BIKRAM MOHANTY, MUMBAI V. ASST CIT CEN CIR 29, MUMBAI

ITA 5783/MUM/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0954 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Keywords: Unexplained cash credit; Search and seizure; Salary income; Rule of consistency; Corroborative evidences
• Section: 143(3); 153A; 68; 27; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MU MBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHR I PAWAN SINGH, JUDICIAL MEMBER ITA NO. 5783 TO 5785/MUM/2014 (ASSESSMENT YEAR-2008 -09 TO 2010-11) BIKRAM MOHANTY FLAT NO. A-013, MAHADA BUILDING NO. 27, CHANDIVALI, ANDHERI (EAST), MUMBAI- 400072. PAN: AIRPM0621N VS. ACIT, CIRCLE-29, MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI T.A. KHAN (DR) DATE OF HEARING : 14.12.2017 DATE OF PRONOUNCEMENT : 10.01.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THESE THREE APPEAL BY ASSESSEE UNDER SECTION 253 OF THE INCOME-TAX ACT (THE ACT) ARE DIRECTED AGAINST THREE DIFFERENT OR DER LD. CIT(A)-40, MUMBAI DATED 27.06.2014 FOR ASSESSMENT YEAR (AY) 20 08-09 TO 2010-11, WHICH IN TURN ARISES FROM THE ORDER OF PENALTY LEVI ED UNDER SECTION 271(1)(C) BY THE ASSESSING OFFICER. IN ALL APPEALS, THE ASSES SEE HAS RAISED IDENTICAL GROUNDS OF APPEAL, FACTS OF ALL THE APPEALS ARE ALS O IDENTICAL. THUS, ALL APPEALS WERE HEARD TOGETHER AND ARE DECIDED BY A CO NSOLIDATED ORDER. 2. FOR AY 2008-09. THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL: 1.THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER LEVYING THE PENALTY U/S 271(1)(C) OF THE AC T AMOUNTING TO RS. 2,88,381/- WHEREAS AS PER THE FACTS AND CIRCUMSTANCES THE SAME SHOULD NOT BE LEVIED. ITA NO . 5783 TO 5785/M/2014- BIKRAM MOHANTY 2 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE ACTION UNDER SECTION 132 WAS CONDUCTED ON 13.12.2010. THE ASSESSEE HAD FILED RETURN OF INCOME ON 31.03.2009 DECLARING TOTAL INCOME OF RS. 1,48,520/- . CONSEQUENT UPON SEARCH A NOTICE UNDER SECTION 153A DATED 07.12.2011 WAS ISSUED TO THE ASSESSEE. THE ASSESSMENT WAS COMPLETED UNDER SECTIO N 143(3) R.W.S. 153A ON 25.03.2013. THE ASSESSING OFFICER (AO) WHILE PAS SING THE ASSESSMENT ORDER MADE THE ADDITION OF RS. 1,95,693/- ON ACCOUN T OF COMMISSION, ADDED RS. 2,40,000/- AS INCOME FROM SALARY AND RS. 4,97,5 00/- ON ACCOUNT OF CASH CREDIT IN THE BANK ACCOUNT. THE AO INITIATED PENALT Y WHILE PASSING THE ASSESSMENT ORDER. NOTICE UNDER SECTION 274 R.W.S. 2 71(1)(C) WAS ISSUED TO THE ASSESSEE. ON SERVICE OF NOTICE UNDER SECTION 27 4, THE ASSESSEE FILED HIS REPLY DATED 17.04.2013. THE REPLY WAS NOT FOUND SAT ISFACTORY BY AO. THE AO LEVIED THE PENALTY @ 100% OF TAX SOUGHT TO BE EV ADED FOR FURNISHING THE INACCURATE PARTICULARS OF INCOME. THE AO WORKED OUT THE PENALTY OF RS. 2,88,381/- IN ITS ORDER DATED 16.09.2013. 4. SIMILARLY, FOR AY 2009-10, THE ASSESSEE FILED RETUR N OF INCOME DECLARING TAXABLE INCOME OF RS. 2,86,160/- ON 29.03.2010. THE ASSESSMENT WAS COMPLETED ON 25.03.2013 UNDER SECTION 143(3) R.W.S. 153A DETERMINING THE TOTAL INCOME AT RS. 10,64,280/-. THE AO MADE THE AD DITION @ 1% OF COMMISSION INCOME FROM RS. 4,85,254/- AND INCOME FR OM SALARY OF RS. 2,40,000/-. THE PENALTY OF RS. 2,24,103/- UNDER SE CTION 271(1)(C) FOR ITA NO . 5783 TO 5785/M/2014- BIKRAM MOHANTY 3 FURNISHING INACCURATE PARTICULARS OF INCOME WAS LEV IED VIDE ORDER DATED 16.09.2013. THE PENALTY WAS LEVIED @ 100% OF TAX SO UGHT TO BE EVADED. 5. SIMILARLY, FOR AY 2010-11, THE ASSESSEE FILED RETUR N OF INCOME ON 28.09.2010 DECLARING TAXABLE INCOME OF RS. 3,64,390 /-. THE ASSESSMENT WAS COMPLETED ON 25.03.2013 DETERMINING THE TOTAL INCOM E OF RS. 11,22,150/-. THE AO MADE THE ADDITION ON ACCOUNT OF COMMISSION I NCOME @ 1% FOR RS. 3,73,943/- AND SALARY INCOME OF RS. 2,40,000/-. THE AO LEVIED THE PENALTY ON BOTH THE DISALLOWANCES @ 100% OF TAX SOUGHT TO B E EVADED. THE AO WORKED OUT THE PENALTY OF RS. 1,89,708/- IN ITS ORD ER DATED 16.09.2013. FOR ALL THREE YEARS, THE LD. CIT(A) UPHELD THE PENALTY ORDER. THUS, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 6. NONE APPEARED ON BEHALF OF ASSESSEE WHEN THE APPEAL WAS TAKEN FOR HEARING. THE PERUSAL OF ORDER-SHEET REVEALS THAT THE HEARING WAS ADJOURNED ON 06/04/2016 ON THE REQUESTED OF ASSESSEE FOR 20/06/2 016. THE APPEAL WAS ADJOURN FROM TIME TO TIME; HOWEVER, THE ASSESSEE HA S NOT APPEARED ON 04.09.2017 AND AGAIN ON 07.09.2017. WE LEFT NO OPTI ON EXCEPT TO PROCEED WITH ON THE BASIS OF MATERIAL AVAILABLE ON RECORD A ND TO DECIDE THE APPEAL AFTER HEARING THE SUBMISSION OF LD. DR FOR THE REVE NUE. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. I T WAS ARGUED THAT IN THE ASSESSMENT ORDER FOR AY 2008-09, THE AO MADE THREE ADDITIONS CONSISTING OF COMMISSION INCOME, ADDITION ON ACCOUNT OF CASH C REDIT AND SALARY INCOME. FOR ASSESSMENT ORDER AY 2009-10 AND 2010- 11, THE AO MADE TWO ITA NO . 5783 TO 5785/M/2014- BIKRAM MOHANTY 4 ADDITIONS CONSISTING OF COMMISSION INCOME AND SALA RY INCOME. THE ASSESSEE HAS NOT DISPUTED THE ASSESSMENT ORDER AND NOT FILED ANY APPEAL AGAINST THE ASSESSMENT ORDER. THE ADDITIONS HAVE BE COME ABSOLUTE. THE AO LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTIC ULARS OF INCOME. THE LD. DR FOR THE REVENUE PRAYED FOR DISMISSAL OF THE APPE AL. 7. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE ORDER OF AUTHORITIES BELOW AND THE MATERIAL PLA CED ON RECORD. THE AO WHILE PASSING THE ASSESSMENT ORDER FOR AY 2008-09 M ADE THREE ADDITIONS. FIRST THE ADDITION ON ACCOUNT OF COMMISSION INCOME OF RS. 1,95,693/- THE ADDITION WAS MADE ON THE BASIS OF TRANSACTION OF RS. 1,95,69,284/- IN THE BANK ACCOUNT OF ASSESSEE DURING THE RELEVANT FINANC IAL YEAR UNDER CONSIDERATION. THE ASSESSEE WAS ASKED TO EXPLAIN TH E MODUS OPERANDI OF HIGH TRANSACTION. THE ASSESSEE IN HIS REPLY CONTEND ED THAT THE TRANSACTION IN HIS BANK ACCOUNT RELATES TO BUSINESS OF THE ASSESSE E. THE ASSESSEE RECEIVED ADVANCE FROM THE CUSTOMER FOR SUPPLY OF GOODS, HOWE VER THE SUPPLY COMMITMENT COULD NOT BE FULFILLED AND THE AMOUNT WE RE RETURNED BACK. THE AO IN ABSENCE ON ANY SUPPORTING EVIDENCE ESTIMATED THE COMMISSION INCOME OF ASSESSEE @ 1% OF THE TRANSACTION. SECOND ADDITION RELATES TO THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF R S. 4,97,500/-. THE AO MADE THE ADDITION OF RS. 4,97,500/- UNDER SECTION 6 8 OF THE ACT, AS THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOS IT. THIRD ADDITION RELATES TO SALARY INCOME OF RS. 2,40,000/-. THE ADDITION OF SALARY INCOME WAS MADE ITA NO . 5783 TO 5785/M/2014- BIKRAM MOHANTY 5 ON THE BASIS OF STATEMENT RECORDED DURING THE SEARC H ACTION UNDER SECTION 132(4) ON 30.12.2010. IN THE STATEMENT, THE ASSESSE E HAS ACCEPTED THAT HE WAS GETTING SALARY INCOME FROM M/S PANAMA OVERSEAS PVT. LTD. AND M/S TAC TECHNOSOFT PVT. LTD. NO APPEAL WAS FILED BY ASS ESSEE AGAINST THE QUANTUM ASSESSMENT. 8. WE MAY NOTE THAT PENALTY PROCEEDING ARE SEPARATE AN D INDEPENDENT AND BASED ON DIFFERENT PARAMETERS. MERE NON-FILING OF A PPEAL AGAINST THE ADDITION WOULD NOT TANTAMOUNT TO ATTRACT THE PENALT Y ON THE ADDITIONS MADE IN THE ASSESSMENT ORDER. EACH AND EVERY ADDITION/ D ISALLOWANCE HAS TO BE EXAMINED INDEPENDENTLY FOR THE PURPOSE OF LEVYING T HE PENALTY. WE HAVE NOTED THAT ADDITION ON COMMISSION INCOME OF RS. 1,9 5,693/- WAS MADE ON THE BASIS OF ESTIMATED/ADHOC ADDITION. IT IS SETTLE D LAW THAT NO PENALTY IS LEVIABLE ON ESTIMATED/ADHOC ADDITION. THUS, NO PENA LTY IS LEVIABLE ON THE ADDITION OF RS. 1,95,693/-. SO FAR AS OTHER ADDITIO N WHICH RELATES TO ADDITION UNDER SECTION 68 FOR RS. 4,97,500/- AND ADDITION ON ACCOUNT OF SALARY INCOME OF RS. 2,40,000/- THE ASSESSEE COULD NOT SUBSTANTIA TE HIS DEFENSE. NO MATERIAL IS PLACED BEFORE US TO TAKE A CONTRARY VIE W. HENCE, WE DIRECT THE AO TO DELETE THE PENALTY QUA THE ADDITION OF COMMIS SION INCOME OF RS. 1,95,693/- AND FOR TWO OTHER ADDITION UNDER SECTION 68 FOR RS. 4,97,500/- AND ADDITION OF RS. 2,40,000/- ON ACCOUNT OF SALARY INC OME, WE CONFIRMED THE PENALTY ORDER. IN THE RESULT THE APPEAL FOR AY 200 8-09 IS PARTLY ALLOWED. ITA NO . 5783 TO 5785/M/2014- BIKRAM MOHANTY 6 9. FOR AY 2009-10, THE AO MADE TWO ADDITION, FIRST AD DITION RELATES TO COMMISSION INCOME OF RS. 4,85,254/- AND SECOND ADDI TION RELATES TO SALARY INCOME OF RS. 2,40,000/-. AS WE HAVE ALREADY DELETE D THE PENALTY IN RESPECT OF COMMISSION INCOME WHICH IS BASED ON THE ESTIMATI ON. THUS, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE AO IS DIRECTED TO DELETE THE PENALTY QUA THE ADDITION OF COMMISSION INCOME OF RS. 4,85,254/-. TH E PENALTY IN RESPECT OF ADDITION ON ACCOUNT OF SALARY INCOME IS CONFIRMED. IN THE RESULT THE APPEAL FOR AY 2009-10 IS PARTLY ALLOWED. 10. SIMILARLY, FOR AY 2010-11, THE AO MADE TWO ADDITION , (I) THE ADDITION OF RS. 3,73,943/- ON ACCOUNT OF COMMISSION INCOME @ 1% OF THE VALUE OF TRANSACTION AND (II) THE ADDITION OF RS. 2,40,000/- ON ACCOUNT OF SALARY INCOME. THE AO LEVIED THE PENALTY ON BOTH THE ADDIT ION. AS WE HAVE ALREADY DELETED THE PENALTY IN RESPECT OF COMMISSION INCOME FOR TWO EARLIER ASSESSMENT YEARS. THUS, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE PENALTY QUA THE COMMISSION OF RS. 3,73,943/- IS DELETED. H OWEVER, THE PENALTY FOR ADDITION ON ACCOUNT OF SALARY INCOME FOR RS. 2,40,0 00/- IS CONFIRMED. IN THE RESULT THE APPEAL FOR AY 2010-11 IS PARTLY ALLOWED. 7. IN THE RESULT, ALL THE APPEALS FILED BY ASSESSEE AR E PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DAY OF JANUARY 2018. SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 10/01/2018 S.K.PS ITA NO . 5783 TO 5785/M/2014- BIKRAM MOHANTY 7 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TE COPY/