ITO, Ward-2(1)(4), Ahmedabad V. Shri Kamlesh P. Modi, Ahmedabad

ITA 635/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6006 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIKEY
• Assessee Lawyers: K C THAKER
• Keywords: Unexplained investment
• Section: 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO.635/AHD/2016 / ASSTT. YEAR: 2006-2007 ITO, WARD-2(1)(4) AHMEDABAD. VS. SHRI KAMLESH P. MODI B-412, HIMALAYA ARCADE OPP: VASTRAPUR LAKE VASTRAPUR AHMEDABAD. PAN : ABWPM 1385 P ./ ITA NO.636/AHD/2016 / ASSTT. YEAR: 2006-2007 ITO, WARD-2(1)(4) AHMEDABAD. VS. SHRI ROHIT P. MODI B-412, HIMALAYA ARCADE OPP: VASTRAPUR LAKE VASTRAPUR AHMEDABAD. PAN : ABWPM 1386 Q / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI K.C. THAKER, AR REVENUE BY : SHRI ALBINUS TIKEY, SR.DR ! / DATE OF HEARING : 20/02/2018 '#$ ! / DATE OF PRONOUNCEMENT: 01 /03/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE REVENUE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-4 DATED ITA NO.635 AND 636/AHD/2016 2 1.1.2016 PASSED FOR THE ASSTT.YEAR 2006-07 ON RESPE CTIVE APPEALS OF THE ASSESSEE. 2. GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT(A) H AS ERRED IN DELETING PENALTY OF RS.23,70,000/- FROM THE HANDS O F EACH ASSESSEE WHICH WAS IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN HIMALAYA GROUP OF CASES ON 22.4.2008. THE ASSESSEES WERE CO VERED UNDER SEARCH ACTION. AN ASSESSMENT ORDER UNDER SECTION 1 53A R.W.S. SECTION 14(3) WAS PASSED IN THE CASES OF EACH RESPO NDENT ON 14.5.2010. THE LD.AO HAS OBSERVED THAT DURING THE COURSE OF SEARCH DOCUMENT INVENTORISED AS ANNEXURE A/1-14 WAS FOUND AND SEIZED. ON PAGE NO.51 (BACK-SIDE OF THIS PAGE) DET AILS OF TRANSACTION RELATED TO SALE OF A PROPERTY BEARING F .P. NO.90 AND FP NO.28 OF VEJALPUR LAND WAS FOUND. THE LD.AO ON THE BASIS OF INQUIRY CONDUCTED FROM MAMLATDAR AND TALATI OFFICE REGARDING LAND IN SURVEY NO.888 FORMED AN OPINION THAT BOTH ASSESS EES HAVE MADE UNEXPLAINED INVESTMENT IN LAND WHICH WERE STAR TED IN F.Y.2003-03 AND THESE LANDS WERE SOLD GIVING RISE T O PROFIT IN ASSTT.YEAR 2006-07. HE MADE AN ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN YEAR 2004-05 AND 2005-06. HE MADE ADDITION OF RS.1,40,61,000/- IN THE HANDS OF EACH A SSESSEE AS PROFIT ON SALE OF SUCH LAND IN THE ASSTT.YEAR 2006- 07. ON APPEAL, THE LD.CIT(A) HAS DELETED THIS ADDITION PARTLY AND CONFIRMED ADDITION TO THE EXTENT TO RS.70,30,507/-. THE AO A CCORDINGLY IMPOSED PENALTY OF RS.23,70,000/- UPON EACH ASSESSE E. ITA NO.635 AND 636/AHD/2016 3 4. IT HAS BEEN BROUGHT TO OUR NOTICE THAT QUANTUM A DDITIONS WERE CHALLENGED BEFORE THE TRIBUNAL IN IT(SS)A.NO.2 61, 285 AND 265/AHD/2012. IN OTHER WORDS, REVENUE CHALLENGED P ART DELETION OF THE ADDITIONS BY THE LD.CIT(A) WHEREAS THE ASSES SEE CHALLENGED CONFIRMATION OF ADDITION. APPEALS OF THE REVENUES WERE DISMISSED AND THE APPEALS OF THE ASSESSEE WERE ALLOWED. ADDI TIONS STANDS DELETED. COPY OF THE TRIBUNALS ORDER DATED 28.6.2 017 HAS BEEN PLACED ON RECORD. 5. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)( C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN, BUT WHIC H SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGU ISHED BY DELETING ADDITIONS BY THE TRIBUNAL IN ITS ORDER DATED 28.6.2 017 (SUPRA) IN THE QUANTUM APPEAL OF THE ASSESSEE THE IMPUGNED PENALTY IS NOT SUSTAINABLE, ACCORDINGLY WE DO NOT FIND ANY ERROR I N THE ORDER OF THE LD.CIT(A), WHICH IS UPHELD AND BOTH APPEALS OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, BOTH APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST MARCH, 2018. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/03/2018