SUNITA R, JADHAV, MUMBAI V. ACIT CEN CIR-8, MUMBAI

ITA 6240/MUM/2009

• Counselvise Citation: 624019914 RSA 2009
• Duration Of Justice: 1 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 04-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 02-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GOLI SRINIWAS RAO
• Keywords: Search and seizure
• Section: 143(3); 54F; 153A; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SHRI R.S. PADVEKAR, JUDICIAL MEMBER. I.T.A. NO. 6240/MUM/2009. ASSESS MENT YEAR : 2003-04. MRS. SUNITA R. JADHAV, ASSTT. COMMISSIONER OF INCOME-TAX, 602, VISHAL VILLA C.H.S. LTD., VS. CENTRAL CIRCLE-8, MUMBAI. PANDURANG NAIK ROAD, SHIVAJI PARK, DADAR (W), MUMBAI 400 028. PAN ACBPJ4391E. APPELLANT. RESPONDENT. APPELLANT BY : SH RI VIJAY MEHTA. A SSESSEE BY : SHRI GOLI SRINIWAS RAO. O R D E R. PER P.M. JAGTAP, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS)-37, MUMBAI DATED 05-10-2009 WHEREBY HE CONFIRMED THE PENALTY OF RS.4,04,200/- IMPOSED BY THE AO U/S 271(1)(C). 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L. SHE FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ORIGINALLY ON 31-12-2003 CLAIMING THEREIN EXEMPTION U/S 54F AMOUNTING TO RS.12,83,175/- IN R ESPECT OF LONG TERM CAPITAL GAIN ON ACCOUNT OF INVESTMENT MADE IN THE HOUSE PRO PERTY. A SEARCH AND SEIZURE 2 ITA NO.6240/MUM/2009 ASSTT. YEAR : 2003-04. ACTION U/S 132(1) WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 04-10-2006. IN HER STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S 132(4), THE ASSESSEE SURRENDERED THE ENTIRE SALE CONSIDERATION OF RS.12,83,175/- REC EIVED ON SALE OF SHARES OF M/S DATABASE FINANCE LTD. AS HER INCOME TO TAX UNDER TH E HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY THE RETURN OF INCOME WAS FILE D BY THE ASSESSEE IN RESPONSE TO NOTICE ISSUED BY THE AO U/S 153A OFFERING THE SAID AMOUNT AS HER INCOME. AFTER COMPLETING THE ASSESSMENT U/S 143(3) READ WITH SECT ION 153A ASSESSING THE SAID INCOME, A NOTICE U/S 271(1)(C) READ WITH SECTION 27 4 WAS ISSUED BY THE AO AND SINCE THE EXPLANATION OFFERED BY THE ASSESSEE IN RE SPONSE TO THE SAID NOTICE WAS NOT FOUND ACCEPTABLE BY HIM, THE AO PROCEEDED TO IMPOSE A PENALTY OF RS.4,04,200/- U/S 271(1)(C). ON APPEAL, THE LEARNED CIT(APPEALS) CONFIRMED THE SAID PENALTY IMPOSED BY THE AO U/S 271(1)(C). AGGRIEVED BY THE O RDER OF THE LEARNED CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEA L BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRES ENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLVED IN THE PRESENT CASE IS SQUARELY COVE RED BY THE ORDER OF THE TRIBUNAL DATED 8 TH OCT., 2010 PASSED IN ITA NO. 6241/MUM/2009 WHEREIN A SIMILAR PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LEARNED CIT( APPEALS) IN THE CASE OF HUSBAND OF THE ASSESSEE, NAMELY, MR. RAMAKANT R. J ADHAV IN RESPECT OF IDENTICAL ADDITION WAS DELETED BY THE TRIBUNAL FOR THE FOLLO WING REASONS GIVEN IN PARAGRAPH NO. 5 OF ITS ORDER : WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS SUBMITTED ON BEHALF OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AS WELL AS BEFORE US, THERE W AS NOTHING FOUND DURING THE COURSE OF SEARCH TO INDICATE THAT THE TRANSACTI ONS OF PURCHASE AND SALE OF SHARES OF M/S DATABASE FINANCE LTD. ENTERED INTO BY THE ASSESSEE WERE 3 ITA NO.6240/MUM/2009 ASSTT. YEAR : 2003-04. BOGUS. IN THE ABSENCE OF SUCH MATERIAL, WE FIND CRE DENCE IN THE STAND TAKEN BY THE ASSESSEE THAT THE ADDITIONAL INCOME WAS OFFE RED/SURRENDERED BY HIM IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH TO BUY PEACE OF MIND AND TO AVOID ANY FURTHER LITIGATION. IT IS PERTINENT TO NOTE HERE THAT THE TRANSACTIONS OF PURCHASE OF SHARES OF M/S DATABASE FINANCE LTD. HAD BEEN ENTERED INTO BY THE ASSESSEE IN THE EARLIER YEARS AND THE SAME WERE ACCEPTED AS GENUINE EVEN BY THE A.O. A PERUSAL OF THE ASSESSMENT ORDER AND P ENALTY ORDER PASSED BY THE A.O. ALSO SHOWS THAT THERE WAS NOTHING BROUGHT ON RECORD BY HIM TO ESTABLISH THAT THE TRANSACTIONS OF SALE AND PURCHAS E OF SHARES OF M/S DATABASE FINANCE LTD. BY THE ASSESSEE WERE BOGUS OR THAT THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE DURING THE COURSE OF SEARCH REPRESENTED HIS UNDISCLOSED INCOME. AS A MATTER OF FACT, THE TRANSA CTIONS OF PURCHASE AND SALE OF M/S DATABASE FINANCE LTD. WERE DULY DISCLOS ED BY THE ASSESSEE IN HIS RETURN OF INCOME FILED ORIGINALLY FOR THE YEAR UNDE R CONSIDERATION. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US, ADDITIONAL INCOME WAS SIMILARLY OFFERED BY OTHER AS SESSEES IN RESPECT OF IDENTICAL TRANSACTIONS OF SALE OF SHARES OF DATABAS E FINANCE LTD. IN THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH. TH E SAID ASSESSEE, HOWEVER, RETRACTED THE SAID STATEMENTS MADE DURING THE COURS E OF SEARCH AND DID NOT OFFER THE ADDITIONAL INCOME SURRENDERED DURING THE COURSE OF SEARCH IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U/S 1 53A. THE A.O., THEREFORE, MADE ADDITION ON ACCOUNT OF ADDITIONAL INCOME SURRE NDERED DURING THE COURSE OF SEARCH AND WHEN THE MATTER REACHED TO THE TRIBUNAL, THE TRIBUNAL DELETED THE SAID ADDITIONS OBSERVING THAT THERE WAS NOTHING TO SHOW THAT THE TRANSACTIONS INVOLVING PURCHASE AND SALE OF SHARES OF M/S DATABASE FINANCE LTD. WERE BOGUS. IT WAS ALSO OBSERVED BY THE TRIBUN AL THAT MERELY BECAUSE SOME OTHER ASSESSEES HAVE DECLARED BOGUS CAPITAL GA IN ON ACCOUNT OF TRANSACTIONS OF SHARES OF M/S DATABASE FINANCE LTD. COULD BE A GROUND TO HOLD THAT THE TRANSACTIONS WERE BOGUS IN THE CASE O F THE ASSESSEE ALSO. THIS DECISION OF THE TRIBUNAL IS SUFFICIENT TO SHOW THAT BUT FOR THE ACTION OF THE ASSESSEE IN OFFERING THE ADDITIONAL INCOME SURRENDE RED DURING THE COURSE OF SEARCH IN THE RETURN FILED IN RESPONSE TO NOTICE U/ S 153A, THE SUSTENANCE OF ADDITION OF SUCH INCOME IN THE HANDS OF THE ASSESSE E IN THE QUANTUM PROCEEDINGS WOULD HAVE BEEN DOUBTFUL. IN THE CASE O F SHRI OMKARESHWAR R. KALANTRI & OTHERS (ITA NO. 1004/PN/2009 DATED 5.2.2 010) CITED BY THE LD. D.R., PENALTY IMPOSED BY THE A.O. U/S 271(1)(C) IN RESPECT OF ADDITION MADE ON THE BASIS OF INCOME SURRENDERED DURING THE COURS E OF SEARCH WAS CANCELLED BY THE LD. CIT(A) RELYING ON EXPLANATION 5 TO SECTION 271(1)(C) AND SINCE THE ASSESSEE WERE FOUND TO HAVE NOT FULFI LLED THE REQUIREMENTS FOR AVAILING THE IMMUNITY AVAILABLE UNDER THE SAID EXPL ANATION, THE PUNE BENCH 4 ITA NO.6240/MUM/2009 ASSTT. YEAR : 2003-04. OF ITAT SET ASIDE THE ORDERS OF THE LD. CIT(A) CANC ELLING THE PENALTY. THE SAID DECISION OF THE TRIBUNAL RENDERED SPECIFICALLY IN THE CONTEXT OF EXPLANATION 5 TO SECTION 271(1)(C) KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES INVOLVED IN THAT CASE THUS HAS NO APP LICATION IN THE PRESENT CASE INVOLVING ALTOGETHER DIFFERENT FACTS. AS SUCH , CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, W E ARE OF THE VIEW THAT IT IS NOT A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) AND THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED BY THE A.O. UNDER THE SAID PROVISION. IN THAT VIEW OF THE MATTER, WE CANCEL TH E PENALTY IMPOSED BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) AND ALLOW THIS APPEAL OF THE ASSESSEE. 4. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS THE MATERIAL FACTS RELEVANT THERETO ARE ADMITTEDLY SIMILAR TO THAT OF THE CASE OF MR. RAMAKANT R, JADHAV (SUPRA), WE RESPECTFULLY FOLLOW THE ORDER OF THE COORDINATE BENCH PASSED IN THE CASE OF RAMAKANT R. JADHAV AND CANCEL THE PENAL TY IMPOSED BY THE AO U/S 271(1)(C) AND CONFIRMED BY THE LEARNED CIT(APPEALS) . 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. . ORDER PRONOUNCED ON THIS 15 TH DAY OF JULY, 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI, DATED: 15 TH JULY, 2011. WAKODE 5 ITA NO.6240/MUM/2009 ASSTT. YEAR : 2003-04. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, H-BENCH. (TRUE COPY ) BY ORD ER ASSTT. R EGISTRAR, ITAT, MUMBAI BEN CHES, MUMBA I.