RAJESH CHANDRAKANT RITHE, PUNE V. ITO WD 4, NEW PANVEL

ITA 3430/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1033 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KUMAR SR
• Assessee Lawyers: MADHAVAM KHISTI
• Keywords: Business income; Deemed to accrue or arise in india
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI DT GARASIA, JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 3430/MUM/2015 ASSESSMENT YEAR: 2010 - 11 MR. RAJESH CHANDRAKAN T RITHE 10, SUKHWANI ELITE, LULLA NAGAR, KONDHWA, KUBERA PARK, PUNE - 411040. VS. ITO WARD - 4 TRIFED TOWER. 2 ND FLOOR, OPPOSIT KHANDA COLONY, NEW PANVEL - 410206 PAN: ACWPR3607G (APPELLANT) : (RESPONDENT) APPELLANT BY : SHRI MADHAVAM KHISTI RESPONDENT BY : SHRI PURUSHOTTAM KUMAR (SR. AR) DATE OF HEARING : 09/03/2017 DATE OF PRONOUNCEMENT : 24 /04 /2017 O R D E R PER D. T. GARASIA, JM: THIS APPEAL IS FILED BY THE ASSESS EE AGAINST THE ORDER OF CIT(A) - 2 THANE , DATED 16/02/2015 ARISING OUT OF ORDER OF ITO - 4 PANVEL DATED 05/12/2012 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. THE ONLY GROUND READS AS UNDER: - 1. THE EFFECTIVE GROUND CIT(A) IS NOT JUSTIFIED IN LEVYING THE PENALTY UNDER SECTION 271( 1)(C) OF THE INCOME TAX ACT 1961. 3. THE SHORT FACTS OF THE CARE ARE AS UNDER: - DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSIT IN THE BANK ACCOUNT. DURING THE ASSESSMENT PROCEEDINGS IT IS MR. RAJESH CHANDRAKANT 2 ITA NO. 3430/M/2015 REVEALED ADMITTED BY THE ASSESSEE THAT HE HAS MAINTAINED THE S ALARY ACCOUNT WITH STATE BANK OF INDIA MANGAON BRANCH. IN ADDITION TO SALARY ACCOUNT, HE HAS ALSO MAINTAINED BANK ACCOUNTS JOINTLY WITH HIS WIFE SMT. LAXMI AND A JOINT S B ACCOUNT WITH HIS MINOR DAUGHTER. THE SUMMARY OF THE BANK ACCOUNT AND THE TOTAL DEPOS IT WHICH READS AS UNDER: - SUMMARY COSMOS CO - OP. BANK, KONDHWA - PUNE BRANCH 073050101816 2717000 RUPEE CO - OP. BANK, KONDHWA PUNE BRANCH 0028 - 0 - 000 - 000340 1554000 COSMOS CO - OP. BANK, PUNE CAMP BRANCH, PUNE 016050201311 1744000 TOTOAL 6015000 IN THE ABOVE BANK ACCOUNTS, THERE WAS CASH DEPOSITS OF RS.60,15,000/ - . THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE TO EXPLAIN THE SOURCE ON THIS DEPOSIT IN THE BANK ACCOUNT. THE ASSESSEE CLAIMS THAT HER WIFE IS CARRYING BUSINESS OF MILK AT KALYAN AND OUT OF T HIS BUSINESS HER WIFE HAS DEPOSITED THE AMOUNT. THE ASSESSING OFFICER FOUND THAT NO BOOKS OF ACCOUNTS WERE MAINTAINED NO SHOP LICENSE, FOOD LICENCE AND DRUG LICENSE WERE PRODUCED TO PROVE THAT WIFE HAS CARRIED OUT TRADING IN MILK BUSINESS. DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS ADMITTED THAT HE DO NOT HAVE ANY EVIDENCE TO PROVE THE SOURCE OF BUSINESS INCOME OF HER WIFE. THEREFORE, THE ASSESSEE HAD ADMITTED UNDISCLOSED INCOME OF RS.60,15,000/ - . THEREFORE, THE ASSESSING OFFICER HAS TREAT ED RS.60,15,000/ - UNEXPLAINED INCOME OF THE ASSESSEE AND IT WAS TREATED AS DEEMED INCOME AS PER THE PROVISIONS OF SECTION 69A OF THE INCOME TAX ACT. THE ASSESSING OFFICER HAS ALSO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT FOR CO NCEALMENT/ FOR INACCURATE PARTICULARS OF INCOME WERE INITIATED. IN RESPONSE TO SHOW CAUSE NOTICE THE ASSESSEE GIVEN PROVE THE SOURCE AND ASSESSEE HAS ADMITTED TO BUY THE MAINTAINABLE PEACE . HE HAS ADMITTED , THE INCOME, THEREFORE, PENALTY SHOULD NOT BE IMPO SED . HOWEVER, THE A.O. HAS IMPOSED THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT FOR CONCEALMENT OF INCOME/ INACCURATE PARTICULARS OF INCOME. MATTER CARRIED TO CIT(A) AND CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSE. MR. RAJESH CHANDRAKANT 3 ITA NO. 3430/M/2015 4. DURING THE COURSE OF HEARING THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT SPECIFIED THE CHARGE ON WHICH HE INTENDS TO IMPOSE THE PENALTY. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS INITIATED THE PENALTY FOR CONCEALMENT OF INCOME/ FURNISHI NG INACCURATE PARTICULARS OF INCOME. WHILE PASSING THE PENALTY ORDER THE ASSESSING OFFICER HAS INITIATED THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT 1961 AND HE HAS LEVIED THE PENALTY OF RS.18,93,408/ - FOR AY 2010 - 11. 5. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT SATISFIED HIMSELF WHETHER HE HAS IMPOSING THE PENALTY FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR RELIED UPON THE DECISION OF KARNATAKA HIGH COURT REPORTED IN 359 ITR 565, GUJARAT HIGH COUR T MANU ENGINEERING 122 ITR 306 AND DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING 171 TAXMAN 156. 6. THE LD. DR SUBMITTED THAT AS PER THE HONBLE SUPREME COURT JUDGEMENT IN THE CASE OF MAK DATA VS. CIT 38 TAXMAN WHEREIN IT IS HELD THAT THE PLEA OF VOLUNT ARY DISCLOSURE TO BY PIECE, AVOID LITIGATION TO EXPLAIN ITS CONDUCT IS NOT MAINTAINABLE AND STATE DO NOT RECOGNIZE DEFENCE. THE ASSESSEE IS A GOVERNMENT EMPLOYEE AND ASSESSEE HAS ADMITTED UNEXPLAINED INCOME AND PAID THE TAXES. THERE IS RIGHTLY IMPOSED THE PENALTY. 7. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. THE ASSESSING OFFICER IS EMPOWERED UNDER THE ACT TO INITIATE THE PENALTY ONCE HE SATISFIED IN THE COURSE OF PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT . CONCEALMENT, AND FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE COMING TO THE CONCLUSION TO TAKE IT IS A CASE OF CONCEALMENT OF INCOME OR IT IS A CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME. THE SUPREME COURT IN ASHOK PAIS CASE HELD THAT CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME DIFFERENT CONNOTATION. THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING AND DELH I HIGH COURT IN THE CASE OF VIRGO MARKETING HELD THAT LEVY OF PENALTY HAVE TO BE CLEAR AS LIMB OF WHICH IT IS LEVIED AND POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, IN THE INSTANT CASE THE ASSESSING OFFICER I S NOT SATISFIED THAT THE PENAL TY IS IMPOSED FOR CONCEALMENT OF INCOME OR FURNISHING OF MR. RAJESH CHANDRAKANT 4 ITA NO. 3430/M/2015 INACCURATE PARTICULARS OF INCOME. THE AO HAS LEVIED THE PENALTY WITHOUT SPECIFYING THE CHARGE . T HEREFORE, FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEERING (SUP RA) , WE DELETE THE PENALTY. JUDGMENT PRONOUNCED IN THE OPEN COURT ON 24 TH APRIL 2017. SD/ - SD/ - (RAJESH KUMAR) ACCOUNTANT MEMBER (D.T. GARASIA) JUDICIAL MEMBER MUMBAI, DATED: 24 TH APRIL 2017 *RAHUL SHARMA* COPY TO: 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, D BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI