ATUL C. VYAS, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 6611/MUM/2013

• Counselvise Citation: 661119914 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-06-2015
• Assessment Year: 1994-1995
• Appeal Filed On: 12-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JEEVANLAL LAVIDIYA
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 148; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.6611/MUM/2013 / ASSESSMENT YEAR 1994-95 . / ITA NO.6612/MUM/2013 / ASSESSMENT YEAR 1998-99 . / ITA NO.6613/MUM/2013 / ASSESSMENT YEAR 2000-01 ATUL C. VYAS, 16, HARDAYAL SOCIETY, 3, GARODIA NAGAR, GHATKOPAR (EAST), MUMBAI 400075 / VS. THE DCIT, CEN. CIR. 31, R.NO.413, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 ./ ./ PAN/GIR NO. : AABPV 5606N ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY NONE RESPONDENT BY SHRI JEEVANLAL LAVIDIYA ' # $ / DATE OF HEARING : 11/06/2015 ' # $ / DATE OF PRONOUNCEMENT : 11/06/2015 / O R D E R PER I.P.BANSAL,J.M: ALL THESE APPEALS ARE FILED BY THE ASSESSEE AND A RE DIRECTED AGAINST THREE SEPARATE ORDERS PASSED BY DATED CIT(A) -36, MUMBAI DATED 26/08/2013 IN RESPECT OF ASSESSMENT YEAR 1994-95, 1998-99 AND 200 0-01. GROUNDS OF APPEAL IN ALL THE YEARS ARE IDENTICAL EXCEPT DIFFERENCE IN FIGURES. GROUNDS OF APPEAL FOR A.Y 1994-95 READ AS UNDER: . ITA NO.6611,6112&6113/MUM/2013 2 1. THE LEARNED COMMISSION OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S.250 OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER WITHOUT COMPLYING WITH P RINCIPLES OF NATURAL JUSTICE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE PENALTY OF RS.1,07,750/- U/ S. 271(1)(C) OF THE ACT. 2. THE FIGURE MENTIONED IN GROUND NO.3 FOR OTHER YEA RS IS AS UNDER: A.Y. 1998-99 RS. 20 ,191/- A.Y. 2000-01 RS. 9 ,240/- 3. THESE APPEALS WERE EARLIER FIXED FOR HEARING ON 7/4/2015, WHEN NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE APPEALS WERE ADJOURNED TO 11/6/2015 WITH A DIRECTION TO SERVE NOTICE THROUGH RPAD. ACCORDINGLY, NOTICE WAS SENT AND THAT HAS BEEN DULY SERVED UPON THE ASS ESSEE, THE COPY OF ACKNOWLEDGEMENT IS PLACED ON RECORD. HOWEVER, AG AIN NONE WAS PRESENT AT THE TIME OF HEARING, AS THESE APPEALS ARE SMALL WE PROCEED TO DECIDE THEM EX- PARTE QUA THE ASSESSEE ON MERITS. A.Y. 1994-95: 4. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE AT AN INCOME OF RS.1,17,404/- AND IT WAS ASSESSED AT AN INCOME OF R S.4,38,855/-. THE FIRST ADDITION MADE TO THE INCOME OF THE ASSESSEE WAS IN RESPECT OF LONG TERM CAPITAL GAIN ON SALE OF 8500 SHARES OF MAZDA INDUSTRIES & L EASING, ON WHICH LONG TERM CAPITAL GAIN WAS SHOWN BY THE ASSESSEE AT A SUM OF RS.92,379/- BY TAKING COST AVERAGE OF SHARE AT RS.67.60 PER SHARES. HOWEVER, AO ADOPTED COST @ RS.52/- PER SHARE AND ACCORDINGLY LONG TERM CAPITAL GAIN WA S COMPUTED BY THE AO AT A SUM OF RS.2,55,890/-, AGAINST LONG TERM CAPITAL GAI N SHOWN BY THE ASSESSEE OF RS.92,379/-. . ITA NO.6611,6112&6113/MUM/2013 3 4.1 ANOTHER ADDITION WAS A SUM OF RS.75,000/- REPRE SENTING LOANS FROM VARIOUS RELATIVES, SUCH AS WIFE AND MOTHER OF THE ASSESSEE. ACCORDING TO AO THOSE CREDITORS WERE NOT GAINFULLY EMPLOYED ANYWHE RE, THEREFORE, COULD NOT HAVE THEIR OWN SOURCE OF INCOME AND IN THE CIRCUMST ANCES THE SAID LOANS WERE CONSIDERED TO BE BOGUS. 4.2 NEXT ADDITION WAS A SUM OF RS.55,000/- WHICH WA S DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IN CASH AND THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE AS IT WAS FOUND BY THE AO THAT EXP LANATION OF THE ASSESSEE WAS NOT SATISFACTORY. 4.3 ANOTHER ADDITION OF RS.9,640/- WAS MADE, WHICH REPRESENTED DIVIDEND INCOME WHICH WAS NOT OFFERED TO TAX. 4.4 THE AFOREMENTIONED ADDITIONS WERE CHALLENGED BY THE ASSESSEE IN AN APPEAL BEFORE LD. CIT(A), WHICH APPEAL WAS DISMISSE D. 5 THE AO ISSUED SHOW CAUSE NOTICES TO THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE LEVIED. HOWEVER, ON THE GIVE N DATES THE ASSESSEE DID NOT COMPLY, THEREFORE, THE AO HAS LEVIED PENALTY @100% WHICH HAS BEEN COMPUTED AT RS.1,07,750/-. 6. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE LD. C IT(A). IT WAS SUBMITTED THAT ASSESSEE IN QUANTUM PROCEEDINGS HAD FILED APPE AL BEFORE LD. CIT(A), WHICH WAS DISMISSED AND ASSESSEE COULD NOT FILE FURTHER A PPEAL BEFORE THE TRIBUNAL DUE TO FINANCIAL PROBLEMS. ON THESE SUBMISSIONS OF THE ASSESSEE, LD. CIT(A) HAS DISMISSED THE APPEAL WITH THE FOLLOWING OBSERVA TIONS: 5.2 NO APPEAL HAS BEEN FILED BEFORE THE HONBLE IT AT, MUMBAI. THE APPELLANT HAS ALSO NOT COOPERATED WITH THE AO DURING THE PENA LTY HEARING. IT IS ALSO SEEN THAT INCOME HAS BEEN ARRIVED AT RS.4,38,855/- AGAIN ST DECLARED RETURNED INCOME OF RS.1,17,404/-. THE AO HAS LEVIED PENALTY AT 100 % OF RS.1,07,750/- WHICH APPEARS TO MY MIND AS REASONABLE FOR CONCEALING PA RTICULARS OF INCOME. . ITA NO.6611,6112&6113/MUM/2013 4 ASSESSMENT YEAR 1998-99: 7. RETURN OF INCOME WAS FILED ON A SUM OF RS.20,000 /-, WHICH WAS ASSESSED AT A SUM OF RS.1,84,008/- WITH THE FOLLOWING ADDITI ONS: 1) INCOME U/S.68 OF I.T. ACT, 1961 - RS. 25,705/- 2) PROFIT ON SALE OF MOVABLE ASSETS - RS. 41,265/- 3) INCOME FROM BROKERAGE BUSINESS - RS. 25,000/- 4) INCOME FROM UNDISCLOSED SOURCES - RS. 72,000/- - RS.1,63,970/- ============ 7.1 REST OF THE FACTS REMAIN THE SAME AS APPEAL WAS FILED BY THE ASSESSEE BEFORE LD. CIT(A) AND THE SAME WAS DISMISSED. NO FURTHER APPEAL WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL DUE TO FINANCIAL P ROBLEMS AND PENALTY HAS BEEN LEVIED BY THE AO FOR NON-COMPLIANCE WITH THE N OTICES. THE MINIMUM PENALTY HAS BEEN COMPUTED AT A SUM OF RS.24,191/- A ND THE SAME IS IMPOSED. ASSESSMENT YEAR 2000-01: 8. THE RETURN OF INCOME WAS FILED AT NIL AND THE SA ME WAS REGULARIZED BY ISSUE OF NOTICE UNDER SECTION 148 DATED 7/2/2003. FOLLOWING ADDITIONS WERE MADE TO THE RETURNED INCOME. I) EXPENDITURE INCURRED FOR HOUSEHOLD EXPENSES OUT OF UNDISCLOSED SOURCES RS.72,000/- II)UNDISCLOSED BROKERAGE INCOME RS.25,000/- TOTAL : RS.97,000/- =========== REST OF THE FACTS REMAIN THE SAME. THE MINIMUM PEN ALTY WAS COMPUTED AT A SUM OF RS.9,214/- AND THE SAME HAS BEEN CONFIRMED B Y LD. CIT(A) ON THE GROUND THAT ASSESSEE DID NOT PREFER FURTHER APPEAL. 9. LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A ) VIDE WHICH IMPUGNED PENALTIES HAVE BEEN CONFIRMED. . ITA NO.6611,6112&6113/MUM/2013 5 10. WE HAVE HEARD LD. DR. WE HAVE CAREFULLY GONE T HROUGH THE PENALTY ORDER AND ORDER PASSED BY LD. CIT(A). THE PENALTY HAS BEEN CONFIRMED BY LD. CIT(A) SIMPLY ON THE GROUND THAT ASSESSEE DID NOT F ILE FURTHER APPEAL IN QUANTUM PROCEEDINGS BEFORE THE TRIBUNAL. THE REASO N WAS CLEARLY STATED THAT WHY THE FURTHER APPEAL WAS NOT FILED. REASON FOR N ON-FILING OF THE APPEAL WAS FINANCIAL CONSTRAINTS. IT CAN ALSO BE SEEN FROM TH E RETURN FILED BY THE ASSESSEE THAT ASSESSEE IS VERY SMALL, THEREFORE, THE REASON FOR NON-FILING OF FURTHER APPEAL IN QUANTUM PROCEEDINGS CANNOT BE SAID TO BE SUFFICI ENT FOR LEVY OF CONCEALMENT PENALTY. THE ADDITIONS MADE BY THE AO ITSELF SHOUL D BE TESTED TO THE CRITERIA FOR LEVY OF CONCEALMENT PENALTY. IF WE LOOK INTO THE A DDITIONS MADE IN RESPECT OF ASSESSMENT YEAR 1994-95, WHICH HAVE BEEN DISCUSSED IN DETAIL IN ABOVE PART OF THIS ORDER, FIRST ADDITION REPRESENT THE DIFFERENCE IN LONG TERM CAPITAL GAIN WHICH HAS BEEN DIFFERENTLY ADOPTED BY AO AS AGAINS T THE CLAIM OF THE ASSESSEE. IT IS NOT A MATTER WHERE THE ASSESSEE DID NOT DISCL OSE THE ENTIRE FACTS TO THE AO, THEREFORE, THE ADDITION ON ACCOUNT OF SUCH LONG TER M CAPITAL GAIN CANNOT BE HELD TO BE A GOOD GROUND FOR LEVY OF CONCEALMENT P ENALTY SINCE THERE ARE NO UNDISCLOSED FACTS. 10.1 THE NEXT ADDITION IS LOANS OBTAINED BY ASSESSE E FROM WIFE AND MOTHER WHICH AGGREGATED TO A SUM OF RS.75,000/- WHICH CANN OT BE SAID TO BE A HUGE AMOUNT WHICH CANNOT BE OWNED BY A PERSON WHO ARE N OT GAINFULLY EMPLOYED. LOOKING INTO THE FACTS OF THE CASE AND SMALLNESS O F THE AMOUNT, THIS ADDITION ALSO DOES NOT WARRANT LEVY OF CONCEALMENT PENALTY. SIMILAR IS THE POSITION WITH THE ADDITION OF RS.55,000/- DEPOSITED AS CASH IN THE BANK ACCOUNT OF THE ASSESSEE. THEREFORE, IN RESPECT OF NONE OF THE ABO VE ADDITIONS LEVY OF CONCEALMENT PENALTY CAN BE HELD TO BE JUSTIFIED. A CCORDINGLY, CONCEALMENT PENALTY LEVIED FOR ASSESSMENT YEAR 1994-95 AMOUNTIN G TO RS.1,07,750/- IS DELETED. . ITA NO.6611,6112&6113/MUM/2013 6 10.2 NOW COMING TO THE ASSESSMENT YEAR 1998-99, THE ADDITIONS MADE IN THIS YEAR ALSO ARE VERY SMALL FOR WHICH IT CANNOT BE SAI D THAT ASSESSEE CAN BE HELD LIABLE FOR LEVY OF CONCEALMENT PENALTY. MOREOVER, THE ASSESSMENT WAS ALSO FRAMED UNDER SECTION 144 OF THE ACT AND THE ADDITIO NS WERE CONFIRMED BY LD. CIT(A). THE ASSESSEE COULD NOT FILE FURTHER APPEA L DUE TO FINANCIAL PROBLEMS. LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CAS E, WE ARE OF THE OPINION THAT LEVY OF CONCEALMENT PENALTY IN THE PRESENT CASE IS NOT JUSTIFIED AND WE, THEREFORE, DELETE THE PENALTY OF RS.24,191/-. 10.3 NOW COMING TO ASSESSMENT YEAR 2000-01, THE NAT URE OF ADDITION MADE IN THE PRESENT CASE IS ALSO REPRESENTING EXPENDITURE I NCURRED FOR HOUSEHOLD EXPENDITURE WHICH HAVE BEEN ESTIMATED AT RS.72,000/ - AND ESTIMATED BROKERAGE INCOME. HERE ALSO AO DID NOT SPECIFY THA T WHAT PARTICULARS WERE CONCEALED BY THE ASSESSEE. THESE ARE ESTIMATED ADD ITION WITHOUT BRINING ANY MATERIAL AND FACTS ON RECORD TO SAY THAT ADDITION S WERE MADE ON THE BASIS OF SOME CONCRETE MATERIAL. THEREFORE, FOR THIS YEAR ALSO, ACCORDING TO THE FACTS OF THE CASE, LEVY OF CONCEALMENT PENALTY OF RS.9240/- IS UNJUSTIFIED AND IS DELETED. 12. IN VIEW OF ABOVE DISCUSSIONS ALL THE APPEALS FI LED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/06/2015 ' )* + , 11/06/2015 ' SD/- SD/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ) MUMBAI; + DATED 11/06/2015 . ITA NO.6611,6112&6113/MUM/2013 7 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /# ( ) / THE CIT(A)- 4. /# / CIT 5. 01 #23 , $ 23 , ) / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, 0# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ) / ITAT, MUMBAI . . ./ VM , SR. PS