SHRI MADANLAL KATARIA, Ratlam V. THE DCIT CENTRAL CIRCLE, Indore

ITA 897/IND/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5994 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P D NAGAR
• Keywords: Search and seizure; Salary income; Source of fund
• Section: 6

Judgement Text

ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO.898/IND/2016 ASSESSMENT YEAR: 2012-13 RAVI KATARIA RATLAM PAN ACMPK 3917P` :: APPELLANT VS DCIT CENTRAL CIRCLE INDORE :: RESPONDENT I.T.A. NO.897/IND/2016 ASSESSMENT YEAR: 2012-13 MADANLAL KATARIA RATLAM PAN ACFPK 5779D :: APPELLANT VS DCIT CENTRAL CIRCLE INDORE :: RESPONDENT ASSESSEE BY SHRI P.D. NAGAR REVENUE BY SHRI MOHD. JAVED ! ' #$ DATE OF HEARING 22.12.2016 %&'( #$ DATE OF PRONOUNCEMENT 6.1.2017 ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 2 * O R D E R PER SHRI D.T. GARASIA, JM THESE APPEALS HAVE BEEN FILED BY THE ASSESSEES AGAINST THE ORDERS OF THE LEARNED CIT(A)-III, INDORE, BOTH DATED 14.6.2016. SINCE COMMON ISSUE IS INVOLVED, THESE APP EALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THESE APPEALS, THE ONLY ISSUE INVOLVED IS REGAR DING CONFIRMATION OF PENALTY LEVIED BY THE ASSESSING OFFIC ER U/S 271AAA OF THE ACT. 2. SINCE THE FACTS INVOLVED IN BOTH THE APPEALS ARE SIMILAR WITH EACH OTHER, WE WOULD LIKE TO DECIDE ITA NO. 898/IND/2016 FIRST. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL BELONGING TO KATARIA GROUP OF RATLAM WHICH WAS SEARCHED ON 7.9.2011. THE MAJOR SOURCES OF INCOME ARE INCOME FROM SALARY, INTEREST AND DIVIDEND. THE RETURN OF ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 3 INCOME WAS FILED FOR THE ASSESSMENT YEAR 2012-13 ON 29.3.2013 DECLARING TOTAL INCOME AT RS. 2,00,49,700/-. THE ASSESSEE HAD OFFERED THE ADDITIONAL INCOME OF RS.32,64,876/- ON ACCOUNT OF DIAMOND JEWELLERY OF RS.6,44,876/-, SILVER BULLION & SILVER COINS OF RS.11,20,000/- AND GROSS PROFIT ESTIMATED ON STOCK FU ND OF RS.15,00,000/-. THE ASSESSING OFFICER HELD THAT THE ADDITIONAL INCOME HAS BEEN OFFERED ONLY AS A RESULT OF SEARCH AND SEIZURE OPERATION AND DOES NOT QUALIFY FOR IMMUNITY U/S 271AAA(2) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY U/S 271AAA @ 10% OF THE UNDISCLOSED INCOME AMOUNTING TO RS.3,36,488/-. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE PENALTY LEVIE D BY THE ASSESSING OFFICER. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF SEARCH, THE ASSES SEE ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 4 HAS EXPLAINED THE SOURCE OF THE ACQUISITION OF JEWELLER Y AND GOLD BULLION FROM ESTIMATED PROFIT SURRENDERED ON UNRECORDED SALES OF GOLD ORNAMENTS, DIAMOND AND JEWELL ERY WHICH WAS FOUND SHORT ON PHYSICAL VERIFICATION OF STOC K. THE LEARNED COUNSEL ALSO CLAIMED THAT ONCE THE INCOME SURRENDERED DURING SEARCH WAS ADMITTED AND TAX WAS DEPOSITED WHILE FILING THE RETURN BY DISCLOSING SUC H ADDITIONAL INCOME, THE ASSESSEE CANNOT BE FASTENED WITH THE PENALTY. FOR THIS PROPOSITION, THE LEARNED COUNSE L FOR THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS :- (I) CIT V. MAHENDRA C. SHAH (2008) 299 ITR 305 (GUJ) (II) CIT V. RADHA KISHANGOEL [2005] 278 ITR 454(ALL.) (III) NEERAT SINGAL VS. ACIT (2014) 146 ITD 152 (DEL) (IV) PROMAD KUMAR JAIN VS. DCIT (2012) 77 DTR 244 (CUTTACK) (V) SITA RAM GUPTA VS. ACIT (2014) 151 ITD 449 (DEL). 6. ON THE OTHER HAND, THE DR RELIED UPON THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WITH THE SUBMISSION THAT IT IS MANDATORY TO SPECIFY THE MANNER I N ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 5 WHICH ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE WAS EARNED. IN THE ABSENCE OF SUCH EXPLANATION REGARDING TH E MANNER IN WHICH SUCH INCOME WAS DERIVED, THE ASSESSEE IS NOT ELIGIBLE FOR IMMUNITY GRANTED UNDER SECTION 271A AA OF THE ACT. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES. WE FIND THAT IN THIS CASE THE ASSESSEE HAS DECL ARED THE ADDITIONAL INCOME AND PAID TAX THEREON. DURING THE COURSE OF RECORDING OF HIS STATEMENT U/S 132(4) OF T HE ACT, THE ASSESSEE HAS EXPLAINED THE EARNING OF THE UNDISCLO SED ADDITIONAL INCOME IN QUESTION IN HIS REPLY. WE, RESPEC TFULLY FOLLOWING THE RATIO OF ABOVE CITED DECISIONS, HOLD T HAT WHEN THE OFFERED UNDISCLOSED INCOME HAS BEEN ACCEPTED AND D UE TAX THEREON HAS ALREADY BEEN PAID BY THE ASSESSEE, NO PENALTY COULD BE IMPOSED. WE, THEREFORE, SET ASIDE TH E ORDERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 6 8. SO FAR AS ITA NO. 897/IND/2016 IS CONCERNED, SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE INVOLVED IN THI S APPEAL ARE MORE OR LESS THE SAME EXCEPT THE FIGURES INVOLVED, FOLLOWING OUR ABOVE ORDER, WE DIRECT THE ASSESSING OFFICER TO DELETE PENALTY. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ST AND ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 6 TH JANUARY, 2016. SD/- SD/- ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : 6 TH JANUARY, 2016. DN/ ITA NOS. 898 & 897/IND/2016 RAVI KATARIA & MADANLAL KATARIA 7