Sh. Prem Pal Gandhi, Nawanshahr V. The Assistant Commissioner of Income Tax, CENTRAL CIRCLE- II, Jalandhar

ITA 456/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5706 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-02-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SHA RMA LD
• Assessee Lawyers: BHAGAT
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBU NAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.456(ASR)/2017 ASSESSMENT YEAR:2008-09 SHRI PREM PAL GANDHI K.C.TOWER, CHANDIGARH ROAD, NAWANSHAHAR PAN:AAQPG6508D VS. ASST. CIT, CENTRAL CIRCLE-II JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. M.R.BHAGAT & CA, RAJINDER KUM AR CHOPRA RESPONDENT BY: SH. P.K.SHA RMA (LD. DR) DATE OF HEARING: 28.02.2018 DATE OF PRONOUNCEMENT: 27.03.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORD ER DATED 21.04.2017 PASSED BY THE LD. CIT(A)-5, LUDHIANA, U/S 2 50(6) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSEE IS AS UNDER. ITA NO.456/ASR/2017 (A.Y.2008-09) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 2 THAT THE LEARNED CIT(A) ERRED IN CONFIRMING PENALT Y OF RS.77,911/- WITHOUT APPRECIATING THE FACTS THAT THE ADDITION OF RS.2,29,000/- HAS BEEN MADE BY INVOKING THE PROVISI ONS OF SECTION 292C OF THE INCOME TAX ACT,1961, WHICH WERE NOT APPLICABLE IN THIS CASE BEING A SURVEY U/S 133A. IT IS PRAYED THAT PENALTY MAY PLEASE BE DELETED. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/S.132 O F THE I.T. ACT WAS CONDUCED AT THE OFFICIAL PREMISES OF THE ASSESSE E AT K.C. TOWER, CHANDIGARH ROAD, NAWANSHAHAR ON 18.02.20 10. DURING THE SEARCH OPERATION, SOME RECEIPTS FROM THE MANA GER OF THE ASSESSEE WAS SEIZED, WHICH WAS NOTICED BY THE ASSESSING OFFICER. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS DECLARED INCOME OF RS.6,000/- PER FUNCTION FROM MARRIAG E HALL/ BANQUET WHEREAS AS PER THE SEIZED RECEIPTS AVERAGE RATE WAS RS.13,500/-, THEREFORE, THE ASSESSING OFFICER WHILE PERUS ING THE BOOKING REGISTER, WHEREIN AMOUNTS IN RESPECT OF BOOKIN GS HAVE BEEN MENTIONED AND RECEIPTS DATED 14.10.2007, 19.10. 2007, 14.02.2008 & 23.02.2008 DEPICTING THE AMOUNT OF RS.6, 000/- HAVE BEEN CONSIDERED AND ON THE AFORESAID BASIS CONCLUDED THE PROBABLE RECEIPTS LEADING TO ADDITION OF RS.2,29,218/- . THE AFORESAID ADDITION WAS UPHELD BY THE LD. CIT(A). THE ASSESSING OFFICER IN PENALTY ORDER WHILE OBSERVING T HAT THE ASSESSEE HAD DECLARED INCOME ONLY OF RS.6,000/- PER FUNCTION FROM THE MARRIAGE HALL /BANQUET WHEREAS AS PE R THE SEIZED ANNEXURE RECEIPTS AVERAGED AT RS.13,500/- AND EXTRAPOLATION INCOME OF RS.2,29,218/- WAS ADDED BACK, W HICH ITA NO.456/ASR/2017 (A.Y.2008-09) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 3 CLEARLY POINTS OUT THE SUPPRESSION OF RECEIPTS, WHEN COMPAR ED WITH REGULAR BOOKS OF ACCOUNTS, THEREFORE, IT WAS LOGICAL FOR THE ASSESSING OFFICER TO COME TO THE CONCLUSION THAT THE RECEIPTS FROM FUNCTION DONE AT K.C. PALACE HAVE BEEN SUPPRESSED W HICH CLEARLY FALLS WITHIN THE PURVIEW OF UNDISCLOSED INCOME. ON THE AFORESAID BASIS THE ASSESSING OFFICER FOUND THE ASSESSEE IS GUIL TY FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND THE REBY, IMPOSED THE PENALTY OF RS.77,911/- ON THE ADDITION OF RS.2,29,218/-. THE PENALTY ORDER WAS UPHELD BY THE LD . CIT(A), THEREFORE, FEELING AGGRIEVED AGAINST THE SAME, THE ASSE SSEE IS BEFORE US. 4. WE HAVE HEARD THE RIVAL PARTIES AT LENGTH AND PERUSED THE RELEVANT RECORD AND FROM THE ASSESSMENT ORDER, IT REFLECT S THAT ON THE BASIS OF SEIZED ANNEXURE, THE AMOUNT OF VARIOU S DATES I.E., 14 TH OCTOBER, 2007, 29 TH OCTOBER, 2007, 14 TH FEBRUARY, 2008 AND 23 RD FEB., 2008 HAVE BEEN SHOWN AS RS.14,000/-, RS.14,900/-, RS.12,500/- & RS.13,000/- RESPECTIVELY, THE REFORE, THE ASSESSING OFFICER TAKEN THE AVERAGE AMOUNT OF RS.13 ,500/- AND MULTIPLIED BY 94 FUNCTIONS WHICH ALLEGED TO BE TAK EN PLACE AT K.C. PALACE, NAWASHAHAR AND WHILE DETERMINING THE LI ABILITY OF RS.2,29,218/- FOR THE ASST. YEAR UNDER CONSIDERATION. FR OM THE ASSESSMENT ORDER AS WELL AS FROM ORDER IN APPEAL AGAINST T HE QUANTUM ORDER PASSED BY THE LD. CIT(A), IT CLEARLY RE FLECTS THAT FOUR ENTRIES IN THE REGISTER WERE FOUND TO BE DISSIMIL AR TO THE RECEIPTS OF BOOKING AMOUNT ENTERED IN LEDGER, BUT NO THING ON ITA NO.456/ASR/2017 (A.Y.2008-09) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 4 RECORD TO SHOW DISSIMILARITIES QUA REMAINING ENTRIES, HOW EVER, THE ASSESSING OFFICER MADE THE ADDITION ONLY ON THE BASI S OF PROBABLE RECEIPTS. DURING THE COURSE OF ARGUMENT, IT WA S SUBMITTED BY LD. AR THAT THE K.C. PALACE (MARRIAGE HA LL) WAS GIVEN TO THE MANAGER FOR A FIXED HIRE RATE OF RS.6,0 00/- PER FUNCTION AND THE MANAGER HIMSELF AFTER MAKING ARRANGE MENT FOR DECORATION, WATER ETC. CHARGED DIFFERENT AMOUNTS FROM D IFFERENT PARTIES WHICH MAY VARY BETWEEN 11,000/- TO 14,000/- P ER FUNCTION AND DURING THE SURVEY, ONLY FOUR ENTRIES COULD BE FOUND, HOWEVER, THE AUTHORITIES BELOW ESTIMATED THE WHOLE IN COME BY APPLYING THE SAME PRINCIPLE TO THE OTHER FUNCTIONS HELD IN THE PALACE, DURING THAT YEAR, WHICH IS APPARENT FROM THE R ECORD WHICH REFLECTS TO BE ON THE BASIS OF PROBABILITIES. ON THE OTHER HAND, IT WAS ARGUED BY THE LD. DR THAT THE ENTRIES HAVE DULY BEEN PROVED BY THE REVENUE DEPARTM ENT, THEREFORE, NO INTERFERENCE IS REQUIRED IN THE ORDER U NDER CHALLENGE. WE REALIZED THAT ALTHOUGH THERE IS A JUDGMENT OF TH E APEX COURT TO THE EFFECT THAT THE ADDITION CAN BE MADE ON THE BASIS OF PROBABILITY, HOWEVER, CONSIDERING THE FACT THAT IN THE INSTANT CASE ONLY FOUR ENTRIES OUT OF 94 HAVE BEEN SHOWN AS DIFFER ENT THAN THE BOOKING AMOUNT ENTERED IN THE REGISTER AND THE ASSESSI NG OFFICER WHILE EXTRAPOLATING DETERMINED THE AMOUNT AND ADDED TO THE INCOME OF THE ASSESSEE ON THE BASIS OF PROBABLE RECEIPTS, WH ICH ITA NO.456/ASR/2017 (A.Y.2008-09) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 5 ACCORDING TO OUR CONSIDERED OPINION DOES NOT ENTAIL THE PENALTY, HENCE, WE ARE INCLINED TO DELETE THE SAME. ORDERED ACCOR DINGLY. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 .03.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED:27.03.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SHRI PREM PAL GANDHI, NAWANSHAHAR (2) THE ACIT, CENTRAL CIRCLE-II, JALANDHAR (3) THE CIT(A)-5, LUDHIANA (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER