DEVESH AGARWAL, MUMBAI V. ASST CEN CIR 32, MUMBAI

ITA 5780/MUM/2013

• Counselvise Citation: 578019914 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 25-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: DEVENDRA A MEHTA
• Keywords: Gift; Search and seizure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' D ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI R.C. SHARMA , ACCOUNTANT MEMBER ITA NO. 5780/MUM/2013 (ASSESSMENT YEAR: 2004 - 05 ) SHRI DEVESH AGARWAL VS. A C I T , CENTRAL CIRCLE - 32 C/O. M/S. RAVI & DEV, CAS 601, 'A' WING, AURUS CHAMBERS BEHIND MAHINDRA TOWERS S.S. AMRU TWAR MARG,WORLI MUMBAI 400013 MUMBAI PAN - AEKPA7464G APPELLANT RESPONDENT APPELLANT BY: SHRI DEVENDRA A. MEHTA RESPONDENT BY: SHRI LOVE KUMAR DATE OF HEARING: 25.05. 2015 DATE OF PRONOUNCEMENT: 25.05.2015 O R D E R PER D. MANMOHAN, V.P. PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT , HAVING BEEN CONFIRMED BY THE CIT(A) - 31, MUMBAI, ASSESSEE IS IN APPEAL BEFORE US. 2. FACTS IN BRIEF ARE THAT ASSESSEE DECLARED NIL INCOME FOR ASSESSMENT YEAR UNDER CONSIDERATION, ON 02.08.2004. CONSEQUENT TO A SEARCH AND SEIZURE OPERATION CONDUCTED IN THE CASE OF EVERSHINE GROUP THE AO COMPLETED THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 1 53 A OF THE ACT ON A TOTAL INCOME OF ` 37,52,094/ - WHICH MAINLY CONSISTS OF BOGUS GIFT OF ` 37 LAKHS. SINCE THE GIFT CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE IS TREATED AS BOGUS , AO LEVIED PENALTY OF ` 12,21,00/ - REFERABLE TO INCOME SOUGHT TO BE EVADED, I. E. AMOUNT SHOWN AS GIFT. CIT(A) CONFIRMED THE ACTION OF THE AO AND THUS ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AGAINST THE ASSESSMENT MADE BY THE AO THE MATTER WAS TAKEN IN APPEAL BEFORE THE ITAT (ITA NOS. 8918 & 8919/MUM/2010 DATED 31.07.2014) ITA NO. 5780/MUM/2013 SHRI DEVESH AGARWAL 2 WHEREIN THE BENCH OBSERVED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION SO AS TO INITIATE PROCEEDINGS UNDER SECTION 153 A OF THE ACT IN THE CASE OF THE ASSESSEE AND IN THIS REGARD HE RELIED UPON THE DECISION OF THE HON'BLE SPECIAL BENCH OF ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. 137 ITR 1 (SB). THE ADDITION MADE FOR THE YEAR UNDER CONSIDERATION WAS ACCORDINGLY DELETED BY THE ITAT D BENCH, MUMBAI. THE LEARNED COUNSEL SUBMITTED THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ARE INITIATED CONSEQUENT TO THE ADDITION MADE IN THE QUANTUM PROCEEDINGS AND WHEN THE QUANTUM PROCEEDINGS ARE SET ASIDE THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WILL HAVE NO LEGS TO STAND. IN THIS REGARD HE RELIED UPON THE DECISION OF THE APEX COURT IN THE CASE OF K.C. BUILDERS 265 ITR 56. 4. ON THE OTHER HAND THE LEARNED D.R. RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SU BMISSIONS AND CAREFULLY PERUSED THE RECORD. IT IS NOT IN DISPUTE THAT PENALTY PROCEEDINGS ARE DIRECTLY LINKED TO THE ADDITION MADE BY THE AO AND ONCE THE ASSESSMENT ORDER IS QUASHED PENALTY PROCEEDINGS WOULD HAVE NO LEGS TO STAND. IN THE INSTANT CASE THE A DDITION MADE BY THE AO WAS DELETED BY THE ITAT VIDE ORDER DATED 31.07.2014. UNDER THESE CIRCUMSTANCES WE ARE OF THE FIRM VIEW THAT THE PENALTY PROCEEDINGS DO NOT STAND. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE LEARNED CIT(A) AS WELL AS THE AO AND HOLD TH AT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2015. SD/ - SD/ - ( R.C. SHARMA ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 25 TH MAY, 2015 ITA NO. 5780/MUM/2013 SHRI DEVESH AGARWAL 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 31 , MUMBAI 4. THE CIT 20 , MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.