JANAK MADHUSUDAN VAKHARIA, MUMBAI V. ASST CIT CEN CIR 23, MUMBAI

ITA 2900/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4053 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 13-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 30-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T D SINGH
• Assessee Lawyers: D V LAKHANI
• Keywords: Salary income
• Section: 27; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 2900 /MUM/2012 ASSESSMENT YEAR: 2008-09 JANAK MADHUSUDAN VAKHARIA 1601, VEENA TOWERS, OPP. COLABA P.O., S.B. ROAD, COLABA MUMBAI 400 005 PAN: AAHPV 2833 R VS. ASST CIT CEN CIR23 MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : MR. D.V. LAKHANI RESPONDENT BY : MR. T.D. SINGH (JCIT) DATE OF HEARING : 13.06.2013 DATE OF PRONOUNCEMENT : 26.07.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER OF LD.CIT(A)-40, MUMBAI DATED 10.02.2012 CONFIRMING THE PENALTY LEVIED BY T HE AO TO THE TUNE OF RS.53,476/- U/S 271 AAA OF THE INCOME TAX ACT FOR THE ASSESSMENT YE AR 2008-09. 2. BRIEFLY STATED, THE RELEVANT FACTS ARE THAT THE ASSESSEE, AN INDIVIDUAL HAD THE INCOME FROM SALARY, CAPITAL GAINS AND OTHER SOURCES IN HIS RETURN OF INCOME DECLARED A TOTAL INCOME OF RS.1,10,99,256/-. A SEARCH AND SEIZ URE ACTION U/S 132(1) WAS UNDERTAKEN BY THE DEPARTMENT AT THE PREMISES OF VAKHARI GROUP IN WHICH THE ASSESSEE WAS ALSO ONE OF THE PERSONS OF THE SAID GROUP. DURING THE COURSE OF SEARCH AND POST SEARCH PROCEEDINGS JEWELLERY VALUED AT RS.26.67 LAKHS WAS FOUND BY THE DEPARTMENT. DURING THE COURSE OF PROCEEDINGS AND AFTER DUE VERIFICATION, JEWELLERY T O THE EXTENT OF RS.5,34,759/- WAS SEIZED AS PER ANNEXURE J(1) DATED 13 TH SEPTEMBER 2007. ASSESSEE DECLARED THE SAID JEWELLE RY AS UNDISCLOSED INCOME U/S 132(4). THIS UNDISCLOSED INC OME HAD BEEN DECLARED IN THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. ACCORDI NG TO THE AO, THE ASSESSEE COULD NOT SUBSTANTIATE THE SOURCE OF ACQUISITION OF THE JEWEL LERY AS NO EVIDENCES HAS BEEN PRODUCED DURING THE COURSE OF PENALTY PROCEEDINGS AND HENCE LEVIED THE PENALTY UNE OF RS.53,476/- ITA NO. 2900 /MUM/2012 JANAK MADHUSUDAN VAKHARIA ASSESSMENT YEAR: 2008-09 2 U/S 271 AAA OF SECTION 271AAA (1) OF ACT AS THE ASS ESSEE HAD FAILED TO COMPLY WITH REQUIREMENTS STIPULATED IN SUB SECTION (2) SO AS TO SEEK EXEMPTION FROM LEVY OF PENALTY. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ACTION OF TH E AO. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 3. BEFORE US, THE LD. AR HAS CONTENDED THAT THE CON DITIONS NECESSARY TO ESCAPE THE PENALTY U/S 271AAA ARE PRESENT IN THEIR CASE AS THE ASSESSEE HAS SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED INCOME IS DERIVED. TO SUBSTANTIATE THE CLAIM THAT THE PENALTY TO BE DELETED, THE LD. AR HAS RELIED ON THE DECISION OF THE ITAT IN THE CASE OF DCIT VS. RAJENDRA PRASAD DOKANIA (ITA NO. 525/AHD/2 012) ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE ORDERS OF THE AO AND THE LD.CIT(A ) IN SUPPORT OF THE REVENUES CASE. 4. HAVING HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL ON RECORD, IT IS OBSERVED THAT DURING THE COURSE OF SEARCH, A STATEMENT HAS B EEN RECORDED U/S 132(4) AND THE ASSESSEE HAS OFFERED THE INCOME OF RS.5,34,759/- FO R DURING THE YEAR UNDER CONSIDERATION AND THE SAID INCOME IS REPRESENTED BY INVESTMENT IN JEWELLERY. IT IS ALSO OBSERVED THAT THE SAID INCOME IS DISCLOSED IN THE RETURN OF INCOME FI LED IN RESPONSE TO NOTICE U/S 153A. THE PREVIOUS YEAR BEING 1/4/2007 TO 31/3/2008 HAS NOT E NDED ON THE DATE OF THE SEARCH AND IN THE RETURN OF INCOME, THE SAID INCOME HAS BEEN O FFERED AND THE TAXES HAVE ALSO BEEN PAID BY THE ASSESSEE. SUB-SECTION (2) OF SECTION 27 1AAA PROVIDES THAT PENALTY UNDER THE SECTION SHALL NOT APPLY IF (I) THE ASSESSEE SPECIFI ES THE MANNER IN WHICH SUCH INCOME HAS BEEN DISCLOSED U/S 132 (4) OF THE I.T. ACT 1961. (I I) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED AND (III) PAY THE TA XES WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. CONSIDERING THE FACTS AND C IRCUMSTANCES OF THE CASE OF THE ASSESSEE IN TOTO, WE ARE OF THE CONSIDERED OPINION THAT ALL THE THREE CONDITIONS OF SUB SECTION (2) OF SECTION 271 AAA ARE FULLY SATISFIED BY THE ASSESSEE. IN VIEW OF THAT MATTER, WE DELETE THE IMPUGNED PENALTY CONFIRMED/LEVIED BY THE LOWER AUTHORITIES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26TH DAY OF JULY, 2013. SD/- SD/- (B. RAMAKOTAIAH) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 26.07.2013. *SRIVASTAVA ITA NO. 2900 /MUM/2012 JANAK MADHUSUDAN VAKHARIA ASSESSMENT YEAR: 2008-09 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR J BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.