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

ITA 457/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5705 (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: 2010-2011
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SHA RMA LD
• Assessee Lawyers: BHAGAT
• Keywords: Search and seizure
• 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.457(ASR)/2017 ASSESSMENT YEAR:2010-11 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.457/ASR/2017 (A.Y.2010-11) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 2 THAT THE LEARNED CIT(A) ERRED IN CONFIRMING PENALT Y OF RS.32,600/- ON ESTIMATED ADDITION OF RS.3,26,000/- IGNORING THE FACT THAT UNDISCLOSED INCOME IS DEFINED IN CLAU SE (A) (I) OF EXPLANATION TO SECTION 271AAA OF THE ACT; WHICH MEA NS MONEY, BULLION, JEWELLERY...........OR ENTRY IN BOOKS OF A CCOUNT OR OTHER DOCUMENTS.........FOUND IN THE COURSE OF SEARCH. IT IS PRAYED THAT PENALTY MAY BE DELETED. 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THE INSTANT CASE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.22,76,000 ON ACCOU NT OF DIFFERENCES OF COMMISSION ALLEGED TO BE RECEIVED AND SHOWN AS ACTUALLY RECEIVED, WHICH WAS CHALLENGED BEFORE THE LD. CIT(A), WHO WHILE PARTLY DELETING THE SAID ADDITION OPINED T HAT THE FIGURE OF RS.30 CRORES HAS NOT BEEN WORKED OUT IN SYSTEMATIC MA NNER BY THE ASSESSING OFFICER AS HE HAS NOT BEEN ABLE TO SHOW, A S TO HOW THIS FIGURE HAS BEEN ARRIVED AT, IN THE ASSESSMENT OR DER. THE PHOTOCOPIES OF SEIZED RECORD SUBMITTED BY THE APPELL ANT HAD BEEN PERUSED AND IT IS SEEN THAT THERE ARE HUGE NOS. OF NOTING ON THE IMPUGNED SEIZED DOCUMENT AND IT IS PRACTICALLY IMPOSSI BLE TO MAKE A SENSIBLE TOTAL OUT OF THE SAME AND, THEREFORE, FIGURE OF RS.30 CRORES DOES NOT HAVE VERY CLEAR ARITHMETICAL BAS IS AND THE ADOPTION OF 1.5% AS RATE OF COMMISSION IS ON THE BASIS OF PRESUMPTION AND FINALLY IT WAS CONCLUDED BY THE LD. CIT (A) THAT IN ALL, THE WORKING OUT OF THE GROSS COMMISSION ON FIGUR E OF RS.30 CRORES IS ARBITRARY AND THE ADOPTION OF RATE OF 1.5% IS ALSO NOT BASED UPON RECORDINGS DONE ON THE SEIZED DOCUMENT A ND IN THAT CIRCUMSTANCES, TOTAL NET INCOME FROM COMMISSION AS RS.30,00,000/- SEEMS BEST COURSE OF ACTION. ON THE BASIS OF PARTLY CONFIRMATION OF ADDITION ON ACCOUNT OF COMMISSION ITA NO.457/ASR/2017 (A.Y.2010-11) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 3 RECEIVED, THE ASSESSING OFFICER IMPOSED THE PENALTY TO TH E TUNE OF RS.32,600/- WHICH WAS CHALLENGED BEFORE THE LD. CI T(A), WHO ALSO CONFIRMED THE SAME. 4. WE HAVE HEARD THE PARTIES AND GONE THROUGH WITH THE FACTS AND RELEVANT MATERIAL PLACED ON RECORD AS IT REFLECTS FR OM THE ORDERS PASSED BY THE A.O THAT IN THE INSTANT CASE THE AD DITION WAS MADE ON THE BASIS OF MERE ESTIMATION OF RS.22,76,000 /- ON ACCOUNT OF DIFFERENCES IN COMMISSION ESTIMATED BY THE AO. THE SAID AMOUNT WAS RESTRICTED TO RS.3,26,000/- ONLY BY THE LD. CIT(A) AND ON THE BASIS OF THE SAME THE AO LEVIED THE PENALTY U/S 271AAA OF THE ACT, WHEREIN THE EXPLANATION DESCRIBE S PENALTY TO BE IMPOSED FOR UNDISCLOSED INCOME. THE SAID PE NALTY WAS CONFIRMED BY THE LD. CIT(A). ALTHOUGH, IT WAS ARGU ED BY THE LD. DR THAT THE ADDITION HAS BEEN MADE ON THE BASIS O F SEARCH AND SEIZURE OPERATION CARRIED OUT BY THE REVENUE DEPA RTMENT AT THE PREMISES OF THE ASSESSEE, HOWEVER, WE ARE OF THE CONSID ERED OPINION THAT IN THE AFORESAID CIRCUMSTANCES, WHERE THE LD . CIT(A) IN QUANTUM ORDER ITSELF OBSERVED THAT THE ASSESSING OFFI CER HAS NOT BASED THE ESTIMATION OF FIGURE ON ANY RECORDINGS DO NE BY THE ASSESSEE ON SEIZED DOCUMENT BUT PURELY ON THE BASIS OF PRESUMPTION AND WORKED OUT THE GROSS COMMISSION ON ESTIMAT ED FIGURE, WHICH IS ARBITRARY. 5. ON THE AFORESAID ANALYZATION, WE ARE OF THE CONSIDERED OPINION THAT IMPOSITION OF PENALTY UNDER THE PECULIAR FACTS AND ITA NO.457/ASR/2017 (A.Y.2010-11) SHRI PREM PAL GANDHI, NAWANSHAHAR VS. ACIT 4 CIRCUMSTANCES OF THE CASE DOES NOT JUSTIFY BECAUSE THE ESTIMATION ITSELF DOES NOT HAVE ANY BASIS AND MERE BASED ON THE ASSUMPTION OF THE ASSESSING OFFICER, EVEN OTHERWISE MAXIMUM PART OF WHICH ALREADY STANDS DELETED BY THE LD. CIT(A) IN QUANTUM PROCEEDINGS. 6. 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