Naynaben Anilbhai Patel, Ahmedabad V. The Income Tax Officer, Ward-6(5), Ahmedabad

ITSSA 147/AHD/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8253 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained investment; Search and seizure
• Section: 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ IT(SS)A NO.147/AHD/2015 / ASSTT. YEAR: 2007-2008 NAYANABEN ANILBHAI PATEL C1, DIVINE HIGHLAND, JBR ARCADE SCIENCE CITY ROAD SOLA, AHMEDABAD 380060. PAN : AEAPP 9362 C VS. ITO, WARD-6(5) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVETIA, AR REVENUE BY : SHRI LALIT P. JAIN, SR.DR ! / DATE OF HEARING : 28/09/2018 '#$ ! / DATE OF PRONOUNCEMENT: 03/10/2018 %& / 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)-10, AHMEDABAD DATED 10.3.2015 PASSED FOR THE ASSESSMENT YEAR 2007-08 VIDE WHICH, THE LD.CIT(A) HAS CONFIRME D ACTION OF THE ASSESSING OFFICER IN CONFIRMING IMPOSITION OF PENAL TY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY STATED FACTS AS COULD BE NOTED FROM ORDE R OF THE REVENUE AUTHORITIES ARE THAT A SEARCH AND SEIZURE ACTION UN DER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF AVIRAT GROUP ON 23.5.2008, WHEREIN IT(SS)A NO.147/AHD/2015 2 BASED ON THE CERTAIN DOCUMENTS FOUND, THE LD.AO ASS UMED THAT THE ASSESSEE ALONGWITH NINE OTHERS HAD MADE INVESTMENT IN LAND FOR RS.3,13,16,430/-, AS AGAINST THE INVESTMENT SHOWN A T RS.1,05,35,020/- IN THE BOOKS OF ACCOUNTS. THE LD.AO TREATED THE DI FFERENT BETWEEN THESE TWO AMOUNTS AS UNACCOUNTED INVESTMENT. THE LD.AO A SSUMED THAT SHARE OF THE ASSESSEE IN THIS UNACCOUNTED INVESTMEN T WOULD BE AT 15% WHICH WORKED OUT AT RS.31,17,211/- AND ADDED THE SA ME TO THE INCOME OF THE ASSESSEE. ADDITION WAS CONFIRMED BY THE LD. CIT(A). CONSEQUENTLY, THE LD.AO HAS ALSO IMPOSED PENALTY OF RS.10,58,390/- UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF PARTICULARS OF INCOME, WHICH WAS CONFIRMED BY THE LD.FIRST APPELLA TE AUTHORITY, WHICH IS NOW UNDER CHALLENGE BY THE ASSESSEE BEFORE THE T RIBUNAL. 3. AT THE THRESHOLD OF THE HEARING, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT QUANTUM ON WHICH IMPUGNED PENALTY HA S BEEN IMPOSED WAS CHALLENGED BEFORE THE TRIBUNAL IN ITA NOS.1864 TO1866/AHD/2012 AND OTHERS [WHEREIN ASSESSEES APPEAL IS ITA NO.188 2/AHD/2012] AND THE TRIBUNAL VIDE ORDER DATED 17.3.2016 DELETED THE QUANTUM ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENTS. THEREFORE, IN VIEW OF THIS ORDER OF THE TRIBUNAL QUA THE ADDITION, IMPUGNED PENALTY IMPOSED BY THE ASSESSEE DOES NOT SURVIVE AND THEREFORE, THE SAME B E NULLIFIED. ON THE OTHER HAND, THE LD.DR DID NOT DENY THE FACTUAL POSI TION SUBMITTED BY THE ASSESSEE. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE RECORD CAREFULLY. DELETION OF ADDITION BY THE TRIB UNAL VIDE ORDER DATED 17.3.2016 (COPY OF WHICH IS PLACED ON RECORD, IS NO T DISPUTED BY THE REVENUE AND THEREFORE, IMPUGNED PENALTY HAS NO LEG TO STAND. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE BY HIM, WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED T HREE TIMES THE IT(SS)A NO.147/AHD/2015 3 AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONC EALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. SINCE IN THE PRESENT CASE, BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGUISHED BY DELE TING THE ADDITION BY THE TRIBUNAL IN QUANTUM APPEAL OF THE ASSESSEE, THE IMPUGNED PENALTY DOES NOT SURVIVE. IN OTHER WORDS, THERE IS NO ROOM FOR THE REVENUE TO IMPOSE PENALTY UNDER SECTION 271(1)(C) IN THIS CASE . THEREFORE, WE CANCEL THE IMPUGNED PENALTY AND SET ASIDE BOTH ORDE RS OF THE REVENUE AUTHORITIES PASSED UNDER SECTION 271(1)(C) OF THE A CT, AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 3 RD OCTOBER, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER