THE ITO-1, Ratlam V. SHRI SUBHASH CHANDRA CHOUHAN, Ratlam

ITA 731/IND/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5596 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER INCOME TAX OFFICER WARD 1, RATLAM VS. SHRI SUBHASH CHANDRA CHOUHAN SADAR BAZAR, NAMLI, DIST. RATLAM APPELLANT RESPONDENT PAN: AAVPC 2526 Q APPELLANT BY SHRI MOHD. JAVED, SR. DR RESPONDENT BY NONE DATE OF HEARING 18.11.2016 DATE OF PRONOUNCEMENT 18.11.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-UJJAIN, [HEREINAF TER REFERRED TO AS THE CIT (A)] DATED 01.09.2015. THIS APPEAL PERTAINS TO ASSESSMENT YEAR 2005-06. WHICH AROSE OUT OF PENALTY ORDER PASSED UNDER SECTIO N 2711(1) (C) OF INCOME TAX ACT, 1961(HEREIN AFTER REFERRED TO AS THE ACT ) BY THE ITO W-1, RATLAM [HEREINAFTER REFERRED TO AS THE AO]. 2. THE AO HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED UNDER SECTI ON 271(1) (C) ON THE I.T.A. NO.731/IND/2015 ASSESSMENT YEAR:2005-06 SHRI SUBHASH CHANDRA CHOUHAN /I.T.A. NO. 731/IND/2 015/A.Y. 05-06 PAGE 2 OF 5 AMOUNT OF CONCEALMENT WHICH WAS ADMITTED BY THE ASSESS EE DURING THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A. 2.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) WAS JUSTIFIED IN DIRECTING THE AO TO REDUCE THE PENALTY ON INCOME OF RS. 16,08,727/- WHICH WAS ALREADY UNDER DISPUTE BEFORE TH E HONOURABLE ITAT BY WAY OF MISCELLANEOUS APPLICATION AS DOUBLE CREDIT OF C ASH SURRENDERED DURING THE SURVEY WAS GIVEN TO THE ASSESSEE. 3. BOTH GROUNDS OF APPEAL ARE BEING CONSIDERED AS SAME AR E INTERCONNECTED 4. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE IS INDIVIDUAL ENGAGED IN THE BUSINESS O F TRADING IN GRAINS AND KIRANA ITEMS. RETURN OF INCOME WAS FILED ON 31.10. 2005 DECLARING TOTAL INCOME AT RS. 14, 61,353/-. A SURVEY UNDER SECTION 1 33A WAS CONDUCTED ON 29.01.2005, WHEREIN PROMISSORY NOTES/HUNDIES, AND AG REEMENT FOR PURCHASE OF LAND WERE FOUND. THE ASSESSEE HAS MADE SURRENDER OF UNDISCLOSED INCOME OF RS. 86,79,000/- IN HIS STATEMENT RECORDED ON OATH WHICH INTER-ALIA INCLUDED RS. 66 LAKH ON HUNDIES, RS. 20 LAKH ON UNACCOUNTED INVESTMENT AND RS. 79,000/- UNACCOUNTED STOCK. HOWEVER, WHILE FILING R ETURN OF INCOME THE ASSESSEE HAS DISCLOSED INCOME AT RS. 16, 50,000/- ON LY. THEREFORE, THE AO MADE ADDITION OF RS. 73, 46,877/- INCLUDING RS. 49, 5 0,000/- BECAUSE OF INVESTMENT IN HUNDIES AND RS. 79,000/- ON ACCOUNT OF UNACCOUNTED STOCK. IN ADDITION, INITIATED PENALTY PROCEEDINGS UNDER SECTIO N 271(1) (C) OF THE ACT. BEING, AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT (A) WHO CONFIRMED THE ADDITION OF RS. 52,29,919/-. THEREFORE , A SHOW CAUSE NOTICE UNDER SECTION 271(1) (C) READ WITH SECTION 274 WAS ISSUED BY THE AO. THE SHRI SUBHASH CHANDRA CHOUHAN /I.T.A. NO. 731/IND/2 015/A.Y. 05-06 PAGE 3 OF 5 ASSESSEE REQUESTED FOR KEEPING THE PROCEEDINGS IN ABEYA NCE UNTIL THE FINALIZATION OF PENDING BEFORE THE TRIBUNAL. HOWEVER THE AO LEVIED THE MINIMUM PENALTY OF RS.16,93,869/- BEING 100% OF CONCEA LED INCOME OF RS. 50,29,000/-. (BEING HUNDIES INVESTMENT OF RS. 49,50 ,000/- AND STOCK OF RS. 79,000/-). 5. BEING, AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE T HE LD. CIT (A). DURING THE COURSE OF APPELLATE PROCEEDING, THE CIT (A) NOTED THAT THE TRIBUNAL VIDE ITS ORDER DATED 11.05.2015 IN I.T.A. NO. 268/IND/201 3 IN CASE OF THE ASSESSEE, HAS ALLOWED SET OFF ON ACCOUNT OF SHORTAGE OF CASH OF RS. 16,08,727/- AS AVAILABLE FOR EXPLAINING IN UNACCOUNTED HUNDIES. ACCO RDINGLY, THE LD. CIT (A) HAS REDUCED THE ADDITION AT RS. 33,41,273/- [ADDIT ION CONFIRMED IN APPEAL BY CIT(A) RS. 49,50,000- MINUS SHORTAGE OF CASH RS. 16, 08,727] AND WORKED OUT QUANTUM OF CONCEALED INCOME AT RS. 34,20,273/- [ 33,4 1,273+ 79,000] FOR LEVY OF PENALTY AND DIRECTED THE AO TO RE-CALCULATE THE PENALTY LEVIABLE ACCORDINGLY INSTEAD OF RS. 50,29,000/- AS CALCULAT ED BY THE AO. THE LD. CIT (A) ALSO PLACED RELIANCE IN THE CASE OF MAK DATA P. LTD. VS. CIT (2013) 358 ITR 593(SC) IN SUPPORT OF HIS FINDING AND CONFIRMED THE PENALTY ON REDUCED QUANTUM. THUS, THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. 6. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. BEFORE US THE LD. DEPARTMENTAL REPRESENTATIVE FILED COPY OF T RIBUNAL ORDER IN THE CASE OF THE ASSESSEE AND SUBMITTED THAT THE LD. CIT (A) HA S CORRECTLY REDUCED THE OF PENALTY QUANTUM ON THE BASIS OF TRIBUNAL ORDER AS THE TRIBUNAL HAS ALLOWED SET OFF ON ACCOUNT OF SHORTAGE OF CASH FOUND DURIN G SURVEY. THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT (A). SHRI SUBHASH CHANDRA CHOUHAN /I.T.A. NO. 731/IND/2 015/A.Y. 05-06 PAGE 4 OF 5 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE AO HAD IMPOSED CONCEALMENT PENALTY ON THE AMOUNT OF RS. 50,29,000/- BEING THE AMOU NT OF ADDITION OF RS. 49,50,000/- ON ACCOUNT OF HUNDIES AND RS. 79,000/- ON ACCOUNT OF UNACCOUNTED STOCK, AS CONFIRMED IN FIRST APPEAL BY THE LD. CIT (A). HOWEVER, IN APPEAL BEFORE LD. CIT (A), IT WAS POINTED OUT THAT T RIBUNAL VIDE ORDER DATED 14.05.2015, HAS FURTHER ALLOWED RELIEF OF RS. 16,08 ,273/- ON SHORTAGE OF CASH FOUND DURING THE SURVEY AND AS REFLECTED IN ASSESSME NT ORDER ALSO. ACCORDINGLY, THE LD. CIT (A) HAS DIRECTED THE AO TO RECALCULATE THE PENALTY ON THE AMOUNT OF CONCEALED INCOME REMAINED AFTER TRI BUNAL ORDER. WE ALSO FIND THAT LD. CIT (A) HAS CORRECTLY RELIED IN THE CASE OF MAK DATA P. LTD. VS. CIT (2013) 358 ITR 593(SC)IN SUPPORT OF HIS FINDING AND WE ALSO CONCUR THE SAME. WE HAVE CONSIDERED THE FACTS AND OF THE VIEW THAT WE D ID NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A). ACCORDINGLY, BOTH THE GRO UNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 9. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2016. SD/- SD/- (D.T.GARASIA) JUDICIAL MEMBER (O.P.MEENA) ACCOUNTANT MEMBER DATED : NOVEMBER 18 , 2016. SHRI SUBHASH CHANDRA CHOUHAN /I.T.A. NO. 731/IND/2 015/A.Y. 05-06 PAGE 5 OF 5