Shri Sudeep Maheshwari, Bhopal V. THE ACIT -1(1), Bhopal

ITA 299/IND/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4603 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-01-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N D PATWA A RS
• Assessee Lawyers: ASHIMA GUPTA
• Keywords: Loose papers; Corroborative evidences; Retraction
• Section: 271(1)(c)

Judgement Text

[ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.524/IND/2013 ASSESSMENT YEAR: 2010-11 ACIT - 1(1) BHOPAL / VS. SHRI SUDEEP MAHESHWARI E-2/178, ARERA COLONY, BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AAFPM4748J ITA NO.299/IND/2017 ASSESSMENT YEAR: 2008-09 SHRI SUDEEP MAHESHWARI E-2/178, ARERA COLONY, BHOPAL / VS. ACIT - 1(1) BHOPAL (APPELLANT) (REVEN UE ) APPELLANT BY SMT. ASHIMA GUPTA, D.R. RESPONDENT BY SHRI ASHISH GOYAL & SHRI N.D. PATWA, A.RS DATE OF HEARING: 15.01.2019 DATE OF PRONOUNCEMENT: 13.02.2019 [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 2 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS IN QUANTUM AND PENALTY PROCEEDINGS BY REVENUE AND ASSESSEE RESPECTIVELY ARE PERTAINING TO THE ASSESSMENT YEARS 2010-11 & 2008-09. BOTH THE APPEALS WERE TAKEN UP TOGETHER AND ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER. FIRST WE TAKE UP REVENUES APPEAL IN ITA NO.524/IND/2013, WHERE IN THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN 1. DELETING THE ADDITION OF RS.2,25,00,000/- MADE B Y THE A.O. ON ACCOUNT OF INCOME SURRENDERED BY THE ASSESSEE AS PE R STATEMENT RECORDED U/S 132(4) OF INCOME TAX ACT, 1961. 2. THE FACTS IN BRIEF ARE THAT A SEARCH ACTION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE. DURING THE COUR SE OF SEARCH, CERTAIN DOCUMENTS WERE SEIZED. A STATEMENT OF THE ASSESSEE WAS RECORDED IN WHICH THE ASSESSEE ADMITTED AND SURRENDERED INCOME ON BEHALF OF SELF AND OTHERS. THE A.O. THEREFORE MADE ADDITION OF RS.2,25,00,000/-. AGAINST THIS, [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 3 THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING SUBMISSIONS DELETED THE ADDITION. NOW THE REVENUE IS IN APPEAL. 3. LD. D.R. VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS. LD. D.R. RELIE D UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF HANS TOWERS (P) LTD. VS. CIT-V (2015) 56 TAXMANN.COM 67 (DELHI). 4. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION AND RELIED UPON VARIOUS CASE LAWS AND HE ALSO REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) DELETED TH E ADDITION BY OBSERVING AS UNDER: 7. THE A.O. HAS PLACED HIS RELIANCE ON THE DECISION OF THE HON'BLE HIGH COURT OF CHATTISGARH IN ACIT VS. HUKUM CHAND JAIN & ORS. (201 1) 337 ITR 238. I HAVE CAREFULLY GONE THROUGH THE SAID DECISION, I FIND THAT IN THE SAID CASE DURING THE COURSE OF SEARCH, CASH, GOLD ORNAMENTS AND CERTAIN LOOSE PAPERS WERE SEIZED AND ASSESSEE COULD NOT EXPLAIN THE RECOVERY OF CASH AND JEWELLERY AND IN HIS STATEMENT UNDER S. 13 2(4), HE SURRENDERED RS.30 LAKHS AS HIS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. I AM OF T HE CONSIDERED OPINION THAT THE FACTS IN THE INSTANT CASE ARE CLEARLY DISTINGUISHABLE FROM THE F ACTS IN THE SAID DECISION OF THE HON'BLE HIGH COURT OF CHHATTISGARH IN AS MUCH AS IN THE INSTANT CASE, NO DISPROPORTIONATE ASSET HAS BEEN BROUGHT ON RECORD. [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 4 [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 5 [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 6 [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 7 6. IT IS THE CASE OF THE ASSESSEE THAT DURING THE COUR SE OF SEARCH & SEIZURE, NO INCRIMINATING MATERIAL OR UNDISCLO SED INCOME OR INVESTMENTS WERE FOUND. IT IS STATED THAT THE ASSESSEE WAS UNDER MENTAL PRESSURE AND TIRED. THEREFOR E, TO BUY PEACE OF MIND, HE ACCEPTED AND DECLARED RS.3 CRO RES [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 8 IN PERSONAL NAME. IT IS ALSO STATED THAT THE CASE LAWS AS RELIED BY THE A.O. ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE ASSESSEE HAS RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT RENDERED IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. 91 ITR 18 (SC), WHEREIN THE HON'BLE COURT HAS HELD THAT ADMISSION CANNO T BE SAID THAT IT IS CONCLUSIVE. RETRACTION FROM ADMISS ION WAS PERMISSIBLE IN LAW AND IT WAS OPEN TO THE PERSON W HO MADE THE ADMISSION TO SHOW THAT IT WAS INCORRECT. HOWEVER, RELIANCE IS PLACED ON THE JUDGEMENT OF THE H ON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMAL KOCHAR (2015) 55 TAXMANN.COM 292 (GUJARAT), WHEREIN IT HAS BEEN HELD THAT MERELY ON THE BASIS OF ADMISSION THAT FEW BENAMI CONCERNS WERE BEING RUN BY ASSESSEE, ASSESSEE COULD NOT BE BASIS FOR MAKING THE ASSESSEE LIABLE FOR TAX AND THE ASSESSEE RETRACTED F ROM SUCH ADMISSION AND REVENUE COULD NOT FURNISH ANY [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 9 CORROBORATIVE EVIDENCE IN SUPPORT OF SUCH EVIDENCE. IT WAS FURTHER URGED BY THE ASSESSEE THAT ADMISSION SHOULD BE BASED UPON CERTAIN CORROBORATIVE EVIDENCES. IN THE ABSENCE OF CORROBORATIVE EVIDENCES, THE ADMISSION IS M ERELY A HOLLOW STATEMENT. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS OF THE PARTIES. IT IS UNDISPUTED FACT THAT THE STATEMENT RECORDED U/S 132(4) OF THE ACT HAS A BETTER EVIDENTIARY VALUE BUT IT IS ALSO A S ETTLED POSITION OF LAW THAT THE ADDITION CANNOT BE SUSTAINED MERELY ON THE BASIS OF THE STATEMENT. THERE HAS TO BE SOME MATERIAL CORROBORATING THE CONTENTS OF THE STATEMENT. IN THE CASE IN HAND, REVENUE COULD NOT POINT OUT AS WHAT WAS THE MATERIAL BEFORE THE A.O., WHICH SUPPORTED THE CON TENTS OF THE STATEMENT. IN THE ABSENCE OF SUCH MATERIAL, COU PLED WITH THE FACT THAT IT IS RECORDED BY THE LD. CIT(A) T HAT THE ASSESSEE HIMSELF HAD SURRENDERED A SUM OF RS.69,59,000 /- AND RS.75,00,000/- IN A.Y. 2008-09 AND 2009-10 [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 10 RESPECTIVELY. THE A.O. FAILED TO CO-RELATE THE DISCL OSURES MADE IN THE STATEMENT WITH THE INCRIMINATING MATERIAL GATHERED DURING THE SEARCH. THEREFORE, NO INFERENCE IS CALLED FOR IN THE FINDING OF THE LD. CIT(A) AND IS HE REBY AFFIRMED. GROUND RAISED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 8. NOW WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.299/IND/2017. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 11 9. THE ASSESSEE HAS TAKEN A LEGAL PLEA THAT THE NOTICE INITIATING THE PENALTY IS BAD IN LAW. THEREFORE, THE PROCEEDINGS INITIATING PENALTY ARE VITIATED. LD. COUNS EL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE NOTICE. NOTICES ARE ENCLOSED ALONG WITH SYNOPSIS. FOR THE SAKE OF CLAR ITY, CONTENTS OF THE WRITTEN SYNOPSIS ARE REPRODUCED AS UN DER: [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 12 10. LD. D.R. OPPOSED THE SUBMISSIONS AND SUBMITTED T HAT THE PENALTY PROCEEDINGS HAVE BEEN VALIDLY INITIATED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE FIND THAT THE NOTICES I SSUED BY THE A.O. ARE CONTRARY TO THE LAWS LAID DOWN BY THE HON 'BLE [ITA 524/IND/2013 & ITA NO.299/IND/2017] [SHRI SUDIP MAHESHWARI, BHOPAL] 13 JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT-I VS. K ULWANT SINGH BHATIA IN ITA NO.9 OF 2018 (M.P.) DATED 9.5.2018 . 12. LD. D.R. COULD NOT CONTROVERT THE FACT THAT NOTI CE ISSUED BY THE A.O. FOR INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT DOES NOT ASSIGN ANY REASON FOR IN ITIATING THE PENALTY. HENCE, IT CAN BE INFERRED THAT NO SPECIF IC CHARGE IS MADE FOR INITIATING THE PENALTY. IN THE ABSEN CE OF THE SPECIFIC CHARGE, THE PROCEEDINGS INITIATED FOR IM POSING PENALTY ARE VITIATED IN THE LIGHT OF THE JUDGEMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT. WE THEREFORE, QUAS H THE PENALTY ORDER BEING BAD IN LAW. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13 . 02.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 13/02/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER