. 69C HAS NOT BEEN SUST AINED. IN THE SAID CIRCUMSTANCES, THE PENALTY LEVIED UNDER S. 27(1)(C) BASED ON THE ADDITION UNDER S. 69C, DOES NOT SURVIVE. FOR THE SAID REASO N, THE APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT, AND THE PENALTY AS IMPOSED IS HEREBY CANCELLED. 3.1 AGGRIEVED BY THE ORDER OF THE LD. CIT(A)-39, MU MBAI DATED 25/10/2013 FOR ASSESSMENT YEAR 2008-09 CANCELLING T HE PENALTY OF RS.15,25,842/- LEVIED UNDER SECTION 271(1)(C) OF TH E ACT, THE REVENUE HAS PREFERRED THIS APPEAL RAISING THE FOLLOWING GRO UNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING PENALTY LEVIED U/S.271(1)( C) STATING THAT THE ADDITION UNDER SECTION 69C OF THE IT ACT, 1969 HAS BEEN DELE TED BY THE HONBLE ITAT, MUMBAI WITHOUT APPRECIATING THE FACT THAT DEPARTMEN T HAS PREFERRED AN APPEAL AGAINST THE ORDER OF THE HONBLE ITAT, MUMBA I BEFORE THE HONBLE BOMBAY HIGH COURT AND THE ISSUES HAVE NOT ATTAINED FINALITY. THE APPELLANT PRAYS THAT THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEAL) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT THE ITO/ AC/DC BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND S OR ADD NEW GROUND WHICH MAY BE NECESSARY. 4 ITA NO. 280/MUM/2014 (ASSESSMENT YEAR 2008-09) 3.2 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVE NUE IN SUPPORT OF THE GROUNDS RAISED (SUPRA) AND THAT OF THE LD. REPR ESENTATIVE FOR THE ASSESSEE IN SUPPORT OF THE IMPUGNED ORDER OF THE L D. CIT(A) CANCELLING THE PENALTY OF RS.15,25,842/- LEVIED UNDER SECTION 271(1)(C) OF THE ACT FOR FIRST YEAR 2008-09. WE FIND THAT A CO-ORDINATE BENCH OF THIS TRIBUNAL IN ITS DECISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2009-10 & 2008-09 IN ITA NOS. 8253 & 8254/MUM/2011 DATED 22/03/2013 HAS HELD THAT THE SEIZED DOCUMENTS HAVE NOT CONCLUSIVELY PROVED THE PAYMENTS IN CASH. ACCORDING TO THE CO-O RDINATE BENCH, THERE IS NOT A SINGLE DOCUMENT/EVIDENCE OF PARTIES INVOLVED IN THE SALE OF LAND AT DIFFERENT VILLAGES BROUGHT ON RECORD TO ESTABLISH THAT AN AMOUNT OTHER THAN THE STATED PAYMENT OF CONSIDERATI ON IN THE AGREEMENTS HAS EXCHANGED HANDS. IN THIS VIEW OF TH E MATTER, THE CO- ORDINATE BENCH DELETED THE ADDITIONS MADE U/S. 69C OF THE ACT. IN OUR VIEW, IN THESE CIRCUMSTANCES, SINCE THE QUANTUM ADD ITION UNDER SECTION 69C OF THE ACT IS DELETED BY THE TRIBUNAL, THE PENA LTY OF RS.15,25,824/- CONSEQUENTLY LEVIED UNDER SECTION 271(1)(C) OF THE ACT BASED ON THE SAID QUANTUM ADDITION UNDER SECTION 69C OF THE ACT, WOULD NOT NOW SURVIVE. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD.CIT(A) DELETING THE PENALTY OF RS.15,25,824/- LEVIED UNDER SECTION 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2008-09. CONSEQUENTLY , THE GROUNDS RAISED BY REVENUE ARE DISMISSED. 5 ITA NO. 280/MUM/2014 (ASSESSMENT YEAR 2008-09) 5. IN THE RESULT, REVENUES APPEAL FOR ASSESSMENT Y EAR 2006-07 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/01/2016 SD/- SD/- (RAMLAL NEGI) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 08/01/2016 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS