Shri Bhargav Harivadan Desai, Ahmedabad V. The Income Tax Officer, Ward-9(2), Ahmedabad

ITA 3050/AHD/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2891 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BIREN SHAH
• Keywords: Unexplained investment; Income from undisclosed sources
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 3050/AHD/2014 (ASSESSMENT YEAR: 2008-09) SHRI BHARGAV HARIVADAN DESAI 6, PRASHANTI APPARTMENT, 74/A/,PRITAM NAGAR, ELLISBRIDGE, AHMEDABAD-380006 V/S INCOME TAX OFFICER, WARD- 9 (2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAUPD3762A APPELLANT BY : SHRI BIREN SHAH, AR RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. ( )/ ORDER DATE OF HEARING : 12 -12-201 8 DATE OF PRONOUNCEMENT : 05 -03-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-XV, AHMEDABAD DATED 10.10.2014 PERTAINING TO A.Y. 2008-09 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 3050 /AHD/2014 . A.Y. 2008- 09 2 1 IN LAW, AND IN THE FACTS AND CIRCUMSTANCE S OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING LEVY OF PENA LTY U/S 271(1)(C) OF THE ACT FOR RS 71,997. 2.1 IN LAW, AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS ERREDIN CONFIRMING THE PENALTY U /S.271(1)(C) FOR CONCEALMENT OF INCOME ON AN AMOUNT OF RS. 1,83,0007- REPRESENTI NG ALLEGED CASH DEPOSITS WITHOUT APPRECIATING THAT THEY WERE MADE OUT OF PER SONAL SAVINGS, AND CONSIDERING THE STATUS OF THE APPELLANT'S FAMILY, S UCH SAVINGS AND DEPOSITS THEREFROM ARE REASONABLE. 2.2 IN LAW, AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS FAILED TO COMPREHEND THAT EXPLAN ATION 1 STIPULATES TWO CONDITIONS FOR THE LEVY OF PENALTY-FIRSTLY, THE PER SON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE 'AND' SECONDLY, FAIL S TO PROVE THAT SUCH A CLAIM IS BONAFIDE. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIA TED THAT IN QUANTUM APPEAL, HER PREDECESSOR CIT(A) HIMSELF HAS ALLOWED ESTIMATE D RELIEF OF RS 50,000 AND SUCH RELIEF WOULD NOT HAVE BEEN PROVIDED IF THE APPELLAN T'S EXPLANATION WAS MALAFIDE. 3.IN LAW, AND IN THE FACT AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE PENALTY ON THE ADDITION OF R S.1,50,000/- ON ACCOUNT OF HOUSEHOLD EXPENSES, WITHOUT CONSIDERING THE FACT TH AT SUCH AN ADDITION WAS MADE ONLY ON ESTIMATE BASIS. 2. IN THIS CASE, ASSESSMENT FOR A.Y.2008-09 WAS FINALI ZED U/S. 143(3) DETERMINING TOTAL INCOME AT RS.8,34,200/- ON 27/12/2010. AS AGA INST RETURN INCOME OF RS.5,21/200/-. ADDITION IN RESPECT OF UNEXPLAINED I NVESTMENT IN CASH DEPOSIT IN BANK ACCOUNT AMOUNTING TO RS.1,33,000/- AND UNEX PLAINED HOUSEHOLD EXPENSES AMOUNTING TO RS.1,80,000/- WERE MADE IN TH E INCOME AND PENALTY PROCEEDINGS U/S.271(L)(C) OF THE I. T. ACT WERE INI TIATED BY ISSUING NOTICE U/S.274 R.W.S. 271(L)(C) OF THE I. T. ACT. 3. AGGRIEVED WITH THE ORDER, THE ASSESSEE HAS GONE IN APPEAL. THE LD. CIT(A) VIDE APPEAL ORDER NO. CIT(A)-XV/9(2)/299/10-11 DATED 02/ 07/2012, HAS GIVEN RELIEF OF RS.50,000/- AND RS.30,000/- IN RESPECT OF UNEXPLAINED INVESTMENT IN CASH DEPOSIT IN BANK AND UNEXPLAINED HOUSEHOLD EXPE NSES RESPECTIVELY. ITA NO. 3050 /AHD/2014 . A.Y. 2008- 09 3 ACCORDINGLY, THE INCOME WAS RE-DETERMINED AT RS.7,5 4,200/-. AS PER ORDER GIVING EFFECT TO THE ORDER OF CIT(A)'S ORDER DATED 29/08/2012 4. AND THEREAFTER PENALTY PROCEEDING PROCEEDINGS WERE INITIATED AND LD. CIT(A) UPHOLD THE LEVY OF PENALTY OF RS. 71997/-. 5. NOW ASSESSEE HAS COME BEFORE US AGAINST THE LEVY OF PENALTY. 6. IN THIS CASE, ASSESSEE DEPOSITED TOTAL AMOUNT OF CA SH RS. 2,35,000/- ON VARIOUS DATES AND STATED THAT THIS DEPOSIT WAS MADE OUT OF PAST SAVING OR FROM PREVIOUS WITHDRAWALS. LD. A.O. CONSIDERING THE CONTENTION OF ASSESSEE ALLOWED THE BENEFIT OF RS. 102000/- WHICH IS CASH WITHDRAWAL O F ASSESSEE DURING THE ASSESSMENT YEAR AND CONFIRMED THE ADDITION OF RS. 1 ,33,000/-. ON APPEAL TO THE LD. CIT(A), HE HAD ESTIMATED RS. 50,000/- AS ASSESS EE PAST SAVING CONSIDERING HIS AGE AND BEING REGULAR TAX PAYER AND RESTRICTED ADDITION OF RS. 83,000/-. 7. IN SUPPORT OF ITS CONTENTION, LD. A.R. CITED AN ORD ER OF CHANDIGARH ITAT (2015) 61 TAXMANN.COM 230 (CHANDIGARH TRIB.) WHEREIN RELEV ANT PARA IS PRODUCED: IT : WHERE IN QUANTUM APPEAL AGAINST ADDITION MADE UNDER SECTION 68, TRIBUNAL HAD ACCEPTED ASSESSEE'S EXPLANATION IN RESPECT OF P ART OF DEPOSIT AND PARTLY CONFIRMED ADDITION STATING THAT EXPLANATION GIVEN B Y ASSESSEE WAS NOT CONVINCING, IT COULD NOT BE SAID THAT ASSESSEE HAD CONCEALED HIS INCOME OR FURNISHED ANY INACCURATE PARTICULARS WARRANTING LEV Y OF PENALTY UNDER SECTION 271(1)(C) ITA NO. 3050 /AHD/2014 . A.Y. 2008- 09 4 8. AND LD. A.R. ALSO CITED A JUDGMENT OF HONBLE GUJAR AT HIGH COURT WHEREIN RELIEF HAS BEEN GRANTED TO THE ASSESSEE IN THE MATT ER OF NATIONAL TEXTILES VS. CIT (SUPRA) , THE RELEVANT PARA IS REPRODUCED: SECTION 271(L)(C), READ WITH SECTION 68, OF THE IN COME-TAX ACT, 1961 - PENALTY - FOR CONCEALMENT OF INCOME -ASSESSMENT YEAR 1974-75 - WHETHER UNDER EXPLANATION 1 TO SECTION 271(L)(C), AS IT STOOD AT RELEVANT TIME, ABSENCE OF | PROOF ACCEPTABLE TO DEPARTMENT CANNOT BE EQUATED WITH FRA UD OR WILLFUL DEFAULT - HELD, YES 9. AND APART FROM ABOVE SAID JUDGMENTS, LD. A.R. ALSO CITED A JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE MATTER OF JUMABHA I PREMCHAND (HUF) VS. CIT WHEREIN LOW HOUSEHOLD EXPENSES WERE ESTIMATED B Y THE REVENUE AND HONBLE HIGH COURT GRANTED RELIEF TO THE ASSESSEE A ND RELEVANT PARA OF THE SAME IS REPRODUCED: SECTION 271(L)(C) OF THE INCOME-TAX ACT, 1961 - PE NALTY - FOR CONCEALMENT OF INCOME - ASSESSMENT YEARS 1968-69 AND 1969-70 - FOR RELEVANT ASSESSMENT YEARS, ASSESSEE - KARTA OF HUF HAD WITHDRAWN CERTAIN AMOUN T AN ACCOUNT OF HOUSEHOLD EXPENSES -CONSIDERING LARGE FAMILY OF ASSESSEE, HIS SOCIAL STATUS, FACT THAT THREE DAUGHTERS WERE STUDYING AND FURTHER THAT THREE DAUG HTERS GOT MARRIED, ITO HELD THAT HOUSEHOLD EXPENSES SHOWN BY ASSESSEE WERE EXTR EMELY LOW AND, THEREFORE, BY ESTIMATING SUCH EXPENSES AT A HIGHER AMOUNT,, HE MADE AN ADDITION - ITO ALSO ISSUED SHOW-CAUSE NOTICE TO ASSESSEE ON GROUND THAT ASSESSEE HAD DELIBERATELY CONCEALED PARTICULARS OF HIS INCOME AND HELD THAT T HERE WAS ENOUGH MATERIAL ON RECORD TO DRAW AN INFERENCE OF CONCEALMENT OF INCOM E AND, ACCORDINGLY, IMPOSED PENALTY ON ASSESSEE - WHETHER, SINCE DEPARTMENT PRO CEEDED ON BASIS OF 'DELIBERATE CONCEALMENT' OF INCOME BY ASSESSEE, IT CO ULD NOT BE SAID, IN ABSENCE OF EVIDENCE AND FINDING TO THAT EFFECT, THAT DEPART MENT HAD ESTABLISHED CASE AGAINST ASSESSEE UNDER SECTION 271(L)(C) - HELD, YE S - WHETHER SINCE DEPARTMENT HAD NOT DISCHARGED ONUS IN ESTABLISHING THAT ASSESS EE HAD MET HIS HOUSEHOLD EXPENSES FROM INCOME FROM UNDISCLOSED SOURCES, PENA LTY COULD NOT BE LEVIED - HELD, YES. ITA NO. 3050 /AHD/2014 . A.Y. 2008- 09 5 10. SINCE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICU LARS AND ADDITION HAS BEEN MADE PURELY ON ESTIMATION BASIS AND ON ACCOUNT OF A FORESAID JUDGMENT, WE ALLOW THE APPEAL OF THE ASSESSEE. 11. IN THE RESULT, PENALTY CONFIRMED BY THE LD. CIT(A) TO BE DELETED. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 05 - 03- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 05/03/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD