BHAVANA A ZOTA, MUMBAI V. ACIT CEN CIR-35, MUMBAI

ITA 7324/MUM/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5214 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-08-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 30-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R M TIWARI
• Assessee Lawyers: PARAS S SAVLA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F , MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI V. DURG A RAO, JM I.T.A.NO.7324/MUM/2008 ASSESSMENT YEAR: 2003-04 MRS.BHAVANA A. ZOTA, A-101, SHIV KESHAR, ST.XAVIERS SCHOOL ROAD, OFF. BAPTISTA ROAD, VILE PARLE (W), MUMBAI 400056 PAN: AAAPZ 1519 M VS. ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 35, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARAS S. SAVLA RESPONDENT BY : SHRI R.M. TIWARI O R D E R PER J. SUDHAKAR REDDY, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 19.11.2008 OF THE COMMISSIONER OF INCOME-TAX(APPEAL S), CENTRAL VI, MUMBAI, FOR THE ASSESSMENT YEAR 2003-04, WHEREIN THE PENALTY LE VIED UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN CONFIRMED. 2. FACTS OF THE CASE ARE BROUGHT OUT IN PARA 1 OF T HE ASSESSMENT ORDER, WHICH IS EXTRACTED FOR READY REFERENCE: CONSEQUENT ON A SEARCH & SEIZURE OPERATION CONDUCT ED U/S.132 OF THE I.T. ACT IN THE CASE OF THE ASSESSEE ON 02.03.2006,A NOT ICE U/S.153A WAS ISSUED ON 13.04.2007. IN COMPLIANCE TO SUCH NOTICE THE ASS ESSEE FILED RETURN OF INCOME ON 18.06.2007 DECLARING A TOTAL INCOME OF ` 22,05,200/-.IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE, A SUM OF ` 19,48,643/- WAS DECLARED AS NET LONG TERM CAPITAL GAIN ARISING ON A CCOUNT OF SALE OF SHARES OF DATABASE FINANCE LTD., AND THE SAME WAS CLAIMED AS EXEMPT U/S.54F. IT WAS FOUND DURING THE SEARCH OPERATION THAT THE SHAR ES IN QUESTION WERE SHOWN TO HAVE BEEN ACQUIRED ON 11.04.2001 IN CASH A ND THEY HAD BEEN DEMATERIALIZED ON 25.02.2003 AFTER AN UNDULY LONG P ERIOD FROM THE ALLEGED DATE OF PURCHASE. THE FACTS AND CIRCUMSTANCES AS EX ISTING IN THE CASE SUGGEST THAT THE ASSESSEE HAD FABRICATED THE TRANSA CTION OF PURCHASE AND SALE OF SHARES TO TAKE ADVANTAGE OF THE EXEMPTION A VAILABLE U/S.54F IN RESPECT OF LONG TERM CAPITAL GAINS. WHEN CONFRONTED , MR. AJHIT B. ZOTA, HUSBAND OF THE ASSESSEE VIDE HIS REPLY TO Q.NO.24 O F THE STATEMENT DATED 02.032006 RECORDED U/S. 132(4) STATED THAT THE TRAN SACTION WAS ACCOMMODATIVE IN NATURE AIMED AT CONVERTING THE UND ISCLOSED INCOME OF THE ASSESSEE INTO ARTIFICIAL LONG TERM CAPITAL GAIN AND OFFERED THE ENTIRE SALE CONSIDERATION OF THE TRANSACTION AS UNDISCLOSED IN COME. SUBSEQUENTLY, MRS. BHAVANA ZOTA IN HER REPLY TO Q.NO. 2 OF THE STATEME NT RECORDED U/S.132(4) ON 03.03.2006 CONFIRMED THE STATEMENT OF HER HUSBAN D AND OFFERED TO DECLARE THE TOTAL CONSIDERATION AS UNDISCLOSED INCO ME FOR A.Y. 2003-04. ACCORDINGLY, THE ASSESSEE IN HER RETURN OF INCOME F ILED IN RESPONSE TO NOTICE ITA NO.7324/M/08 MRS. BHAVANA A. ZOTA. 2 U/S.153A HAS SHOWN THE ENTIRE CONSIDERATION OF ` 20,00,000/- AS SPECULATION PROFIT. 3. THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTI ON 271(1)(C) OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE FIRST APPELLATE AUTHORITY. THE ASSESSEE CLAIMED IMMUNITY FROM LEVY OF PENALTY UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1)(C) AMONGST OTHER T HINGS. THE FIRST APPELLATE AUTHORITY AT PARA 6.3 HELD THAT ASSESSEE IS NOT COV ERED BY THE EXEMPTION PROVIDED UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1) (C). HE CONFIRMED THE PENALTY. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI PARAS S. SAVLA, FAIRLY SUBMITTED THAT A BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F THE HUSBAND OF THE ASSESSEE, SHRI AJIT B. ZOTA, IN ITA NO.7325/MUM/2008, ORDER D ATED 16 TH JULY, 2010, ON IDENTICAL FACTS UPHELD THE ORDER OF THE CIT(A) AND CONFIRMED THE PENALTY UNDER SECTION 271(1)(C). 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI R. M. TIWARI, RELIED ON THE ORDER OF THE CIT(A). 7. ON CAREFUL CONSIDERATION ON THE FACTS AND CIRCUM STANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ISSUE IN QUESTION IS IDENT ICAL TO THE ISSUE BEFORE THE A BENCH OF THE TRIBUNAL IN THE CASE OF SHRI AJIT BL Z OTA, WHO WAS THE HUSBAND OF THE ASSESSEE. THE TRIBUNAL HAD RELIED UPON THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V. KIRIT DAHYABHAI PATEL, 121 ITR 159 (TB)(AHD.) HELD THAT THE BENEFIT OF IMMUNITY CONFERRED BY EXP LANATION 5 TO SECTION 271(1)(C) IS CONFINED TO THE RETURN FOR THE YEAR IN RESPECT O F WHICH THE PREVIOUS YEAR IS YET TO END OR EVEN THOUGH ENDED, THE TIME FOR FILING TH E RETURN UNDER SECTION 139(1) IS YET TO EXPIRE. IT HELD THAT IN THE CASE OF ANJIT B . ZOTA, THE RETURNS WERE FILED AFTER THE SEARCH AND THE INCOME IN QUESTION WAS NOT DISCL OSED IN THE ORIGINAL RETURN AND AS THE TIME FOR FILING THE RETURN U/S.139(1) HAD EX PIRED, THE ASSESSEE IS NOT ENTITLED TO IMMUNITY UNDER EXPLANATION 5 TO SECTION 271(1)(C ). AS NO OTHER ARGUMENT HAS BEEN ADVANCED BEFORE US, WE RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE ITA NO.7324/M/08 MRS. BHAVANA A. ZOTA. 3 BENCH OF THE TRIBUNAL IN THE CASE OF AJIT B. ZOTA D ISMISS GROUND NOS. 1 & 2 OF THE ASSESSEE. 8. COMING TO GROUND NO. 3, NO ARGUMENT HAS BEEN ADV ANCED BY THE ASSESSEE. THIS GROUND IS, THEREFORE, DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 13 TH DAY OF AUGUST, 2010. SD. SD. (V. DURGA RAO) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED THE 13 TH AUGUST, 2010. KN COPY TO: 1. THE ASSESSEE 2. THE ACI, CC-35, MUMBAI 3. THE CIT, CENTRAL III, MUMBAI. 4. THE CIT(A), CENTRAL-VI, MUMBAI 5. THE DR F BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI