ACIT CEN CIR 29, MUMBAI V. SUNIL MANTRI BUILDTECH P.LTD, MUMBAI

ITA 5955/MUM/2012

• Counselvise Citation: 595519914 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 08-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 28-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIPDR
• Section: 27; 153A

Judgement Text

, , ,, , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , .. , ! BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO.5955/MUM/2012 ' ' ' ' #' #' #' #' / ASSESSMENT YEAR: 2008-09 ACIT, CENTRAL CIRCLE-29, ROOM NO.411, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, CHURCHGATE, MUMBAI-400020 VS. M/S. SUNIL MANTRI BUILDTECH PVT. LTD. G-1, COURT CHAMBERS, GROUND FLOOR, V. THAKKERSEY MARG, 35, NEW MARINE LINES, CHURCHGATE, MUMBAI-400020 ( $ / REVENUE) ( %&'( / RESPONDENT) P.A. NUMBER : AAFCM0404P $ ) * / REVENUE BY: SHRI NEIL PHILIP-DR %&'( ) * / RESPONDENT BY : NONE ) +, / DATE OF HEARING : 08/12/2014 -.# ) +, / DATE OF PRONOUNCEMENT : 08/12/2014 O R D E R PER JOGINDER SINGH, JM: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 13/07/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MUM BAI, ON THE GROUND IN HOLDING THAT MERE NON SUBMISSION OF THE P ROOF OF EARNING 2 M/S. SUNIL MANTRI BUILDTECH PVT. LTD THE UNDISCLOSED INCOME CANNOT LEAD TO LEVY OF PENAL TY U/S 271AAA(1) OF THE ACT AS THE CASE OF THE ASSESSEE FALLS U/S 27 1AAA(2) OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSEE HAS NOT FULF ILLED THE CONDITIONS MENTIONED IN SUB-CLAUSE (I) AND (II) OF SECTION 271 AAA(2) OF THE ACT. 2. AT THE TIME OF HEARING, THE LD. DR, SHRI NEIL PHILI P DEFENDED THE CONCLUSION DRAWN IN THE PENALTY ORDER AND ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED. ON THE O THER HAND, NONE APPEARED FOR THE ASSESSEE IN SPITE OF ISSUANCE OF N OTICE. IT IS ALSO SEEN THAT ON EARLIER OCCASION, THE ASSESSEE SOUGHT ADJOU RNMENT BY AN APPLICATION DATED 03/12/2014 AND LATER ON WITHDREW THE SAME. AT THE TIME OF HEARING, THE ASSESSEE NEITHER PRESENTED ITSELF NOR MOVED ANY ADJOURNMENT PETITION. IT SEEMS THAT THE ASSESS EE HAS NOTHING TO SAY, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX -PARTY QUA THE ASSESSEE AND PROCEED TO DISPOSED OF THE APPEAL ON T HE BASIS OF MATERIAL AVAILABLE ON RECORD. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS PUT FORTH B Y THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUC TION OF RESIDENTIAL AND COMMERCIAL UNITS AT VARIOUS PLACES. A SEARCH AN D SEIZURE ACTION U/S 132(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER THE ACT) WAS CARRIED OUT ON 09/07/2008 AT THE PREMISES OF THE MA IN GROUP COMPANY I.E. SUNIL MANTRI REALITY LTD. SIMULTANE OUSLY, THE ASSESSEE COMPANY WAS ALSO COVERED UNDER THE SEARCH ACTION. THE ASSESSEE COMPANY DECLARED TOTAL INCOME AT RS.76,117/- IN ITS RETURN FILED ON 28/09/2008. SUBSEQUENTLY, RETURN OF INCOME DECLARI NG TOTAL INCOME AT RS.45,76,117/- WAS FILED U/S 153A OF THE ACT ON 30/10/2009. THE 3 M/S. SUNIL MANTRI BUILDTECH PVT. LTD ASSESSMENT WAS COMPLETED DETERMINING THE TOTAL INCO ME AT RS.4,33,14,420/- ON 30/12/2010. THE ADDITION U/S 2(22)(E) OF THE ACT WAS MADE ON PROTECTIVE BASIS. PENALTY PROCEEDI NGS U/S 271AAA OF THE ACT WERE INITIATED ON ACCOUNT OF DISCLOSURE OF RS.45,00,000/- AS UNACCOUNTED PAYMENTS FOR PURCHASE OF IMMOVABLE PROP ERTY AT HYDERABAD, IMPOSING PENALTY OF RS.4,50,000/- BEING 10% OF THE UNDISCLOSED INCOME OFFERED BY THE ASSESSEE. 2.2. ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE PENALTY ON THE FACTS AND THE REASONING CONTAINED IN THE IMPUGNED ORDER. BEFORE COMING TO ANY CONCLUSION, W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S): I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. IT IS AN UNDISPUTED FACT THAT APPELLANTS DIRECTOR IN STATEM ENT RECORDED U/S 132(4) ON 28/08/2008 AND AGAIN ON 05/09/2008 ADMITTED THE UNDISCLOSED INCOME OF RS.45,00,000/- AND THEREAFTER, IN RETURN OF INCOME F ILED IN PURSUANCE TO THE NOTICE U/S 153A, HAD OFFERED SUCH ADDITIONAL INCOME AND HAD MADE PAYMENT OF TAX ALONG WITH INTEREST THEREON. THE COPY OF I.T. RETURN FILED U/ S 153A ON 30/10/2009 AND TAX PAID CHALLAN OF RS.17,39,600/- PA ID ON 28/10/2009 BEAR TESTIMONY TO THESE FACTS. THE APPELLANT CONTENDED THAT APPELLANTS SOLE SOURCE OF INCOME, WHETHER ACCOUNTED OR UNDISCLOSED, IS OUT OF BROKING AND COMMISSION ACTIVITIES. THE CONTENTION SEEMS TO BE ACCEPTABLE, AS IN BALANCE SHEET FILED ON RECORD, O NLY SOURCE OF INCOME IS COMMISSION RECEIPTS, WHICH HAS BEEN AC CEPTED IN THE ASSESSMENT. IN ANY CASE, SPECIFICATION OF M ANNER OF EARNING UNDISCLOSED INCOME U/S 271AAA, CANNOT BE CONSTRUED TO MEAN THAT THE EVIDENCE TO THE EXTENT OF 4 M/S. SUNIL MANTRI BUILDTECH PVT. LTD ACCOUNTED INCOME MAY BE MADE AVAILABLE IN RESPECT OF HITHERTO UNDISCLOSED INCOME. ACCORDINGLY, LD. ARS ARGUMENT THAT APPELLANT HAD SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED INCOME IS DERIVED AS ARISING OU T OF COMMISSION ACTIVITY NEEDS TO BE ACCEPTED. THE MERE NON SUBMISSION OF THE PROOF OF EARNING THE UNDISCLOSED I NCOME CANNOT LEAD TO A CASE OF LEVY OF PENALTY U/S 271AAA (1) OF THE ACT. ACCORDINGLY, IT IS HELD THAT APPELLANTS C ASE FALLS UNDER SEC. 271AAA(2) AND LEVY OF PENALTY U/S 271AAA( 1) IS NOT SUSTAINABLE. ACCORDINGLY, THE ASSESSING OFFICE R IS DIRECTED TO DELETE THE PENALTY U/S 271AAA(1) OF RS.4,50,000/-. GROUNDER NO. 1 AND 2 OF APPEAL ARE, ACCORDINGLY, ALLOWED. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDE R/PENALTY ORDER LEADING TO IMPOSITION OF PENALTY OF RS.4,50,000/-, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD AN D THE ASSERTION MADE BY THE LD. DR, IF KEPT IN JUXTAPOSITION AND AN ALYZED, WE FIND THAT THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS.45,00, 000/- WHILE TENDERING STATEMENT AND PAID TAXES ALONGWITH INTERE ST THEREUPON ON 28/10/2009. THE SOLE OF SOURCE OF INCOME OF THE AS SESSEE (UNACCOUNTED OR UNDISCLOSED) IS OUT OF BROKING AND COMMISSION ACTIVITIES. SUCH SOURCE EVEN HAS BEEN ACCEPTED BY THE LD. ASSESSING OFFICER. IT SEEMS THAT THE UNDISCLOSED INCOME WAS ALSO DERIVED OUT OF COMMISSION ACTIVITIES THUS MERE IMPOSING THE PENALT Y ON ACCOUNT OF NON SUBMISSION OF PROOF OF EARNING UNDISCLOSED INCO ME, UNDER THE FACTS AVAILABLE ON RECORD, CANNOT BE SAID TO BE JUS TIFIED FOR LEVYING PENALTY U/S 271AAA(1) OF THE ACT. THE ASSESSING OFF ICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE SUBSTANTIATING THAT THE ASSESSEE WAS HAVING ANY OTHER SOURCE OF INCOME ALSO, IMPLICATING /EVIDENCING THAT THE CASE OF THE ASSESSEE FALLS UNDER SUB-SECTION (2 ) TO SECTION 271AAA 5 M/S. SUNIL MANTRI BUILDTECH PVT. LTD OF THE ACT, THUS, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE. IT IS DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 08/12 /2014. SD/- SD/- B.R. BASKARAN JOGINDER SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED -08/12/2014 . ./ SHEKHAR. P.S. / / / / ) )) ) %+0 %+0 %+0 %+0 10#+ 10#+ 10#+ 10#+ / COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. %&'( / THE RESPONDENT. 3. 2 ( ) / THE CIT(A)- 4. 2 / CIT 5. 03 %+ , , / DR, ITAT, MUMBAI 6. 34' 5 / GUARD FILE. / / / / / BY ORDER, &0+ %+ //TRUE COPY// 6 66 6 / 7 7 7 7 $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI