M/S. ALANKAR ORNAMENTS & JEWELLERS, MUMBAI V. THE ITO 14(1)(4), MUMBAI

ITA 965/MUM/2008

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8271 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 01-11-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 08-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH POOJARY
• Keywords: Unexplained investment
• Section: 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND , SHRI RAJENDRA, ACCOUNTANT MEMBER I.TA. NO. 965/MUM/2008 ASSESSMENT YEAR 2000-01 ALANKAR ORNAMENTS & JEWELLERS, PIRAMAL BUILDING 9, BHULESHWAR ROAD, 2 ND FLOOR, ABOVE SURTHI HOTEL, MUMBAI 400 002. PAN: AAGFA 1223 K VS. INCOME TAX OFFICER 14(1)(4), AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI-400 020. ( / APPELLANT ) ( ! / RESPONDENT ) ' / APPELLANT BY : SHRI RAJESH POOJARY ! # ' /RESPONDENT BY : SHRI RAKESH RANJAN $ # %& / DATE OF HEARING : 01-11-2012 '() # %& / DATE OF PRONOUNCEMENT : 07-11-2012 * / O R D E R PER RAJENDRA, AM THIS APPEAL IS DIRECTED AGAINST THE ORDER DTD. 14-1 2-2007 OF THE CIT(A)-XIV MUMBAI. FOLLOWING GROUNDS OF APPEAL HAVE BEEN RAIS ED BY THE ASSESSEE: THE COMMISSIONER OF INCOME TAX (APPEALS)-XIV MUMBA I (HEREINAFTER REFERRED TO AS THE CIT(A)) ERRED IN UPHOLDING THE VALIDITY OF IN ITIATION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER. 2.THE CIT(A) ERRED IN NOT DEALING WITH THE ADDITION AL EVIDENCE PRODUCED BEFORE HIM. 3.THE CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALT Y OF RS.3,47,971/-. I.TA. NO. 965/MUM/2008 ALANKAR ORNAMENTS & JEWELLERS, 2 4.THE APPELLANT CRAVES GROUNDS OF APPEAL SET LEAVE TO REFER TO ALTER VARY ANY OF THE GROUNDS OF APPEAL SET OUT HEREIN ABOVE. 2. BEFORE DECIDING THE APPEAL ,WE WOULD LIKE TO MENTIO N THE FACTS OF THE CASE- ON 25-3-2000, THE RAJKOT RAILWAY POLICE SEIZED ORNA MENTS WEIGHING 9031.680 GMS. FROM ONE OF THE PARTNER OF THE ASSES SEE-FIRM I.E. FROM KAUSHIK MEHTA. ON THE BASIS OF THE INFORMATION RECEIVED BY THE DIT (INV.), RAIKOT THE JOINT DIT (LNV.) MUMBAI, CONDUCTED ENQUIRIES TO FIND OUT THE OWNERSH IP OF THE SEIZED JEWELLERY. COPY OF REPORT ALONG WITH VARIOUS DOCUMENTS WAS FORWARDE D TO THE AO, WHO ISSUED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE THERETO T HE ASSESSEE FILED RETURN OF INCOME ON 30-8-2000 DECLARING LOSS OF RS.18,941/-.OUT OF T HE SAID JEWELLERY, IT WAS EXPLAINED THAT JEWELLERY WEIGHING 5046.340 GMS. OF GOLD BELON GED TO THE ASSESSEE FIRM REST OF THE JEWELLERY WEIGHING 4372.550 GMS. WAS CLAIMED TO BELONGING TO SIX KARIGARS (GOLD- SMITHS). OUT OF THESE SIX KARIGARS, THREE KARIGARS APPEARED BEFORE THE AO AND ADMITTED THAT THE GOLD ORNAMENTS BELONGED TO THEM. THE AO ACCEPTED THE SOURCE OF GOLD ORNAMENTS TO THE EXTENT OF 5046.340 GMS. BELONGING TO THE ASSESSEE FIRM AND 1718.850 GMS. BELONGING TO THE THREE KARIGARS, WHO HAD APPEARED AND CONFIRMED THAT FACT. THE FOLLOWING THREE KARIGARS, WHO HAD FILED A FFIDAVITS BEFORE THE DDIT(INV.), MUMBAI CLAIMING OWNERSHIP OF THE GOLD JEWELLERY, WE RE NOT PRODUCED BEFORE THE AO, AS THE SUMMONS ISSUED TO THEM, STOOD RETURNED WITH THE REMARK NOT FOUND/NOT KNOWN:- I) SHRI POKALDAS MAHTRE 898.900GMS. II) SHRI BHAGWAN GADA 782.450GMS. III) SHRI SATHYA BABU 972.350GMS. TOTAL 2653.700 GMS. AO TREATED THESE JEWELLERY, AMOUNTING TO RS.9,03,8 24/- , AS UNEXPLAINED INVESTMENT U/S 69A OF THE ACT. BESIDES, HE ALSO INI TIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AFTER ISSUING A NOTICE AS PER THE PROVISIONS OF SEC.274.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HE IMP OSED A PENALTY OF RS.3,47,971/- U/S.271(1)(C) OF THE ACT. 2.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE PENALTY ORDER O F THE AO HE HELD THAT THE ASSESSEE WAS NOT ABLE TO EXPLAIN THAT THE PART OF GOLD ORNAM ENTS WHICH WAS SEIZED BY THE RAILWAY POLICE WAS ACTUALLY OF THE THREE KARIGARS, THAT THE TREATMENT GIVEN BY THE AO FOR TAKING THE GOLD ORNAMENTS AS UNEXPLAINED INCOME OF THE ASSESSEE WAS JUSTIFIED, THAT EXPL. TO SEC.271(1)(C)OF THE ACT WAS ATTRACTED IN THE CASE UNDER CONSIDERATION, THAT ASSESSEE HAD CONCEALED PARTICULARS OF INCOME TO THE EXTENT OF RS.9.03 LAKHS. FINALLY, HE UPHELD THE PENALTY IMPOSED BY THE AO. 3. BEFORE US AR SUBMITTED THAT WHILE DECIDING THE QUAN TUM APPEAL BENCH OF THE TRIBUNAL HAS REMANDED THE MATTER BACK TO THE FI LE OF THE AO, THAT IN THESE CIRCUMSTANCES PENALTY IMPOSED/ UPHELD BY THE AO/FAA SHOULD BE DELETED. DR RELIED UPON THE ORDER OF THE DEPARTMENTAL AUTHORITIES. WE HAVE HEARD THE RIVAL SUBMISSIONS. TRIBUNAL VIDE ITS ORDER DATED 19-10-2012 (ITA NO. 4 255/MUM/2005 AY 2000-01) HAS REMANDED BACK THE MATTER TO THE AO. AS IN THE QUAN TUM APPEAL MATTER HAS BEEN RESTORED BACK TO AO, THEREFORE, IN OUR OPINION PENA LTY IMPOSED U/S. 271(1)(C) CANNOT I.TA. NO. 965/MUM/2008 ALANKAR ORNAMENTS & JEWELLERS, 3 SURVIVE. WE DELETE THE PENALTY UPHELD BY THE FAA. AO IS LIBERTY TO CONSIDER THE QUESTION OF IMPOSING PENALTY AFRESH AFTER COMPLETIN G THE ASSESSMENT. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS A LLOWED. ORDER PRONOUNCED IN THE OPEN COUR T ON 7 TH NOVEMBER, 2012. SD/- SD/- ( . . / I.P. BANSAL ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI, +$ DATE: 7 TH NOVEMBER, 2012 TNMM * * * * # ## # %, %, %, %, -,)% -,)% -,)% -,)% / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE !,% % //TRUE COPY// *$ *$ *$ *$ / BY ORDER, . .. . / / / / / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI