SHRI GYARSI LAL SHARMA, Jaipur V. DEPUTY COMMISSIONER OF INCOME TAX, Jaipur

ITA 315/JPR/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0117 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL JCIT DHK
• Keywords: Search and seizure; Document seized; Assessment record; Documents seized
• Section: 153A; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 315/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2011-12. SHRI GYARSI LAL SHARMA 40, NEAR GLASS FACTORY, PRATAP NAGAR, TONK ROAD, JAIPUR. CUKE VS. THE DCIT, CENTRAL CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ASUPS 7114 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. RUNI PAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.11.2019 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/12/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 01.12.2017 OF LD. CIT (A)-4, JAIPUR ARISING FROM PENALTY ORDER PA SSED UNDER SECTION 271AAA OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2011-12. THE ASSE SSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT (A) HAS GROSSLY ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271AAA TO THE TUNE OF RS. 3,07,500/- IN RESPECT OF UNDISCLOSED INCOME ADMITTED BY ASSESSEE DURING ASSESSMENT PROCE EDINGS AND DUE TAX HAVE BEEN PAID. APPELLANT PRAYS PENALTY SO CONFIRMED DESERVES TO BE DELETED. 2 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. 1.1. THAT THE LD. CIT (A) HAS FURTHER ERRED IN CONFIRMIN G THE PENALTY OF RS. 3,07,500/- BY COMPLETELY IGNORING THE FACT T HAT MODE AND MANNER OF DERIVING UNDISCLOSED INCOME WAS DULY EXPL AINED AND NOT DOUBTED BY LD. AO. IT IS THUS PRAYED THAT PENAL TY OF RS. 3,07,500/- DESERVES TO BE DELETED. 2. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF THIS APPEAL AT THE TI ME OR BEFORE THE ACTUAL HEARING OF THE CASE. 2. THE ASSESSEE IS AN INDIVIDUAL AND A PRACTICING D OCTOR HAVING INCOME FROM PROFESSION AND INTEREST. A SEARCH AND SEIZURE ACTI ON UNDER SECTION 132 OF THE I.T. ACT WAS CARRIED OUT AT HIS RESIDENTIAL PREMISES ON 08.06.2011 ALONG WITH M/S. JAIPUR HOSPITAL GROUP WHERE HE IS PROVIDING PROFESSIONAL S ERVICES. DURING THE COURSE OF SEARCH AND SEIZURE ACTION, CERTAIN INCRIMINATING DO CUMENTS WERE FOUND DISCLOSING UNDISCLOSED INCOME OF THE ASSESSEE. IN THE STATEME NT RECORDED UNDER SECTION 132(4) OF THE IT ACT, THE ASSESSEE HAS DISCLOSED RS . 2,53,96,000/- AS HIS UNDISCLOSED INCOME. IN RESPONSE TO NOTICE UNDER SECTION 153A, T HE ASSESSEE FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 29 TH DECEMBER, 2012 DECLARING TOTAL INCOME AT RS. 1,62,94,690/- WHICH INCLUDES INCOME O F RS. 90,50,356/- DISCLOSED AND SURRENDERED BY THE ASSESSEE IN HIS STATEMENT RECORD ED UNDER SECTION 132(4) OF THE IT ACT. DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE AO NOTED THAT THE ASSESSEE HAS MADE A SHORT DECLARATION OF INCOME IN THE RETURN OF INCOME IN COMPARISON TO THE DISCLOSURE MADE IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. THE AO ACCORDINGLY ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE BY MAKING THE REFERENCE OF VARIOUS SEIZED DOCUMENTS SU GGESTING UNDISCLOSED INCOME ON ACCOUNT OF INVESTMENT FOR THE ASSESSMENT YEARS 2008 -09 TO 12-13. THE ASSESSEE SUBMITTED A REVISED FUND FLOW STATEMENT AND OFFERED THE UNDISCLOSED INCOME AT RS. 3 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. 1,21,25,356/- AS AGAINST RS. 90,50,356/- DISCLOSED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. THE AO HAS COMPLETED THE ASSESSMENT BY ACCEPTING THE UNDISCLOSED INCOME OFFE RED BY THE ASSESSEE IN THE REVISED COMPUTATION. SUBSEQUENTLY, THE AO INITIATE D THE PROCEEDINGS UNDER SECTION 271AAA OF THE IT ACT AND LEVIED THE PENALTY @ 10% A GAINST THE ENTIRE UNDISCLOSED INCOME OF RS. 1,21,25,356/- AMOUNTING TO RS. 12,12, 536/-. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A). THE L D. CIT (A) HAS DELETED THE PENALTY LEVIED UNDER SECTION 271AAA TO THE EXTENT OF UNDISC LOSED INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME OF RS. 90,50,356/- AND CONFIRMED THE BALANCE AMOUNT OF PENALTY IN RESPECT OF THE UNDISCLOSED INC OME OFFERED BY THE ASSESSEE OF RS. 30,75,000/- IN THE REVISED COMPUTATION OF INCOM E. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE SOLE REASON FOR CONFIRMING THE PENALTY BY THE LD. CIT (A) ON THE AD DITIONAL INCOME OF RS. 30,75,000/- IS THAT THE SAME WAS NOT ADMITTED IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. THE LD. A/R HAS SUBMITTED THAT THE MODE A ND MANNER OF EARNING THE SAID INCOME WAS DULY SUBSTANTIATED AS ALSO THE TAX DUE O N SAME HAS BEEN PAID WHICH FACT REMAINED UNDISPUTED BOTH BY THE AO AS WELL AS LD. CIT (A). HE HAS REFERRED TO THE DEFINITION OF UNDISCLOSED INCOME IN THE EXPLA NATION TO SECTION 271AAA(1) OF THE ACT AND SUBMITTED THAT UNDISCLOSED INCOME DEFINES I N THE EXPLANATION INTER ALIA INCLUDES AN INCOME FOUND IN THE COURSE OF SEARCH UN DER SECTION 132 OF THE ACT. SINCE THIS INCOME WAS OFFERED BY THE ASSESSEE ON HIS OWN AND IT WAS NOT FOUND DURING THE COURSE OF SEARCH, THEREFORE, NO PENALTY CAN BE LEVI ED UNDER SECTION 271AAA OF THE ACT. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE CA ME TO KNOW ABOUT THESE PAPERS AS REFERRED BY THE AO ONLY DURING THE ASSESSMENT PR OCEEDINGS AND THUS IT WAS 4 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. OFFERED AS ADDITIONAL INCOME BASED ON THESE PAPERS. THEREFORE, PENALTY UNDER SECTION 271AAA CANNOT BE IMPOSED ON SUCH INCOME OFF ERED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE HAS FURTH ER CONTENDED THAT THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE TO TAX IS BASED ON T HE INCRIMINATING DOCUMENTS FOUND AS A RESULT OF SEARCH FROM POSSESSION OF THIR D PARTY. THEREFORE, THE CONDITIONS PROVIDED UNDER SECTION 271AAA ARE NOT SATISFIED FOR LEVY OF PENALTY. ALTERNATIVELY, ONCE THESE SEIZED DOCUMENTS WERE CONFRONTED TO THE ASSESSEE, THE ASSESSEE HAS OFFERED THE SAME TO TAX AND PAID THE DUE TAX, THERE FORE, IT SATISFIES THE CIRCUMSTANCES PRESCRIBED UNDER SUB SECTION (2) OF S ECTION 271AAA PROVIDING IMMUNITY FROM LEVY OF PENALTY. IN SUPPORT OF HIS C ONTENTION, HE HAS RELIED UPON THE DECISION OF MUMBAI BENCHES OF THE TRIBUNAL DATED 10 .07.2013 IN CASE OF ACIT (OSD) VS. M/S. KANAKIA SPACES PVT. LTD. (ITA NO. 6763/MUM /2011) AS WELL AS DECISION OF PUNE BENCH OF THE TRIBUNAL DATED 18.01.2019 IN CASE OF SANJAY DATTATRAY KAKADE VS. ACIT (ITA NO. 932/PUN/2013). THUS THE LD. A/R HAS SUBMITTED THAT THE PENALTY LEVIED UNDER SECTION 271AAA AND CONFIRMED BY THE LD . CIT (A) MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE ASSESSEE HAS DISCLOSED UNDISCLOSED INCOME OF RS. 2,53,96,000/- IN HIS STAT EMENT RECORDED UNDER SECTION 132(4) OF THE ACT. THE SAID DISCLOSURE WAS MADE BAS ED ON THE INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH AND SE IZURE IN CASE OF THE ASSESSEE AS WELL AS THE JAIPUR HOSPITAL GROUP. THUS THIS SEIZU RE OF INCRIMINATING MATERIAL WAS MADE DURING THE COURSE OF SEARCH OF THE ASSESSEE. THE LD. D/R HAS CONTENDED THAT THE SURRENDER MADE BY THE ASSESSEE DURING THE COURS E OF ASSESSMENT PROCEEDINGS IS BASED ON THE INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH AND SEIZURE AND ALSO DISCLOSED BY THE ASSESSEE AS PART OF THE U NDISCLOSED INCOME OF RS. 5 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. 2,53,96,000/-. THE LD. D/R HAS RELIED UPON THE ORD ER OF THE AO UNDER SECTION 271AAA OF THE IT ACT AS WELL AS THE ASSESSMENT ORDE R WHEREIN THE SAID ADDITIONAL UNDISCLOSED INCOME WAS OFFERED BY THE ASSESSEE IN R ESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS CONTENDED THAT THE ADDITI ONAL INCOME SURRENDERED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S IS NOT BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND SEIZURE ACTION AND CONFRONTED WITH THE ASSESSEE WHILE RECORDING THE ST ATEMENT UNDER SECTION 132(4) OF THE ACT. THE LD. A/R OF THE ASSESSEE HAS FORCEFULL Y CONTENDED THAT THE SAID SURRENDER WAS MADE BY THE ASSESSEE WHEN THE INCRIMI NATING MATERIAL WAS CONFRONTED BY THE AO FIRST TIME DURING THE COURSE O F ASSESSMENT PROCEEDINGS. WE FIND THAT THESE CONTENTIONS OF THE ASSESSEE ARE CON TRARY TO THE FACTS AVAILABLE ON RECORD. THE AO HAS REPRODUCED THE RELEVANT PART OF THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT AT PAGE 2 IN ANSWER TO QU ESTION NO. 37 AS UNDER :- IZ'U 37 . VUR ESA ESA VKILS IWNUK PKGWAXK FD VIUH@VIUH IFRU O ES- FIZ;ADK GSYFK DS;J IZK-FY- DH V?KKSFKR VK; DS LACA /K ESA VKT DQN DGUK PKGSAXSA MRJ% ESAUS VIUS C;KUKSA ESA IWOZ ESA TKS CRK;K GS MLDS VUQLKJ ESJH IFRU DK D`FK HKWFE ,OA LSAVY LIKBZU ;KSTUK] TXRIQJK DS IYKAV ESA YXHKX 39]60]750@& :I;S DK FUOSK MUDH V?KKSFKR VK; LS FD ;K X;K GSA ESJS }KJK IYKV UA-40 IZRKI UXJ DKWYKSUH] D`FK HKWFE ,D DJKSM+ CHL YK[K :I;S LUUH VSM LSAVJ ,OA HANGING GARDEN ;KSTUK ESA 1 DJKSM+ 53 YK[K 36 GTKJ 148 :I;S DK FUOSK ESJH V?KKSFKR VK; LS FD;K X;K GSA ESJH DEIUH ESA- FIZ;ADK GSYFK DS;J IZK-FY- }KJK IYK V LA[;K 44] IZRKI UXJ DKWYKSUH DH [KJHN ESA 51 YK[K :I;S DK FUOSK DE IUH DH V?KKSFKR VK; LS FD;K X;K GSA ;G TKS DEIUH DH V?KKSFKR VK; G S ;G DIRECTORS }KJK GH YKBZ XBZ GSA BLDS VYKOK HKH TKS HKH DKXT T CR 6 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. FD, X, GSAA FTUDK ESA LR;KIU VHKH UGHA DJOK IK JGK GWWA RFKK TKS UDNH FEYH GS MLDK HKH LR;KIU ESA IW.KZ :IK LS UGHA DJOK IK JGK GWWAA VR% ESA ;G EKURK GWWA FD MIJKSDR JKFK;KSA DS VYKOK HKH YXHKX 10 YK[K DH JKFK TKS FD ESA LR;KIU DJOKUS ESA VLEFKZ J GWWAXK DKS VIUH PKYW FOR OKZ DH V?KKSFKR VK; EKURS GQ, DJKJKSI.K DS FY, LOSPNK LS ISK DJRK GWWAA BL RJG DQY V?KKSFKR VK; 2 DJKSM+ 5 3 YK[K 96 GTKJ GKSRH GS] TKS ESA LACAF/KR O;FDR DH FOOJ.KH ESA FU/ KKZJ.K OKZ VUQLKJ FU;FER VK; DS VYKOK TKSM+DJ NKKZ NWAXKA THUS IT IS CLEAR THAT IN HIS STATEMENT THE ASSESSEE HAS ADMITTED VARIOUS UNDISCLOSED INCOME BELONGING TO HIM AS WELL AS HIS WIFE AND HIS COMPANY M/S. PRIANKA HEALTH CARE PVT. LTD. HOWEVER, THE ASSESSEE HAS MADE A TO TAL SURRENDER OF RS. 2,53,96,000/- ONLY FOR THE UNDISCLOSED INCOME BELON GED TO THE ASSESSEE AND BASED ON THE INCRIMINATING MATERIAL REGARDING THE INVESTM ENT MADE IN VARIOUS PROPERTIES BY THE ASSESSEE IN HIS OWN NAME. THE SAID DISCLOSURE IS RESTRICTED ONLY TO THE AMOUNT OF UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE AND NO SURRENDER WAS MADE BY THE ASSESSEE FOR THE UNDISCLOSED INCOME OF HIS WIFE AS WELL AS OF M/S. PRIANKA HEALTH CARE PVT. LTD. SINCE THE ASSESSEE HAS OFFERED THE UNDISCLOSED INCOME OF RS. 90,50,356/- IN THE RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION AND RS. 2,28,000/- FOR THE ASSESSMENT YEAR 2012-13, THE AO FOUND THAT THERE IS A SHORT DISCLOSURE OF UNDISCLOSED INCOME BY THE ASSESSEE IN COMPARISON TO THE SURRENDER MADE IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE AO, THE ASSESSEE CA ME OUT WITH THE ADDITIONAL SURRENDER OF RS. 30,75,000/- IN THE REVISED COMPUTA TION OF INCOME WHEREIN THE TOTAL UNDISCLOSED INCOME WAS OFFERED TO TAX AT RS. 1,21,2 5,356/- AS AGAINST THE ORIGINAL DECLARATION/SURRENDER OF RS. 90,50,356/- MADE IN TH E RETURN OF INCOME FILED UNDER SECTION 153A OF THE ACT. THUS IT IS CLEAR THAT THI S ADDITIONAL SURRENDER MADE BY THE 7 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. ASSESSEE IS PART OF THE TOTAL SURRENDER MADE DURING THE SEARCH AND SEIZURE ACTION AND IN THE STATEMENT UNDER SECTION 132(4) OF THE AC T. IN THESE UNAMBIGUOUS FACTS EMERGING FROM THE RECORD, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. A/R OF THE ASSESSEE. THE MERE OBSERVATION OF THE LD. C IT (A) THAT THE SURRENDER WAS NOT MADE IN THE STATEMENT UNDER SECTION 132(4) OF THE A CT WOULD NOT ALTER THE FACTS ALREADY AVAILABLE ON RECORD AND PARTICULARLY OF THE ASSESSMENT RECORD AS WELL AS SEIZED MATERIAL. THUS IN THESE FACTS AND CIRCUMSTAN CES, THE DECISIONS RELIED UPON BY THE LD. A/R OF THE ASSESSEE WILL NOT HELP THE CASE OF THE ASSESSEE. IN THOSE CASES, IF THE INCOME IS SURRENDERED BY THE ASSESSEE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS OVER AND ABOVE THE SURRENDER MADE DURIN G THE SEARCH AND SEIZURE ACTION WOULD NOT ATTRACT THE LEVY OF PENALTY UNDER SECTION 271AAA OF THE ACT BECAUSE OF THE REASON THAT THE SAID SURRENDER MADE DURING T HE ASSESSMENT PROCEEDINGS WOULD NOT FALL IN THE DEFINITION OF UNDISCLOSED IN COME PROVIDED IN THE EXPLANATION TO SECTION 271AAA(1) OF THE ACT. HENCE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE AUTHORITIES BELOW. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/12/201 9. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/12/2019. DAS/ 8 ITA NO. 315/JP/2018 SHRI GYARSI LAL SHARMA, JAIPUR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI GYARSI LAL SHARMA, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE DCIT, CENTRAL CIRCLE-1, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO.315/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR