ITO, WD-6(4), KOLKATA, Kolkata V. M/s Wanderland Real Estates Pvt. Ltd., Kolkata

ITA 757/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1308 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 153A; 115JB; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 757/KOL/201 5 ASSESSMENT YEAR : 2009-1 0 I.T.O, WARD-6(4), KOLKATA - VS- M/S WANDERLAND REAL ESTATES PVT. LTD. [PAN: AAACW 6397 F] (APPELLANT) (RESPONDEN T) FOR THE APPELLANT : SHRI G. HANGSHING, CIT FOR THE RESPONDENT : NONE. DATE OF HEARING : 13.02.2018 DATE OF PRONOUNCEMENT : 07.03.2018 ORDER PER M.BALAGANESH, AM 1. . THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-2, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO.589/CIT(A)- 2/6(4)(13-14)/14-15 DATED 06.01.2015 AGAINST THE O RDER PASSED BY THE ITO, WARD-6(4), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 271AAA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30.09.2013 FOR THE ASSESSM ENT YEAR 2009-10. 2. AT THE OUTSET, WE FIND THAT THERE IS A DELAY OF 27 DAYS IN FILING OF APPEAL BY THE REVENUE. THE REASONS FOR THE DELAY STATED IN THE C ONDONATION PETITION HAS BEEN EXAMINED AND WE ARE CONVINCED THAT THE REVENUE HAD PROPERLY EXPLAINED THE DELAY IN THE INSTANT CASE AND ACCORDINGLY WE DEEM IT FIT AND APPROPRIATE TO CONDONE THE DELAY AND ADMIT THE APPEAL OF THE REVENUE FOR ADJUDICATIO N. 2 ITA NO.757/KOL/2015 M/S WANDERLAND REAL ESTATES PVT. LTD. A.YR.2009-10 2 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL OF T HE REVENUE IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U /S 271AAA OF THE ACT IN THE SUM OF RS 40,50,000/- IN THE FACTS AND CIRCUMSTANCES OF TH E CASE. 4. THE BRIEF FACTS OF THIS CASE IS THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. THE RE GULAR RETURN OF INCOME FOR THE ASST YEAR 2009-10 WAS FILED BY THE ASSESSEE ON 25.11.200 9 DECLARING TOTAL INCOME OF RS 1,32,76,503/- WHICH WAS DULY PROCESSED U/S 143(1) O F THE ACT. THERE WAS A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT CARRIED OUT AT THE BUSINESS PREMISES OF KALANI GROUP SITUATED AT 11, TUKOGANJ MAIN ROAD, INDORE ON 16.4.2009. CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE COMPANY WERE FOUND AND SE IZED DURING THE COURSE OF SEARCH. ACCORDINGLY, THE PROCEEDINGS U/S 153C OF THE ACT WE RE INITIATED VIDE OFFICE NOTICE DATED 18.4.2012 WHICH WAS DULY SERVED UPON THE ASSE SSEE ON 18.4.2012. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED ITS RETURN O N 17.5.2012 DECLARING TOTAL INCOME OF RS 1,32,76,503/- . ON THE BASIS OF INFORMATION REC EIVED FROM ADI WING, INDORE, THE ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTION OF RS 1,00,00,000/- RECORDED ON PAGE NO. 10 OF BS-6 AND RS 1,37,28,000/- ON PAGE NO. 287 OF BS-16. THE ASSESSEE COMPANY FILED A WRITTEN SUBMISSION AND STATED THAT SAID SUMS AND RS 10,84,000/- AS DISCUSSED IN ASST YEAR 2007-08 ARE PART OF RS 4,05, 00,000/- SHOWN AS INCOME FROM BUSINESS ACTVITIES IN THE PROFIT AND LOSS ACCOUNT. THIS FACT OF DECLARATION OF ADDITIONAL INCOME OF RS 4,05,00,000/- WAS ALSO MENTIONED IN TH E NOTES TO ACCOUNTS TO THE AUDITED ACCOUNTS. AS THE SAID SUMS ARE ALREADY INCLUDED IN THE ORIGINAL RETURN WHICH WAS FILED AFTER THE DATE OF SEARCH, NO FURTHER DECLARATION WA S REQUIRED IN THE INCOME FILED BY IT U/S 153C OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S 153C READ WITH SECTION 153A OF THE ACT ON 28.3.2013 DETERMINING TOTAL INCOME AT RS 1,32,76,503/- UNDER THE NORMAL PROVISIONS OF THE ACT AND BOOK PROFIT OF RS 4,09,96 ,771/- U/S 115JB OF THE ACT. IN EFFECT, THE RETURNED INCOME WAS ACCEPTED U/S 153C O F THE ACT. 3 ITA NO.757/KOL/2015 M/S WANDERLAND REAL ESTATES PVT. LTD. A.YR.2009-10 3 5. THE LD AO OBSERVED THAT THE ASSESSEE MADE DISCLO SURE U/S 132(4) OF THE ACT TO OFFER ADDITIONAL INCOME OF RS 4,05,00,000/- CONSEQUENT TO THE SEARCH , SUBSTANTIATED THE MANNER OF DERIVING THE SAME AND ALSO PAID THE TAXES TOGETHER WITH INTEREST THEREON. HOWEVER, HE OBSERVED THAT BUT FOR THE SEARCH, THE A SSESSEE WOULD NOT HAVE COME FORWARD TO OFFER THIS INCOME AND PAY TAXES THEREON. ACCORDINGLY, HE LEVIED PENALTY U/S 271AAA OF THE ACT @ 10% OF UNDISCLOSED INCOME OF RS 4,05,00,000/- AND ARRIVED AT THE PENALTY FIGURE OF RS 40,50,000/-. 6. THE LD CITA OBSERVED THAT SUBSEQUENT TO THE SEAR CH , THE PRESIDENT OF KALANI GROUP IN HIS LETTER DATED 13.10.2009 MADE A CONSOLIDATED DISCLOSURE OF RS 30,00,00,000/- , WHICH INCLUDED A DISCLOSURE OF RS 4,05,00,000/- PER TAINING TO THE ASSESSEE FOR ASST YEAR 2009-10. THE ASSESSEE THEN FILED ITS RETURN O F INCOME U/S 139(1) OF THE ACT DISCLOSING INCOME OF RS 1,32,76,503/- ON 25.11.2009 AND SUBSEQUENTLY WHEN PROCEEDINGS U/S 153C OF THE ACT WERE INITIATED ON I T VIDE NOTICE DATED 18.4.2012 , THE ASSESSEE FILED ITS RETURN ON 17.5.2012 DISCLOSING T HE SAME INCOME OF RS 1,32,76,503/- .THE ASSESSEE PLEADED THAT IT HAD SATISFIED ALL THE CUMULATIVE CONDITIONS PRESCRIBED U/S 271AAA(2) OF THE ACT AND ACCORDINGLY IS ENTITLED FO R IMMUNITY FROM LEVY OF PENALTY. HE ACCORDINGLY DELETED THE PENALTY LEVIED IN THE SU M OF RS 40,50,000/- U/S 271AAA OF THE ACT. 7. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US O N THE FOLLOWING GROUND:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT PENALTY OF RS. 40,50,000/- U/S 271AAA WAS NOT WARRANTED, IGNORING THE FACT THAT THE ASSES SEE COULD NOT EXPLAIN THE SOURCE OF ADDITIONAL INCOME DECLARED U/S 132(4). 8. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAV E HEARD THE LD DR, WHEREIN HE VEHEMENTLY RELIED ON THE ORDER OF THE LD AO. WE FI ND THAT THE PRESIDENT OF KALANI GROUP HAD MADE A DISCLOSURE U/S 132(4) OF THE ACT P URSUANT TO THE SEARCH TO THE TUNE OF 4 ITA NO.757/KOL/2015 M/S WANDERLAND REAL ESTATES PVT. LTD. A.YR.2009-10 4 RS 30 CRORES, OUT OF WHICH RS 4.05 CRORES PERTAINED TO ASSESSEE HEREIN FOR THE ASST YEAR 2009-10. HENCE THE FIRST CONDITION PRESCRIBED U/S 271AAA(2) OF THE ACT HAS BEEN SATISFIED BY THE ASSESSEE. THE SAID INCOME WA S ALSO STATED TO BE DERIVED OUT OF PROFIT ON SALE OF LAND THEREBY SUBSTANTIATING THE M ANNER IN WHICH SUCH INCOME WAS DERIVED. HENCE SECOND CONDITION PRESCRIBED U/S 27 1AAA(2) OF THE ACT HAS BEEN SATISFIED BY THE ASSESSEE. THE ASSESSEE HAD ALSO P AID THE ENTIRE TAXES TOGETHER WITH INTEREST THEREON AND PRODUCED EVIDENCES IN THAT REG ARD. HENCE THE THIRD CONDITION PRESCRIBED U/S 271AAA(2) OF THE ACT HAS BEEN SATISF IED BY THE ASSESSEE. SINCE ALL THE THREE CUMULATIVE CONDITIONS WERE SATISFIED BY THE A SSESSEE, IT IS ENTITLED FOR IMMUNITY PROVIDED IN SUB-SECTION (2) OF SECTION 271AAA OF TH E ACT, WHICH HAS BEEN RIGHTLY APPRECIATED BY THE LD CITA BY DELETING THE PENALTY. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER DELETING THE LEVY OF PENALTY U/S 271AAA OF THE ACT IN THE INSTANT CASE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENU E ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 07.03.2018 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 07.03.2018 SB, SR. PS 5 ITA NO.757/KOL/2015 M/S WANDERLAND REAL ESTATES PVT. LTD. A.YR.2009-10 5 COPY OF THE ORDER FORWARDED TO: 1. I.T.O., WARD-6(4), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA- 700069. 2. M/S WANDERLAND REAL ESTATES PVT. LTD., 19, R.N. MUKHERJEE ROAD, 2 ND FLOOR OF MAIN BLDG, KOLKATA-700001 3. C.I.T(A)- , KOLKATA 4. C.I.T.- K OLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S