Vishal V.Agarwal, Ahmedabad V. Income Tax Officer, Ward-7(2), Ahmedabad

ITA 3483/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8559 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 29-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 143(3); 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.3483/AHD/2014 / ASSTT. YEAR: 2004-05 VISHAL V. AGARWAL 8, KAIRVI BUNGALOW NR. SARTHI HOTEL BODAKDEV AHMEDABAD. AEQPA 7393 L VS ITO, WARD - 7(2) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI P.M.MEHTA, AR WITH SHRI GULAB THAKOR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR / DATE OF HEARING : 12/09/2017 / DATE OF PRONOUNCEMENT: 15/09/2017 $%/ O R D E R PER BENCH: THIS IS ASSESSEES APPEAL AGAINST ORDER OF LD.CIT(A )-XIV, AHMEDABAD DATED 15.10.2014 PASSED FOR THE ASSTT.YEAR 2004-05. 2. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED IMPO SITION OF PENALTY OF RS.3,85,840/- UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT BY THE AO AND CONFIRMED BY THE LD.CIT(A). 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ORIGINAL RETURN OF INCOME ON 01/11/20-4. THEREAFTER A SEARCH UNDER SE CTION 132 OF THE ACT WAS IT(SS)A NO.3483/AHD/2014 2 CARRIED OUT ON 15.10.2008. AO ISSUED A NOTICE UNDE R SECTION 153A OF THE ACT ON 21.7.2009. IN RESPONSE TO THAT THE ASSESSEE FIL ED RETURN OF INCOME ON 30.11.2009 DECLARING TOTAL INCOME AT RS.1,32,160/-. ASSESSMENT UNDER SECTION 143(3) R.W.S. 153A(1)(B) OF THE ACT WAS FIN ALIZED ON 29.12.2010 WHEREBY THE AO DETERMINED ASSESSED INCOME AT RS.12, 57,160/-. WHILE ASSESSING THE RETURNED INCOME OF THE ASSESSEE, THE AO ADDED BACK A SUM OF RS.11,25,000/- BEING UNEXPLAINED/UNPROVED GIFTS ALL EGED TO HAVE BEEN RECEIVED BY THE ASSESSEE. THIS ADDITION WAS CHALLE NGED BEFORE THE LD.CIT(A), BUT IN VAIN.. THEREAFTER, THE AO INITIATED PENALTY PROCEEDINGS AND IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE ASS ESSEE IS NOW BEFORE US CHALLENGING THE IMPUGNED PENALTY LEVIED BY THE REVE NUE AUTHORITIES. 4. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE B ROUGHT TO OUR ATTENTION THAT ADDITION ON WHICH PENALTY UNDER SECTION 271(1) (C) OF THE ACT IMPOSED BY THE REVENUE AUTHORITIES WERE CHALLENGED IN SECOND A PPEAL BEFORE THE TRIBUNAL IN THE CASE OF FAMILY GROUP OF ASSESSEES IN IT(SS)A NO.153 TO 156/AHD/2012 AND OTHERS AND THE ASSESSEES APPEAL HEREIN IS IA N O.161/AHD/2012. THE TRIBUNAL VIDE ORDER DATED 29.4.2016 QUASHED THE ORD ER OF THE AO UNDER SECTION 143(3) R.W.S. 153A RESULTING NULLIFICATION OF IMPUGNED ADDITIONS. IN THIS VIEW OF THE MATTER, PENALTY UNDER SECTION 271( 1)(C) QUA ADDITIONS IS NON- EST . IT IS THEREFORE PRAYED THAT APPEAL OF THE ASSESS EE BE ALLOWED BY DELETING THE IMPUGNED PENALTY. THE LD.COUNSEL FOR THE ASSE SSEE FILED A COPY OF ORDER OF THE TRIBUNAL ON RECORD. ON THE OTHER HAND, THE LD.DR WAS UNABLE TO CONTROVERT THIS FACTUAL POSITION. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE IT(SS)A NO.3483/AHD/2014 3 WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES , IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT E XCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONC EALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. IN THE PRESENT CASE, ITAT IN THE GROUP CASES OF FAMILY MEMBERS OF THE ASSESSEE, IN IT(SS)A.NO.153, 154, 155 & 156/AHD/2012 AND OTHERS INCLUDING ASSESSEES APPEAL I.E. IT(SS)A.NO.161/AHD/2012, ITAT HAS QUASHED THE ORDER OF THE AO, CONSEQUENTLY, IMPUGNED ADDITION ON WHICH PENALTY HA S BEEN IMPOSED WAS EXTINGUISHED. RELEVANT OBSERVATION OF THE ITAT MADE IN PARA 19, 20 AND 21 OF TRIBUNALS ORDER READS AS UNDER: 19. WE ALSO FIND THAT THE CO-ORDINATE BENCH OF MUMB AI TRIBUNAL IN THE CASE OF GURINDER SINGH BAVA VS DCIT (2012) 28 TAXMA NN.COM 328 (MUM) HAS AFTER RELYING ON THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD. HAS HELD THAT WHEN TH E ASSESSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH AND THEREFORE THERE WAS NO ASSESSMENT PENDING IN AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEMENT. 20. IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN CO MPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEA RCH. THEREFORE, THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEMENT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. THE GIFT DEEDS AND THE COPIES OF RETURN OF INCOME OF THE DONORS THAT WERE FOUND A T THE TIME OF SEARCH COULD NOT BE CONSIDERED TO BE INCRIMINATING MATERIA L FOR THE PURPOSE OF ADDITION IN VIEW OF THE FACT THAT THESE VERY DOCUME NTS WERE THE BASIS OF THE GIFTS THAT WERE CONSIDERED BY THE ASSESSEE WHILE CR EDITING THE CAPITAL ACCOUNT. 21. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE V IEW THAT THESE ASSESSMENTS FRAMED U/S.153A NEED TO BE QUASHED. OR DERED ACCORDINGLY. SINCE THE LEGAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, WE ARE OF IT(SS)A NO.3483/AHD/2014 4 THE VIEW THAT THE OTHER GROUNDS RAISED ON THE MERIT S OF ADDITION HAVE BEEN RENDERED ACADEMIC AND REQUIRES NO ADJUDICATION. IN VIEW OF TRIBUNALS (SUPRA) QUASHING THE ORDER OF THE AO UNDER SECTION 143(3) R.W.S.153A, BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN ELIMINATED. THEREFORE, WE DELETE IMPUGNED PENALTY, AND ALLOW APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 15 TH SEPTEMBER, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15/09/2017