Mrs. Usha Gupta, Delhi V. ACIT, New Delhi

ITA 4656/DEL/2011

• Counselvise Citation: 465620114 RSA 2011
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 11-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Keywords: Search and seizure; Revised return
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H NEW DELHI BEFORE SHRI G.D.AGRAWAL, V.P. AND S HRI K.BHARAT , J.M. ITA NO. 4656 /DEL/2011 ASSESSMENT YEAR : 2007 - 08 MRS.USHA GUPTA VS. ACIT, CC 6 FLAT NO.203 - 206, SECOND FLOOR NEW DELHI HOOVER APARTMENTS, KH ASRA NOS. 773 & 774 SANT NAGAR BURADI, DELHI PAN: AAEPG 9014 E (APPELLANT) (RESPONDENT ) APPELLANT BY : - SH. AJAY WADHWA, ADV. RESPONDENT BY : - SH. J.P.CHANDRAKAR, CIT, D.R. O R D E R PER G.D.AGRAWAL, VICE PRESIDENT THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS) - I, NEW DELHI DT. 18.8.2011 PERTAINING TO THE ASSE SSMENT YEAR 2007 - 08. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASSESSEE IS AGAINST THE LEVY OF PENALTY OF RS.2,90,700/ - LEVIED U/S 271(1)(C ) OF THE ACT BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(APPEALS). 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. 4. THE FACTS OF THE CASE ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION IN HOOVER GROUP OF CASES ON 28.7.2006. THE ASSESSEE BELONG TO THE SAID GROUP. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE FILED A RETURN OF INCOME ON 31 ST MARCH, 2008 DECLARING TOTAL INCOME OF RS.2,82,420/ - . THE A.O. VIDE LETTER DATED 29 TH NOVEMBER,2008 ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH OF RS.16 LAKHS FOUND AND SEIZED FROM THE ASSESSEE S PREMISES. IN REPLY THERETO THE ASSESSEE SUBMITTED AS UNDER. ITA NO. 4656/DEL/2011 A.Y. 2007 - 08 USHA GUPTA, DELHI 2 OUT OF RS.16 LAKHS I HAD RECEIVED RS.13 LAKHS IN CASH AS ADVANCE AGAINST THE PROPERTY AS UNDER: 1 . RS.5,00,000 FROM MR.SUBHASH TYAGI 2 . RS.5,00,000 FROM MR.PARAMJEET SINGH CHAHAIL 3 . RS.2,00,000 FROM MR.SUNIL KUMAR 4 . RS.1,00,000 FROM MR.MANMEET SINGH BESI DE THESE RS.1,50,000 WAS RECEIVED FROM MR.SS AGARWAL FOR PURCHASE OF TICKETS ETC. F OR MRS.NEERU AND BALANCE CASH WAS OUT OF MY SAVINGS. THESE ALL DETAILS WERE ALSO EXPLAINED AT THE TIME OF SEIZURE OF THE CASH IN MY STATEMENT AND POST SEARCH ENQUIRY. MOREO VER, ALL THE PARTICULARS/DOCUMENTS RELATING TO THEM SUCH AS BAYANA RECEIPTS HAVE ALREADY BEEN FURNISHED. I UNDERSTAND THAT MR.PARAMJEET SINGH CHAHAIL HAS ALREADY APPEARED BEFORE YOURSELF AND HAS GIVEN HIS STATEMENT. AS FAR AS MR.SUBHASH TAYGI, MR.SUNIL KU MAR AND MR.MANMEET SINGH ARE CONCERNED, THERE IS SOME FINANCIAL DISPUTE WITH THEM AND YOURSELF MAY SUMMON THEM U/S 131 OF THE ACT. AS REGARDS MRS.NEERU, SHE IS A NRI AND SETTLED IN AUSTRALIA. YOU MAY ISSUE COMMISSION THROUGH PROPER CHANNEL TO HER AND SEE K HER DEPOSITION. ALTHOUGH I AM CONFIDENT OF ESTABLISHING THE VERACITY OF THE AFORESAID ADVANCES YET IN ORDER TO AVOID ANY LITIGATION AND TO BUY PEACE OF MIND FROM THE DEPARTMENT I OFFERED TO TAX A SUM OF RS.9,50,000/ - BEING AMOUNTS RECEIVED FROM SUBHASH T YAGI RS.5,00,000, MR.SUNIL KUMAR RS.2 LACS, MR.MANMEET SINGH RS.1 LAC AND RS.1,50,000 FROM MISS NEERU RECEIVED THROUGH MR SS AGGARWAL IN A.Y. 2007 - 08. THIS DISCLOSURE/OFFER IS WITH THE ASSURANCE THAT NO PENAL CONSEQUENCE SHALL ENSUE. THE ASSESSEE ALSO FILED A REVISED RETURN DISCLOSING ADDITION AL INCOME OF RS.9,50,000/ - . THUS AS PER REVISED RETURN, INCOME DECLARED BY THE ASSESSEE WAS RS.12,32,420/ - . THE A.O. ACCEPTED ASSESSEE S REPLY AND COMPLETED THE ASSESSMENT AT RS.12,32,420/ - I.E. THE INCOME DISCLO SED AS PER THE REVISED RETURN. HOWEVER, THE A.O. LEVIED PENALTY OF RS.2,90,700/ - TREATING THE SUM OF RS.9,50,000/ - AS UNDISCLOSED INCOME. THE SAID PENALTY WAS SUSTAINED BY THE CIT(A). HENCE THIS APPEAL BY THE ASSESSEE. 5. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTED BY THE LD.COUNSEL THAT THE ASSESSEE IN HER REPLY HAS EXPLAINED THE SOURCE OF RS.16 LAKHS. HE ALSO REQUESTED TO EXAMINE THE PERSONS FROM WHOM THE MONEY WAS RECEIVED AND THE PURPOSE FOR WHICH THE MONEY WAS R ECEIVED. HOWEVER TO AVOID ANY LITIGATION AND TO BUY PEACE OF MIND THE ASSESSEE OFFERED A SUM OF RS.9,50,000/ - AS ADDITIONAL INCOME. THE OFFER WAS MADE WITH THE RIDER DISCLOSURE/OFFER I S WITH THE AS SURANCE THAT NO PENAL CONSEQUENCES SHALL ITA NO. 4656/DEL/2011 A.Y. 2007 - 08 USHA GUPTA, DELHI 3 ENSUE . AFTER REPRODUCING THE ASSESSEE S LETTER IN THE ASSESSMENT ORDER THE AO ONLY OBSERVED THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED AND RS.9,50,000 IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH. THUS THE AO HAS ACCEPTED ASSESSEE S DIS CLOSURE OF RS.9,50,000/ - WHICH WAS WITH THE RIDER THAT NO PENAL CONSEQUENCES SHALL FOLLOW. THEREFORE ONCE THE AO HAS ACCEPTED THE ASSESSEE S LETTER, HE SHOULD NOT HAVE LEVIED PENALTY U/S 271(1)(C ) OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE THEREFORE R EQUESTED THAT THE PENALTY LEVIED BY THE A.O. AND SUSTAINED BY THE CIT(A) BE CANCELLED. 6. THE LD.D.R. ON THE OTHER HAND STATED THAT IT IS A SEARCH/SEIZURE MATTER AND DURING THE COURSE OF SEARCH CASH OF RS.16 LAKHS WAS FOUND FROM THE PREMISES OF THE ASSESSE E. WHEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN SUCH CASH THEN ONLY THE ASSESSEE OFFERED THE ADDITIONAL INCOME OF RS.9,50,000. THEREFORE THE ADDITIONAL INCOME WAS OFFERED ONLY AFTER THE CONCEALMENT WAS ALREADY DETEC TED BY THE REVENUE. THEREFORE THE LEVY OF PENALTY U/S 271(1)(C ) WAS FULLY JUSTIFIED AND THE SAME SHOULD BE SUSTAINED. 7. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT DURING THE COUR SE OF SEARCH A SUM OF RS.16 LAKHS WAS FOUND FROM THE ASSESSEE S PREMISES. DURING THE ASSESSMENT PROCEEDINGS THE A.O. ASKED THE ASSESSEE TO EXPLAIN THE CASH FOUND DURING THE COURSE OF SEARCH I.E. RS.16 LAKHS. THE ASSESSEE FURNISHED THE REPLY EXPLAINING TH E SOURCE OF ENTIRE RS.16 LAKHS. THE ASSESSEE ALSO MENTIONED THAT OUT OF VARIOUS PERSONS FROM WHOM THE CASH IS CLAIMED TO HAVE BEEN RECEIVED ONE PERSON IS ALREADY EXAMINED BY THE A.O. IN RESPECT OF OTHERS THE ASSESSEE REQUESTED TO ISSUE SUMMONS U/S 131 AN D EXAMINE THEM. HOWEVER AFTER EXPLAINING THE ENTIRE SUM OF RS.16 LAKHS THE ASSESSEE OFFERED A SUM OF RS.9,50,000 AS ADDITIONAL INCOME T O AVOID ANY LITIGATION AND TO BUY PEACE OF MIND. THIS ADDITIONAL INCOME OF RS.9,50,000 WAS OFFERED WITH THE CONDITION THAT NO PENALTY CONSEQUENCES WILL FOLLOW. THUS THE A.O. HAD THE OPTION TO REJECT ASSESSEE S OF FER OF RS.9,50,000 AND EXAMINE THE SOURCE OF CASH OF RS.16 LAKHS AS EXPLAINED BY THE ASSESS EE AND ITA NO. 4656/DEL/2011 A.Y. 2007 - 08 USHA GUPTA, DELHI 4 IF ANY PART OF SUCH CASH REMAINED UNEXPLAINED HE COULD HAVE MA DE THE ADDITION THERE FOR. BUT IF THE AO MADE AN ADDITION OF RS.9,50,000 ON THE BASIS OF ADDITIONAL INCOME OFFERED BY THE ASSESSEE THEN THE ASSESSEE S OFFER IS TO BE CONSIDERED IN TOTO I.E. WITH THE RIDER THAT NO PENALTY CONSEQUENCES SHALL FOLLOW. THE RE VENUE CANNOT CLAIM ACCEPTANCE OF ADDITIONAL INCOME OF RS.9,50,000 AND AT THE SAME TIME LEVY PENALTY U/S 271(1)(C ) THEREON. IN VIEW OF THE ABOVE WE DEEM IT PROPER TO CANCEL THE PENALTY LEVIED U/S 271(1)(C ) OF RS.2,90,700/ - AND ALLOW THIS GROUND OF THE A SSESSEE. 8. IN THE RESULT ASSESSEE S APPEAL IS ALLOWED. P RONOUNCED IN THE OPEN COURT ON 31 ST MARCH , 2015. SD/ - SD/ - ( K. BHARAT ) ( G.D.AGRAWAL ) JUDICIAL MEMBER VICE PRESIDENT DATED: THE . 31 ST MARCH, 2015 *MANGA ITA NO. 4656/DEL/2011 A.Y. 2007 - 08 USHA GUPTA, DELHI 5 COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR