The DCIT, Central Circle-2, Baroda V. Shri Umesh C. Patel, Baroda

ITA 447/AHD/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7981 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV DEV
• Assessee Lawyers: S N SOPARKAR
• Keywords: Document seized; Documents seized
• Section: 27; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER 1. (SS) ./ I.T(SS).A.NO.83/AHD/2016 2. . / I.T.A. NO.447/AHD/2016 ( / ASSESSMENT YEARS : 2011-12 & 2012-13) 1-2.DY.CIT CENTRAL CIRCLE-2 BARODA / VS. 1-2.SHRI UMESH C.PATEL 14/A, PURSHOTTAM NAGAR SOCIETY BPC ROAD, BARODA-390 020 ./ ./ PAN/GIR NO. : ACUPP 1733 D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANJEEV DEV, SR.DR / RESPONDENT BY : SHRI S.N. SOPARKAR, AR / DATE OF HEARING 11/09/2018 !'# / DATE OF PRONOUNCEMENT 25/09/2018 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX( APPEALS)-12, AHMEDABAD [LD.CIT(A) IN SHORT] DATED 28/10/2015 ARISING OUT OF ASSESSMENT ORDERS PASSED BY THE DCIT, CENTRAL CIRCLE-2, BARODA DATED 25/03/2014 FOR THE ASSESSMENT YEARS (AYS) 2011-12 & 2012-13. 2. SINCE BOTH THE APPEALS ARE INTER-CONNECTED, THESE ARE BEING DISPOSED OF BY WAY OF A CONSOLIDATED ORDER FOR THE SAKE OF CONVENI ENCE. IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 2 - 3. TO BEGIN WITH WE SHALL ADDRESS THE REVENUES APP EAL IN IT(SS)A NO.83/AHD/2016 FOR AY 2011-12 AS A LEAD CASE. 4. THE REVENUE RAISED THE COMMON GROUND OF APPEA L WHICH READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING THE PENALTY U/S.271AAA BY AMOUNTING TO RS. 24,57,306/- (AY 2011-12) AND RS.39,51,145/- (AY 2012-13), IN SPITE OF THE FACT THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITION (II) LAY D OWN IN PENALTY U/S.271AAA, I RESPECT OF SUBSTANTIATES THE MANNER I N WHICH THE UNDISCLOSED INCOME WAS DERIVED DURING THE COURSE OF ASSESSMENT & PENALTY PROCEEDINGS. 5. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS AN ACTION U/S.132 ON GROUP ON 09/089/2011. THE ASSESSEES CASE WAS ALSO COVER ED THEREIN. THE ASSESSING OFFICER (AO) IN PARA 2.1 OF THE PENALTY ORDER HAS O BSERVED THAT SHRI RAJESHBHAI M. SHAH, THE KEY PERSON OF THE GROUP, IN HIS STATEM ENT U/S.132(4) DATED 09/08/2011 AND DATED 05/10/2011 HAS MADE A DISCLOSU RE OF TOTAL AMOUNT OF RS.25,00,35,460/- FOR THE GROUP AS A WHOLE. THE DE TAILED BIFURCATION OF INCOME WAS ALSO SUBMITTED BY RAJESHBHAI M. SHAH IN WHICH I NCOME OF RS.2,47,72,230/- AND RS.3,99,78,970/- RESPECTIVELY PERTAINING TO THE ASSESSEE WAS SEPARATELY SHOWN VIDE LETTER ADDRESSED TO THE I NVESTIGATING OFFICER REFERRED TO BY TO THE AO. THE DISCLOSED INCOME WAS OFFERED FOR TAXATION UNDER THE HEAD OTHER INCOME BY THE ASSESSEE. THE QUESTIONNAIRE DATED 16/09/2013 WAS SPECIFICALLY ISSUED REQUIRING THE ASSESSEE INTER AL IA TO INDICATE THE MANNER IN WHICH UNDISCLOSED INCOME WS DERIVED, SUBSTANTIATE T HE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED AND WHETHER TAXES TO GETHER WITH INTEREST HAVE IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 3 - BEEN PAID IN RESPECT OF OTHER INCOME SO AS TO FULFI LL THE ELIGIBILITY CONDITIONS FOR EXEMPTION PRESCRIBED U/S.271AAA. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS NOT PROVIDED ANY DETAILS OR EXPLANATIO N IN THIS REGARD DURING THE COURSE OF ASSESSMENT PROCEEDINGS HENCE, IT IS CLEAR THAT THE INCOME IS UNDISCLOSED INCOME OF THE ASSESSEE. THE AO FURTH ER OBSERVED THAT THE ASSESSEE IN HIS STATEMENT RECORDED U/S.132(4) OF TH E ACT DID NOT HIMSELF ADMIT THE UNDISCLOSED INCOME AND SPECIFIED THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED BUT THE UNDISCLOSED INCOME WAS ADMITTE D BY SHRI RAJESH M. SHAH. IT IS FURTHER EVIDENT AS OBSERVED BY THE AO THAT TH E FINAL DISCLOSURE OF RS.25 CRORE WAS MADE IN THE COURSE OF STATEMENT U/S.131(1 ) AND NOT U/S.132(4), AND THAT TOO BY SHRI RAJESH M. SHAH AND NOT BY THE APPE LLANT. THUS, THE FIRST CONDITION AS PER CLAUSE (I) OF SUB SECTION (2) OF T HE SECTION 271AAA IS NOT SATISFIED BY THE ASSESSEE AND THEREFORE THE ASSESSE E CANNOT BE GRANTED IMMUNITY FROM PENALTY. THE SECOND CONDITION OF SUB SECTION (2) OF SECTION 271AAA PROVIDES THAT THE ASSESSEE SHOULD SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. AS ASSESSEE HAD NO T ESTABLISHED BY ANY COGENT EVIDENCES THE MANNER OF EARNING UNDISCLOSED INCOME DERIVED. THE ASSESSEE NEVER FILED ANY FURTHER DETAILS OR EXPLANA TIONS PROVIDING DETAILS OF SOURCE FROM WHERE THE MONEY WAS RECEIVED AND THE MA NNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. THUS, THE ASSESSEE HAS FAILED TO SATISFY THE SECOND THE CONDITION LAID DOWN IN SUB SECTION (2) O F SECTION 271AAA BUT HAS IN FACT MADE NO GENUINE EFFORT TO PROVIDE DETAILS S O AS TO SATISFY THAT CONDITION. THUS, THE CONDITIONS MENTIONED IN THE SECTION 271AA A HAVE NOT BEEN FULFILLED BY THE ASSESSEE AND THUS THOUGH INCOME RETURNED U/S .153A IN CONFORMITY WITH IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 4 - ADMISSION HAS BEEN ACCEPTED BY THE AO WITHOUT ANY FURTHER ENQUIRY OR ADDITIONS, IMMUNITY WITHIN THE MEANING OF SECTION 2 71AAA(2) WAS NOT GRANTED AND PENALTY HAS BEEN LEVIED. 6. IN APPEAL BEFORE THE LD.CIT(A), THE CIT()A) MENT IONED IN HIS ORDER THAT THERE IS NO CONTROVERSY ABOUT THE DISCLOSURE OF THE RELEVANT UNDISCLOSED INCOME IN THE RETURN OF INCOME AND DUE PAYMENTS O F TAXES WITH INTEREST ON SUCH UNDISCLOSED INCOME BY THE ASSESSEE. THE AO HAS HOWEVER HELD THAT CONDITIONS AS PRESCRIBED U/S.271AAA(2)(I) AND 271AA A(2)(II) HAVE NOT BEEN FULFILLED BY THE ASSESSEE AND THEREFORE DENYING THE IMMUNITY, PENALTY HAS BEEN LEVIED BY HIM. THE LD.CIT(A) CITED A JUDGEMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C.SHAH (2008) 172 TAXMAN 58 (GUJ.) WHEREIN IT WAS HELD THAT SUFFICIENT COMPLIANCE TO I MMUNITY CONDITION IN SECTION 271AAA(2)(II) HAS BEEN MADE DURING 132(4) WHEREIN T HE UNDISCLOSED INCOME IS INCOME FROM VARIOUS PROJECTS AND FROM THE TRANSA CTION OF SALE OF LAND ETC. AND RECEIVED FROM VARIOUS BUSINESS PROJECTS, AND TH E ENTITY-WISE BIFURCATION WAS GIVEN IN THE STATEMENT U/S.131 RECORDED IN CONT INUATION OF SEARCH PROCEEDINGS. THE ASSESSEES ARE OF ALLOCATION/MAN NER WAS STATED TO BE BEING FROM LAND TRANSACTIONS, CAPITAL GAINS AND MISCELLAN EOUS. THE LD.CIT(A) GAS AGREED WITH THE ASSESSEE THAT THERE IS NO DEFINITIO N OF STATING THE MANNER AND SUBSTANTIATING THE SAME LAID DOWN IN SECTION 271AA A, AS INDEED IT IS TO BE GATHERED FROM NOT ONLY THE STATEMENT U/S.132(4) BUT ALSO THE SEIZED DOCUMENTS/ASSETS WHICH ARE CONFRONTED TO THE ASSESS EE AND LD.CIT(A) DELETED THE PENALTY LEVIED BY THE AO. IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 5 - 7. NOW, THE REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD THE PARTIES AND GONE THROUGH THE R ELEVANT MATERIAL ON RECORD. IN THIS CASE, THE ASSESSEE IS A PARTNER IN VARIOUS FIRMS WHICH ARE ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND CON STRUCTION. A SEARCH U/S.132 OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASSESSEE AS A MEMBER OF VASANWALA GROUP ON 09/08/2011. THE ASSESSEE IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT HAD MADE DISCLOSURE OF CERTAI N INCOME FOR AY 2011-12 & AY 2012-13. FOR THE ASSESSMENT YEAR UNDER REFERENC E, THE UNDISCLOSED INCOME DECLARED FROM LAND TRANSACTIONS AS INCOME FROM OTH ER SOURCES IS RS.2,45,73,060/- WHICH DERIVED FROM LAND TRADING ET C. THE ASSESSEE HAD FILED HIS RETURN OF INCOME U/S.139 OF THE ACT DATED 29/9/ 2011 ON TOTAL INCOME OF RS.2,47,72,230/- WHICH INCLUDES RS.2,45,73,060/- D ECLARED. THE ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S.153A OF THE ACT ACCE PTING RETURNED INCOME. THE TOTAL INCOME ASSESSED WAS SAME AS INCOME RETURN ED AND NO ADDITION HAD BEEN MADE. THEREAFTER, A SHOW-CAUSE NOTICE U/S.271 AAA OF THE ACT DATED 25/03/2014 RECEIVED ASKING THE ASSESSEE TO SHOW CAU SE WHY PENALTY US/271AAA OF THE ACT SHOULD NOT BE LEVIED. IN REPL Y THEREOF, THE ASSESSEE STATED THAT UNDISCLOSED INCOME HAS BEEN DISCLOSED I N STATEMENT U/S.132(4) OF THE ACT WHICH IS RECORDED BEFORE CONCLUSION OF SEAR CH AND AS THE ASSESSEE HAS SPECIFIED AND SUBSTANTIATED THE MANNER IN WHICH SUC H INCOME HAS BEEN EARNED AND HAS PAID TAX TOGETHER WITH INTEREST. HENCE, TH E CASE IS COVERED BY EXCEPTION PROVIDED IN SUB SECTION (2) OF SECTION 27 1AAA OF THE ACT AND AS SUCH, NO PENALTY CAN BE LEVIED. THE ASSESSEE ALSO CITED DECISION OF COORDINATE IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 6 - BENCH IN THE CASE OF ITO VS. SHRI MANIBHAI A.SHAH IN ITA NO.460/AHD/2016 FOR AY 2012-13 IN WHICH APPEAL OF THE REVENUE WAS D ISMISSED FOR DELETING THE PENALTY BY THE LD.CIT(A) U/S.271AAA OF THE ACT. TH E RELEVANT PORTION OF THE ITAT ORDER IS REPRODUCED HEREUNDER:- 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD. AREA OF DISPUTE BETWEEN BOTH THE PARTIES I S WHETHER THE ASSESSEE IS ENTITLED TO BENEFIT OF SUB-SECTION (2) OF SECTION 2 71AAA OF THE INCOME TAX OR NOT. SECTION 271AAA CONTEMPLATES LEVY OF PENALTY U PON AN ASSESSEE. HOWEVER, SUB-SECTION 2 PROVIDES THAT SUB-SECTION 1 OF SECTION 271AAA WOULD NOT BE APPLICABLE UPON AN ASSESSEE IF HE FULFILLS T HE FOLLOWING CONDITIONS VIZ. (A) THAT THE ASSESSEE IN THE COURSE OF SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AN D SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, AND (B) SUBSTAN TIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED, AND (C) PAYS TH E TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF UNDISCLOSED INCOME. 7. AS FAR AS THE FULFILLMENT OF CLAUSE (C) IS CONCE RNED, THERE IS NOT DISPUTE BETWEEN THE PARTIES. SIMILARLY, ASSESSEE HAS DISCL OSED THE INCOME DURING THE COURSE OF SEARCH. THE DISPUTE BETWEEN THE PARTIES IS WHETHER THE ASSESSEE HAS SPECIFIED MANNER IN WHICH SUCH INCOME HAS BEEN DERI VED AND SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. TH E AO HAS SIMPLY OBSERVED THAT THE ASSESSEE HAS NOT ADMITTED THE INC OME HIMSELF AND HAS NOT DISCLOSED THE MANNER. THE INCOME WAS DISCLOSED BY THE SON OF THE ASSESSEE. IT IS PERTINENT TO SAY THAT THE STATEMENT OF SHRI RAJE SH M. SHAH WAS RECORDED ON BEHALF OF GROUP ITSELF. HE HAS SPECIFIED THE INCOM E OF RS.25 CRORES NOT ONLY ASSESSABLE IN HIS HAND, BUT POINTED OUT THAT IT WIL L BE ALLOCATED BETWEEN DIFFERENT ENTITIES AND THE PERSONS. HE HAS ALSO DI SCLOSED THE MANNER IN WHICH THE INCOME WAS DERIVED. ALL THESE ASPECTS HAVE BEE N SPECIFICALLY CONSIDERED BY THE LD.FIRST APPELLATE AUTHORITY IN THE FINDING EXT RACTED SUPRA. AFTER PERUSAL OF THE FINDING OF THE LD.CIT(A), I DO NOT SEE ANY REAS ONS TO INTERFERE IN IT. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DEVOID OF ANY MERIT, AND DISMISSED. IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 7 - 9. AFTER GOING THROUGH THE ORDER OF THE ITAT, WE A RE OF THE OPINION THAT THE CIT(A) HAS RIGHTLY DELETED THE PENALTY U/S.271A AA(2)(II) AND HAS PASSED A DETAILED AND REASONED ORDER AND SIMILAR APPEAL OF T HE REVENUE HAS BEEN DISMISSED BY THE COORDINATE BENCH IN THE CASE OF PA RTNER OF THE ASSESSEE. HENCE, WE ARE NOT INCLINED TO INTERFERE WITH THE OR DER PASSED BY THE LD.CIT(A). AS A RESULT, APPEAL OF THE REVENUE IN IT(SS)A NO.83 /AHD/2016 FOR AY 2011-12 IS DISMISSED. ITA NO.447/AHD/2016 FOR AY 2012-13 REVENUES APPE AL 10. WE FIND THAT THE CAPTIONED APPEAL OF THE REVEN UE IS IDENTICAL TO THE FACTS OF THE IT(SS)A NO.83/AHD/2016 FOR AY 2011-12(SUPRA) . IN VIEW OF THE PARI MATERIA FACTS CONCERNING THE IDENTICAL ISSUE, OUR DECISION IN IT(SS)A NO.83/AHD/2016 SHALL APPLY MUTATIS MUTANDIS TO THE CAPTIONED APPEAL. THUS, THE APPEAL OF THE REVENUE IN ITA NO.447/AHD/2016 FO R AY 2012-13 IS DISMISSED. 11. IN THE COMBINED RESULT, BOTH THE APPEALS OF T HE REVENUE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 25/09/2018 SD/- SD/- ( PRADIP KUMAR KEDIA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/ 09 /2018 &.., .(../ T.C. NAIR, SR. PS IT(SS)A NO.83/A HD/2016 &ITA NO.447/AHD/2016 DCIT VS. SHRI UMESH C.PATEL ASST.YEARS 2011-12 & 2012-13 - 8 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-12, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 11.9.18 (DICTATION-PAD 17- PAGES ATTACHED AT THE END OF T HIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.9.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.25.9.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.9.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER