Manipushpak Hitech Plantation Pvt. Ltd., Ahmedabad V. The ACIT, Cent. Circle 1(4), Ahmedabad

ITSSA 242/AHD/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0844 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 25-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 133A; 27

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ IT(SS)A NO.238 TO 244/AHD/2013 / ASSTT. YEAR: 2001-2002 TO 2007-2008 MANIPUSHPAK HITECH PLANTATION PVT. LTD. 2 ND FLOOR, NARAYAN CHAMBERS NR. PATANG HOTEL ASHRAM ROAD AHMEDABAD 380 009. PAN : AABCM 0513 E VS ACIT, CENT.CIR.1(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI SOMOGYAN PAL, SR.DR / DATE OF HEARING : 30/09/2015 / DATE OF PRONOUNCEMENT: 30/09/2015 $%/ O R D E R PER BENCH: THE PRESENT SEVEN APPEALS ARE DIRECTED AT THE INST ANCE OF THE ASSESSEE AGAINST SEPARATE ORDERS OF EVEN DATE I.E. 11.4.2013 PASSED FOR THE ASSTT.YEARS 2001-02 TO 2007-08. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.45,965/-, RS.48,685 /-, RS.30,987/-, RS.65,640/-, RS.80,863/-, RS.67,320 AND RS.1,00,980 IN THE ASSTT.YEARS 2001-02 TO 2007-08 RESPECTIVELY. IT(SS)A NO.238 TO 244/AHD/2013 2 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A N APPLICATION FOR ADJOURNMENT. HOWEVER, AFTER GOING THROUGH THE ADJO URNMENT APPLICATION AS WELL AS CASE RECORD, WE DO NOT SEE A NY REASON TO ADJOURN THE HEARING. 4. WITH THE ASSISTANCE OF THE LD. DR, WE HAVE GONE THROUGH THE RECORD CAREFULLY AND PROCEED TO DISPOSE OF THE APPE ALS EX PARTE QUA THE ASSESSEE. 5. THE FACTS ON ALL VITAL POINTS ARE COMMON IN ALL THE YEARS. THEREFORE, FOR THE FACILITY OF REFERENCE, WE TAKE U P THE MATTER MAINLY FROM THE ASSTT.YEAR 2001-02. 6. BRIEF FACTS OF THE CASE ARE THAT A SEARCH ACTION UNDER SECTION 132(1)OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 1.11.2006 IN THE NEPTUNE GROUP OF CASES BY THE ITO (INVESTIGATIONS), UNIT-1, AHMEDABAD. SURVEY UNDER SECTION 133A WAS ALSO COND UCTED IN RESPECT OF FEW PREMISES OF THIS GROUP. DURING THE COURSE O F SEARCH ACTION VARIOUS DOCUMENTS AND BOOKS OF ACCOUNTS WERE FOUND AND SEIZED. AT THE PREMISES OF SHRI BHOLABHAI V. PATEL CERTAIN DOC UMENTS WERE FOUND EXHIBITING THE ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSESSEE. THEREFORE, AFTER RECORDING SATISFACTION, INCRIMINAT ING MATERIALS WERE TRANSMITTED TO THE AO HAVING JURISDICTION OVER THE ASSESSEE. THE AO HAD ISSUED NOTICE UNDER SECTION 153C R.W.S. 153A(1)(B). IN RESPONSE TO THIS NOTICE, IT WAS CONTENDED BY THE ASSESSEE THAT THE R ETURNS FILED BY IT UNDER SECTION 139(1) OF THE I.T.ACT WITHIN THE DUE DATE PRESCRIBED UNDER THE ACT MAY BE TREATED AS FILED IN RESPONSE TO THIS NOTICE. IT MERGES OUT FROM THE RECORD THAT THE RETURNS UNDER SECTION 139(1) WERE FILED ON 31.10.2001 FOR THE ASSTT.YEARS 2001-02, 2002-03, 20 03-04 AND 2004- 05. THE ASSESSEE HAS DECLARED A LOSS OF RS.85/-, R S.15,170/- AND RS.6,387/- IN THE ASSTT.YEARS 2001-02 TO 2003-04, W HEREAS, IN THE ASSTT.YEAR 2004-05 NIL INCOME WAS SHOWN. THE ASSES SEE HAS DISCLOSED IT(SS)A NO.238 TO 244/AHD/2013 3 3 AGRICULTURAL INCOME OF RS.1,16,300/-, RS.1,21,200/- , RS.90,705/-, RS.90,705, RS.2,20,884/-, RS.2,00,000/- AND RS.3,00 ,000/- FOR THE ASSTT.YEARS 2001-02 TO 2007-08 RESPECTIVELY. THE AO HAS ASSESSED THESE AMOUNTS AS INCOME FROM OTHER SOURCES BY DISBE LIEVING THE CLAIM OF THE ASSESSEE UNDER THE HEAD AGRICULTURE INCOME. ACCORDING TO THE AO, THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE DEM ONSTRATING THE AGRICULTURAL OPERATION CARRIED OUT BY IT IN THE LAN D. 7. THE LD.AO HAS INITIATED PENALTY UNDER SECTION 27 1(1)(C) OF THE I.T.ACT. 8. THE ASSESSEE HAS CONTENDED THAT IT HAS AGRICULTU RAL LAND APPROXIMATELY ADMEASURING 170 ACRES. IT HAS PRODUC ED COPIES OF FORM NO.7/12. IT INDICATED THAT THE ASSESSEE COULD HAVE GENERATED THIS MUCH AGRICULTURAL INCOME, THEREFORE, NO PENALTY BE IMPOS ED UPON IT. THE LD.AO WITHOUT RECORDING A SPECIFIC FINDING WHETHER THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME, PROCEED TO IMPOSE PENALTY UNDER SECTION 271(1)(C) S IMPLY UNDER THE VAGUE TERM THAT THE ASSESSEE HAS COMMITTED A DEFAUL T UNDER SECTION 271(1)(C) OF THE ACT. HE IMPOSED PENALTY OF RS.45, 965/-, RS.48,685/-, RS.30,987/-, RS.65,640/-, RS.80,863/-, RS.67,320 AN D RS.1,00,980 IN THE ASSTT.YEARS 2001-02 TO 2007-08 RESPECTIVELY. 9. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 10. ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT THE ASSESSEE HAS CONTENDED BEFORE THE AO AS UNDER: 1. THE ADDITIONS ARE ESTIMATION ON OTHER INCOME IN STEAD OF AGRI. INCOME. 2. THE ASSESSEE HAS ALREADY PRODUCED THE AGRICULTUR AL LANDOWNERSHIP 7/12, UTARA ETC. AT THE TIME OF ASSTT . 3. THE ADDITIONS ARE TECHNICAL BASIS FROM FREE INCO ME TO TAXABLE INCOME. 4. THE ADDITION ON ESTIMATION BASIS AND/OR ESTIMATI ON BASIS ARE DEBATABLE ISSUE. WHICH ARE NOT SUBJECT MATTER OF P ENALTY IT(SS)A NO.238 TO 244/AHD/2013 4 4 U/S.27191)(C) OF THE ACT AS, THERE WERE NO CONCEALM ENT INCOME OR CONCEALMENT INCOME OR CONCEALMENT PARTICULARS OF IN COME. 11. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE REVENUE AUTHORITIES BELOW. SHE CONTENDED THAT THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE ON THE RECORD DEMONSTRATING TH E FACT THAT IT HAS CARRIED OUT AGRICULTURAL OPERATIONS ON THE LAND OWN ED BY IT. THE AO HAS RIGHTLY DISBELIEVED ITS CLAIM FOR EXEMPTION FROM TA XATION OF THE INCOME SHOWN UNDER THE HEAD AGRICULTURE INCOME. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D R AND GONE THROUGH THE RECORD. SECTION 271(1)(C) OF THE ACT HA S A DIRECT BEARING ON THE CONTROVERSY WHICH READS AS UNDER: '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. (1) THE ASSESSING OFFICER OR THE C OMMISSIONER (APPEALS) OR THE CIT IN THE OF COURSE OF ANY PROCEE DINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B) ** ** ** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIREC T THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. (I)AND (INCOME-TAX OFFICER,)** ** ** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLA USE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL N OT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULA RS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INAC CURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER (APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOT AL INCOME OR IT(SS)A NO.238 TO 244/AHD/2013 5 5 SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURP OSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INC OME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 13. A BARE PERUSAL OF THIS SECTION WOULD REVEAL TH AT FOR VISITING ANY ASSESSEE WITH THE PENALTY, THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) DURING THE COURSE OF ANY PROCEEDINGS B EFORE THEM SHOULD BE SATISFIED, THAT THE ASSESSEE HAS; (I) CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS FAR AS THE QUANTIFICATION OF THE PENALTY IS CONCERNED, THE PENALTY IMPOSED UN DER THIS SECTION CAN RANGE IN BETWEEN 100% TO 300% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE, AS A RESULT OF SUCH CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. THE OTHER MOST IMPORTANT FE ATURES OF THIS SECTION IS DEEMING PROVISIONS REGARDING CONCEALMENT OF INCO ME. THE SECTION NOT ONLY COVERED THE SITUATION IN WHICH THE ASSESSEE HA S CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS, IN CERT AIN SITUATION, EVEN WITHOUT THERE BEING ANYTHING TO INDICATE SO, STATUT ORY DEEMING FICTION FOR CONCEALMENT OF INCOME COMES INTO PLAY. THIS DEE MING FICTION, BY WAY OF EXPLANATION-1 TO SECTION 271(1)(C) POSTULATE S TWO SITUATIONS; (A) FIRST WHETHER IN RESPECT OF ANY FACTS MATERIAL TO T HE COMPUTATION OF THE TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE A SSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERED BY THE AS SESSEE IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR LEARNED CIT(APPEA L); AND, (B) WHERE IN RESPECT OF ANY FACT, MATERIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND THE ASSESSEE FAILS, TO PROVE THAT S UCH EXPLANATION IS BONA FIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL T HE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOT AL INCOME. UNDER FIRST SITUATION, THE DEEMING FICTION WOULD COME TO PLAY IF THE ASSESSEE FAILED TO GIVE ANY EXPLANATION WITH RESPECT TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME OR BY ACTION OF THE ASS ESSING OFFICER OR THE LEARNED CIT(APPEALS) BY GIVING A CATEGORICAL FINDIN G TO THE EFFECT THAT IT(SS)A NO.238 TO 244/AHD/2013 6 6 EXPLANATION GIVEN BY THE ASSESSEE IS FALSE. IN THE SECOND SITUATION, THE DEEMING FICTION WOULD COME TO PLAY BY THE FAILURE O F THE ASSESSEE TO SUBSTANTIATE HIS EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME AND IN ADDITION TO THIS THE ASSESSEE IS NOT ABLE TO PROVE THAT SUCH EXPLANATION WAS GIVEN BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMP UTATION OF THE TOTAL INCOME HAVE BEEN DISCLOSED BY THE ASSESSEE. THESE T WO SITUATIONS PROVIDED IN EXPLANATION 1 APPENDED TO SECTION 271(1 )(C) MAKES IT CLEAR THAT THAT WHEN THIS DEEMING FICTION COMES INTO PLAY IN THE ABOVE TWO SITUATIONS THEN THE RELATED ADDITION OR DISALLOWAN CE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE FOR THE PURPOSE OF SEC TION 271(1)(C) WOULD BE DEEMED TO BE REPRESENTING THE INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS HAVE BEEN FURNISHED. 14. THE CASE OF THE ASSESSEE IS THAT IN THE LAND RE VENUE RECORD MAINTAINED BY THE STATE GOVERNMENT, IT HAS BEEN SHO WN AS OWNER IN POSSESSION OF LAND ADMEASURING 3,92,714 SQ.METERS, WHICH IS ROUGHLY 170 ACRES. IN THE COLUMN OF CULTIVATOR, NAME OF TH E ASSESSEE-COMPANY HAS BEEN RECORDED. THE ASSESSEE HAS PRODUCED LAND RECORD FROM THE REVENUE AUTHORITIES OF THE STATE GOVERNMENT. IT FA ILED TO SUBSTANTIATE ITS EXPLANATION ABOUT THE AGRICULTURAL INCOME. IT IS THE OWNER OF THE AGRICULTURE LAND. IT HAS BEEN SHOWN AS CULTIVATOR IN THE REVENUE RECORD. THUS, ITS CLAIM WAS NOT FALSE. THE AO HAS NOWHERE RECORDED ANY FINDING THAT THE ASSESSEE HAS FURNISHED ANY INACCURATE PART ICULARS OF ITS INCOME. THE ONLY AREA OF DISPUTE BETWEEN THE AO AND THE ASS ESSEE IS THAT THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM OF AGRICU LTURE INCOME WITH THE HELP OF SUPPORTING EVIDENCE. BUT THE CLAIM WAS NOT FOUND TO BE FALSE, BECAUSE THE ASSESSEE IS THE OWNER AND IN POSSESSION OF HUGE TRACT OF AGRICULTURE LAND. THE INCOME OF THE ASSESSEE HAS B EEN ESTIMATED. THE AO COLD HAVE ESTIMATED THE GENERATION OF AGRICULTUR E INCOME TO THIS EXTENT, OUT OF SUCH HUGE TRACT OF AGRICULTURE LAND. THEREFORE, TO OUR IT(SS)A NO.238 TO 244/AHD/2013 7 7 MIND, THE ASSESSEE DOES NOT DESERVE TO BE VISITED W ITH THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, AND WE DELETE P ENALTY OF RS.45,965/-, RS.48,685/-, RS.30,987/-, RS.65,640/-, RS.80,863/-, RS.67,320 AND RS.1,00,980 IN THE ASSTT.YEARS 2001-0 2 TO 2007-08 RESPECTIVELY AND ALLOW THE APPEALS OF THE ASSESSEE. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER