Anil Kumar Mittal, New Delhi V. ITO, Ward-28(1), New Delhi

ITA 3393/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6776 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1994-1995
• Appeal Filed On: 09-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 3393 / DEL/ 2018 ASSESSMENT YEAR:1994-95 MR. ANIL KUMAR MITTAL 5190, LAHORI GATE, NEW DELHI- 110006] ASSESSMENT YEAR: 1994- 95 ITO, WARD - 28(1 ) NEW DELHI TAN/PAN: AALPM8403A (APP ELL ANT) (RESPONDENT) A PP ELL ANT BY: MS. SWEETY KOTHARI, CA RESPONDENT BY: SH. SURENDER PAL, SR. DR DATE OF HEARING: 25 09 2018 DATE OF PRONOUNCEMENT: 21 12 201 8 O R D E R AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 26.3.2018 PASSED B Y LD. CIT(A)-16, NEW DELHI IN RELATION TO PENALTY PROCEED INGS UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEAR 1994-95. 2. THE ASSESSEE IS MAINLY AGGRIEVED BY THE LEVY OF PENALTY OF RS. 3,02,400/- UNDER SECTION 271(1)(C) O N ACCOUNT OF RS. 6,75,000/- AS UNEXPLAINED JEWELLERY FOUND DU RING THE COURSE OF SEARCH. FACTS IN BRIEF ARE THAT THE SEARC H AND SEIZURE ACTION HAD TAKEN PLACE AT THE RESIDENTIAL L OCKER OF THE ASSESSEE ON 20 TH -21 ST JULY, 1994. DURING THE COURSE OF SEARCH, THE ASSESSEE SURRENDERED THE UNEXPLAINED JEWELLERY IN THE ITA NO. 3393/DEL/2018 2 HANDS OF THE FIRM KHUSHI RAM BIHARI LAL IN THE STAT EMENT RECORDED UNDER SECTION 132(4). ACCORDINGLY, THE FIR M HAD DECLARED THE UNDISCLOSED INCOME AND ITS RETURN OF I NCOME INCLUDING THE SAID JEWELLERY AMOUNTING TO RS. 6,75, 000/-. THE COPY OF THE BALANCE-SHEET AND PROFIT AND LOSS ACCOU NT OF THE FIRM FOR THE YEAR ENDING MARCH, 1994 AND CHALLAN FO R TAX DEPOSITED WERE ALSO PLACED ON RECORD. HOWEVER, THIS AMOUNT OF JEWELLERY AMOUNTING TO RS. 6,75,000/- WAS ASSESS ED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE WHI CH HAS BEEN SUSTAINED AND THE QUANTUM PROCEEDINGS UP TO TH E STAGE OF THE TRIBUNAL. 3. IN THE COURSE OF PENALTY PROCEEDINGS, THE ASSESS EE HAD EXPLAINED THAT THIS AMOUNT OF JEWELLERY ALREADY STA NDS DISCLOSED IN THE HANDS OF THE FIRM AND THEREFORE, N O ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. HOWEVER, THE AO NOTED THAT IN THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE COULD NOT EXPLAINED MONEY AND SOURCE OF EA RNING OF INCOME FROM WHICH THE IMPUGNED JEWELLERY WAS ACQUIR ED AND DECLARED IN THE HANDS OF THE FIRM. ACCORDINGLY, HE HAS LEVIED THE PENALTY OF RS. 3,02,400/- BEING 100% OF THE TAX OUGHT TO BE EVADED MAINLY ON THE GROUND THAT THIS ADDITION S TANDS CONFIRMED FROM THE LIST OF THE TRIBUNAL. 4. IN THE FIRST ROUND OF PROCEEDINGS, THE ISSUE OF LEVY OF PENALTY HAD REACHED TO THE STAGE OF THE TRIBUNAL WH EREBY THE TRIBUNAL HAS SET ASIDE THE ORDER TO THE FILE OF THE CIT(A) TO DECIDE THE SAME AFRESH. HOWEVER, THE CIT (A) TOO HA S ITA NO. 3393/DEL/2018 3 CONFIRMED THE PENALTY ON THE GROUND THAT ASSESSEES EXPLANATION THAT JEWELLERY BELONGS TO THE FIRM HAD NOT BEEN ACCEPTED BY THE TRIBUNAL AND THUS THIS ISSUE HAS BE COME FINAL AND THEREFORE, IT IS UNDISCLOSED INVESTMENT INCOME MADE BY THE ASSESSEE. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT, FIRST OF ALL, THE ASSESSING OFFICER IN HIS OR DER HAD NOT SPECIFIED THE CHARGE UNDER WHICH PENALTY IS TO BE I NITIATED NOR HAS BEEN SPECIFIED IN THE SHOW CAUSE NOTICE ISSUED BY THE AO. IN THE PENALTY PROCEEDINGS, THE AO HAS LEVIED THE P ENALTY ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS AND HENCE WITHOUT GIVING ANY SPECIFIC CHARGE IN THE SHOW CAUS E NOTICE. THE AO CANNOT LEVY THE PENALTY ON DIFFERENT GROUND. IN SUPPORT, SHE ALSO DREW OUR ATTENTION TO THE SHOW CA USE NOTICE ISSUED BY THE AO. IN SUPPORT, SHE RELIED UPON THE J UDGMENTS OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS REPORTED IN ITA NO. 380/2015. THIS JUDGMENT HAS NOW BEEN CONFIRMED BY HONBLE SUPREME COURT IN SLP NO. 11485/2016. APART FROM THAT, SHE HAS ALSO FILED VAR IOUS DECISIONS OF THE TRIBUNAL IN THIS REGARD. ON MERITS , SHE SUBMITTED THAT THE FIRM HAD DULY DISCLOSED THE JEWE LLERY AND ITS BALANCE-SHEET OF RS. 8,85,000/- WHICH INCLUDED THE IMPUGNED JEWELLERY OF RS. 6,75,000/-. THUS, PRIMA F ACIE ASSESSEE HAD DISCHARGED ITS BURDEN THAT THIS JEWELL ERY BELONGS TO THE FIRM AND EVEN IF SUCH A PLEA HAS NOT BEEN AC CEPTED IN THE QUANTUM PROCEEDINGS BUT THERE IS NO OTHER MATER IAL ON RECORD TO SHOW THAT ASSESSEES EXPLANATION IS NOT B ONA FIDE OR ITA NO. 3393/DEL/2018 4 THE JEWELLERY ACTUALLY BELONGS TO THE ASSESSEE. THU S PENALTY PROCEEDINGS OF SUCH AN ADDITION COULD NOT BE MADE. 5. ON THE OTHER HAND, LEARNED DR STRONGLY RELIED UP ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED T HAT THE ASSESSEE COULD NOT SUBSTANTIATE THAT THE JEWELLERIE S HAVE BEEN PURCHASED BY THE FIRM AND THEREFORE, IT HAS RIGHTLY BEEN HELD TO BE BELONGING TO THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL REFERRED TO BEFORE US . ON THE PERUSAL OF THE IMPUGNED ASSESSMENT ORDER, IT IS SEE N THAT DURING THE COURSE OF SEARCH, JEWELLERY WORTH RS. 7, 48,776/- AND RS. 13,40,216/- WAS FOUND FROM THE RESIDENTIAL PREMISES OF THE LOCKER OF THE ASSESSEE. IN THE STATEMENT REC ORDED UNDER SECTION 132(4), THE ASSESSEE SURRENDERED THE UNDISC LOSED INVESTMENT IN THE JEWELLERY IN THE FIRM NAMED M/S K HUSHI RAM BIHARILAL IN WHICH HE WAS A PARTNER. THE AO REQ UIRED THE ASSESSEE TO EXPLAIN THE EARNING OF THE INCOME IN TH E HANDS OF THE FIRM AND ALSO PROVIDE THE DETAILS FOR ACQUISITI ON OF THE JEWELLERY BY THE FIRM. SINCE THE ASSESSEE COULD NOT FURNISH THOSE EXPLANATION IT WAS PRESUMED THE JEWELLERY BEL ONGS TO THE ASSESSEE AND ACCORDINGLY THE ADDITION OF RS. 6, 75,000/- WAS MADE WHICH STANDS CONFIRMED FROM THE STAGE OF T HE TRIBUNAL. ON THE PERUSAL OF THE BALANCE-SHEET AS WE LL AS PROFIT AND LOSS ACCOUNT OF THE FIRM AND THE SURRENDER MADE BY THE FIRM, IT IS SEEN THAT THE FIRM HAD SHOWN THAT ADDIT IONAL INCOME OF RS. 21,35,000/- AND ALSO SHOWN ACQUISITIO N OF ITA NO. 3393/DEL/2018 5 JEWELLERY OF RS. 8,85,000/-. ON SUCH DISCLOSURE, TH E FIRM HAS DULY PAID THE TAXES. EVEN IN THE STATEMENT, THE ASS ESSEE HAD GIVEN THE FOLLOWING STATEMENT. IN RESPONSE TO THE Q UESTION RAISED BY THE DEPARTMENT. UNDISCLOSED JEWELLERY WORTH OF RS. 6,75,000/- FOUND IN THE LOCKER AND PREMISES OF MRS. PREETI MIT TAL AND JEWELLERY WORTH OF RS. 2,10,000/- FOUND IN THE LOCK ER AND PREMISES OF SMT. BINITA GUPTA W/O. SH. ANOOP GUPTA A RE HEREBY OFFERED FOR DISCLOSURE IN THE HANDS OF M/S K HUSHI RAM BIHARI LAL FOR THE ASSESSMENT YEAR 1994-95 AMOUNTING TO RS. 8,85,000/- (EIGHT LAKHS EIGHTY FIVE THOUSAND ONLY). JEWELLERY UNDECLARED WORTH OF RS. 10,00,000/- (T EN LAKHS ONLY) FOUND IN THE LOCKER AND PREMISES OF SMT . TARA DEVI W/O. LATE SHRI BHAGIRATH LAL (MY MOTHER) IN HERE HANDS AS LEGAL HEIR OF LATE SHRI BHAGIRATH LAL IS OFFERED FOR DISCLOSURE FOR THE ASSESSMENT YEAR 1993 -94 AS IT WAS ACQUIRED OUT OF FUNDS GENERATED IN THAT YEAR BY LATE FATHER (SH. BHAGIRATH LAL) IN CLOVES / CASSSLA BUSINESS UNDER TAKEN BY HIM FOR WHICH RS. 15,00,000/ - IS OFFERED FOR TAXATION INCLUDING THEREIN THE ABOVE SA ID JEWELLERY OF RS. 10,00,000/- (TEN LAKHS ONLY). 7. THUS, THE OTHER PORTION OF THE JEWELLERY WAS SAI D TO BE BELONGING OF OTHER PERSONS AND IN SO FAR AS JEWELLE RY WORTH RS. 8,75,000/- IS CONCERNED, SAME HAS BEEN OFFERED AND DISCLOSED IN THE HANDS OF THE FIRM FOR THE ASSESSMENT YEAR 19 94-95 ON WHICH TAXES WERE ALSO BEEN PAID. SIMPLY BECAUSE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF ACQUISITION OF JEWE LLERY BY THE FIRM IT CANNOT BE PRESUMED THAT THE JEWELLERY BELON GS TO THE ASSESSEE BECAUSE THE FIRM ITSELF HAS DISCLOSED THE JEWELLERY AS ITA NO. 3393/DEL/2018 6 UNDISCLOSED INVESTMENT AND THEREFORE IN SUCH A FACT S AND CIRCUMSTANCES IT CANNOT BE HELD THAT PENALTY FOR FU RNISHING OF INACCURATE PARTICULARS CAN BE LEVIED IN THE HANDS O F THE ASSESSEE. THE ASSESSEE HAD NOT FURNISHED ANY INACCU RATE PARTICULARS IN HIS RETURN OF INCOME FOR WHICH PENAL TY HAS BEEN SOUGHT TO BE LEVIED BECAUSE IT IS AN UNDISCLOSED IN VESTMENT OFFERED BY THE FIRM IN ITS HAND IN WHICH ASSESSEE I S ONLY A PARTNER. THUS, PENALTY LEVIED BY THE AO AND IS CONF IRMED BY THE CIT(A) IS DIRECTED TO BE DELETED. 8. SINCE WE HAVE DELETED THE PENALTY ON MERITS, THE OTHER ISSUE RAISED BY THE LEARNED COUNSEL THAT A CHARGE H AS NOT BEEN SPECIFIED IN THE SHOW CAUSE NOTICE HAS BECOME PURELY ACADEMIC AND IS LEFT OPEN. ASSESSEES APPEAL IS ALL OWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2018 . SD/ - [AMIT SHUKLA] JUDICIAL MEMBER DATED: 21 ST DEC, 2018 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR ITA NO. 3393/DEL/2018 7 DATE 1. DRAFT DICTATED ON 21.12.2018 2. DRAFT PLACED BEFORE AUTHOR 21.12.2018 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9.1.2019 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.