Late Gokalbhai M. Aajani, L/H Babubhai G. Ajani, Amreli V. Income Tax Officer, Ward-2(3), Amreli

ITA 478/RJT/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8633 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 29-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: WRITTEN SUBMISSIOND R ADHIA
• Keywords: Business income; Difference of opinion; Bonafide mistake
• Section: 271(1)(c); 143(3); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT RAJKOT BENCH BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER . ITA NO. 478/RJT/2017 / ASSTT. YEAR: 2009-10 GOKALBHAI MOHANBHAI AAJANI, DECEASED L/H. BABUBHAI GOKALBHAI AJANI, HARI KRISHNA , PROP. OF GOKUL MILK SUPPLIER, CHAKKARGADH ROAD, AMRELI VS. ITO WARD-2(3), AMRELI ./ ./PAN/GIR NO. : ADW PS4 007 C / (APPELLANT) / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSION(D R ADHIA) REVENUE BY : SHRI ANIL KUMAR DAS, SR. DR ! /DATE OF HEARING : 13/01/2020 '# ! /DATE OF PRONOUNCEMENT: 20/01/2020 $% / O R D E R PER AMARJIT SINGH - AM : THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2009-10, ARISE FROM ORDER OF THE CIT(A)-3, RAJKOT DATED 17.11.2017, IN PROCEEDINGS UN DER SECTION 143(3) AND PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING PENALTY UNDER SECTION 271(1)(C) OF RS. 33,790/-. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLA RING TOTAL INCOME OF RS. 2,43,610/- WAS FILED ON 23.06.2009. THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 28.12.2011 AND TOTAL INCOME W AS ASSESSED AT RS. 18,68,463/- . ITA NO. 478/RJT/2017(GOKALBHAI MOHANBHAI AAJNI VS. ITO) A.Y. 2009-10 2 4. DURING THE COURSE OF ASSESSMENT THE AO NOTICED T HAT ASSESSEE HAS DEPOSITED CASH OF RS. 37,43,100/- IN AXIS BANK LTD. AMRELI DUR ING THE F.Y. 2008-09. ON QUERY THE ASSESSEE EXPLAINED THAT THE ABOVE REFERRE D CASH DEPOSITED IN AXIS BANK LTD. WAS OUT OF HIS BUSINESS TRANSACTIONS. THE ASSES SEE ALSO ADMITTED THAT SAID BUSINESS TRANSACTION WAS NOT RECORDED IN HIS REGULA R BOOKS OF ACCOUNT. WHEN THE AO HAS CONFRONTED ASSESSEE WITH THE AFORESAID UNREC ORDED TRANSACTION THE ASSESSEE HAS AGREED FOR CONSIDERING NET PROFIT @5% ON UNDISC LOSED CASH TRANSACTION OF RS. 38,43,100/-. THEREAFTER, THE AO ISSUED SHOW-CAUSE NOTICE TO THE ASSESSEE FOR REJECTING HIS BOOKS OF ACCOUNT UNDER SECTION 145 OF THE ACT. CONSIDERING THE FACT THAT ASSESSEE HAS NOT DISCLOSED HIS TRANSACTION AS REPORTED IN THE ABOVE CITED BANK ACCOUNT THE AO HAS REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED INCOME @5% ON THE ENTIRE TOTAL TURNOVER OF RS. 2,35 ,23,362/- AND RS. 37,61,789/- WHICH WAS PERTAINED TO THE UNDISCLOSED BANK ACCOUNT . CONSEQUENTLY, THE AO HAS MADE ADDITION OF RS. 11,24,713/- AND ALSO INITIATED PENALTY PROCEEDING UNDER SECTION 271(1)(C) OF THE ACT. 5. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A ). LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 6. THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE ITAT AGAINST THE DECISION OF THE CIT(A). THE ITAT RAJKOT BENCH HAS PARTLY SUSTAI NED THE ADDITION HOLDING THAT AO HAS ONLY FOUND THE TRANSACTION AS PER UNDISCLOSE D BANK OF TRADING IN MILK NOT RECORDED IN THE BOOKS OF ACCOUNT, THEREFORE RESTRIC TED THE ADDITION TO RS. 1,92,155/- BEING 5% OF THE UNDISCLOSED SALE OF RS. 38,43,100/- . THE AO HAS LEVIED PENALTY OF RS. 33,790/- AS PER PROVISION OF 271(1)(C) OF THE A CT SINCE THE ASSESSEE HAS CONCEALED HIS INCOME BY NOT SHOWING THE TRANSACTION S MADE IN SUCH ACCOUNT IN HIS RETURN OF INCOME. THE ASSESSEE HAS PREFERRED APPEA L BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE CIT(A) IS AS UNDER:- 6.1. IT IS CASE WHERE IT HAD BEEN HELD BY THE A.O. , CIT(A), & HONBLE ITAT THAT A SEGMENT OF THE APPELLANT BUSINESS WHICH HAD BEEN CL AIMED TO BE THE SOURCE OF CASH ITA NO. 478/RJT/2017(GOKALBHAI MOHANBHAI AAJNI VS. ITO) A.Y. 2009-10 3 DEPOSITED IN THE BANK ACCOUNT (UNDISCLOSED TO DEPAR TMENT) WAS NOT DISCLOSED BY THE APPELLANT IN HIS I.T. RETURN. THIS NON-DISCLOSURE WAS DISCOVERED BY THE DEPARTMENT AND THEREAFTER THE APPELLANT CAME WITH THE PLEA OF THAT IT WAS ALSO HIS BUSINESS WHICH WAS NOT DISCLOSED IN HIS RETURN WAS THE SOURCE OF C ASH DEPOSIT IN THE BANK. IT WAS STATED THAT PROCEEDS FROM THIS UNDISCLOSED BUSINESS TURNOVER WAS DEPOSITED IN THE UNDECLARED BANK ACCOUNT AND THEREFORE ONLY THE ESTI MATED PROFIT OF THIS UNDISCLOSED BUSINESS SHOULD BE BROUGHT TO TAXATION AND NOT THE ENTIRE DEPOSIT. HONBLE ITAT STATED ... ON THIS UNDISCLOSED BUSINESS TRANSACTIO N INCOME CAN BE ESTIMATED AT @5% ...... THUS, ITAT RESTRICTED THE UNDISCLOSED INCO ME FROM THE UNDISCLOSED BUSINESS SEGMENT AT RS. 1,92,155/-. THE A.O. HAD IMPOSED PE NALTY ON THIS AMOUNT ONLY MEANING BY HE HAD TAKEN THE QUANTUM OF CONCEALED IN COME AT THE SAME FIGURE AS DECIDED BY THE ITAT. 6.2. IT IS APPARENT THAT FACT OF NON-DISCLOSURE BY APPELLANT OF SOURCE OF BUSINESS INCOME IS BEYOND DISPUTE. THERE WAS DIFFERENCE OF OPINION REGARDING THE QUANTUM OF INCOME FROM THIS UNDISCLOSED SOURCE WHICH WAS DECID ED BY HONBLE ITAT AT RS. 1,92,155/- AND THE A.O. HAD ADOPTED THE SAME FIGURE FOR COMPUTING PENALTY U/S. 271(1)(C). 6.3. THUS, IN PRESENT CASE THE ASSESSEE HAD NOT AT ALL DISCLOSED ITS BUSINESS OF M/S. BHAGIRATH MILS MARKETING WHEREAS OTHER SIMILAR BUSI NESS SEGMENT (SOURCE) IN THE NAME OF M/S. GOKUL MILK SUPPLIER WAS DISCLOSED IN T HE RETURN. THE FACT OF APPELLANT HAVING INDULGED IN CONCEALMENT OF ONE OF HIS BUSINE SS SOURCES STANDS CONFIRMED BY LEARNED ITAT. LEARNED AR HAD RELIED UPON CERTAIN D ECISIONS WHEREIN IT WAS HELD THAT PENALTY IS NOT IMPOSABLE IF ADDITION IS ONLY ON ACC OUNT OF ESTIMATION OF PROFIT AND THE BUSINESS TURNOVER WAS AS SUCH DISCLOSED. CLEARLY T HESE CASE LAWS WILL NOT HELP THE APPELLANT AS IN PRESENT CASE, THE FACT THAT THE APP ELLANT HAD NOT AT ALL DISCLOSED A BUSINESS SOURCE HAD BEEN CONFIRMED BY HONBLE ITA. LEARNED AR HAD RAISED PLEA OF THE MISTAKE BEIN A BONAFIDE MISTAKE WHICH IS NOT AC CEPTABLE. THE SAME APPELLANT IS DISCLOSING ONE BUSINESS SEGMENT IN SAME FIELD (DIST RIBUTOR OF MILK OF MOTHER DIARY) AND THEREFORE IT CANT BE ACCEPTED THAT HE HAD FORG OTTEN TO DISCLOSE THIS PARTICULAR SOURCE. NONE OF THE CASES LAWS RELIED UPON BY LD. AR ARE HELPING HIM AS IN PRESENT CASE, THE DEFAULT BY APPELLANT IS NEITHER TECHNICAL NOR DUE TO INADVERTENT ERROR NOT DUE TO DIFFERENT LEGAL INTERPRETATION. THE A.O. WAS CO MPLETELY CORRECT IN RULING THAT APPELLANT HAD CONCEALED A PARTICULAR BUSINESS TRANS ACTIONS INTER ALIA RESULTING IN CONCEALMENT OF INCOME ULTIMATELY DECIDED AT RS. 1,9 2,155/- BY HONBLE ITAT. THUS, PENALTY IMPOSED BY THE A.O. U/S. 271(1)(C) OF RS. 3 3,790/- IS HEREBY CONFIRMED. 6.4. APPELLANT HAS RAISED A NUMBER OF OTHER GROUNDS BUT IN REALITY THE ONLY GRIEVANCE IS REGARDING IMPOSITION OF PENALTY U/S. 2 71(1)(C) BY THE A.O. IN THE GIVEN FACTS OF THE CASE. GROUNDS OF NOT DOING PROPER VER IFICATIONS, NOT GRANTING PROPER OPPORTUNITY, NOT BRINGING ANY COGENT MATERIAL JUSTI FYING LEVY OF PENALTY ETC. ARE TOTALLY INCORRECT AND CONTRARY TO FACTS. CLAIM OF ADDITION BEING ONLY ON ESTIMATION BASIS IS ALSO TOTALLY INCORRECT AS ALREADY DISCLOSED. AS SU CH ALL THERE ACCESSORY GROUNDS STAND DISMISSED. DURING THE COURSE OF APPELLATE PROCEEDING BEFORE US NO BODY HAS ATTENDED FROM THE SIDE OF THE ASSESSEE. HOWEVER, THE ASSESS EE HAS FILED A WRITTEN SUBMISSION DATED 13.01.2020 IN THE WRITTEN SUBMISSION THE ASSE SSEE HAS SUBMITTED THAT AO HAS ITA NO. 478/RJT/2017(GOKALBHAI MOHANBHAI AAJNI VS. ITO) A.Y. 2009-10 4 LEVIED PENALTY UNDER SECTION 271(1)(C) PURELY ON ES TIMATION BASIS. THEREFORE, NO PENALTY SHOULD BE LEVIED. THE LD. COUNSEL IN THE WRI TTEN SUBMISSION HAS ALSO REFERRED THE JUDICIAL DECISION AND THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT IN THE CASE OF RAJESHBHAI LAXMANBHAI TANTI VS. IT O IN ITA NO. 73/RJT/2014. 7. ON THE OTHER HAND THE LD. DR HAS VEHEMENTLY CONTE NDED THAT FACTS OF THE CASE OF THE ASSESSEE ARE DISTINGUISHABLE FROM THE F ACTS OF THE CASES REFERRED BY THE ASSESSEE. HE HAS SUBMITTED THAT THE ASSESSEE HAS D ELIBERATELY NOT DISCLOSED THE BUSINESS TRANSACTION REPORTED IN THE BANK ACCOUNT I N HIS RETURN OF INCOME. THEREFORE, THE INCOME WAS DETERMINED ON THE BASIS OF CONCRETE EVIDENCES DETECTED BY THE AO WHICH WERE CONCEALED BY THE ASSESSEE. 8. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS NOT DIS CLOSED CASH AMOUNT OF RS. 37,43,100/- DEPOSITED IN THE AXIS BANK LTD. DURING THE COURSE OF ASSESSMENT THE AO HAD CONFRONTED THE ASSESSEE WITH THE EVIDENCES O F CASH DEPOSITED IN THE SAID BANK ACCOUNT AND THE ASSESSEE HAD ADMITTED THAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT DETECTED BY THE AO WAS PERTAINED TO HI S UNDISCLOSED BUSINESS TRANSACTION. THE ABOVE FACTS AND CIRCUMSTANCES DEMO NSTRATE THAT ASSESSEE WAS INDULGED IN DEPOSITING RECEIPT FROM PART OF THE BUS INESS TRANSACTION IN THE UNDISCLOSED BANK ACCOUNT AND BY THIS MODUS OPERANDI ASSESSEE HAS CONCEALED HIS INCOME. WE HAVE ALSO GONE THROUGH THE DECISION OF CO-ORDIN ATE BENCH OF RAJKOT REFERRED BY THE ASSESSEE AND NOTICE THAT FACTS IN T HE CASE OF THE ASSESSEE ARE DISTINGUISHABLE FROM THE FACTS OF THE CASE REFERRED BY THE ASSESSEE. IN THE REFERRED CASE THE TOTAL TURNOVER OF THE ASSESSEE WAS LESS TH AN 40 LAKH AND THE ASSESSEE WAS NOT SUPPOSED TO MAINTAIN THE BOOKS OF ACCOUNT. HOW EVER, IN THE CASE OF THE ASSESSEE THE TOTAL TURNOVER WAS TO THE AMOUNT OF RS . 2,73,66,462/- AND THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT AND THE ASS ESSEE HAS NOT RECORDED THE PART OF BUSINESS TRANSACTION IN HIS REGULAR BOOKS THE BO OKS OF ACCOUNTS WHICH WERE REJECTED BY THE AO UNDER SECTION 145(3) OF THE ACT. THE AO HAS DETECTED THE ITA NO. 478/RJT/2017(GOKALBHAI MOHANBHAI AAJNI VS. ITO) A.Y. 2009-10 5 SPECIFIC MODUS OPERANDI ADOPTED BY THE ASSESSEE OF DEPOSITING PART OF CASH FROM BUSINESS TRANSACTION IN THE UNDISCLOSED BANK ACCOUN T MAINTAINED WITH THE AXIS BANK LTD. THE ASSESSEE HAS ADMITTED THAT THESE WERE UNACCOUNTED TRANSACTION NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THE ASSES SEE HAS FAILED TO OFFER AN EXPLANATION FOR NOT RECORDING THE TRANSACTION DETEC TED BY THE AO IN HIS BOOKS OF ACCOUNT. THE ABOVE CITED UNDISCLOSED BANK ACCOUNT D ELETED BY THE AO DEMONSTRATE SUPPRESSION OF INCOME BY THE ASSESSEE. THE ASSESSEE HAS ADMITTED ADDITIONAL INCOME ONLY AFTER THE DEPARTMENT COLLECT ED EVIDENCE AND DETERMINED THE MODUS OPERANDI OF NOT SHOWING SUCH INCOME IN THE RE GULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THEREFORE, WE CONSIDERE D THAT LD. CIT(A) IS JUSTIFIED IN SUSTAINING THE PENALTY OF RS. 33,790/- LEVIED FO R CONCEALMENT OF INCOME. ACCORDINGLY, APPEAL OF THE ASSESSEE IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. [ORDER PRONOUNCED IN THE COURT ON 20-01- 2020.] SD/- SD/- ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/01/2020 TANMAY, SR. PS / COPY OF ORDER FORWARDED TO:- $% / BY ORDER TRUE COPY TRUE COPY & / ' (DY./ASSTT. REGISTRAR) !( , ')$*$ / ITAT, RAJKOT 1. / THE APPELLANT 2. + / THE RESPONDENT. 3. *( , / CONCERNED CIT 4. , ( ) / THE CIT(A) 5. -./ ( , !( / DR, ITAT, 6. /01 / GUARD FILE.