Shri Rakesh Agarwal, Baroda V. The ACIT., Circle-1(1), Baroda

ITA 803/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6579 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-04-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 19-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJA RAM SOH
• Assessee Lawyers: D K PARIKH
• Keywords: Earning of tax free income; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI B. S. SAINI, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER DATE OF HEARING : 20-04-10 DRAFTED ON: 20-04-10 ITA NO.803/AHD/2007 ASSESSMENT YEAR : 1998-1999 SHRI RAKESH AGRAWAL 61, ALKAPURI, BARODA. VS. THE ASST. COMMISSIONER OF INCOME TAX CIRCLE 1 (1), AYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA. PAN/GIR NO. : AAQPA 3487 P (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI D.K.PARIKH C.A RESPONDENT BY: SHRI RAJA RAM SOH SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)- I, BARODA, DATED 15.12.2006. 2. THE SOLE ISSUE INVOLVED IN THE APPEAL IS THAT T HE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIR MING THE PENALTY OF RS.1,50,000/- LEVIED UNDER SECTION 271( 1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNE D ASSESSING OFFICER NOTICED THAT IN THE WEALTH-TAX, THE ASSESSE E HAS SHOWN NET- - 2 - WEALTH AS ON 31.03.1998 AT RS.4,52,62,043 AS AGAINS T THE NET WEALTH OF RS.4,07,57,689 ON 31.3.1997. HENCE, THE NET WEAL TH OF THE ASSESSEE HAS BEEN INCREASED DURING THE YEAR BY RS.45,44,356. HE FURTHER OBSERVED THAT AS AGAINST THE SAID NET INCOME, THE A SSESSEE HAS SHOWN EXEMPT INCOME U/S.10(33) OF RS.57,56,184 I.E, RS.10 ,18,765 ON ACCOUNT OF SALARY RS.42.000 ON ACCOUNT OF HOUSE PRO PERTY, RS.46,15,612 ON ACCOUNT OF DIVIDEND RECEIPT AND RS. 88,207 ON ACCOUNT OF INTEREST, THEREFORE, THE TOTAL EARNING O F THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AS DECLARED IN HIS RETURN OF INCOME ON GROSS BASIS IS TO THE TUNE OF RS.57,56,184. OUT OF THE SA ME, THE ASSESSEE HAS SHOWN PAYMENT OF TAX OF RS.3,66,767 AND HOUSE HOLD WITHDRAWALS AT RS.10,95,000 AND TRAVELING EXPENSES OF RS.2,66,600. THUS, THE TOTAL OUTGOING OF THE ASSESSEE ARE AT RS.17,28,367,HENCE, THE NET CURRENT INCOME AVAILABLE IS RS.40,27,817. HOWEVER, ADDITION IN THE NET WEALTH IS OF RS.45,44,354. HENCE, THE LEARNED ASSES SING OFFICER TREATED THE AMOUNT OF RS.5,16,537 AS UNDISCLOSED IN COME OF THE ASSESSEE AND THEREFORE, HE MADE IMPUGNED ADDITION T O THE TOTAL INCOME. 4. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS OBSERVED THAT NO DIRECT TALLY IS A VAILABLE OF VARIOUS EXPENSES AND THE ASSESSEE HAS NOT PRODUCED THE COPI ES OF BANK ACCOUNTS ETC., TO SHOW THE SOURCE OF EXPENSES MUST HAVE BEEN NECESSARILY INCURRED AS CLAIMED AND AS SUCH THE NET ADDITION MADE BY THE LEARNED ASSESSING OFFICER OF RS.5,16,537 IS SUS TAINED THOUGH NOT FOR THE SPECIFIC REASON STATED BY HIM BUT ON ACCOUN T OF THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW HOW THERE HA S BEEN AN ADDITION TO NET WEALTH OF RS.45,44,354/-. - 3 - 5. THEREAFTER, THE LEARNED ASSESSING OFFICER INITI ATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND LEVIED PENALTY UNDER SECTION 1,50,000/- ON ACCOUNT OF CONC EALMENT OF INCOME, WHICH WAS CONFIRMED IN APPEAL BY THE LEARNE D COMMISSIONER OF INCOME TAX(APPEALS). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS A VAILABLE ON RECORD. AT THE TIME OF THE HEARING, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE FILED COPY OF ORDER OF THE TRIBUNAL IN QUANTUM APPEAL OF THE ASSESSEE IN ITA NO.4525/AHD/2003 DATED 10.08.20 07 AND SUBMITTED THAT THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR REDECIDING THE IS SUE AFTER VERIFICATION OF THE RECONCILIATION FILED BY THE ASS ESSEE WITH THE BOOKS OF ACCOUNT. THEREFORE, THE PENALTY LEVIED SHOULD BE DELETED. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND CONTENDED THAT AS THE ISSUE ON WHICH PENALTY WAS LEVIED HAS B EEN REMANDED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR FR ESH ADJUDICATION, THE ISSUE OF PENALTY SHOULD ALSO BE REMANDED BACK TO TH E FILE OF THE LEARNED ASSESSING OFFICER FOR DECIDING THE SAME AFR ESH IN LIGHT OF THE DECISION TAKEN IN THE READJUDICATION OF THE ISSUE. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSID ERED VIEW THAT AS THE ISSUE ON WHICH PENALTY WAS LEVIED HAS BEEN REST ORED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR READJUDIC ATION THEREFORE, THE ISSUE OF PENALTY SHOULD ALSO BE SET ASIDE TO THE FI LE OF THE LEARNED ASSESSING OFFICER FOR DECIDING THE ISSUE OF PENALTY IN THE LIGHT OF THE DECISION TAKEN ON READJUDICATION OF THE ISSUE OF AD DITION TO THE - 4 - INCOME OF THE ASSESSEE. WE ORDER ACCORDINGLY. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 20 TH DAY OF APRIL, 2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBE R AHMEDABAD; ON THIS 20 TH DAY OF APRIL, 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-I, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 20.04.2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 20.04.2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 20.04.2010 ------------ ------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 20.04.2010 ----------- -------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 20.04.2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK 20.04.2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------