SURESH C. BASANTANI, MUMBAI V. ACIT CIR 7(2),

ITSSA 18/MUM/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0823 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-06-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: RAVIKANT S PATH AK
• Keywords: Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.18/M/2012 ASSESSMENT YEAR: 1997-98 SHRI SURESH C. BASANTANI, A.T. JAIN & CO., 212, REWA CHAMBERS, 31, NEW MARINE LINE, MUMBAI 400 020 PAN: AIQBP 6043G VS. ACIT CIRCLE 7(2), MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI JITENDRA JAIN, A.R. & RAVIKANT S. PATHAK, A.R. REVENUE BY : SHRI NEIL PHILIP, D.R. DATE OF HEARING : 22.06.2015 DATE OF PRONOUNCEMENT : 30.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 06.01.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 1997-98. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL: THE COMMISSIONER OF INCOME TAX (APPEALS) 13 MUMB AI [HEREINAFTER REFERRED TO AS CIT (A)] ERRED IN CONFIRMING THE PENALTY OF RS.3 ,65,000/- U/S. 158 BFA(2) OF THE I.T. ACT LEVIED BY DCIT. YOUR APPELLANT SUBMITS THAT ON THE FACTS AND CIRCUM STANCES OF THE CASE, PENALTY LEVIED U/S 158BFA(2) OF THE I.T. ACT SHALL BE DELET ED. 3. THE ASSESSEE IN THIS APPEAL IS AGGRIEVED BY THE CONFIRMATION OF PENALTY LEVIED U/S 158BFA OF THE INCOME TAX ACT. THE ASSES SEE IS AN INDIVIDUAL AND A RESIDENT OF DUBAI. A SEARCH &R SEIZURE ACTION U/S 132 OF THE I.T. ACT WAS ITA NO.18/M/2012 SHRI SURESH C. BASANTANI 2 CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSE SSEE ON 24 TH SEPTEMBER, 2004. IN RESPONSE TO THE NOTICE U/S 158BC OF THE I.T. ACT , THE ASSESSEE HAD NEITHER FILED THE RETURN OF INCOME NOR MADE ANY SUBMISSION. THE ASSESSMENT WAS COMPLETED BY THE AO U/S 158BC R.W.S. 144 OF THE I.T . ACT VIDE ORDER DT. 29 TH SEPT, 2004 ASSESSING THE UNDISCLOSED INCOME AT RS. 75,58,524/-. THE PENALTY PROCEEDINGS WERE ALSO INITIATED U/S 158 BFA (2) OF THE I.T. ACT. 4. THE ASSESSEE PREFERRED APPEAL AGAINST THE QUANTU M ADDITIONS. THE COMMISSIONER OF INCOME TAX (APPEAL) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGITATING THE ADDITIONS SUSTAINED BY THE LD. CIT(A), THE ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL (ITAT). THE ITAT VID E ITS ORDER DT. 5TH MAY, 2009 ALLOWED SUBSTANTIAL RELIEF TO THE ASSESSEE AND DELETED VARIOUS ADDITIONS IN RELATION TO DIFFERENT ISSUES, HOWEVER SUSTAINED ADD ITIONS IN RESPECT OF DOLLAR DEPOSITS OF 206220/- AND OTHER CREDITS OF RS.3,65,2 00/- IN THE BANK ACCOUNT OF THE ASSESSEE. ON GIVING EFFECT TO THE ITAT ORDER, T HE AO ASSESSED THE REVISED UNDISCLOSED INCOME AT RS. 5,78,213/- HE ALSO PASSED AN ORDER U/S 158BFA (2) OF THE I.T. ACT LEVYING PENALTY OF RS. 3,65,000/- I . E. @ 100% OF THE TAX LEVIED ON THE AMOUNT OF ADDITION CONFIRMED BY THE ITAT. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CITA). THE CIT(A) VIDE IMPUGNED ORDER HAS CONFI RMED THE PENALTY. BEING AGGRIEVED, THE ASSESSEE HAS COME IN APPEAL BEFORE U S. 5. THE LD. AR OF THE ASSESSEE HAS SUBMITTED BEFORE US, THAT DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS, THE AMOUNT CREDITED IN VARIOUS FINANCIAL YEARS WAS TREATED AS UNEXPLAINED CASH CRE DIT FOR THE BLOCK PERIOD TOTALING RS. 14,49,275/- THE CIT (A) VIDE HIS ORDER DT. 06.09.2005 HAS ALLOWED RELIEF TO THE EXTENT OF RS. 8,15,000/- AND THE ITAT VIDE ORDER DATED 05.05.2009 HAS ALLOWED FURTHER RELIEF TO THE EXTENT OF RS. 25, 261/- (I.E. 20,821 + 4,440) TO THE ASSESSEE. THE LD. AR HAS FURTHER SUBMITTED THAT THE CREDIT ENTRIES IN BANK ITA NO.18/M/2012 SHRI SURESH C. BASANTANI 3 ACCOUNT OF HDFC BANK REPRESENTING DOLLAR DEPOSIT TO THE EXTENT OF 2,06,220/- AND OTHER BANK DEPOSITS WERE OUT OF THE DOLLARS W HICH THE ASSESSEE HAD BROUGHT FROM ABROAD ON HIS VISITS TO INDIA ON VARIO US OCCASIONS AND HAD REMAINED UNUTILIZED DURING THE PERIOD OF STAY IN IN DIA. THE LD. AR HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NO BUSINESS IN INDI A OR SOURCE OF INCOME IN INDIA FOR PAST SEVERAL YEARS. THE DEPOSIT IN BANK A CCOUNT REPRESENT ONLY REMITTANCES FROM ABROAD OR UNUTILIZED MONEY OUT OF MONEY BROUGHT IN FROM ABROAD. THE LD. AR HAS RELIED UPON THE DOCUMENTS SH OWING THE DATES OF VISIT AND PERIOD OF STAY OF THE ASSESSEE IN INDIA. HE HAS FURTHER RELIED ON THE DATES AND DETAILS OF DEPOSITS TO CONTEND THAT THE AMOUNTS WERE OUT OF THE UNUTILIZED FUNDS OF THE ASSESSEE WHICH WERE BROUGHT BY THE ASS ESSEE DURING HIS VISITS TO INDIA. THE HONBLE JURISDICTIONAL HIGH COURT OF BOM BAY IN THE CASE OF CIT VS. DODSAL LTD. [2008]218 CTR 430 HAS HELD THAT TE RMINOLOGY OF SECTION 158BFA(2) MAKES IT CLEAR THAT THERE IS A DISCRETION TO THE AO TO DIRECT THE PAYMENT OF PENALTY. THE LEVY OF PENALTY IS NOT MEND ATORY IN RELATION TO THE ADDITION OF UNDISCLOSED INCOME. THE HONBLE HIGH CO URT HAS THUS UPHELD THE ORDER OF THE ITAT IN ACCEPTING THE EXPLANATION OF T HE ASSESSEE AND THEREBY DELETING THE PENALTY WHICH WAS LEVIED BY THE AO UND ER SECTION 158BFA(2) OF THE ACT. IN THE CASE IN HAND ALSO, THE ASSESSEE HAS GIVEN EXPLANATION ABOUT THE DEPOSITS IN THE BANK. THE EXPLANATION OF THE ASSESS EE IN RESPECT OF THE OTHER ADDITIONS/DEPOSITS HAS BEEN ACCEPTED IN THE QUANTUM APPEALS. NEITHER DURING THE QUANTUM PROCEEDINGS NOR DURING THE PENALTY PROC EEDINGS, THERE IS NO REBUTTAL PUT BY THE REVENUE TO THE CONTENTION OF TH E ASSESSEE THAT HE DOES NOT CARRY ANY BUSINESS IN INDIA AND HAS NO SOURCE OF IN COME IN INDIA. WE FURTHER FIND THAT THE ITAT IN THE QUANTUM APPEAL HAS SUSTAI NED THE ADDITIONS TO THE ABOVE EXTENT OBSERVING THAT THE EXPLANATION GIVEN B Y THE ASSESSEE WAS NOT CONVINCING. HOWEVER THE TRIBUNAL HAS NOT GIVEN ANY FINDING THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS WRONG. IN VIE W OF OUR DISCUSSION MADE ITA NO.18/M/2012 SHRI SURESH C. BASANTANI 4 ABOVE, WE DO NOT THINK IT TO BE FIT CASE OF LEVY OF PENALTY. THE PENALTY LEVIED/CONFIRMED BY THE LOWER AUTHORITIES IS THEREF ORE ORDERED TO BE DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.06.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.