M/S. MARATHON DEVELOPERS, MUMBAI V. DY.C.I.T. CENTRAL CIRCLE-38, MUMBAI

ITA 6550/MUM/2008

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2866 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 11-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.6550/MUM/2008 ( %' ( / ASSESSMENT YEAR: 2005-06) M/S. MARATHON DEVELOPERS MARATHON HOUSE, DEVIDAYAL ROAD, MULUND(W) MUMBAI - 400080 ' / VS. DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-38 AAYAKAR BHAVAN, MUMBAI ./ ./ PAN/GIR NO. : AAAFM1737A ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 18.03.2016 !' /DATE OF PRONOUNCEMENT: 22.06.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED PRESENT APPEAL AGAINST THE O RDER DATED 11.09.2008 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL VI, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2005-06 WHEREIN THE ASSESSEE HAS CHALLEN GED THE ASSESSEE BY: SHRI J. P. BAIRAGRA DEPARTMENT BY: SHRI SUMIT KUMAR ITA NO.6550/M/2008 A.Y. 2005-06 2 CONFIRMATION OF THE PENALTY ORDER DATED 28.06.2007 PASSED BY THE ASSESSING OFFICER. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSMENT OF THE APPELLANT WAS COMPLETED U/S.143(3) R.W.S.153B OF THE INCOME T AX ACT, 1961 (IN SHORT THE ACT) ON 08.12.2006 DETERMINING THE TOTAL INCOME TO THE TUNE OF RS.47,38,360/- AS AGAINST THE RETURNED INCO ME OF RS.40,93,810/- SHOWED BY THE ASSESSEE IN HIS RETURN OF INCOME FILED ON 31.10.2005. ON 02.12.2004 SEARCH ACTION U/S.132 OF THE ACT WAS INITIATED AND SOME LOOSE SHEETS WERE FOUND AND SEIZ ED. ON THE BASIS OF TWO LOOSE PAPERS, THE ADDITION TO THE TUNE OF RS .6,44,550/- WAS MADE. AFTER FINALIZING OF THE ASSESSMENT THE ASSES SING OFFICER INITIATED ACTION AGAINST THE ASSESSEE U/S.271(1)(C) OF THE ACT AND LEVIED PENALTY TO THE TUNE OF RS.2,35,858/-. THE ACTION O F THE ASSESSING OFFICER WAS CONFIRMED BY THE LEARNED CIT(A). THERE FORE THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D CAREFULLY. AT THE VERY OUTSET THE LEARNED REPRESENTATIVE OF THE ASSES SEE HAS ARGUED THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE PENALT Y TO THE TUNE OF RS.2,35,858/- WHICH IS NOT BASED UPON NON-FURNISHIN G OF AN INACCURATE PARTICULARS AND NOR CONCEALMENT OF ANY PARTICULAR O F INCOME. IT IS ALSO ARGUED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.6,44,550/- ON THE BASIS OF TWO LOOSE PAPERS WHICH WERE NOT CONNEC TED WITH ANY ITA NO.6550/M/2008 A.Y. 2005-06 3 RECORD OF THE ASSESSEE, THEREFORE, THE SAME IS NOT LIABLE TO BE CONSIDERED IN ACCORDANCE WITH LAW AND THE SAME IS N OT A REASONABLE GROUND TO IMPOSE THE PENALTY UPON THE ASSESSEE. I T IS ALSO ARGUED THAT THE EXPLANATION TO SECTION 271(1)(C) OF THE ACT WAS NOT APPLICABLE TO THE CASE OF THE APPELLANT BECAUSE IT IS NOT A CASE WHETHER NO EXPLANATION WAS OFFERED OR WHETHER THE EXPLANATION OFFERED BY THE APPELLANT WAS FOUND FALSE. 5. ON THE OTHER HAND THE LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS STRONGLY RELIED UPON THE ORDER PASSED BY THE CI T(A) IN QUESTION AND IT IS ALSO ARGUED THAT THE ASSESSEE DID NOT FIL E AN APPEAL AGAINST THE SUBSTANTIVE ORDER OF ASSESSMENT, THEREFORE, THE ASS ESSMENT ORDER HAS BECOME FINAL HENCE THE CIT(A) HAS RIGHTLY CONFIRMED THE ORDER IN QUESTION. KEEPING IN VIEW OF THE ARGUMENT ADVANCE D BY THE PARTIES AND PERUSING THE RECORD CAREFULLY, IT CAME INTO NOT ICE THAT THE ASSESSING OFFICER MADE THE ADDITION IN THE ASSESSME NT ORDER DATED 08.12.2006 ON THE BASIS OF TWO LOOSE PAPERS FOUND I N THE PREMISES OF THE ASSESSEE. BEFORE DISCUSSING FURTHER IT IS NECE SSARY TO ADVERT THE CONTENTS OF LOOSE PAPER ON RECORD. THE CONTENTS O F THESE DOCUMENTS AND THE EXPLANATION GIVEN BY THE APPELLANT IN RESP ECT OF THESE DOCUMENTS ARE AS FOLLOWS: PAGE NO.1. THIS PAGE CONTAINS HAND WRITTEN NOTE AMOUNTING TO RS.2,47,950/- REDUCED BY RS.38,000/- A ND RS.2,09,950/- SHOWN AS BALANCE. THERE IS ALSO MENT ION OF ITA NO.6550/M/2008 A.Y. 2005-06 4 M. MAX, MRS. SANAMA SHETTY, UNIT NO.509 AND AREA : 551 X 450. THE ASSESSEE EXPLAINED THAT THE NOTING PERTAINED TO ESTIMATES GIVEN FOR EXTRA WORK / FURNI TURE WORK AND ABOUT 15% DISCOUNT OFFERED BY SHRI CHETAN R. SHAH AS PARTY WAS REFERRED BY DIRECTORS CLOSE FRIE ND BUT THE PROPOSAL DID NOT MATERIALIZED. PAGE NO.4 THIS PAGE CONTAINS HAND WRITTEN EQUATIONS OF 661 X 600 AMOUNTING TO RS.3,96,600/- REDUCED BY RS.50,000/- AND RS.3,46,600/- SHOWN AS RECEIVABLE. THERE IS ALSO MENTION M. MAX, MR. B. GOSH, UNIT NO.508, - 2.5 S.K.PAPER AND 1.0 ABHAY SHAH. THE ASSESSEE EXPLAINED THAT THE NOTHING PERTAINED TO ES TIMATE GIVEN FOR EXTRA WORK / FURNITURE WORK ALONG WITH ESTIMATED AMOUNT OF EXPENSES TO BE INCURRED FOR THE SAME OUT OF WHICH RS.50,000/- WAS TOWARDS LIGHT FITTINGS TO NORTHLIGHT (SUPPLIER). AS REGARDS 2.5 S.K. PAPER AND - 1.0 ABHAY SHAH, THE ASSESSEE STATED THAT AS PER TH E NOTINGS ON THIS PAGE, OUT OF BALANCE OF RS.3.5 LACS , RS.2.5 LACS WERE TO BE GIVEN TO SK PAPER FOR WORK TO BE CA RRIED OUT AND RS.1.00 LAC TO BE PAID TO ARCHITECT SHRI AB HAY SHAH. THE ASSESSEE STATED THAT THE PROPOSAL DID NO T MATERIALIZE. ITA NO.6550/M/2008 A.Y. 2005-06 5 NOW IT IS TO BE SEEN WHETHER THESE LOOSE PAPERS ARE RELATED TO THE ASSESSEE OR NOT. ASSESSEE DENIED THE CONTENTS OF T HE LOOSE PAPERS AND ALSO EXPLAINED THE MATTER OF THE LOOSE PAPER BEFORE THE ASSESSING OFFICER WHILE MAKING HIS STATEMENT. THE REPLY HAS ALSO BEEN MENTIONED ABOVE. NO DOUBT, WHILE COMPLETING THE AS SESSMENT U/S.143(3) DATED 08.12.2006, THE ADDITION WAS MADE TO THE TUNE OF RS. RS.6,44,550/-. THE SAID AMOUNT WAS ADDED TO THE IN COME OF THE ASSESSEE. THE ORDER DATED 08.12.2006 NOWHERE SPEAK S ABOUT THIS FACT THAT THESE LOOSE PAPERS WERE CORROBORATED WITH ANY OTHER DOCUMENTS RELATING TO THE ASSESSEE. THE ASSESSING OFFICER NO WHERE TALLIED THE FIGURE MENTIONED IN THE LOOSE PAPERS WITH THE ACCO UNTS BOOKS OF THE ASSESSEE. THE ASSESSING OFFICER ALSO NOWHERE ISSUE D THE NOTICE TO THE PARTIES TO PROVE OR DISPROVE THE STATEMENT. SINCE THE LOOSE PAPERS WERE RECOVERED BY THE AUTHORITY AND THE ASSESSEE DE NIED THE FIGURE MENTIONED THEREIN AS HIS INCOME, THEREFORE IT IS NE CESSARY ON THE PART OF THE DEPARTMENT TO LINK THE DOCUMENT WITH THE LED GER / ACCOUNT BOOKS OF THE ASSESSEE. MERELY SAYING THAT THE ASSE SSEE GAVE THE EVASIVE REPLY, IS NOT ITSELF SUFFICIENT TO ARRIVE A T THIS CONCLUSION THAT THE SAID AMOUNT WHICH WAS WRITTEN ON THE LOOSE PAPE RS WAS THE INCOME OF THE ASSESSEE. IT ALSO CAME INTO NOTICE T HAT IT IS NOWHERE ON RECORD THAT THE ASSESSING OFFICER HAS PROVED THIS F ACT THAT THE ASSESSEE HAD MADE THE FALSE STATEMENT BEFORE HIM. IT IS NOT IN DISPUTE THAT THE AMOUNT WHICH WAS WRITTEN ON THE LOOSE PAPERS AND AD DED TO THE INCOME OF THE ASSESSEE NOWHERE REFLECTED IN THE RET URN OF THE ASSESSEE ITA NO.6550/M/2008 A.Y. 2005-06 6 BUT THE SAID AMOUNT NOWHERE FOUND CONNECTED WITH TH E ASSESSEE WITH ANY RECORD OF HIM. IT IS THEREFORE, THERE IS NO CA SE TO FURNISH THE INACCURATE PARTICULARS AND CONCEALMENT OF PARTICULA R OF INCOME. IN VIEW OF THE ABOVE SAID PECULIAR FACTS AND CIRCUMSTA NCES OF THE CASE, WE ARE OF THE VIEW THAT THE CIT(A) HAS WRONGLY CONF IRMED THE ORDER PASSED BY THE ASSESSING OFFICER, THEREFORE WE SET A SIDE THE ORDER IN QUESTION AND DELETE THE PENALTY IN QUESTION. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 22 ND JUNE, 2016 MP MP MP MP * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI