Smt. Nandavatiben Mahendrabhai Shah, Surat V. The ACIT, Circle-3, Surat

ITSSA 165/AHD/2009

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7746 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-02-2012
• Assessment Year: misc
• Appeal Filed On: 01-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DIVYAKANT PARIKH
• Keywords: Document seized; Block assessment; Documents seized
• Section: 132; 11

Judgement Text

, , , . , ! ! ! ! IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD BEFORE SHRI MUKUL KR.SHRAWAT, J.M. & SHRI A.MOHAN A LANKAMONY, A.M.) . IT(SS)A NO.165/AHD./2009 : BLOCK PERIOD 1990-1991 TO 1999-2000 & UPTO 29.10.19 99 SMT. NANDAVATIBEN M. SHAH, SURAT VS- AC IT, CIRCLE-3, SURAT (PAN : AESPS 2424L) ( '# /APPELLANT) ( $%'# /RESPONDENT ) '# & ' / APPELLANT BY : SHRI DIVYAKANT PARIKH, A.R. $%'# & ' / RESPONDENT BY : SHRI VINOD TANWANI, SR.D.R. ( & ) / DATE OF HEARING : 22/02/2012 *+ & ) / DATE OF PRONOUNCEMENT : 24/02/2012 , , , , / ORDER PER SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED WI TH THE ORDER OF THE LD. CIT(APPEALS)-II, SURAT IN APPEAL NO.CAS/II/21/0 8-09 DATED 03.08.2009 FOR THE BLOCK PERIOD 1990-1991 TO 1999-2000 & UPTO 29.10.1999 PASSED UNDER SECTION 250 R.W.S.158BFA(2) OF THE I.T. ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL. (1) THE ORDER OF THE LEARNED CIT (APPEALS)-II, SUR AT IS CONTRARY TO LAW AND FACTS OF THE CASE IN AS MUCH AS HE CONFIRMED TH E ORDER OF THE AO LEVYING PENALTY OF RS.1,61,520/- U/S 158BFA(2) OF T HE ACT ON ACCOUNT ITA NO.165-AHD-09 2 OF ALLEGED UNDISCLOSED INVESTMENT IN PURCHASE OF SH OP NO, 11 LOWER IN YOGI COMPLEX, NEW RANDER ROAD, SURAT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LEARNED CIT (APPEALS)-II, SURAT HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN LEVYING PENALTY U/S 158BFA(2) O F THE ACT FOR RS. 1,61,520/-, WITHOUT CONSIDERING IN THE RIGHT PERSPE CTIVES THE WRITTEN SUBMISSIONS AND ALSO THE ORDER OF THE JURISDICTIONA L ITAT, AHMEDABAD IN THE CASE OF ADIL PARVEZ RANDERIYA IN I T(SS)A NO. 25/AHD/2007 QUASHING THE ASSESSMENT ORDER MADE ON T HE IDENTICAL AND THE SAME SET OF FACTS AND ISSUES INVOLVED IN TH E PRESENT CASE AND THEREFORE, HIS ACTION IN LEVYING PENALTY FOR TH E ALLEGED UNEXPLAINED SOURCE OF INVESTMENT IN THE PURCHASE OF SHOP IS BAD IN LAW, ILLEGAL, WITHOUT JURISDICTION, VOID AB INITIO AND HENCE, NOT JUSTIFIED. (3) YOUR APPELLANT FURTHER RESERVES HIS RIGHTS TO A DD, ALTER, AMEND OR MODIFY ANY OF THE AFORESAID GROUNDS BEFORE OR AT TH E TIME OF HEARING OF AN APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF M/S. OHM DEVELOP ERS AND M/S. OHM ORGANIZERS ON 29.10.1999. DURING THE COURSE OF SEAR CH, SOME INCRIMINATING BOOKS OF ACCOUNT PERTAINING TO THE CA SE OF THE ASSESSEE WERE SEIZED ALONGWITH OTHER BOOKS OF ACCOUNTS/DOCUMENTS. BLOCK ASSESSMENT IN THE CASE OF PARTIES SEARCHED WAS COMPLETED ON 31.11 .2001. THE LD.AO OBSERVED THAT ON THE BASIS OF SEIZED DOCUMENTS FOUN D IN THE CASE OF SEARCH AT THE PREMISES OF TWO PARTIES, ASSESSEE HAD PAID ON MONEY TO M/S. OHM DEVELOPERS AND M/S. OHM ORGANIZERS FOR PUR CHASE OF A FLAT. ON THE BASIS OF THE ENTRIES IN THE SEIZED DOCUMENTS OF THE PRESENT ASSESSEE, THE LD. AO HAD INITIATED PROCEEDINGS UNDER SECTION 158BD AND COMPLETED THE ASSESSMENT UNDER SECTION 158BC R.W.S.158BD OF T HE I.T. ACT ON 28.06.2006 ON TOTAL UNDISCLOSED INCOME OF RS.9,72,9 50/-. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), SURAT. THE LD. CIT(A) VIDE HIS ORDER DATED 23.02.2007 PARTLY ALLOWED THE APPEAL OF THE A SSESSEE AND THE ASSESSEE WAS PROVIDED RELIEF OF RS.7,03,750/- WHICH INCLUDED SOURCE OF ITA NO.165-AHD-09 3 INVESTMENT OF RS.3,43,750/- AND RS.3,60,000/-. HOWE VER, A SUM OF RS.1,96,200/- AS WELL AS RS.73,000/- FOR EXTRA WORK , TOTALING TO RS.2,69,200/- REMAINED UNEXPLAINED. 3.1 ON 23.01.2008, A FRESH SHOW CAUSE NOTICE FOR GR ANTING OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO EXPLAIN HER CASE. I N RESPONSE TO THIS NOTICE, THE ASSESSEE CONTENDED THAT THE ASSESSMENT MADE WAS PURELY ON PRESUMPTION AND ASSUMPTION, HENCE IT CANNOT BE A FO UNDATION FOR THE PENALTY PROCEEDINGS UNDER SECTION 158BFA(2) OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT AN APPEAL HAD BEEN FILED BEF ORE THE HONBLE ITAT, AHMEDABAD BENCH AGAINST THE ASSESSMENT ORDER AND TH E ASSESSMENT HAS BEEN SET ASIDE BY THE ITAT IN TOTO . HOWEVER, NO EVIDENCE IN SUPPORT OF THE SAID CLAIM WAS FURNISHED BY THE ASSESSEE BUT THE AS SESSEE REQUESTED THE LD. AO TO KEEP THE PENALTY PROCEEDINGS IN ABEYANCE. THE ASSESSEE HAS ALSO REFERRED THE CASE OF SHRI RUPESH RAJNIKANT JAM BUDI IN ITA NO.469/AHD/2006. THE LD. AO REJECTED THE ASSESSEES REQUEST AND RELYING ON THE CASES OF KHOPADE KISANRAO MANIKRAO VS- ACIT 74 ITD 25 (PUNE) AND GOLANI BROTHERS VS- ACIT IN ITA NOS.579 TO 583 /P/1998, 165 ITC 144 (PUNE), CAME TO THE CONCLUSION THAT THE ASSESSEE HA D FAILED TO EXPLAIN THE SOURCE OF INVESTMENT TO THE EXTENT OF RS.2,69,200/- IN THE PURCHASE OF FLAT. THEREFORE, THE ASSESSEE HAS COMMITTED A DEFAULT WIT HIN THE MEANING OF SECTION 158BFA(2) OF THE ACT. HENCE, THE LD. AO LEV IED A PENALTY OF RS.1,61,520/- UNDER SECTION 158BFA(2) OF THE ACT BE ING 100% OF THE TAX ON UNDISCLOSED INCOME SOUGHT TO BE EVADED. 4. ON APPEAL, THE LD. CIT(A), VIDE HIS ORDER DATED 03.08.2009, CONFIRMED THE ACTION OF THE LD. AO BY OBSERVING THAT GIVEN THE FACTS AND CIRCUMSTANCES OF THE CASE AS ALSO THE LEGAL POSITIO N AS DISCUSSED ABOVE IN DETAIL, AND FURTHER RELYING ON THE LATEST DECISION OF HONBLE SUPREME COURT ITA NO.165-AHD-09 4 IN THE CASE OF UOI AND ORS. VS- DHARMENDRA TEXTILE PROCESSORS, (2008) 306 ITR 277, IT IS HELD THAT THE AO WAS FULLY JUSTI FIED, IN NOT ONLY TREATING THE ON-MONEY PAYMENT OF RS.2,69,200 AS UNEXPLAINED, BUT ALSO IN LEVYING THE PENALTY OF THE SUM OF RS.1,61,520 UNDER THE PROVISI ONS OF SECTION 158BFA(2) OF THE IT ACT. 5. AGITATED, THE ASSESSEE HAS COME BEFORE THE TRIBU NAL. DURING THE COURSE OF HEARING, THE LD. A.R. SUBMITTED THAT IN T HE QUANTUM APPEAL, THE THE HONBLE TRIBUNAL, VIDE ITS ORDER DATED 30.06.20 11, FOLLOWING THE CASE OF SHRI VISHNUBHAI R. BAROT VS- ACIT IN IT(SS) NO.104 /AHD/2009, ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE IN IT(SS) NO. 82/AHD/2007 BY HOLDING THAT SINCE THE FACTS OF THE CASE ARE THE SAME, FOL LOWING THE ABOVE JUDGMENT WE HOLD THE ASSESSMENT IN THE CASE OF ASSE SSEE U/S 158BD AS INVALID AND ACCORDINGLY ALLOW THE APPEAL OF THE ASS ESSEE. SINCE THE ASSESSMENT IS HELD INVALID THE GROUNDS RAISED BY TH E REVENUE IN ITS APPEAL DO NOT SURVIVE. AS A RESULT, THE APPEAL OF THE REVE NUE IS DISMISSED WHEREAS THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . THEREFORE, THE LD. A.R. CONTENDED THAT AS THE HONBLE ITAT HAS CANCELL ED THE ASSESSMENT AS INVALID, HENCE THE PENALTY CANNOT STAND. 6. THE LD. D.R. DID NOT CONTROVERT THE ABOVE SUBMIS SIONS OF THE LD. A.R. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE ORDER DATED 30.06 .2011 OF THE TRIBUNAL. AT THE OUTSET, IT IS OBSERVED THAT IN THE QUANTUM APPE AL IN IT(SS) 82/AHD/2007 OF THE PRESENT ASSESSEE, THE TRIBUNAL ALLOWED THE S AME IN FAVOUR OF THE ASSESSEE SETTING ASIDE THE ASSESSMENT UNDER SECTION 158BD AS INVALID, FOLLOWING THE SIMILAR CIRCUMSTANCES AS IN THE CASE OF SHRI VISHNUBHAI R. BAROT VS- ACIT IN IT(SS) NO.104/AHD/2009. THEREFOR E, WE ARE OF THE ITA NO.165-AHD-09 5 CONSIDERED VIEW THAT THE PENALTY ORDER DOES NOT SUR VIVE IN THE LIGHT OF THE QUANTUM APPEAL DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. FOR THIS REASON, WE CANCEL THE PENALTY ORDER. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. - , & *+ ./ 24 / 02 /201 2 0 & 1( 2 SD/- SD/- (MUKUL KR. SHRAWAT) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED : 24/02/2012 , , , , & && & $3 $3 $3 $3 43+/ 43+/ 43+/ 43+/ - 1. '# 2. $%'# 3. 5 4. 5 - - 5. 361 $ , , 2 6. 17 8- , , 9 / : , 2 TALUKDAR/ SR. P.S.