DIWALIBEN LAKHAMSHI SHAH, MUMBAI V. ITO 21(1)(1), MUMBAI

ITA 6119/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0945 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 26-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA (AM) &SHRI PAWAN SINGH (JM ) ITA NO. 6119/MUM/2018(ASSESSMENT YEAR :2008-09) DIWALIBEN LAKHAMSHI SHAH 7/8, WAMAN, NEAR PALESHWAR MANDIR, M.G. ROAD, VILE PARLE (E), MUMBAI-57 PAN : AMRPS0702N VS ITO, WD.21(1)(1), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI MANOJ PANDIT AR RESPONDENT BY SHRI AKHTAR H ANSARI SR DR DATE OF HEARING 27-11-2019 DATE OF PRONOUNCEMENT 04-12-2019 O R D E R PER PAWAN SINGH, JM : 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-53, MUMBAI DATED 28-08-2018 FOR ASSESSMENT Y EAR 2008-09, WHICH IN TURN ARISES OUT OF THE ORDER U/S 271(1)(C) DATED 28-03-2014. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A)-53 ERRED IN CONFIRMING THE LEARNED ASSESSING OFFICER ('THE AO') ACTION IN INVOKING PROVISIONS OF THE SEC TION 271(1) (C) OF THE INCOME TAX, 1961 ('THE ACT'). ON FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A)-53 ERRED IN CON FIRMING PENALTY U/S. 271 (1) (C) OF THE ACT WITHOUT ANY ADDITIONAL CONCRETE INDEPENDENT EVIDENCE AGAINST THE ASSESSEE FOR HAVIN G CONCEALED HIS INCOME. 2) ON FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW LEARNED CIT (A)-53 ERRED IN CONFIRMING THAT APPELLANT HAS CONCE ALED INCOME AND 2 ITA 6119/MUM/2018 DIWALIBEN LAKSHAMSHI SHAH LEVIED PENALTY OF 200% OF TAX EVADED BY CONCEALMENT OF INCOME OF RS 2,87,349/- 3) ON FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW LEARNED CIT (A) -53 ERRED IN CONFIRMING THAT THE ASSESSEE HAS C ONCEALED THE PARTICULARS OF THE INCOME BASED ON THE PURPORTED IN SPECTORS REPORT WHICH WAS NEVER GIVEN TO ASSESSEE NOR ALLOWED TO CO NFRONT THE SAME. 2. FACTS IN BRIEF AS GATHERED FROM THE ORDER OF LOWER AUTHORITIES ARE THAT ASSESSEE IS AN INDIVIDUAL, FILED HER RETURN OF INCO ME FOR AY 2008-09 ON 17-09-2008 DECLARING TOTAL INCOME AT RS.1,68,282. IN THE RETURN OF INCOME THE ASSESSEE OFFERED INCOME FROM HOUSE PROPE RTY AND INCOME FROM OTHER SOURCES BEING INTEREST ON BANK DEPOSITS. DURING THE ASSESSMENT, THE AO NOTED THAT AN AMOUNT OF RS.10,43 ,000/- HAD BEEN DEPOSITED IN CASH IN THE SAVINGS BANK ACCOUNT OF TH E ASSESSEE MAINTAINED WITH COSMOS CO-OPERATIVE BANK LTD, VILE PARLE (E), MUMBAI. THE AO, AFTER ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE AND CONSIDERING THE SUBMISSION OF ASSESSEE TREATED THE DEPOSITS IN BANK AS UNEXPLAINED CASH CREDIT AND MADE ADDITION U/S 68 OF THE I.T. ACT, 1961. ON APPEAL BEFORE CIT(A), THE ACTION OF AO WAS SUSTA INED. THE AO ISSUED SHOW CAUSE NOTICE FOR LEVYING PENALTY VIDE N OTICE DATED 12-03- 2014. THE ASSESSEE FILED ITS REPLY DATED 21-03-201 4. IN THE REPLY, THE ASSESSEE STATED THAT SHE HAS FILED APPEAL BEFORE TH E TRIBUNAL AND, THEREFORE, THE PENALTY PROCEEDINGS MAY BE KEPT IN A BEYANCE TILL THE 3 ITA 6119/MUM/2018 DIWALIBEN LAKSHAMSHI SHAH DECISION IN QUANTUM APPEAL. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY AO. THE AO LEVIED THE PENALTY @200% OF TAX SOUGHT TO BE LEVIED ON ADDITION U/S 68 OF RS.10,43,000/-. TH E AO WORKED OUT THE PENALTY AT RS.7,09,032/- IN HIS ORDER DATED 28-03-2 014 PASSED U/S 271(1)(C) OF THE I.T. ACT, 1961. ON APPEAL, THE LD . CIT(A) THE ASSESSEE SUBMITTED THAT THE DISALLOWANCES UNDER SEC TION 68 HAS BEEN RESTRICTED TO 30% OF THE ADDITIONS MADE BY THE AO. THE LD CIT(A) UPHELD THE ORDER OF PENALTY. HOWEVER, THE AO WAS D IRECTED TO RE- COMPUTE THE PENALTY BASED ON QUANTUM UPHELD BY THE TRIBUNAL IN QUANTUM APPEAL. THUS, FURTHER AGGRIEVED BY THE ORD ER OF CIT(A), THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBU NAL. 3. WE HAVE HEARD THE SUBMISSIONS OF THE LD.AR OF THE A SSESSEE AND THE LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AV AILABLE ON RECORD. THE LD.AR OF THE ASSESSEE SUBMITS THAT AGAINST THE ADDITIONS IN QUANTUM ASSESSMENT, THE ASSESSEE FILED APPEAL BEFOR E TRIBUNAL VIDE ITA NO.4451/MUM/2013 AND THE SAME WAS DECIDED BY AN ORDER DATED 06-04-2016. THE TRIBUNAL, WHILE DECIDING THE APPEA L OF THE ASSESSEE DIRECTED THE AO TO ACCEPT THE SOURCE TO THE EXTENT OF 70% OF DEPOSITS (IN THE BANK ACCOUNT OF THE ASSESSEE) AND ACCORDING LY 30% OF RS.10.43 LAKHS WAS TREATED AS INCOME OF THE ASSESSEE. THE L D.AR FURTHER 4 ITA 6119/MUM/2018 DIWALIBEN LAKSHAMSHI SHAH SUBMITS THAT IN THE ORDER GIVING EFFECT DATED 28-12 -2016, THE AO ACCEPTED THE ORDER OF TRIBUNAL. THE LD.AR FURTHER SUBMITS THAT ADMITTEDLY, THE ADDITION WAS RESTRICTED ON ESTIMATE BASIS AND PENALTY IS NOT SUSTAINABLE IF THE ADDITION IS BASED ON ESTIMAT ION. THE LD.AR FURTHER SUBMITS THAT THE FINDING OF LD.CIT(A) ARE C ONTRARY TO THE SETTLED LEGAL POSITION THAT NO PENALTY IS LEVIABLE ON ESTIM ATED ADDITION. 4. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS THAT THE LD.CIT(A) IN HIS REASONABLE FINDING HAS CATEGORICALLY DIRECTED T HE AO TO RE-COMPUTE THE PENALTY ON THE BASIS OF QUANTUM UPHELD BY TRIBU NAL IN ITA NO.4451/MUM/2013. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES CAREFULLY I NCLUDING THE ASSESSMENT ORDER UNDER SECTION 143(3) DATED 28-12-2 010, PENALTY ORDER UNDER SECTION 271(1)(C) DATED 28-03-2014, ORDER IMP UGNED BEFORE US, DATED 28-08-2018 AND THE ORDER PASSED BY CO-ORDINAT E BENCH OF TRIBUNAL IN ITA NO.4451/MUM/2013. IN OUR CONSIDERE D VIEW, A VERY SHORT POINT FOR OUR ADJUDICATION IS THAT ONCE THE A DDITION ON THE BASIS OF WHICH THE AO LEVIED PENALTY HAS BEEN REDUCED TO 30% , THAT TOO, ON ESTIMATE BASIS, WOULD, STILL THE PENALTY LEVIED BY AO U/S 271(1)(C) 5 ITA 6119/MUM/2018 DIWALIBEN LAKSHAMSHI SHAH SUBSISTS OR NOT? WE HAVE FURTHER NOTED THAT ADDITI ON ESTIMATED BY TRIBUNAL IN ITS ORDER DATED 06-04-2016 IS ACCEPTED BY AO AND ORDER GIVING EFFECT DATED 28-12-2016 IS ALSO PASSED RESTR ICTING THE ADDITION TO 30% OF RS.10.43 LAKHS. THEREFORE, IN OUR VIEW, ONC E THE ADDITION IS RESTRICTED ON ESTIMATE BASIS, THE PENALTY LEVIED UN DER SECTION 271(1)(C) WILL NO MORE SURVIVE. CONSIDERING THE FACTS AND CI RCUMSTANCES OF THE CASE, WE DIRECTED THE AO TO DELETE THE ENTIRE PENAL TY LEVIED U/S 271(1)(C) OF THE I.T. ACT, 1961. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-12-2019. SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 04 TH DECEMBER, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI