RUPEN PATEL, MUMBAI V. DCIT - CC-25, MUMBAI

ITA 3076/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3752 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 21-05-2015
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: B K VATSARAJ
• Keywords: Deemed owner of house property; Income from undisclosed sources; Bonafide belief
• Section: 132

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI R.C . SHARMA, A M AND SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO. 3075 & 3076 /MUM/2015 ( / ASSESSMENT YEAR: 2010 - 11 & 2011 - 12 ) RUPEN PATEL 5 - D A.K. PATEL BUNGLOW, L INKING ROADM DADBHOY ROAD, SANTACRUZ (W), M UMBAI - 400 054 . / VS. DCIT - CC 25, AAYAKAR BHAVAN, MK ROAD, MUMBAI . ./ ./ PAN/GIR NO. AACPP 8986C ( / APPELLANT ) : ( / RESPONDENT ) / APPELLAN T BY : SHRI B.K. VATSARAJ / RESPONDENT BY : SHRI NEIL PHILIP / DATE OF HEARING : 20 /07 /2016 / DATE OF PRONOUNCEMENT : 03/08/2016 / O R D E R PER R.C. SHARMA , A. M.: THESE ARE THE A PPEAL S FILED BY THE ASSE SSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 51 , MU MB AI (CIT(A) FOR SHORT) DATED 04.02 . 2015 FOR THE ASSESSMENT YEAR (A.Y.) 2011 - 12 . ITA NO.3076/MUM/2015 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED . THE FACTS OF THE CASE ARE THAT THERE WAS AN ACTION UNDER SECTION 132 OF THE INCOME TAX ACT 1961 ON 2 ITA NO. 3076 &3076 / M /15 (A.Y.10 - 11 & 11 - 12 ) RUPESH PATEL VS. DY. CIT 16.12.2010 IN THE CASE OF M/S PATEL ENGINEERING LTD. GROUP OF CASES AND THE ASSESSEE WAS INTER - ALIA COVERED IN THE SEARCH OPERATION. DURING THE COURSE OF SEARCH, CASH OF RS.6.5 LAKHS WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE. IT WAS THE EXPLANATION OF THE ASSESSEE BEFORE THE AO THAT THE CASH I N HAND ON 16.12.2012 WAS ON ACCOUNT OF WITHDRAWAL OF RS.7.75 LAKHS FROM HDFC BANK ACCOUNT HELD BY HIMSELF, HIS WIFE AND HIS S ON AND ALSO ON ACCOUNT OF WITHDRAWAL BY SON SHRI RYAN PATEL OF RS.2 LAKHS ON 13.5.2008. T HE AO HELD THAT IT IS NOT POSSIBLE TO GIVE CREDIT FOR THE SUM OF RS.2 LAKHS FOR THE REASON THAT IT IS IMPROBABLE THAT THE CASH WITHDRAWN ON 13.05.2008 WOULD STILL REMA IN WITH THE ASSESSEE. TAKING THESE ASPECTS INTO CONSIDERATION, THE AO ACCEPTED RS.5.75 LAKHS AS EXPLAINED AND ADDED BACK RS.75,000/ - AS THE UNACCOUNTED INCOME OF THE ASSESSEE. AGGRIEVED BY THE SAID ADDITION THE ASSESSEE APPEAL HAS BEEN FILED BEFORE THE CIT (A). 3. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ACTION OF AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT AS ON DATE OF S EARCH ASSESSEE WAS HAVING CASH I N HAND OF RS.6.50 LACS OUT OF W ITHDRAWALS OF RS.7.75LAKHS WAS FROM HDFC BANK A CCOUNT HELD BY ASSESSEE, H IS WIFE AND H IS SON. THERE WAS ALSO WITHDRAWAL FROM SON SHRI. RYAN PATEL OF RS.2 LAKHS. CASH 3 ITA NO. 3076 &3076 / M /15 (A.Y.10 - 11 & 11 - 12 ) RUPESH PATEL VS. DY. CIT WITHDRAWAL WAS FOUND TO BE MUCH MORE THAN THE CASH - IN - HAND AS ON DATE OF SEARCH. ALL CASH FOUND DURING SEARCH WAS DULY EXPLAINED AND STATEMENT WAS ALSO RECORDED U/S 13 2(4) . A CCORDINGLY WE DO NOT FIND ANY MERIT FOR THE ADDITION OF R S.75,000/ - SO MADE BY AO. 5. IN THE RESULT , THE APPEAL OF ASSESSEE IS ALLOWED. ITA NO. 3075/MUM/2015 A.Y. 2010 - 11 6 . ASSESSEE IS AGGRIEVED FOR PENALTY IMPOSED U/S 271(1)(C) OF RS.24,280/ - IN RESPECT OF ADDITION OF DEEMED LET OUT VALUE OF PROPERTY SITUATED AT KARJAT . PROPERTY WAS NOT ACTUALLY LET - OUT NOR ASSESSEE WAS IN RECEIPT OF ANY RENT. HOWEVER, BY APPLYING THE DEE MING PROVISIONS THE AO MADE AN ADDITION OF NOTIONAL VALUE OF RENT. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT PENALTY WAS LEVIED WITH RESPECT TO THE ADDITION MADE ON ACCOUNT OF DEEMED RENT OF SAID HOUSE PROPERTY. WE FOUND THAT THE SAID PROPERTY WAS SITUATED 8KMS OF THE MUNICIPAL LI M ITS AND SI N CE IT WAS EXE MPT FROM WEALTH TAX AND THAT ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT SUCH PROPERTY WAS NOT TAXABLE UNDER THE INCOME TAX AS WELL , NO INCOME UNDER THE HEAD HOUSE PROPERTY WAS DECLARED. WE FOUND THAT BOTH THE HOUSE PROPERTIES WERE DISCLOSED BY THE ASSESSEE IN THE BALANCE SHEET AND THAT BEING SO THE PENAL PROVISION OF SECTION 271(1)(C) CANNOT BE INVOKED AS THERE WAS NO DELIBERATE ATTEMPT TO FURNISH INACCURATE PARTICULARS OF INCOME. 4 ITA NO. 3076 &3076 / M /15 (A.Y.10 - 11 & 11 - 12 ) RUPESH PATEL VS. DY. CIT 8 . IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY MERIT FOR THE PENALTY OF RS.,24,280/ - WITH RESPECT TO THE ABOVE ADDITION . 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 03/08 / 201 6 SD/ - SD/ - ( SANDEEP GOSAIN ) ( R.C. SHARMA) / JUD I C I AL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 03.08 .201 6 PS. ASHWINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBA I.