SHRI OMPRAKASH CHOKHANI, Nagpur V. A.C.I.T. Central Cir. 1(3), Nagpur

ITA 310/NAG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1297 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Search and seizure
• Section: 143(3); 153A; 132; 139

Judgement Text

1 ITA NO. 245/NAG/2016 . IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 245 /NAG/201 4 . ASSESSMENT YEAR : 20 09 - 10 . NANDINI REALTORS PVT. LTD., ASSTT. COMMISSIONER OF INCOME - TAX, NAGPUR. VS. CENTRAL CIRCLE - 1(3), NAGPUR. PAN AACCN0532H. APPELLANT. RESPONDENT. APPELLANT BY : SHRI MUKESH AGRAWAL . RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 0 7 - 11 - 2016 DATE OF PRONOUNCEMENT : 6 TH DEC., 2016 O R D E R. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - 3, NAGPUR DATED 01 - 03 - 2016 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUNDS OF APPEAL READ AS UNDER : 1. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961. 2. THE ORDER PASSED BY THE LEARNED CIT(APPEALS) IS BAD IN L AW. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : THE SEARCH AND SEIZURE ACTION U/S 132 OF I.T. ACT IS CONDUCTED ON 22 - 01 - 2010 AT THE PREMISES OF M/S NANDINI REALTORS PVT. LTD. ALONG WITH ITS ASSOCIATED CONCERNS, BUSINESS PREMISES AND AT THE RESIDENCE OF DI RECTORS OF M/S N ANDINI REALTORS PVT. LTD. 2 ITA NO. 245/NAG/2016 . M/S NANDINI REALTORS HAS PURCHASED THE LAND 32, CLARKE TOWN, NAGPUR ADMEASURING 14855 SQ. FT. FOR WHICH THE SALE DEED IS REGISTERED ON 18 - 01 - 2010 DISCLOSING CONSIDERATION AT RS.2,75,65,000/ - . THE SAID LAND IS PURC HASED FROM SHRI YOGRAJ SAHANI & HIS DAUGHTER SMT. UMA SABLOK. 3. DURING THE COURSE OF SEARCH AND SEIZURE ACTION, SHRI PANKAJ CHOKHANI, DIRECTOR OF ASSESSEE COMPANY, ON 22 - 01 - 2010 IN HIS STATEMENT RECORDED U/S 132(4) OF I.T. ACT, HAS ADMITTED THAT THE SALE CONSIDERATION PAID TO SHRI YOGRAJ SAHANI & SMT. UMA SABLOK IN CASH AMOUNTING TO RS.2,00,00,000/ - I OVER AND ABOVE THE SALE CONSIDERATION DISCLOSED IN SALES DEED, HENCE ACTUAL SALES CONSIDERATION OF THE SUBJECT LAND IS AT RS.4,75,65,000/ - . THE CASH CONSI DERATION PAID IN CASH IS NOT DISCLOSED IN THE BOOKS OF ACCOUNT. 4. THE ORIGINAL RETURN FOR THE ASSESSMENT YEAR HAS BEEN FIL E D BY THE ASSESSEE U/S 139(1) ON 16 - 09 - 2009 DECLARING TOTAL INCOME AT RS.11,37,870/ - . 5. THE RETURN OF INCOME IN RESPONSE TO THE NOTI CE ISSUED U/S 153A WAS FILED ON 22 - 12 - 2010 DECLARING TOTAL INCOME AT RS.11,37,870/ - . SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE REVISED THE RETURN OF INCOME ON 07 - 12 - 2011 DECLARING TOTAL INCOME AT RS.22,87,871/ - . 6. THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE I.T. ACT BY ORDER DATED 27 - 12 - 2011 DETERMINING TOTAL INCOME AT RS.22,87,871/ - WHICH INCLUDE THE PAYMENT IN CASH MADE BY THE ASSESSEE IN THE TRANSACTION OF PURCHASE OF PROPERTY. 7. THE ASSESSEE PURCHASED PROPERT Y FOR WHICH SALE DEED WAS REGISTERED ON 18 - 01 - 2010 IN WHICH SALE CONSIDERATION DISCLOSED WAS RS.2,75,65,000/ - . THE ASSESSEE HAD PAID CASH OF RS.2,00,00,000/ - OVER AND ABOVE THE RECORDED CONSIDERATION AND THEREFORE, THE PROPERTY WAS ACTUALLY PURCHASED BY TH E ASSESSEE FOR THE AMOUNT OF RS.4,75,00,000/ - . OUT OF THE SAID CASH PAYMENT ADMITTED BY THE ASSESSEE IN STATEMENT U/S 132(4) , THE AMOUNT OF RS.11,50,000/ - WAS PAID 3 ITA NO. 245/NAG/2016 . DURING THE RELEVANT PREVIOUS YEAR. THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) AND L EVIED THE PENALTY WITH THE FOLLOWING OBSERVATIONS : 'IN VIEW OF THE ABOVE FACTS , IT IS EVIDENT THAT THE DISCLOSURE OF THE ADDITIONAL INCOME OF RS. 11,50 , 000/ - IN ONLY CONSEQUENT TO THE EVIDENCES GATHERED DURING THE COURSE OF SEARCH & SEIZURE AND CONFRONTAT ION THEREOF. THIS FACT IS ALSO STRENGTHENED BY ASSESSEE'S ACTION OF FILING ITS RETURN OF INCOME U/S . 139 WHICH EXCLUDES INCOME ARISING ON THIS ACCOUNT. THIS IS FURTHER TO STATE THAT THE ASSESSEE HAS OFFERED THE UNDISCLOSED INCOME ON THE BASIS OF DOCUMENTS FOUND IN THE SEARCH PROCEEDINGS. THE ASSESSEE WOULD NOT HAVE DISCLOSED THE INCOME HAD THERE B EEN NO SEARCH PROCEEDINGS. THE ASSESSEE HAS INTENTIONALLY CONCEALED THE PARTICULARS OF ITS INCOME. EVERY CASE WHERE A STATEMENT U / S. 132(4) IS RECORDED WOULD NOT AUTOMATICALLY ENSURE IMMUNITY FROM LEVY OF PENALTY U/S 271 (1) (C). THE PROVISIONS CLEARLY STATE THAT ASSESSEE IS DEEMED TO HAVE CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS WHEN THERE IS UNEARTHING OF INCO ME CONSEQUENT TO SEARCH PROCEEDINGS. THE HON 'BLE BOMBAY HIGH COURT IN THE DECISION REPORTED IN 190 ITR 679 IN THE CASE OF F0ADRAS BANGALORE TRANSPORT CO. VS. CIT HAS HELD THAT WHEN INCOME IS DETECTED DUE TO SEARCH PENALTY IS LEVIABLE ON CONCEALED INCOME. THE MERE FILING OF A RETURN OF INCOME DISCLOSING UNACCOUNTED TRANSACTIONS DOES NOT ABSOLVE THE ASSESSEE FROM PENALTY U/S. 271(1) (C). SIMILARLY WHERE THE ASSESSEE HAS AGREED TO THE INCLUSION OF CERTAIN AMOUNTS WHICH WERE DISCOVERED FROM ACCOUNTS LEVY OF PENALTY WAS HELD JUSTIFIED IN WESTERN AUTOMOBILES (INDIA) V CIT 112 ITR 1048 (BOM.). MERE FILING OF RETURNS CANNOT HAVE EFFECT OF EXONERATING THE ASSESSEE FROM THE LIABILITY FOR PENALTY AS THIS WAS NOT A VOLUNTARY ACT UNCONNECTED WITH SEA RCH. THIS VIEW IS SUPPORTED BY THE DECISION OF THE MADRAS HIGH COURT IN CIT VS. A MOHD. ABDUL KHADIR 260 ITR 650. IN VIEW OF THE ABOVE DISCUSSIONS AND FACTS AND MATERIAL ON THE RECORD, IT IS CRYSTAL CLEAR THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOME AND I AM SATISFIED THAT THIS IS FIT FOR CASE TO LEVY PENALTY U/S 271(1)(C). 8. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) ELABORATELY CONSIDERED THE ISSUE AND REFERRED SEVERAL CASE LAW S AND CONFIRMED THE PENALTY. 9. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 10. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE UPON SEVERAL CASE LAWS WHICH ARE AS UNDER : 1. ITATS DECISION IN ASSESSEES OWN CASE IN ITA NO. 415/NAG/2014 DATED 5 TH MAY, 2016. 4 ITA NO. 245/NAG/2016 . 2. ITAT, MUMBAI BENCH DECISION IN THE CASE OF RAMESH D. SHAH VS. ACIT IN ITA NO. 5179/MUM/2012 DATED 14 TH OCT., 2016. 3. HONBLE GUJARAT HIGH COURT DECISION IN TH CASE OF KIRTI DAHYABHAI PATEL VS, ACIT 280 CTR 216. LEARNED COUNSEL FUR THER SUBMITTED THAT THE ASSESSEE HAS IN THE SUBMISSION OF RETURN AFTER THE SEARCH DULY DISCLOSED THE AMOUNT AND PAID TAXES. HENCE HE SUBMITTED THAT NO PENALTY IS EXIGIBLE. 11. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE FURT HER SUBMITTED THAT THE LEARNED COUNSEL OF THE ASSESSES SUBMISSION THAT IN THE RETURN SUBSEQUENT TO SEARCH THE ASSESSEE HAS DULY DISCLOSED THE SUM INVOLVED IS FACTUALLY WRONG. HE SUBMITTED THAT IN RESPONSE TO NOTICE U/S 153A THE ASSESSEE FILED RETURN ON 22 - 12 - 2010 IN WHICH HE DISCLOSED RS.11,37,870/ - . SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE AGAIN FILED THE RETURN ON 07 - 12 - 2011 DISCLOSING RS.22,87,811/ - . HENCE LEARNED D.R. SUBMITTED THAT IT WAS ONLY UPON THE FINDING OF SEARCH AN D SUBSEQUENT SCRUTINY DURING POST SEARCH ASSESSMENT THAT THE ASSESSEE AGREED TO PAY TAX ON THE SAME. 12. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE WAS NOT ABLE TO REFUTE THE SUBMISSION OF THE LEARN ED D.R. THAT IT IS NOT THE CASE THAT IN THE RETURN SUBSEQUENT TO SEARCH THE ASSESSEE HAS DISCLOSED THE UNDISCLOSED INCOME. IN THIS VIEW OF THE MATTER THE CASE LAWS REFERRED BY THE LEARNED COUNSEL OF THE ASSESSEE ARE NOT APPLICABLE ON THE FACTS OF THE CASE. THESE CASE LAWS ARE ALSO FOR THE PROPOSITION THAT IF THE UNDISCLOSED INCOME IS SHOWN IN THE RETURNS SUBSEQUENT TO SEARCH, PENALTY MAY NOT BE EXIGIBLE. HOWEVER, IN VIEW OF THE SPECIFIC FACTS IN THIS CASE THAT THE ASSESSEE HAS NOT DISCLOSED INCOME IN THE R ETURN PURSUANT TO SEARCH, BUT HAS SHOWN THE SAME WHEN THE ASSESSMENT PROCEEDINGS WERE GOING ON SUBSEQUENT TO SEARCH AND THE UNDISCLOSED INCOME IS REALLY DETECTED BY THE REVENUE , T HE ASSESSEE IS CLEARLY LIABLE FOR PENALTY U/S 271(1)(C) OF THE I.T. ACT. ACCO RDINGLY I 5 ITA NO. 245/NAG/2016 . DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW. HENCE I UPHOLD THE SAME. 13. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF DEC., 2016. SD/ - ( SH AMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 6 TH DEC. , 2016. COPY FORW ARDED TO : 1. NANDINI REALATORS PVT. LTD. RAMBAG ROAD, BAIDNATH SQUARE, NAGPUR. 2. A.C.I.T., CENTRAL CIRCLE - 1(3), NAGPUR. 3. C.I.T. - (CENTRAL), NAGPUR. 4. CIT(APPEALS) - 3 , NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.