ATUL RUIA, MUMBAI V. DCIT CEN CIR 47, MUMBAI

ITA 6060/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3655 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMCHANDRAN
• Keywords: Search and seizure
• Section: 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) ./ I.T.A. NO . 6060 / MUM/20 13 ( / ASSESSMENT YEAR : 20 0 8 - 09 ) MR.ATUL RUIA, 19,RUIA HOUSE, BHAUSAHEB MARG, MALABAR HILL, MUMBAI - 400006 / VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 47, MUMBAI . ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN NO. : AB HPR8582Q / APPELLANT BY: SHRI VIJAY MEHTA / RESPONDENT BY SHRI A RAMCHANDRAN / DATE OF HEARING : 2 5 .7 .201 6 / DATE OF PRONOUNCEMENT : 12. 08 .2016 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 38 , MUMBAI D A T ED 23.8.2013 PERTAINING TO A.Y. 20 08 - 09 . 2. ONLY GROUND RAISED IN THE APPEA L BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF PENALTY OF RS.1,45,108/ - AS LEVIED BY THE AO UNDER SECTION 271(1) (C ) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO ACT). 3 . FACTS IN BRIEF ARE THAT THE SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENCE AND BUSINESS PREMISES OF PHOENIX GROUP ITA NO .6060 /M/ 2013 2 ON 20.2.2008 BY THE DDIT (INV.) UNIT IV(2), MUMBAI . THE SAID GROUP WAS CONTROLLED AND MANAGED BY THE ASSESSEE AND HIS FAMILY AND HENCE HE BUSINESS CONCERNS AND THE RESIDENCES OF M R. RUIA WAS ALSO COVERED UNDER SEARCH AND SEIZURE ACTION. DURING THE COURSE OF SEARCH ACTION AN AMOUNT O F RS.4,57,840/ - WAS FOUND FROM THE ASSESSEE OUT OF WHICH AN AMOUNT OF RS.3.5 LAKHS WAS SEIZED AND IN RESPECT OF REMAINING AMOUNT OF RS.1.5 LAKHS , THE ASSESSEE STATED IN THE STATEMENT THAT THE SUM WAS ON ACCOUNT OF SAVINGS OVER THE YEARS. THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)( C ) OF THE ACT UPON NOT FINDING ANY CONVINCING REPLY FROM THE ASSESSEE AND THEREBY TREATED THE ENTIRE SUM OF CASH FOUN D DURING T HE COUR S E OF SEARCH OF RS.4,57,840/ - AS INCOME FROM UN DISCLOSED SOURCES AND PENALTY WAS ALSO INITIATED FOR FILING INACCURATE PARTICULARS OF INCOME. FINALLY, THE AO PASSED ORDER UNDER SECTION 271( 1 )(C) OF THE ACT DATED 30.6.2011 AND LEVIED PENA LTY OF RS.1,54,108/ - BEING 100% OF THE TAX SOUGHT TO BE EVADED. AGGRIEVED BY THE ORDER OF AO , THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO IN TURN DISMISSED THE APPEAL OF THE ASSESSEE BY UPHOLDING THE ORDER PASSED BY THE AO ON T HE GROUND THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH AND THE SAME WAS NO T ACCOUNTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THEREFORE CONCEALMENT HAS BEEN ESTABLISHED. 4 . WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE PARTIES, PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW. THE LD. AR ARGUED BEFORE US THAT SEARCH IN THE CASE OF ASSESSEE WAS CONDUCTED ITA NO .6060 /M/ 2013 3 ON 20.2.2008 AND THEREFORE THE PENALTY AS LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT WAS LEGALLY NOT SUSTAINABLE AS HAS BEEN HELD BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SMT.HIRAL HIMANSHU KANAKIA V/S ACIT IN ITA NO.2028/MUM/2012 (AY - 2008 - 09) VIDE ORDER DATED 19.7.2013 . THE LD. AR SUBMITTED TH AT IN THE CASE IN THE CASE OF SEARCH ACTION U/S 132 OF THE ACT WHICH WAS INITIATED AFTER 1.6.2007 , PENALTY U/S 271(1) (C) OF THE ACT COULD NOT CANNOT BE IMPOSED BY VIRTUE OF INSERTION OF NEW PROVISIONS ON THE STATUTE BOOK FOR LEVY OF PENALTY IN THE CASE OF SEARCH BY BRINGING A NEW SECTION 271AAA OF THE ACT W.E.F. AY 2007 - 08 AND THEREFORE THE PENALTY AS IMPOSED BY THE AO AND CONFIRMED BY THE LD.CIT(A) HAS TO BE DELETED. THE LD. DR RE - ITERATED THE SAME CONTENTIONS AS MADE BEFORE THE LD.CIT(A) AND HEAVILY RELIED UPON THE ORDER S OF AUTHORITIES BELOW. WE FIND MERIT IN THE SUBMISSION S OF THE LD.AR THAT IN CASE SEARCH IS CARRIED OUT ON 20.2.2008 WHICH IS AFTER 1.6.2007 AND PENALTY CAN ONLY BE IMPOSED U/S 271AAA AND NOT UNDER SECTION 271(1)(C) OF THE ACT. TH E CA S E OF THE ASSESSEE IS SUPPORTED BY THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT.HIRAL HIMANSHU KANAKIA (SUPRA), WHEREIN IT HAS BEEN HELD AS UNDER : 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE RELEVANT A.Y. UNDER CONSIDERATION IS 2008 - 09. IT IS AN ADMITTED FACT THAT A SEARCH U/S 132 HAS BEEN CARRIED OUT ON 19.07.2007 IN KANAKIA GROUP TO WHICH THE ASSESSEE BELONGS. FROM THE PROVISIONS OF SECTION 271 AAA OF THE INCOME TAX ACT, IT IS CLEAR THAT WHE RE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER 01.06.2007, PENALTY CAN BE LEVIED ONLY UNDER SECTION 271 AAA AND NOT U/S 271(1)(C) OF THE ACT. THUS, IN VIEW OF THE FACT THAT THE AO HAS NOT INVOKED THE CORRECT PROVISIONS OF LAW FOR LEVYING THE PE NALTY IN THE ITA NO .6060 /M/ 2013 4 PRESENT CASE, THE LD.CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY. IN VIEW OF THAT MATTER, THE IMPUGNED PENALTY IS DELETED WE, THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN T HE ABOVE MENTIONED DECISIONS WE ARE OF TH E CONSIDERED VIEW THAT THE PENALTY IMPOSED ON THE ASSESSEE U/S 271(10 OF THE ACT IS NOT CORRECT AND ACCORDINGLY WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12TH AUG , 2016 . 12TH AUG, 2016 S D SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 12TH AUG , 2016 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCER NED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, T RUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI