AL Vijay Owners Association, Ahmedabad V. The Dy.CIT.,Circle-9, Ahmedabad

ITSSA 126/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2968 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 05-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 40A(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ IT(SS)A.NO.126/AHD/2014 / ASSTT. YEAR: 2003-2004 A1 VIJAY OWNERS ASSOCIATION J.P. CHOWK, KHANPUR AHMEDABAD. VS. DCIT, CIR.9 AMBAWADI, AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI SUNIL TALATI, AR REVENUE BY : SHRI JAMES KURIAN, SR.DR / DATE OF HEARING : 09/02/2017 / DATE OF PRONOUNCEMENT: 13 /02/2017 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-II, AHMEDABAD DATED 17.1.2014 PASSED FOR THE ASSTT.YEAR 2003-04. 2. IN THE FIRST GROUND OF APPEAL, GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING PENALTY UNDER SEC TION 271(1)(C) OF THE INCOME TAX ACT, 1961 WITH REGARD TO THE ADDITION MA DE ON ACCOUNT OF UNEXPLAINED CASH CREDIT AMOUNTING TO RS.2,30,000/-. 3. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET SUBMITTED THAT THE AO HAS IMPOSED PENALTY OF RS.1,05,000/- ON TWO ADDI TIONS VIZ. (A) IT(SS)A NO.126/AHD/2014 2 UNEXPLAINED CASH CREDIT OF RS.2,30,000/- AND (B) DI SALLOWANCE UNDER SECTION 40A(3) OF THE ACT OF RS.1,94,000/-. THE LD.CIT(A) D ID NOT UPHELD PENALTY WITH REGARD TO THE ADDITION OF RS.1,94,000/- , BUT CONFIRMED PENALTY QUA ADDITION OF RS.2,30,000/-. HE FURTHER CONTENDED TH AT ADDITION OF RS.2,30,000/- WAS AGITATED BY THE ASSESSEE IN ITA NO.348/AHD/2011 . THIS APPEAL OF THE ASSESSEE HAS BEEN ALLOWED FOR STATISTICAL PURPOSE, AND THE ISSUE HAS BEEN REMITTED TO THE AO FOR RE-ADJUDICATION. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER DATED 27.6.2014. ON THE STRENGTH OF THIS ORDER, HE CONTENDED THAT VERY BASIS FOR VISITING THE ASSESSEE WITH PENA LTY HAS BEEN EXTINGUISHED, AND THEREFORE, THERE SHOULD NOT BE ANY PENALTY UPON THE ASSESSEE. ON THE OTHER HAND, THE LD.DR WAS UNABLE TO CONTROVERT CONT ENTIONS OF THE LD.COUNSEL FOR THE ASSESSEE. 4. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE HAVE ALSO GONE THROUGH THE ORDER OF THE ITAT IN THE CASE OF THE ASSESSEE IN QUANTUM APPEAL. SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHI CH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITIONS MADE TO THE INCOME OF THE ASSESS EE. SINCE ADDITION MADE BY THE AO HAS BEEN SET ASIDE AND THE ISSUE HAS BEEN RESTORED TO THE FILE OF AO, THEREFORE, UPTO AND UNTIL THE ISSUE REG ARDING QUANTUM ADDITION IS RESOLVED NO PENALTY CAN BE IMPOSED UPON THE ASSESSEE. IT WILL BE IN THE DISCRETION OF THE AO TO INITIATE OR NOT T O INITIATE PENALTY IT(SS)A NO.126/AHD/2014 3 PROCEEDINGS AGAINST THE ASSESSEE UNDER SECTION 271( 1)(C) OF THE ACT AFTER PASSING OF THE ASSESSMENT ORDER IN PURSUANCE OF THE TRIBUNALS ORDER. ACCORDINGLY, IMPUGNED PENALTY IS DELETED AND APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 13 TH FEBRUARY, 2017 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER