ITO, BEHROR V. RAMESH CHAND SONI, KOTPUTLI

ITA 87/JPR/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5577 (ITAT-JAIPUR)
• Duration Of Justice: 6 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 02-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: MAHENDRA GARGIEYA DHK
• Section: 143(3); 133A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO.87/JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2002-03. THE INCOME TAX OFFICER, BEHROR. CUKE VS. SHRI RAMESH CHAND SONI C/O TIRUPATI AUTOMOBILE. NEAR DAIRY, NH 8, KOTPUTLI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AETPS2050M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO.1430/JP/2010 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2002-03. SHRI RAMESH CHAND SONI C/O TIRUPATI AUTOMOBILE. NEAR DAIRY, NH 8, KOTPUTLI. CUKE VS. THE INCOME TAX OFFICER, WARD BEHROR, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AETPS2050M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADVOCATE) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.02.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16.02.2017 VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO CROSS APPEALS BY THE REVENUE AND THE ASSE SSEE ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TA X (APPEALS), ALWAR, DATED 2/11/2010 PERTAINING TO THE ASSESSMENT YEAR 2002-03 . FIRST, WE TAKE UP REVENUES APPEAL IN ITA NO. 87/JP/2011. THE REVENUE HAS RAIS ED FOLLOWING GROUNDS OF APPEALS :- 2 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES IN RESTRICTING THE PENALTY TO RS. 370280/- FROM RS. 1382826/- IMPOSED U/S 271(1)(C) OF I.T. AC T, 61 BY A.O. 2. THE DEPARTMENT RESERVE ITS RIGHT TO ADD, ALTER, MOD IFY, DELETE OR AMEND ALL OR ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST RESTRICTING THE PENALTY OF RS. 3,70,280/- FROM RS. 13,82,826/-. 3. BRIEFLY STATED THE FACTS ARE THAT A SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESEE ON 10/8/2001. DURING THE CO URSE OF SURVEY, THE ASSESSEE ADMITTED, UNDISCLOSED INCOME AT RS. 47 LACS BUT IN THE INCOME TAX RETURN HE DISCLOSED ONLY RS. 27,85,500/-. SUBSEQUENTLY, THE A SSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 30/3/2005 AND ASSESSED THE TOTAL INCOME AT RS. 78,33,390/- AS AGAINST DECLARED INCOME OF RS. 30,83,000/-. IN APP EAL, THE LD. CIT (APPEALS) CONFIRMED THE ADDITION TO THE EXTENT OF RS. 48,46,2 27/- INCLUDING RETURNED INCOME. THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEE DINGS AND IMPOSED PENALTY VIDE ORDER DATED 17 TH MARCH, 2008 OF RS. 13,82,626/-. THE ASSESSEE AGGRI EVED BY THIS, PREFERRED AN APPEAL BEFORE LD. CIT (APPEALS) WHO AF TER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL THEREBY THE LD. CIT (APPE ALS) DELETED THE PENALTY IN RESPECT OF THE AMOUNT INVESTED IN THE BUILDING. T HE LD. CIT (A), HOWEVER, AFFIRMED THE ACTION OF THE ASSESSING OFFICER IN RESPECT OF T HE UNDISCLOSED INCOME OF RS. 9,00,000/-. IT IS OBSERVED BY LD. CIT (A) THAT OUT OF ADDITION OF RS. 14,03,225/-, THE ADDITION OF RS. 6,53,225/- WAS CONFIRMED BY THE TRI BUNAL. OUT OF ADDITION OF RS. 4,33,825/-, THE LD. CIT( APPEALS) RESTRICTED THE PE NALTY OF RS. 67,500/- AND RS. 3 1,41,900/- IN RESPECT OF THE CONCEALED INCOME. AGGR IEVED BY THIS ORDER, BOTH THE REVENUE AND THE ASSESSEE HAVE FILED THE APPEALS BEF ORE THIS TRIBUNAL. 4. THE LD. D/R SUPPORTED THE ORDER OF AO AND SUBMIT TED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN RESTRICTING THE PENALTY. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED SUB MISSION AS MADE IN THE WRITTEN SUBMISSIONS, HE SUBMITTED THAT SO FAR REVEN UES APPEAL IS CONCERNED, HE SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIE S. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE AO LEVIED PENALTY ON SU M OF RS. 27,48,500/- WHICH WAS DULY DISCLOSED IN THE RETURN OF INCOME ON THE GROUN D THAT HAD SURVEY WOULD HAVE NOT TAKEN PLACE, THE ASSESSEE MIGHT HAVE NOT DISC LOSED THIS INCOME. IN OUR VIEW, THIS ACT OF AO IS CONTRARY TO THE PROVISIONS OF LAW AND SETTLED LAW. THEREFORE, WE DO NOT SEE ANY INFIRMITY INTO THE ORDER OF LD. CIT (A) . HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. 7. NOW, WE TAKE UP THE ASSESSEES APPEAL IN ITA NO . 1430/JP/2010, WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS . 1. THE LD. AO HAS ERRED IN IMPOSING PENALTY UNDER SEC TION 271 (1) (C) ON ADDITION OF RSS. 600000/- ON ACCOUNT OF REPAYMENT O F LOANS. CIT(A) HAS ERRED IN CONFIRMING THE SAME. 2. THE LD AO HAS ERRED IN IMPOSING PENALTY UNDER SECTI ON 271(1) (C) ON ADDITION OF RS. 300000/-ON ACCOUNT OF REPAYMENT OF LOANS. C IT (A) HAS ERRED IN CONFIRMING THE SAME. 3. THE LD. AO HAS ERRED IN IMPOSING PENALTY UNDER SECT ION 271(1)(C) ON ADDITION OF RS. 67,500/- ON ACCOUNT OF INTEREST EARNED. CIT( A) HAS ERRED IN CONFIRMING THE SAME. 4. THE LD. AO HAS ERRED IN IMPOSING PENALTY UNDER SECT ION 271(10 (C) ON ADDITION OF RS. 141900/- ON ACCOUNT OF SALE PROCEED OF OLD TYRES. CIT(A) HAS ERRED IN CONFIRMING THE SAME. 5. ANY OTHER GROUND OF APPEAL AT THE TIME HEARING. 4 8. APROPOS THE GROUND NOS. 1 AND 2, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS AND ADDITIONAL WRITTEN SUBMISSION. IT IS CONTENDED THAT THE ASSESESSE HAD FILED THE R ETURN OF INCOME DECLARING INCOME OF RS. 30,83,000/-. THE ASSESSING OFFICER, HOWEVE R, ASSESSED THE INCOME AT RS. 78,33,390 AND CAPITAL OF RS. 14,66,000/-. THE MATTE R TRAVELLED UP TO THE STAGE OF TRIBUNAL. THE DISALLOWANCES OF ADDITION AS SUSTAIN ED BY THE HONBLE ITAT HAVE BEEN TABULIZED BY THE ASSESSING OFFICER AT PAGE NOS. 1 AND 2 OF HIS ORDER. HE SUBMITTED THAT IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT AS SESSING OFFICER DO NOT APPRECIATE THE FACTUAL ASPECT THAT THE ASSESSEE IN ANSWER TO Q UESTION NO. 2 OF HIS STATEMENT DATED 21/08/2008 HAS CLEARLY STATED THAT THE SOURCE OF PURCHASES OF THESE TRUCKS WAS A LOAN RAISED FROM THE FRIENDS. HE SUBMITTED TH AT SOLE RELIANCE OF THE STATEMENT AS TAKEN DURING THE COURSE OF SURVEY IS NOT CORRECT , ON THE PART OF THE ASSESSING OFFICER, HE FURTHER SUBMITTED THAT IT IS SETTLED PO SITION OF LAW THAT THERE IS NO EVIDENTIAL VALUE OF STATEMENT TAKEN DURING THE SURV EY. HE SUBMITTED THAT MERELY BECAUSE THE ASSESSEE HAD NOT RAISED THIS GROUND AGA INST THE ADDITION OF RS. 9,00,000/-, IT CAN NOT BE INFERRED AGAINST THE AS SESSEE. 9. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE SUPPORTED THE ORDER OF THE LD. CIT(A). 10. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND THAT THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT QUA THESE TWO ADDITIONS SAME HAVE BEEN SUSTAINED TILL THE STAGE OF ITAT AND THE LD. CIT(A) HAS GIVEN A FINDING OF FACT IN HIS ORDER THAT THIS WAS NOT RAISED BEFORE THE TRIBUNAL. THEREFORE, THE ADDITION AS MADE 5 WAS THE PART OF THE CONCEALED INCOME CANNOT BE DISP UTED. WE THEREFORE FIND NO INFIRMITY INTO THE ORDER OF THE LD. CIT(A), THE SAM E IS HEREBY AFFIRMED. GROUND NO. 1 AND 2 OF THE ASSESSEES APPEAL ARE DISMISSED. 11. GROUND NO. 3 IS AGAINST IMPOSITION OF PENALTY OF RS. 67,500/-. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSION MADE BEFORE THE LD. CIT(A). 12. ON THE CONTRARY, THE LD. D/R SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. 13. WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND TH AT THE ASSESSING OFFICER MADE THIS ADDITION OF RS. 67,500/- ON THE BASIS THAT TH E ASSESSEE HAD GIVEN A LOAN OF RS. 5 LAKHS TO SHRI ASHOK WHICH WAS NOT GIVEN FOR THE P URPOSE OF BUSINESS. HENCE, COMPUTED THE NOTIONAL INCOME @ 1.5%. IN OUR CONS IDERED VIEW, SINCE THIS ISSUE IS DEBATABLE WITH REGARD TO INTEREST RATE TO BE CHARGE D, HENCE IMPOSITION OF PENALTY ON THIS ADDITION IS NOT JUSTIFIED. WE THEREFORE DIREC T THE ASSESSING OFFICER TO DELETE THE PENALTY ON THE AMOUNT OF RS, 67,500/-. 14. GROUND NO. 4, IS AGAINST SUSTAINING THE PENALTY ON THE ADDITION OF RS. 1,41,900/- ON ACCOUNT OF SALE PROCEEDS OF OLD TYRE S. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE TH E LD. CIT(A) AND SUBMITTED THAT THE LD. CIT(A) DID NOT JUDICIALLY APPRECIATE THAT THE ASSESSEE HAVING DECLARED THE INCOME UNDER SECTION 40A ON THE ESTIMATED BASIS ON THE TRUCKS. UNDER CONSIDERATION, THERE WAS NO NECESSITY OF MAKING ANY SEPARATE DISALLOWANCE OR ADDITION WHICH IS A LAW WELL SETTLED. 15. ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV E SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 16. WE HAVE HEARD THE RIVAL CONTENTIONS. WE ARE UNA BLE TO AGREE WITH THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT MERELY BECAUSE THE ASSESSEE HAS 6 BEEN SHOWING INCOME ON ESTIMATED BASIS, HE WAS NOT REQUIRED TO DISCLOSE THE RECEIPTS ON ACCOUNT OF SALE OF OLD TYRES. THEREFOR E, WE SEE NO INFIRMITY INTO THE ORDER OF THE LD. CIT(A). THIS GROUND OF THE ASSESSE ES APPEAL IS REJECTED. 17. GROUND NO. 5 IN GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 18. IN THE COMBINED RESULT, APPEAL OF THE REVENUE I S DISMISSED WHEREAS APPEAL OF THE ASSESS IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON: 16.02 .2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 16.02.2017. POOJA:- VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- INCOME TAX OFFICER, BEHROR. 2. THE RESPONDENT SHRI RAMESH CHAND SONI, KOTPURI . 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 87/JP/2011) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR