SUMER BUILDERS, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 812/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2492 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 11-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order; Condonation of delay
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL H, BENCH MUM BAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO.812/MUM/2011 ( / ASSESSMENT YEAR: 2006-07) SUMER BUILDERS, 201, COMMERCE HOUSE, 140, N.M. ROAD, FORT, MUMBAI 400023. VS. THE DY. CIT CENTRAL CIRCLE-36 , 11/43, GROUND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400020. ./ ! ./ PAN/GIR NO. : AAAFS2829R ( ' / APPELLANT ) .. ( #$ ' / RESPONDENT ) % &' /ASSESSEE BY : SHRI. NISHIT GANDHI /REVENUE BY : SHRI. VACHASPATI TRIPATHI ( ) * ' + / DATE OF HEARING : 22/04/2016 ,-./ * ' + / DATE OF PRONOUNCEMENT 20/07/2016 !' / O R D E R PER RAM LAL NEGI, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSES SEE AGAINST ORDER DATED 26/02/2010 PASSED BY THE LD. CIT (APPEALS)-41 , MUMBAI PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDE R ON THE FOLLOWING EFFECTIVE GROUND:-. 1 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED COMMISSIONER OF INCOME TAX (A)-41, MUMBAI H AS ERRED 2 ITA NO 812/MUM/2011 ASSESSMENT YEAR: 2006-07 IN LAW IN CONFIRMING THE PENALTY LEVIED OF RS. 8,35 ,090/- U/S 271 (1)(C) BY THE A.O.'. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. A SEARCH WAS C ONDUCTED U/S 132 OF THE INCOME TAX ACT (IN SHORT THE ACT) ON 06/11/20 06. DURING SEARCH SOME DOCUMENTS CONTAINING ENTRIES REGARDING ALLOTME NT OF FLATS WERE FOUND AT THE PREMISES OF THE ASSESSEE WHICH REVEALE D THAT THE ASSESSEE HAD RECEIVED @ RS. 12,100/- PER SQ. FT. FOR TWO FLA TS HAVING TOTAL AREA OF 1462 SQ, FT. THE ASSESSEE RECEIVED RS 1700/- PER SQ , FT. IN CASH AND THE REMAINING AMOUNT WAS RECEIVED THROUGH CHEQUES. SINC E THE ASSESSEE HAD NOT REFLECTED THE AMOUNT RECEIVED IN CASH IN IT S BOOKS OF ACCOUNT, AO ADDED RS. 24,85,400/-(RS. 1700X1462SQ.FT=24,85,4 00/-) TO THE INCOME OF THE ASSESSEE. ACCORDINGLY, PENALTY PROCEE DINGS WERE INITIATED AND THE ASSESSEE WAS LEVIED A PENALTY OF RS. 8,35,0 94/- U/S 271(1)(C) OF THE ACT. 2.2. THE ASSESSEE CHALLENGED THE PENALTY ORDER BY F ILING FIRST APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER HEARING THE AS SESSEE DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE FINDINGS O F THE AO HOLDING THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS NOT P LAUSIBLE. 2.3 AGGRIEVED BY THE IMPUGNED ORDER PASSED BY THE L D. CIT(A), CONFIRMING THE PENALTY LEVIED BY THE AO, THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. 2.4 SINCE THE APPELLANT HAS MOVED AN APPLICATION FO R CONDONATION OF DELAY OF 265 DAYS IN FILING THE PRESENT APPEAL, AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY I N FILING APPEAL WAS NEITHER INTENTIONAL NOR WILLFUL BUT IT HAS HAPPENED DUE TO THE NEGLIGENCE OF STAFF OF ASSESSEES CONSULTANT AS MENTIONED IN T HE APPLICATION AND THE PERSON CONCERNED HAS SWORN AFFIDAVIT TO THIS EFFECT , THEREFORE, THE DELAY MAY BE CONDONED IN THE INTEREST OF JUSTICE. THE LD. COUNSEL FURTHER 3 ITA NO 812/MUM/2011 ASSESSMENT YEAR: 2006-07 SUBMITTED THAT THE HONBLE JURISDICTIONAL HIGH COUR T HAS CONDONED THE DELAY OF 515 DAYS IN PRIMA PAPERS & ENGINEERING (P) LTD V. COMMISSIONER OF INCOME TAX (2014)221 TAXMAN 209 BOM ., ON THE IDENTICAL GROUND. AFTER HEARING THE LD. DR WE ALLOWED THE APPLICATION FOR CONDONATION OF DELAY IN THE INTEREST OF JUSTICE AND ALLOWED THE LD . COUNSEL TO ARGUE THE CASE ON MERITS. 2.5 THE LD. COUNSEL SUBMITTED THAT THE CIT(A) HAS WRONGLY CONFIRMED THE PENALTY OF RS. 8,35,090/- IMPOSED BY THE AO U/S 271(1) (C) OF THE ACT. THE CASE OF THE ASSESSEE DOES NOT COME WITHIN THE PURVIEW OF CONCEALMENT OF PARTICULARS OF INCOME WITHIN A MEANI NG OF SECTION 271 (1)(C) OF THE ACT. AS A MATTER OF PRACTICE THE ASS ESSEE RUBBED THE INITIAL SELLING PRICE QUOTED IN PENCIL AND MADE ENTRIES IN INK AFTER FINALIZATION OF THE DEALS WITH THE BUYERS. THEREFORE, THE ASSESS EE HAS NEITHER CONCEALED THE INCOME NOR MADE ANY INCORRECT PARTICU LARS IN RESPECT OF THE INCOME FOR THE RELEVANT YEAR. MOREOVER, THE ASS ESSEE HAS MADE VOLUNTARILY DECLARATION VIDE STATEMENT DATED 06/11/ 2006 U/S 132(4) OF THE ACT, DURING THE COURSE OF SEARCH AND OFFERED TH E INCOME TO THE TAX, THEREFORE, THE EXPLANATION 5 TO SECTION 271(1)(C) O F THE ACT DOES APPLY TO THE ASSESSEES CASE. THE LD. COUNSEL RELYING ON T HE LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF GEBILAL KANHAIALAL, HUF VS. ACIT 2012 348 ITR 561 (SC) , SUBMITTED THAT IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE SAID CASE, THE IMP UGNED ORDER IS LIABLE TO BE SET ASIDE. 2.6 ON THE OTHER HAND LD DR RELYING UPON THE ORDER PASSED BY THE LD. CIT (A) SUBMITTED THAT THERE IS NO INFIRMITY IN THE IMPUGNED ORDER. THE CASE LAW RELIED UPON BY THE ASSESSEE IS NOT APPLICA BLE TO THE FACTS OF THE PRESENT CASE. HENCE, THERE IS NO MERIT IN THE APPEA L OF THE ASSESSEE. 4 ITA NO 812/MUM/2011 ASSESSMENT YEAR: 2006-07 3. WE HAVE HEARD THE RIVAL CONTENTION AND ALSO PER USED THE MATERIAL ON RECORD IN LIGHT OF THE CONTENTIONS OF THE PARTIES. WE NOTICE THAT DURING THE PENALTY PROCEEDINGS BEFORE THE AO THE ASSESSEE HAS TAKEN THE PLEA THAT THE QUOTED PRICE WAS WRITTEN IN PENCIL WHEREAS PRICE FINALLY AGREED HAS BEEN WRITTEN IN INK. MERELY BECAUSE THE EVIDENC E WAS DISBELIEVED IN ASSESSMENT PROCEEDINGS, IT CANNOT BE SAID THAT THE ASSESSEE HAS FAILED TO DISCHARGED THE INITIAL BURDEN. PENALTY PROCEEDIN GS ARE DIFFERENT AND DISTINCT FROM ASSESSMENT PROCEEDINGS AND WHERE FIND INGS ON ASSESSMENT PROCEEDINGS ARE BASED ON PRESUMPTIONS, S AME COULD NOT CONSTITUTE A GOOD EVIDENCE FOR THE PURPOSE OF PENAL TY UNDER SECTION 271(1)(C ) OF THE ACT. APART FROM THE PLEA TAKEN BE FORE THE AUTHORITIES BELOW, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED D URING THE COURSE OF ARGUMENTS THAT THE CASE OF THE ASSESSEE FALLS UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. THE ASSESSEE HAS ALSO SUBMITTED PHOTO COPY OF LETTER ADDRESSED TO THE ASST. DIRECTOR OF INCOME TAX (INV) UNIT VIII(2), MUMBAI, REGARDING VOLUNTARY DISCLOSURE OF INCOME OF RS. 20 CRORE MADE BY SHRI RAMESH S. SHAH IN STATEMENT RECORDER UNDER SECTION 132(4) IN THE COURSE OF SEARCH ACTION U/S 132 OF THE ACT ON S UMER GROUP ON 6.11.2006. WE NOTICE THAT THE ASSESSEE HAS NOT FURN ISHED ANY EXPLANATION WITH REGARD TO THE INCRIMINATING DOCUME NTS CONTAINING QUESTIONED ENTRIES, RECOVERED FROM THE PREMISES OF THE ASSESSEE DURING SEARCH ACTION PERTAINING TO THE PRESENT ASSESSEE I. E., M/S SUMER BUILDERS FOR THE ASSESSMENT YEAR UNDER CONSIDERATIO N. THE ASSESSEE HAS SUBMITTED EXPLANATION PERTAINING TO M/S SUMER BUILD ERS FOR THE ASSESSMENT YEAR 2007-08. THE COPY OF TAXPAYERS COU NTERFOIL FILED BY THE ASSESSEE REVEALS THAT THE ASSESSEE HAS DEPOSITED RU PEES THREE CRORES AS TAX FOR THE ASSESSMENT YEAR 2007-08 AND NOT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. SO, THERE IS NO MATERIAL ON TH E 5 ITA NO 812/MUM/2011 ASSESSMENT YEAR: 2006-07 RECORD TO HOLD THAT THE ASSESSEE HAS COMPLIED WITH ALL THE THREE CONDITIONS CONTEMPLATED IN EXPLANATION 5 TO SECTION 271 OF THE ACT. 3.1 SO FAR AS THE CONTENTION OF THE ASSESSEE THAT T HE LD. CIT HAS SIMPLY RELIED ON THE FINDINGS OF THE ASSESSING OFFICER WIT HOUT APPRAISING THE EVIDENCE BROUGHT BEFORE HIM INCLUDING THE ASSESSMEN T ORDER FOR THE SUBSEQUENT YEAR IS CONCERNED, THE MATERIAL ON RECOR D REVEAL THAT THE ASSESSEE DID NOT CHALLENGE THE ASSESSMENT ORDER BEF ORE THE APPROPRIATE APPELLATE AUTHORITY. SINCE THE ASSESSMENT ORDER HAD BECOME ABSOLUTE AFTER THE EXPIRY OF LIMITATION PERIOD, THE LD. CIT( A) HAD NO OPTION BUT TO CONFIRM THE PENALTY IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. HENCE, IN OUR CONSIDERED OPINION, THE IMPUGNED ORDER DOES NOT SUFFER FROM ANY LEGAL INFIRMITY TO INTERFERE WITH. WE THEREFORE, UPHOLD ORDER DATED 26.2.2002 PASSED BY THE LD. CIT (A) AND DISMISS THE APPEAL OF THE ASSESSEE BEING DEVOID OF ANY MERIT. 4. IN THE RESULT, THE ASSESSEES APPEAL FOR ASST. YEAR 2006-07 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JULY, 2016 SD/- SD/- ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0) MUMBAI; 1 DATED:20/07/2016 6 ITA NO 812/MUM/2011 ASSESSMENT YEAR: 2006-07 !'#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT. 3. ( 3' ( ) / THE CIT(A)- 4. ( 3' / CIT 5. 67 #'8% , + 8%/ , ( 0) / DR, ITAT, MUMBAI 6. 9 : ) / GUARD FILE. !' / BY ORDER, $ 6' #' //TRUE COPY// ()*+ (DY./ASSTT. REGISTRAR) , ( 0) / ITAT, MUMBAI PRAMILA