Shri Vithalbhai R.Patel, Nadiad V. The Dy.CIT.,Kheda Circle, Nadiad

ITA 996/AHD/2013

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 3552 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 11-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER VITHAL R. PATEL, SARVODAY HOSPITAL DABHAN, BHAGOL, NADIAD - 2822 PAN: AJFPP7758N (APPELLANT) VS THE D CIT, KHEDA CIRCLE , NADIAD (RESPONDENT) REVENUE BY : S H RI ANAND KUMAR , SR. D . R. ASSESSEE BY: MS. URVASHI SHODHAN, A.R. DATE OF HEARING : 06 - 09 - 2 018 DATE OF PRONOUNCEMENT : 27 - 09 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE TWO APPEALS FILED BY ASSESSEE FOR A. Y. 1997 - 98 TO 19 9 8 - 99 , ARI SE FROM OR DER OF THE CIT(A) - IV, BARODA DATED 1 4 - 02 - 2 013 , IN PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. AS THE FACTS IN BOTH THE APPEALS ARE SIMILAR, SO, WE T AKE ITA NO. 955/AHD/2013 FOR ASSESSMENT YEAR 1997 - 98 AS A LEAD CASE AND ITS FINDINGS WILL BE APPLICABLE TO ITA NO. 996/AHD/2018 FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITA NO. 995/AHD/2013 I T A NO S . 995 & 996 / A HD/ 20 13 A SS ESSMENT YEAR 1997 - 98 TO 1998 - 9 9 I.T.A NO. 995 TO 996 /AHD/20 13 A.Y. 1997 - 9 8 T O 1998 - 9 9 PAGE NO VITHAN R. PATEL VS. D CIT 2 1. THE LD. CIT(A ) HAS ERRED IN LAW AND ON FACTS BY IMPOSING A P ENALTY OF RS.1694683/ - U/S 271(1 )(C) PARTICULARLY WHEN THE SAME IS BASED UPON WRONG FACTS AND WRONG APPLICATION OF PROVISION OF THE L.T. ACT. 2. THE LD. CIT(A) HAS ALSO ERRED IN IMPOSING THE PENALTY U/S 271(1 ) (C) ON THE GROUND THAT NO BOOKS OF ACCOUNTS AND OTHER MATERIALS WERE PRODUCED AND ON SUCH GROUND THE PENALTY CANNOT BE IMPOSED. HENCE THE PENALTY IMPOSED DESERVES TO BE DELETED. 3. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN IMPOSING THE PENALTY U/S 271(1 )(C ) PARTICULARLY WHEN THE ENHANCEMENT NOTICE WAS ISSUED ON DIFFERENT GROUNDS AND THE PENALTY IS INITIATED AND LEVIED ON DIFFERENT GROUNDS AND HENCE THE PENALTY IMPOSED DESERVES TO BE DELETED. 4. THE LD. CIT(A) HAS EQUALLY ERRED I N IMPOSING THE PENALTY U/S 271( 1 )(C) IGNORING THE FACTS THAT WHEN THE HON'BLE ITAT HAS DELETED SUCH AGRICULTURAL INCOME TAXED AS INCOME FROM OTHER SOURCES AS PER ITS ORDERS FOR A.Y. 1999 - 2000 AND A.Y. 2001 - 02. 5. THE LD. CIT(A) HAS ALSO ERRED IN IMPOSING THE PENALTY WITHOUT CONSIDERING THE FACTS THAT THE WITNESSES RELIED UPON WHILE MAKING THE ENHANCEMENT WERE AT THE TIME OF CROSS EXAMINATION, DENIED AND /OR CHANGED THEIR STATEMENTS AND HENCE THE IMPOSITION OF PENALTY BY FOLLOWING WRONG STATEMENTS DESERVES TO BE DELETED PARTICULARLY WHEN SUCH IMPORTANT FACTS WERE IGNORED BY HIM AT THE TIME OF ENHANCING THE INCOME U/S 251(1)(2). 6. THE LD. CIT(A) HAS ALSO ERRED IN LAW AND FACTS THAT NO PENALTY SHOULD HAVE BEEN IMPOSED PARTICULARLY WHEN THE HON'BLE IT AT ALSO ESTIMATED INCOME OF THE ASSESSE E WHILE PASSING THE ORDERS FOR A.Y. 1999 - 2000 AND 2001 - 02 . 7. THE LD. CIT(A) HAS EQUALLY ERRED I N IMPOSING THE PENALTY U/S 271(1 )(C ) BY SIDELING AND IGNORING THE ORDERS OF THE SENIOR COURT I.E. LD. AND HON'BLE ITAT AND HENCE IMPOSITION OF PENALTY DESER VES TO BE CANCELLED. 8. THE LD. CIT(A) HAS EQUALLY ERRED IN IMPOSITION THE PENALTY U/S 271(1 )(C ) PARTICULARLY WHEN PRODUCTION OF BOOKS OF ACCOUNTS AFTER A LAPS OF 13 TO 14 YEARS IS NOT POSSIBLE IN ANY CIRCUMSTANCE HENCE THE PENALTY IMPOSED ON THE GROUNDS OF NON PRODUCTION OF BOOKS IS NOT LEGALLY SUPPORTED UNDER ANY PROVISIONS OF THE ACT AND HENCE THE PENALTY DESERVES TO BE CANCELLED. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE HAS BROUGHT TO OUR NOTICE T HAT THE CO - ORDINATE BENCH OF THE ITAT VIDE THEIR ORDER ITA NOS. 2405 & 2406/AHD/2013 PERTAINING T O ASSESSMENT YEAR S 1997 - 98 & 1998 - 99 IN THE CASE OF THE ASSESSEE HAS DELETED THE QUANTUM ADDITION ON WHICH T HE PENALTY U/S. 271(1) (C) OF THE ACT FOR BOTH T H E YEAR S WERE LEVIED BY THE ASSESSING OFFICER. SHE HAS FURTHER CONTENDED THAT THE PENALTY LEVIED BE DELE TE D AS THE QUANTUM HAS BEEN DELETED. ON THE OTHER HAND , LD. DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH NOT TO CONTRADICT THE AFORESAID FACTS REFERRED IN THE SUBMISSION OF THE ASSESSEE. I.T.A NO. 995 TO 996 /AHD/20 13 A.Y. 1997 - 9 8 T O 1998 - 9 9 PAGE NO VITHAN R. PATEL VS. D CIT 3 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE RELEVANT PART OF THE DECISION OF THE COORDINATE BENCH IS REPRODUCED AS UNDER: - 7. SO FAR AS GROUND TREATING AGRICULTURE INCOME OF RS.56,49,542/ - I S CONCERNED. IN THIS CASE, APPELLANT ORIGINALLY TOTAL AGRICULTURAL INCOME OF RS.81,50,000/ - WAS DECLARED FOR THE YEAR UNDER CONSIDERATION. HOWEVER, ON SCRUTINY OF THE CASE, IT WAS FOUND THAT INTEREST INCOME OF RS.10,66,866/ - WAS ALSO INCLUDED IN SUCH AGRIC ULTURAL INCOME AND AFTER EXCLUDING THIS INTEREST INCOME OF RS.10,66,866/ - FROM THIS AGRICULTURAL INCOME THERE REMAINS AGRICULTURAL INCOME THE EXTENT OF RS.70,80,134/ - . AGAIN, OUT OF THIS AMOUNT OF RS.70,83,134/ - AN AMOUNT OF RS.6,33,592/ - IS SHOWN BY THE A PPELLANT ON ACCOUNT OF SALE OF POTATO SEEDS HAS ALREADY BEEN TREATED AS INCOME FROM OTHER SOURCES AS DISCUSSED IN EARLIER. THEREFORE THERE REMAINS ONLY AN AMOUNT OF RS.64,49,542/ - . OUT OF THE SAID AMOUNT LD. CIT(A) REMAINING AMOUNT OF RS.56,49,542/ - WAS TR EATED AS INCOME FROM UNDISCLOSED SOURCES FOR THE YEAR UNDER CONSIDERATION. AS APPELLANT HAS FAILED TO PRODUCE THE RELEVANT RECORD AND BOOKS OF ACCOUNTS AND HAS ALSO FAILED TO FURNISH DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM OF AGRICULTURAL INCOME OF RS .56,49,542/ - . 8. LD. AR CITED AN ORDER OF CO - ORDINATE BENCH IN ITA NO.354/AHD/2008 FOR ASST. YEAR 2001 - 02. IN THIS ORDER, HON BLE BENCH MENTIONED HERE AS UNDER: THE AGRICULTURE INCOME DECLARED BY THE ASSESSEE IN THE PRECEDING YEARS, WHICH ARE LISTED BEL OW, HAVE BEEN ACCEPTED BY THE AO IN THE SCRUTINY ASSESSMENT. RS.11,40,022 IN A.Y. 1993 - 94 RS.25,70,952 IN A.Y. 1994 - 95 RS.46,57,100 IN A.Y. 1995 - 96 RS.77,94,368 IN A.Y. 1996 - 97 RS.81,03,045 IN A.Y. 1997 - 98 RS.84,65,643 IN A.Y. 1998 - 99 RS.84,34,198 IN A.Y. 1999 - 2000 THE LD. CIT(A) HAS ALSO NOTICED THAT THE AO HAS NOT OFFERED OPPORTUNITY TO CROSS EXAMINE THE EMPLOYEES, ON WHOSE STATEMENTS HE HAD PLACED RELIANCE. THUS, ON A CONSPECTUS OF THE MATTER, THE LD. CIT(A) CONSIDERED THAT THE AGRIC ULTURAL INCOME DECLARED BY THE ASSESSEE WAS REASONABLE AND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO WITH A DIRECTION THAT THE SAME SHOULD BE TREATED AS AGRICULTURAL INCOME OF THE ASSESSEE. 9. ON THE OTHER HAND LD. DR STATED THAT ASSESSEE HAS NOT C OME TO THE COURT WITH CLEAN HAND AND THEORY OF RAISIN (KISHMISH) CANNOT BE ACCEPTED AND APPELLANT HAS SHOWN VERY LESS LABOUR CHARGES AND FACTS OF THE CASE ARE NOT IDENTICAL TO THE CITED ORDER. 10. SINCE IN THE AFORESAID ORDERS DEPARTMENT HAS ACCEPTED THE PLEA OF THE APPELLANT AND CO - ORDINATE BENCH IN THIS ORDER HAS ALSO MENTIONED THE SAME. THEREFORE, RESPECTFULLY FOLLOWING THE FINDING OF THE CO - ORDINATE BENCH, WE ALLOW THIS GROUND OF APPEAL AND HOLD THAT RS.56,49,542/ - IS TO BE TREATED AS AGRICULTURAL INCO ME. 20. SO FAR AS GROUND NOS.5 TO 7 REGARDING TREATING AGRICULTURAL INCOME OF RS.72,09,810/ - AS INCOME FROM OTHER SOURCES ARE CONCERNED. AS PER THE APPELLANT, LD. CIT(A) HAS IGNORED THE ITAT ORDER FOR ASST. YEAR 1999 - 2000 AND 2001 - 02. RESPECTFULLY FOL LOWING THE ORDER OF THE CO - ORDINATE BENCH, WE ALLOW THIS GROUND OF APPEAL. I.T.A NO. 995 TO 996 /AHD/20 13 A.Y. 1997 - 9 8 T O 1998 - 9 9 PAGE NO VITHAN R. PATEL VS. D CIT 4 AFTER CONSIDERING THE UNDISPUTED FACT THAT QUANTUM ADDITION HAS BEEN DELETED BY THE CO - ORDINATE BENCH OF THE ITAT AS SUPRA IN THE CASE OF THE ASSESSEE , WE CONSIDER THAT THE IMPUGNE D PENALTY HAS BECOME INFRUCTUOUS, THEREFORE, THE SAME IS QUASHED. ACCORDINGLY, THE APPEAL OF THE ASSESSE IS ALLOWED. 6. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 09 - 2 01 8 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /09 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONC ERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,