MONA HARESH JETHAMALANI, ULHASNAGAR V. ASST CIT CIR 2, KALYAN

ITA 588/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1651 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-02-2016
• Court: TRIBUNAL
• Department Lawyers: SHRIKANT NAMDEO
• Assessee Lawyers: SURESH N OTWANI
• Keywords: Unexplained investment
• Section: 143(3); 133(6); 69

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH , JUDICIAL MEMBER I.T.A. NO. 588/M/2016 (ASSESSMENT YEAR: 2007 - 2008) MONA HARESH JETHEMALANI, C/O. SHRI SURESH N. OTWANI, ADVOCATE, 109, 110, TILSON SHOPPING CENTRE, KALYA, AMBARNATH ROAD, ULHASNGAR - 421003. / VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 2, 2 ND FLOOR, MOHAN PLAZA, WAYALE NAGAR, KHADAKPADA, KALYAN (W). ./ PAN : AATPJ1158K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SURESH N. OTWANI / RESPONDENT BY : SHRI SHRIKANT NAMDEO / DATE OF HEARING : 28 .11.2016 / DATE OF PRONOUNCEMENT : 30.11 .2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 5.2.2016 IS AGAINST THE ORDER OF THE CIT (A) - 3, THANE DATED 7.10.2015 FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, ASSESSEE RAIS ED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. THE LD CIT (A) ERRED IN CONFIRMING PENALTY LEVIED BY AO IGNORING THE SUBMISSION AND LEGAL POSITION POINTED OUT BY AO IN APPELLATE PROCEEDINGS. 2. THE LD CIT (A) ERRED IN NOT PASSING SPEAKING ORDER ON SUBMISSION DATED 7.10.2015 AS WELL AS DISCUSSION RECORDED IN PARA 4.0 BY CIT (A) - 3, THANE. 3. THE APPEAL IS IN TIME AND ORDER. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD, AT THE OUTS ET, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS OF THE CASE WHICH INCLUDE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ELECTRICAL GOODS AND RUNNING A PROPRIETORSHIP CONCERN NAMES M/S. BHARAT ELECTRICAL INDUSTRIES. ASSESS EE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 19,91,887/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT THE ASSESSEE INCOME WAS DETERMINED AT RS. 22,95,250/ - . IN 2 THE ASSE SSMENT, AO MADE ADDITION, U/S 69 OF THE ACT, OF RS. 3,03,357/ - O N ACCOUNT OF UNEXPLAINED INVESTMENT IN STOCK. SUBSEQUENTLY, PENALTY OF RS. 1,02,113/ - WAS LEVIED BY THE AO VIDE ORDER DATED 27.9.2013 ON THE SAID AMOUNT. ON APPEAL, CIT (A) CONFIRMED THE SAME. THEREFORE, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 3. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID ADDITION OF RS. 3,03,357/ - RELATES TO THE PURCHASES MADE BY THE ASSESSEE FROM VARIOUS SUPPLIERS. MENTIONING THAT THE PENALTY PROCEEDINGS ARE DIFFERENT FROM THAT OF THE ASSESSMENT PROCEEDINGS, WHERE THE AO SHOULD EXAMINED THE CORRECTNESS OF THE ALLEGATION OF CONCEALMENT / FURNISHING OF INACCURATE PARTICULARS OF INCOME INDEPENDENTLY, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS NOT UNDERTAKEN ANY ENQU IRY WHATSOEVER INVOLVING THE SAID SUPPLIERS OF THE STOCK. LD COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS READY EVEN NOW FOR ENQUIRY INTO THE SAID INVESTMENT. FURTHER, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT AO HAS NOT UNDERTAKEN AN Y ENQUIRY U/S 133(6) OF THE ACT. LD AR ALSO SUBMITTED THAT THE SAID SUPPLIERS HAVE RECORDED THE SALES TO THE ASSESSEE AND ASSESSEE IS READY TO SUBSTANTIATE THE SAME IF THE MATTER IS REMANDED TO THE FILE OF THE AO. 4. ON THE OTHER HAND, LD DR FOR THE REVENU E RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES, WE FIND, THE SAID ADDITION OF RS. 3,03,3 57/ - IS UNDISPUTED L Y RELATES TO THE PURCHASES FROM 8 PARTIES AND THE AO DID NOT UNDERTAKE ANY INVESTIGATION I N TO THE SUBMISSIONS OF THE ASSESSEE THAT THE SAID PURCHASES ARE ENTIRELY ACCOUNTED FOR AND BORNE OUT OF BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL AS THE SUPPLIERS OF THE ASSESSEE. IN OUR VIEW, THE ABOVE FACTS WERE NOT PUT TO THE SCRUTINY DURING THE ASSESSMENT PROCEEDINGS INDEPENDENTLY. W H Y T O L E V Y P E N A L T Y , I F T H E T R A N S A C T I O N S A R E F A C T U A L L Y A C C O U N T E D ? CONSIDERING THE PECULIAR FACTS OF THE CASE, WE ARE OF THE OPINION, THE CORRECTNESS OF THE UNEXPLAINED NATURE OF THE INV ESTMENT OF RS. 3,03,357/ - IS REQUIRED TO BE INVESTIGATED IF THEY CONSTITUTE UNEXPLAINED INVESTMENTS. WE ORDER ACCORDINGLY AND DIRECT THE AO TO UNDERTAKE INVESTMENT INTO THE SAME AND EXAMINE THE RELEVANT BOOKS OF ACCOUNT OF THE ASSESSEE AND THE PARTIES CON CERNED 3 AND DECIDE THE ISSUE AFTER TO FIND OUT IF THEY CONSTITUTE UNEXPLAINED IN EVERY POINT OF VIEW. SAME IS REQUIRED BEFORE THE PENALTY IS LEVIED . AFTER CONDUCTING RELEVANT ENQUIRIES AND BASED ON THE OUTCOME OF THE SAME, AO IS DIRECTED TO TAKE A FRESH DE CISION ON THE ISSUE IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON 3 0 T H NOVEMBE R, 2016. S D / - S D / - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 30.11 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI